1.

RA 8042 as amended by RA 10022

1a.) SAMEER OVERSEAS PLACEMENT AGENCY, INC., vs. JOY C. CABILES,

G.R. No. 170139 August 5, 2014

PONENTE: Leonen
TOPIC:  Section 10 of RA 8042 vis-a-vis Section 7 of RA 10022
 
FACTS:
                Petitioner, Sameer Overseas Placement Agency, Inc., is a recruitment and placement agency.
                Respondent Joy Cabiles was hired thus signed a one-year employment contract for a monthly salary of
NT$15,360.00. Joy was deployed to work for Taiwan Wacoal, Co. Ltd. (Wacoal) on June 26, 1997. She alleged
that in her employment contract, she agreed to work as quality control for one year. In Taiwan, she was asked to
work as a cutter.
                Sameer claims that on July 14, 1997, a certain Mr. Huwang from Wacoal informed Joy, without prior
notice, that she was terminated and that “she should immediately report to their office to get her salary and
passport.” She was asked to “prepare for immediate repatriation.” Joy claims that she was told that from June
26 to July 14, 1997, she only earned a total of NT$9,000.15 According to her, Wacoal deducted NT$3,000 to
cover her plane ticket to Manila.
                On October 15, 1997, Joy filed a complaint for illegal dismissal with the NLRC against petitioner and
Wacoal. LA dismissed the complaint. NLRC reversed LA’s decision. CA affirmed the ruling of the National Labor
Relations Commission finding respondent illegally dismissed and awarding her three months’ worth of salary,
the reimbursement of the cost of her repatriation, and attorney’s fees
ISSUE:
                Whether or not Cabiles was entitled to the unexpired portion of her salary due to illegal dismissal.
 
HELD:
                YES. The Court held that the award of the three-month equivalent of respondent’s salary should be
increased to the amount equivalent to the unexpired term of the employment contract.
                In Serrano v. Gallant Maritime Services, Inc. and Marlow Navigation Co., Inc., this court ruled that the
clause “or for three (3) months for every year of the unexpired term, whichever is less” is unconstitutional for
violating the equal protection clause and substantive due process.
                A statute or provision which was declared unconstitutional is not a law. It “confers no rights;
it imposes no duties; it affords no protection; it creates no office; it is inoperative as if it has not been passed at
all.”
                The Court said that they are aware that the clause “or for three (3) months for every year of the
unexpired term, whichever is less” was reinstated in Republic Act No. 8042 upon promulgation of Republic Act
No. 10022 in 2010.
Ruling on the constitutional issue
                In the hierarchy of laws, the Constitution is supreme. No branch or office of the government
may exercise its powers in any manner inconsistent with the Constitution, regardless of the existence of any law
that supports such exercise. The Constitution cannot be trumped by any other law. All laws must be read in light
of the Constitution. Any law that is inconsistent with it is a nullity.
                Thus, when a law or a provision of law is null because it is inconsistent with the Constitution, the
nullity cannot be  cured  by reincorporation or reenactment of the same or a similar law or provision. A law or
provision of law that was already declared unconstitutional remains as such unless circumstances have so
changed as to warrant a reverse conclusion.
                The Court observed that the reinstated clause, this time as provided in Republic Act. No. 10022, violates
the constitutional rights to equal protection and due process.96 Petitioner as well as the Solicitor General have
failed to show any compelling change in the circumstances that would warrant us to revisit the precedent.
                The Court declared, once again, the clause, “or for three (3) months for every year of the unexpired
term, whichever is less” in Section 7 of Republic Act No. 10022 amending Section 10 of Republic Act No. 8042 is
declared unconstitutional and, therefore, null and void.

1b.) SAMEER OVERSEAS PLACEMENT AGENCY, INC., vs. JOY C. CABILES,

G.R. No. 170139 August 5, 2014
 2. Labor only contracting

2.a.) Petron Corp. v Caberte GR 182255; June 15, 2015

Summary: The Principal Company bears the burden of proving that the contractor is not engaging in labor-only
contractor, but rather a legitimate independent contractor.

Facts:

Petron, a domestic corporation engaged in the manufacture and distribution to the general public of various
petroleum products, hired the respondents to work at Petron’s Bulk Plant in San Patrick, Bacolod City, and
Negros Occidental from 1979 to 1998.

For the periods from March 1, 1996 to February 28, 1999 and November 1, 1996 to June 30, 1999, Petron and
ABC, a labor contracting business owned and operated by Caberte Sr., entered into a Contract for Services and a
Contract for LPG Assistance Services. Under both service contracts, ABC undertook to provide utility and
maintenance services to Petron in its Bacolod Bulk Plant.

On July 1, 1999, Petron no longer allowed them to enter and work in the premises of its Bacolod Bulk Plant.
Hence, eight respondents were filed a complaint for illegal dismissal, underpayment of wages and non-payment
of allowances, 13th month pay, overtime pay, holiday pay, service incentive leave pay, moral and exemplary
damages and attorney's fees against Petron before the Labor Arbiter.

On March 7, 2002, LA Danilo C. Acosta held that ABC is an independent contractor that has substantial capital
and that respondents were its employees. He likewise ruled that ABC's cessation of operation is a force majeure
that justifies respondents' dismissal. Hence, the petition is dismissed.

The case elevated to the NLRC, but, the NLRC affirmed the decision of Labor Arbiter.

Thereafter, the respondents filed a petition for certiorari before the Court of Appeals. In their decision, the CA
ruled that ABC is engaged in labor-only contracting because: first, it did not have substantial capital or
investment in the form of tools, equipment, implements, machineries and work premises, actually and directly
used in the performance or completion of the job it contracted out from Petron; second, the work assigned to
respondents were directly related to Petron's business; and, third, the nature of Petron's business requires it to
exercise control over the performance of respondents' work. Consequently, the CA declared respondents as
Petron's regular employees.

As a result, the petitioner Petron filed a petition for review on certiorari before the Supreme Court.

Issue:

Whether or not the Court of Appeals seriously erred and decided a question of substance in a manner not in
accord with law and with applicable jurisprudence in finding that ABC Contracting Services is a mere labor-only
contractor and in holding that respondents are thus regular employees of the company.

Held:

No – The Court of appeals did not err in finding that ABC Contracting Services is a mere labor-only contractor
and holding that respondents are regular employees of the Petron.

Under Article 106 of the Labor Code, a contractor is deemed to be a labor-only contractor if the following
elements are present:

(i) the contractor does not have substantial capital or investment to actually perform the job, work
or service under its own account and responsibility; and
(ii) the employees recruited, supplied or placed by such contractor are performing activities which
are directly related to the main business of the principal.
The law presumes a contractor to be a labor-only contractor and the employees are not expected to prove the
negative fact that the contractor is a labor-only contractor. Therefore, the Petron, principal, bears the burden of
establishing that ABC is no a labor-only contractor but a legitimate independent contractor.

In order to be a legitimate independent contractor, the following conditions concur:

a) the contractor carries on a distinct and independent business and partakes the contract work on his
account under his own responsibility according to his own manner and method, free from the control
and direction of his employer or principal in all matters connected with the performance of his work
except as to the results thereof;
b) the contractor has substantial capital or investment; and
c) the agreement between the principal and the contractor or subcontractor assures the contractual
employees' entitlement to all labor and occupational safety and health standards, free exercise of the
right to self-organization, security of tenure, and social welfare benefits.

In the case at bar, Gestupa, Ponteras, Develos, Blanco and Mariano were LPG fillers and maintenance crew;
Caberte was an LPG operator supervisor; Te was a warehouseman and utility worker; and Servicio and Galorosa
were tanker receiving crew and utility workers. Undoubtedly, the work they rendered were directly related to
Petron's main business, vital as they are in the manufacture and distribution of petroleum products. Besides, it is
clear that Petron failed to discharge its burden of proving that ABC is not a labor-only contractor.

Therefore, Petron is declared to be the true employer of respondents who are considered regular employees in
view of the fact that they have been regularly performing activities which are necessary and desirable to the
usual business of Petron for a number of years.

WHEREFORE, the petition is DENIED. The November 14, 2007 Decision and the March 4, 2008 Resolution of the
Court of Appeals in CA-G.R. SP No. 82356 are MODIFIED in that: (1) the Complaint of respondent Antonio
Caberte, Jr. against petitioner Petron Corporation is dismissed; and (2) petitioner Petron Corporation is ordered
to reinstate all of the respondents, except for Antonio Caberte, Jr., to their former positions with the same rights
and benefits and the same salary rates as its regular employees, or if reinstatement is no longer feasible, to
separation pay equivalent to one month salary for every year of service and to pay them their full backwages
from July 1, 1999 until actual reinstatement or upon finality of this Decision as the case may be, as well as
attorney's fees equivalent to 10% of the monetary award, with costs against Petron Corporation.

Concept:

LABOR-ONLY vs. PERMISSIBLE/LEGITIMATE:

As defined under Article 106 of the Labor Code, labor-only contracting, a prohibited act, is an arrangement
where the contractor, who does not have substantial capital or investment in the form of tools, equipment,
machineries, work premises, among others, supplies workers to an employer and the workers recruited are
performing activities which are directly related to the principal business of such employer.

Permissible or legitimate job contracting or subcontracting, on the other hand, "refers to an arrangement
whereby a principal agrees to put out or farm out with the contractor or subcontractor the performance or
completion of a specific job, work, or service within a definite or predetermined period, regardless of whether
such job, work, or service is to be performed or completed within or outside the premises of the principal. A
person is considered engaged in legitimate job contracting or subcontracting if the following conditions concur:
(a) the contractor carries on a distinct and independent business and partakes the contract work on his account
under his own responsibility according to his own manner and method, free from the control and direction of his
employer or principal in all matters connected with the performance of his work except as to the results thereof;
(b) the contractor has substantial capital or investment; and (c) the agreement between the principal and the
contractor or subcontractor assures the contractual employees' entitlement to all labor and occupational safety
and health standards, free exercise of the right to self-organization, security of tenure, and social welfare
benefits.
2.b.) South Davao v Gamo GR 171814; May 8, 2009

Summary:

Gamo and the copra workers did not exercise independent judgment in the performance of their tasks as per
their tools used are not sufficient to complete their job.

Facts:

Petitioner South Davao Development Company (petitioner or petitioner corporation) is the operator of a
coconut and mango farm in San Isidro, Davao Oriental and Inawayan/Baracatan, Davao del Sur. On August 1963
petitioner hired respondent Sergio L. Gamo (Gamo) as a foreman. Sometime in 1987, petitioner appointed
Gamo as a copra maker contractor. Respondents Ernesto Belleza, Carlos Rojas, Maximo Malinao were all
employees in petitioners coconut farm, while respondents Felix Terona, Virgilio Cosep, Maximo Tolda, and
Nelson Bagaan were assigned to petitioners mango farm. All of the abovenamed respondents (copra workers)
were later transferred by petitioner to Gamo as the latters copraceros. From 1987 to 1999, Gamo and petitioner
entered into a profit-sharing agreement wherein 70% of the net proceeds of the sale of copra went to petitioner
and 30% to Gamo. The copra workers were paid by Gamo from his 30% share.

Petitioner wanted to standardize payments to its contractors in its coconut farms. On 2 October 1999, petitioner
proposed a new payment scheme to Gamo. The new scheme provided a specific price for each copra making
activity. Gamo submitted his counter proposal. [6] Petitioner did not accept Gamos counter proposal since it was
higher by at least fifty percent (50%) from its original offer. Without agreeing to the new payment scheme,
Gamo and his copra workers started to do harvesting work. Petitioner told them to stop. Eventually, petitioner
and Gamo agreed that the latter may continue with the harvest provided that it would be his last contract with
petitioner. Gamo suggested to petitioner to look for a new contractor since he was not amenable to the new
payment scheme.[7]

Gamo and petitioner failed to agree on a payment scheme, thus, petitioner did not renew the contract of Gamo.
Gamo and the copra workers alleged that they were illegally dismissed.

The Labor Arbiter ruled that there was no employee-employer relationship between petitioner and respondents.

Upon Appeal, NLRC reversed the decision of the LA and ruled that respondents were petitioners’ employees.
Petitioners filed a motion for reconsideration, which was granted by NLRC. Upon granted, NLRC ruled that the
nature of the job of the respondents could not result in an employer-employee relationship. Respondents
moved for reconsideration which was denied.

Respondent filed a petition on certiorari before the Court of Appeals. The Court of Appeals ruled that there
existed an employer-employee relationship. It declared that respondents were regular seasonal employees who
can be dismissed by the petitioner at the end of the season provided due process is observed.

Hence this case elevated before the Supreme Court.

Issue:

Whether or not Gamo is an independent contractor.

Held:

No –

To establish the existence of an independent contractor, we apply the following conditions:

First, the contractor carries on an independent business and undertakes the contract work on his own account
under his own responsibility according to his own manner and method, free from the control and direction of his
employer or principal in all matters connected with the performance of the work except to the result thereof;
and
Second, the contractor has substantial capital or investments in the form of tools, equipment, machineries, work
premises and other materials which are necessary in the conduct of his business.

In the case at bar, Gamo and the copra workers did not exercise independent judgment in the performance of
their tasks. The tools used by Gamo and his copra workers like
the karit, bolo, pangbunot, panglugit and pangtapok are not sufficient to enable them to complete the
job. Reliance on these primitive tools is not enough. In fact, the accomplishment of their task required more
expensive machineries and equipment, like the trucks to haul the harvests and the drying facility, which
petitioner corporation owns.

Concept:

The Implementing Rules and Regulation of the Labor Code defines investmentas tools, equipment, implements,
machineries and work premises, actually and directly used by the contractor or subcontractor in the
performance or completion of the job, work, or service contracted out. [23] The investment must be sufficient to
carry out the job at hand.
 3. Constructive Dismissal

3.a. BISIG MANGGAGAWA SA TRYCO V. NLRC (G.R. NO. 151309)

Facts:

Tryco Pharma Corporation, manufacturer of veterinary medicines with principal office in Caloocan City, and
petitioner union Bisig Manggagawa Sa Tryco (BMT), the exclusive bargaining representative of the rank-and-file
employees, signed separate Memoranda of Agreement providing for a compressed workweek schedule to be
implemented in the company. BMT and Tryco negotiated for the renewal of their CBA but failed to arrive at a
new agreement. Meanwhile, Tryco received a letter from the Bureau of Animal Industry of the Department of
Agriculture reminding the former that its production should be conducted in Bulacan City and not in Caloocan
City. Accordingly, Tryco issued a memo directing petitioners herein who are members of BMT to report to the
plant site in Bulacan. Contending that the transfer of its members constitutes unfair labor practice, BMT
declared a strike. Later, petitioner employees filed separate complaints for illegal dismissal and added that the
transfer of petitioners to the Bulacan site is intended to paralyze the union. LA dismissed the complaint. NLRC
and CA affirmed.

Issues:

(1) Whether the transfer of petitioners amounted to constructive dismissal; and

(2) Whether the transfer of petitioners amounted to unfair labor practice.

Ruling: NO.

(1) Management’s prerogative of transferring and reassigning employees from one area of operation to another
in order to meet the requirements of the business is, therefore, generally not constitutive of constructive
dismissal. Thus, the consequent transfer of Tryco’s personnel, assigned to the Production Department was well
within the scope of its management prerogative. When the transfer is not unreasonable, or inconvenient, or
prejudicial to the employee, and it does not involve a demotion in rank or diminution of salaries, benefits, and
other privileges, the employee may not complain that it amounts to a constructive dismissal. However, the
employer has the burden of proving that the transfer of an employee is for valid and legitimate grounds.
Indisputably, in the instant case, the transfer orders do not entail a demotion in rank or diminution of salaries,
benefits and other privileges of the petitioners. The Court has previously declared that mere incidental
inconvenience is not sufficient to warrant a claim of constructive dismissal. Objection to a transfer that is
grounded solely upon the personal inconvenience or hardship that will be caused to the employee by reason of
the transfer is not a valid reason to disobey an order of transfer. The distance from Caloocan to San Rafael,
Bulacan is not considerably great so as to compel petitioners to seek living accommodations in the area and
prevent them from commuting to Metro Manila daily to be with their families.

(2) We cannot see how the mere transfer of its members can paralyze the union. The union was not deprived of
the membership of the petitioners whose work assignments were only transferred to another location. More
importantly, there was no showing or any indication that the transfer orders were motivated by an intention to
interfere with the petitioners’ right to organize. Unfair labor practice refers to acts that violate the workers’ right
to organize. With the exception of Article 248(f) of the Labor Code of the Philippines, the prohibited acts are
related to the workers’ right to self-organization and to the observance of a CBA. Without that element, the
acts, no matter how unfair, are not unfair labor practices.
3.b. G.R. No. 188086  August 3, 2011
FRANCIS BELLO, represented herein by his daughter and attorney-in-fact, Geraldine Bello-Ona,Petitioner, –
versus – BONIFACIO SECURITY SERVICES, INC. and SAMUEL TOMAS,
Respondents.

The Factual Background

 
Respondent Bonifacio Security Services, Inc. (BSSI) is a domestic private corporation engaged in the business of
providing security services. In July 2001, the BSSI hired Bello as a roving traffic marshal to manage traffic and to
conduct security and safety-related operations in the Bonifacio Global City (BGC). In August 2001,Bello was
posted at the Negros Navigation Company in Pier 2,NorthHarbor, to supervise sectoral operations. In November
2001, he was assigned at BGC as assistant detachment commander. After a week, he was transferred to Pacific
Plaza Towers as assistant detachment commander and later as detachment commander. In June 2002, he was
assigned at Pier 2,NorthHarbor as assistant detachment commander, but later reassigned to BGC. In August
2002, the BSSI hired a new operations manager, resulting in the reorganization of posts. In October 2002,Bello
was assigned as roving traffic marshal at the BGC. On October 25, 2002, he filed an indefinite leave of absence
when his new assignment took effect.

On November 5, 2002, Bello filed a complaint against the BSSI and its General Manager, respondent Samuel
Tomas, with the National Labor Relations Commission (NLRC),[16][5] claiming that he had been constructively
dismissed when he was demoted from a detachment commander to a mere traffic marshal. He alleged that he
received a series of promotions from 2001 to 2002, from traffic marshal to supervisor, to assistant detachment
commander, and to detachment commander.[17][6]
The BSSI denied Bello’s claim of constructive dismissal, arguing that no promotion took place; Bello’s designation
as assistant detachment commander or detachment commander was not an employment position but a duty-
related assignment; Belloabandoned his job when he went on an indefinite leave of absence and did not report
for work.[18][7]

The Labor Arbiter’s Ruling

 
In his December 29, 2005 decision,[19][8] Labor Arbiter Cresencio G. Ramos, Jr. found that Bello was illegally
dismissed, noting that the BSSI failed to adduce evidence that Bello abandoned his employment. Thus, he
ordered Bello’s reinstatement and awarded him backwages amounting to P391,474.25.
After the NLRC dismissed the BSSI’s belated appeal and subsequent motion for reconsideration,[20][9]the latter
filed a petition for certiorari with the CA. The CA granted the petition,[21][10] thus reinstating BSSI’s appeal with
the NLRC.
In its March 26, 2008 resolution, the NLRC affirmed the labor arbiter’s decision, finding that Bellohad been
constructively dismissed when he was demoted to the rank-and-file position of traffic marshal after occupying
the supervisory position of assistant detachment commander and detachment commander.[22][11]  The denial
of BSSI’s subsequent motion for reconsideration led it back to the CA on a petition for certiorari  under Rule 65 of
the Rules of Court.[23][12]
 
The CA Ruling
 
The CA nullified the NLRC resolutions, finding the records bereft of evidence substantiating the labor arbiter’s
and the NLRC’s conclusions that Bellohad been constructively dismissed.[24][13] It noted that Bello offered no
evidence to prove that there was a series of promotions that would justify his claim of subsequent demotion. 
The CA denied the BSSI’s motion for reconsideration,[25][14] paving the way for the present petition.
 
The Petition
 
       Belloinsists that he was constructively dismissed when he was demoted to a mere traffic marshal after
having been promoted to the positions of supervisor, assistant detachment commander, and detachment
commander.
The Case for the BSSI
 
        The BSSI prays for the petition’s outright dismissal due to a defective verification, arguing that the special
power of attorney (SPA) of Bello’s attorney-in-fact, Geraldine Bello-Ona, was limited to representing him in the
NLRC case only and not to the present petition; and that Bello-Ona has no personal knowledge of the allegations
in the petition. On the merits of the case, the BSSI contends that the CA correctly ruled that there was no
evidence to substantiate the NLRC’s finding of constructive dismissal.

The Issues
The core issues boil down to: whether the petition should be dismissed outright for defective verification; and
whether the CA erred in annulling the NLRC’s resolutions.
The Court’s Ruling
 
The petition lacks merit.
 
Verification of a pleading is a formal, not jurisdictional, requirement intended to secure the assurance that the
matters alleged in a pleading are true and correct.[26][15] Thus, the court may simply order the correction of
unverified pleadings or act on them and waive strict compliance with the rules.[27][16] It is deemed
substantially complied with when one who has ample knowledge to swear to the truth of the allegations in the
complaint or petition signs the verification, and when matters alleged in the petition have been made in good
faith or are true and correct.[28][17] 
In this case, we find that the petition’s verification substantially complied with the requirements of the rules.
The SPA authorized Bello-Ona to represent Belloin the case entitled “Francis Bello v. Bonifacio Security Services,
Inc. and/or Samuel Tomas, (CA) Case No. 047829-06; NLRC-N[CR] Case No. 00-11-09529-2002”[29][18] – the
case from which the present petition originated. As the daughter ofBello, Bello-Ona is deemed to have sufficient
knowledge to swear to the truth of the allegations in the petition, which are matters of record in the tribunals
and the appellate court below.
On the merits of the case, we find no reason to disturb the CA conclusion that there was no constructive
dismissal. Case law defines constructive dismissal as a cessation of work because continued employment has
been rendered impossible, unreasonable, or unlikely, as when there is a demotion in rank or diminution in pay,
or both, or when a clear discrimination, insensibility, or disdain by an employer becomes unbearable to the
employee.[30][19]
We note that, other than his bare and self-serving allegations, Bellohas not offered any evidence that he was
promoted in a span of four months since his employment as traffic marshal in July 2001 to a detachment
commander in November 2001. During his six-month probationary period of employment,[31][20] it is highly
improbable that Bello would be promoted after just a month of employment, from a traffic marshal in July 2001
to supervisor in August 2001, and three months later to assistant detachment commander and to detachment
commander in November 2001. At most, the BSSI merely changed his assignment or transferred him to the post
where his service would be most beneficial to its clients. The management’s prerogative of transferring and
reassigning employees from one area of operation to another in order to meet the requirements of the business
is generally not constitutive of constructive dismissal.[32][21]  We see this to be the case in the present dispute
so that the consequent reassignment ofBello to a traffic marshal post was well within the scope of the BSSI’s
management prerogative.
WHEREFORE, we hereby DENY the petition and AFFIRM the assailed CA decision and resolution in CA-G.R. SP.
No. 105402. Costs against the petitioner.
SO ORDERED.
 
 4. Twin notice requirement

4.a. RB Michael Press vs. Galit, G.R. No. 153510, February 13, 2008

Facts:

Respondent was employed by petitioner R.B. Michael Press as an offset machine operator, whose work schedule
was from 8:00 a.m. to 5:00 p.m., Mondays to Saturdays, and he was paid PhP230 a day. During his employment,
Galit was tardy for a total of 190 times, totaling to 6,117 minutes, and was absent without leave for a total of
nine and a half days.

On February 22, 1999, respondent was ordered to render overtime service in order to comply with a job order
deadline, but he refused to do so. The following day, respondent reported for work but petitioner Escobia told
him not to work, and to return later in the afternoon for a hearing. When he returned, a copy of an Office
Memorandum was served on him, as follows:

To:Mr. Nicasio Galit

From:ANNALENE REYES-ESCOBIA
Re:WARNING FOR DISMISSAL; NOTICE OF HEARING

This warning for dismissal is being issued for the following offenses:
(1)habitual and excessive tardiness
(2)committing acts of discourtesy, disrespect in addressing superiors
(3)failure to work overtime after having been instructed to do so
(4)Insubordination — willfully disobeying, defying or disregarding company authority

The offenses you've committed are just causes for termination of employment as provided by the Labor Code.
You were given verbal warnings before, but there had been no improvement on your conduct.

Further investigation of this matter is required, therefore, you are summoned to a hearing at 4:00 p.m. today.
The hearing will determine your employment status with this company.
(SGD) ANNALENE REYES-ESCOBIA
Manager

On February 24, 1999, respondent was terminated from employment. The employer, through petitioner Escobia,
gave him his two-day salary and a termination letter averring that Galit was dismissed due to the following
offenses: (1) habitual and excessive tardiness; (2) commission of discourteous acts and disrespectful conduct
when addressing superiors; (3) failure to render overtime work despite instruction to do so; and (4)
insubordination, that is, willful disobedience of, defiance to, or disregard of company authority..

Respondent subsequently filed a complaint for illegal dismissal and money claims before the National Labor
Relations Commission (NLRC).

Issues:
(1) WON there was just cause to terminate the employment of respondent, and whether due process was
observed in the dismissal process;
(2) WON respondent is entitled to backwages and other benefits despite his refusal to be reinstated.

Ruling:

Respondent's tardiness cannot be considered condoned by petitioners

Habitual tardiness is a form of neglect of duty. Lack of initiative, diligence, and discipline to come to work on
time everyday exhibit the employee's deportment towards work. Habitual and excessive tardiness is inimical to
the general productivity and business of the employer. This is especially true when the tardiness and/or
absenteeism occurred frequently and repeatedly within an extensive period of time.

The mere fact that the numerous infractions of respondent have not been immediately subjected to sanctions
cannot be interpreted as condonation of the offenses or waiver of the company to enforce company rules. A
waiver is a voluntary and intentional relinquishment or abandonment of a known legal right or privilege. It has
been ruled that "a waiver to be valid and effective must be couched in clear and unequivocal terms which leave
no doubt as to the intention of a party to give up a right or benefit which legally pertains to him." Hence, the
management prerogative to discipline employees and impose punishment is a legal right which cannot, as a
general rule, be impliedly waived.

Thus it is incumbent upon the employee to adduce substantial evidence to demonstrate condonation or waiver
on the part of management to forego the exercise of its right to impose sanctions for breach of company rules.
In the case at bar, respondent did not adduce any evidence to show waiver or condonation on the part of
petitioners.

Insubordination or willful disobedience

For willful disobedience to be a valid cause for dismissal, these two elements must concur: (1) the employee's
assailed conduct must have been willful, that is, characterized by a wrongful and perverse attitude; and (2) the
order violated must have been reasonable, lawful, made known to the employee, and must pertain to the duties
which he had been engaged to discharge.

In the present case, there is no question that petitioners' order for respondent to render overtime service to
meet a production deadline complies with the second requisite. Art. 89 of the Labor Code empowers the
employer to legally compel his employees to perform overtime work against their will to prevent serious loss or
damage:

Art. 89.EMERGENCY OVERTIME WORK

Any employee may be required by the employer to perform overtime work in any of the following cases:
xxx xxx xxx
(c)When there is urgent work to be performed on machines, installations, or equipment, in order to avoid
serious loss or damage to the employer or some other cause of similar nature;
xxx xxx xxx

In the present case, petitioners' business is a printing press whose production schedule is sometimes flexible and
varying. It is only reasonable that workers are sometimes asked to render overtime work in order to meet
production deadlines.

The issue now is, whether respondent's refusal or failure to render overtime work was willful; that is, whether
such refusal or failure was characterized by a wrongful and perverse attitude. In Lakpue Drug Inc. v. Belga,
willfulness was described as "characterized by a wrongful and perverse mental attitude rendering the
employee's act inconsistent with proper subordination." The fact that respondent refused to provide overtime
work despite his knowledge that there is a production deadline that needs to be met, and that without him, the
offset machine operator, no further printing can be had, shows his wrongful and perverse mental attitude; thus,
there is willfulness.

After a re-examination of the facts, we rule that respondent unjustifiably refused to render overtime work
despite a valid order to do so. The totality of his offenses against petitioner R.B. Michael Press shows that he was
a difficult employee. His refusal to render overtime work was the final straw that broke the camel's back, and,
with his gross and habitual tardiness and absences, would merit dismissal from service.

Due process: twin notice and hearing requirement

On the issue of due process, petitioners claim that they had afforded respondent due process. Petitioners
maintain that they had observed due process when they gave respondent two notices and that they had even
scheduled a hearing where he could have had explained his side and defended himself.

We are not persuaded.

We held in Agabon v. NLRC:

Procedurally, (1) if the dismissal is based on a just cause under Article 282, the employer must give the employee
two written notices and a hearing or opportunity to be heard if requested by the employee before terminating
the employment: a notice specifying the grounds for which dismissal is sought a hearing or an opportunity to be
heard and after hearing or opportunity to be heard, a notice of the decision to dismiss; and (2) if the dismissal is
based on authorized causes under Articles 283 and 284, the employer must give the employee and the
Department of Labor and Employment written notices 30 days prior to the effectivity of his separation

Under the twin notice requirement, the employees must be given two (2) notices before his employment could
be terminated: (1) a first notice to apprise the employees of their fault, and (2) a second notice to communicate
to the employees that their employment is being terminated. Not to be taken lightly of course is the hearing or
opportunity for the employee to defend himself personally or by counsel of his choice.

A scrutiny of the disciplinary process undertaken by petitioners leads us to conclude that they only paid lip
service to the due process requirements.

The undue haste in effecting respondent's termination shows that the termination process was a mere
simulation — the required notices were given, a hearing was even scheduled and held, but respondent was not
really given a real opportunity to defend himself; and it seems that petitioners had already decided to dismiss
respondent from service, even before the first notice had been given.

Anent the written notice of charges and hearing, it is plain to see that there was merely a general description of
the claimed offenses of respondent. The hearing was immediately set in the afternoon of February 23, 1999 —
the day respondent received the first notice. Therefore, he was not given any opportunity at all to consult a
union official or lawyer, and, worse, to prepare for his defense.
 4.b New Puerto Commercial vs. Lopez, G.R. No. 169999, July 26, 2010

“In order to validly dismiss an employee, he must be accorded both substantive and procedural due process by
the employer. Procedural due process requires that the employee be given a notice of the charge against him,
an ample opportunity to be heard, and a notice of termination. Even if the aforesaid procedure is conducted
after the filing of the illegal dismissal case, the legality of the dismissal, as to its procedural aspect, will be upheld
provided that the employer is able to show that compliance with these requirements was not a mere
afterthought.”

Facts:

In 1999, petitioner New Puerto Commercial hired respondents Felix Gavan and Rodel Lopez as a delivery panel
driver and as a roving salesman, respectively. Under a rolling store scheme, petitioners assigned respondents to
sell goods stocked in a van on cash or credit to the sari-sari stores of far-flung barangays and municipalities
outside Puerto Princesa City, Palawan. Respondents were duty-bound to collect the accounts receivables and
remit the same upon their return to petitioners' store on a weekly basis.

In 2000, respondents filed a Complaint for illegal dismissal and non-payment of monetary benefits against
petitioners with the Regional Office of the DOLE in Puerto Princesa City. On November 20, 2000, a conciliation
conference was held but the parties failed to reach an amicable settlement. As a result, the complaint was
endorsed for compulsory arbitration at the RAB of the NLRC.

Previously or on November 28, 2000, petitioners sent respondents notices to explain why they should not be
dismissed for gross misconduct based on (1) the alleged misappropriation of their sales collections, and (2) their
absence without leave for more than a month. The notice also required respondents to appear before
petitioners' lawyer on December 2, 2000 to give their side with regard to the foregoing charges. Respondents
refused to attend said hearing. On December 18, 2000, petitioners served notices of termination on respondents
on the grounds of gross misconduct and absence without leave for more than one month.

The Labor Arbiter dismissed the complaint for illegal dismissal. The NLRC affirmed the ruling of the Labor Arbiter.
It ruled that damages cannot be awarded in favor of respondents because their dismissal was for just causes.
The CA affirmed with modification the ruling of the NLRC, to wit, it awarded nominal damages of P30,000.00
each to petitioners because they were denied due process.

Issue:
Whether the respondents were denied procedural due process justifying the award of nominal damages in
accordance with the ruling in Agabon v. National Labor Relations Commission

Ruling:

The petition is meritorious.

When the requirements of procedural due process are satisfied, the award of nominal damages is improper.

In termination proceedings of employees, procedural due process consists of the twin requirements of notice
and hearing. The employer must furnish the employee with two written notices before the termination of
employment can be effected: (1) the first apprises the employee of the particular acts or omissions for which his
dismissal is sought; and (2) the second informs the employee of the employer's decision to dismiss him. The
requirement of a hearing is complied with as long as there was an opportunity to be heard, and not necessarily
that an actual hearing was conducted. As we explained in Perez v. Philippine Telegraph and Telephone
Company: 
An employee's right to be heard in termination cases under Article 277 (b) as implemented by Section 2 (d), Rule
I of the Implementing Rules of Book VI of the Labor Code should be interpreted in broad strokes. It is satisfied
not only by a formal face to face confrontation but by any meaningful opportunity to controvert the charges
against him and to submit evidence in support thereof.
A hearing means that a party should be given a chance to adduce his evidence to support his side of the case
and that the evidence should be taken into account in the adjudication of the controversy. "To be heard" does
not mean verbal argumentation alone inasmuch as one may be heard just as effectively through written
explanations, submissions or pleadings. Therefore, while the phrase "ample opportunity to be heard" [in Article
277 of the Labor Code] may in fact include an actual hearing, it is not limited to a formal hearing only. In other
words, the existence of an actual, formal "trial-type" hearing, although preferred, is not absolutely necessary to
satisfy the employee's right to be heard. 

It was duly established, as affirmed by the appellate court itself, that respondents failed to report for work
starting from October 22, 2000 for respondent Lopez and October 28, 2000 for respondent Gavan, then at the
time of the filing of the complaint with the labor office on November 3, 2000, respondents were not yet
dismissed from employment. Prior to this point in time, there was, thus, no necessity to comply with the twin
requirements of notice and hearing.

The mere fact that the notices were sent to respondents after the filing of the labor complaint does not, by
itself, establish that the same was a mere afterthought. The surrounding circumstances of this case adequately
explain why the requirements of procedural due process were satisfied only after the filing of the labor
complaint. Sometime in the third week of October 2000, petitioners received information that respondents
were not remitting their sales collections to the company. Thereafter, petitioners initiated an investigation by
sending one of their trusted salesmen, Bagasala, in the route being serviced by respondents. To prevent a
possible cover up, respondents were temporarily reassigned to a new route to service. Subsequently,
respondents stopped reporting for work (i.e., starting from October 22, 2000 for respondent Lopez and October
28, 2000 for respondent Gavan) after they got wind of the fact that they were being investigated for
misappropriation of their sales collection, and, on November 3, 2000, respondents filed the subject illegal
dismissal case to pre-empt the outcome of the ongoing investigation. On November 18, 2000, Bagasala returned
from his month-long investigation in the far-flung areas previously serviced by respondents and reported that
respondents indeed failed to remit P2,257.03 in sales collections. As a result, on November 28, 2000,
termination proceedings were commenced against respondents by sending notices to explain with a notice of
hearing scheduled on December 2, 2000. As narrated earlier, respondents failed to give their side despite
receipt of said notices. Petitioners sent another set of notices to respondents on December 7, 2000 to attend a
hearing on December 15, 2000 but respondents again refused to attend. Thus, on December 18, 2000,
petitioners served notices of termination on respondents for gross misconduct in misappropriating their sales
collections and absence without leave for more than a month. 

As can be seen, under the peculiar circumstances of this case, it cannot be concluded that the sending of the
notices and setting of hearings were a mere afterthought because petitioners were still awaiting the report from
Bagasala when respondents pre-empted the results of the ongoing investigation by filing the subject labor
complaint. For this reason, there was sufficient compliance with the twin requirements of notice and hearing
even if the notices were sent and the hearing conducted after the filing of the labor complaint. Thus, the award
of nominal damages by the appellate court is improper.
 5. Just causes

5a. Triumph International Philippines v. Apostol, G.R. No. 164423, June 16, 2009

Facts:

Respondent Apostol was hired as assistant manager by petitioner Triumph International (Phils.), Inc. (TIPI) in
March 1991, and was terminated by TIPI on 21 January 2000. On the other hand, respondent Opulencia was
hired as a warehouse helper by TIPI sometime in 1990, and was the company’s warehouse supervisor at the
time of the termination of his employment on 21 January 2000. Apostol was the immediate superior of
Opulencia. On 14 and 15 August 1999, TIPI conducted an inventory cycle count of its direct and retail sales in its
Muñoz warehouse. The inventory cycle count yielded discrepancies between its result and the stock list balance
Sugue (TIPI’s Marketing Services Manager) sent a “show-cause letter” to Apostol, TIPI’s Assistant Manager-
Warehouse and Distribution, requiring him to explain in writing the negative variance based on the inventory
cycle count.

On 21 January 2000, TIPI, through Sugue, served notices to Apostol and Opulencia, stating that their
employment had been terminated for committing infractions of the company’s rules and regulations.
Specifically, Apostol was found to have committed Offense No. 3 (Fraud or willful breach by an employee of the
trust reposed in him by the Company) and Offense No. 25 (Using, uttering or saying profane, indecent, abusive,
derogatory and/or indecorous words or language against the employer or supervisor), while Opulencia was
found to have committed Offense No. 3 only. On 28 January 2000, Apostol and Opulencia filed with the Labor
Arbiter a complaint for illegal dismissal and non-payment of salaries and other benefits against TIPI. Labor
Arbiter rendered a Decision dismissing the Complaint for lack of merit. On appeal, the NLRC affirmed the
Decision of the Labor Arbiter. On 20 February 2004, the Court of Appeals rendered judgment, reversing and
setting aside the NLRC Decision.

Issues:

WON respondents were illegally dismissed.

Ruling:

NO. We find the appeal meritorious.

In cases of termination of employees, the well-entrenched policy is that no worker shall be dismissed except for
just or authorized cause provided by law and after due process. Dismissals of employees have two facets: first,
the legality of the act of dismissal, which constitutes substantive due process; and second, the legality in the
manner of dismissal, which constitutes procedural due process.

TIPI complied with the Procedural Due Process

The grounds to which respondents were held liable are among the just causes for termination of employment
under Article 282 of the Labor Code.

Termination of employment based on Article 282 mandates that the employer substantially comply with the
requirements of due process under the rules implementing the Labor Code (Sec. 2(d), Rule 1, Book VI of the
Omnibus Rules), to wit:
x x x
(i) A written notice served on the employee specifying the ground or grounds for termination, and giving said
employee reasonable opportunity within which to explain his side;
(ii) A hearing or conference during which the employee concerned, with the assistance of counsel if he so
desires is given opportunity to respond to the charge, present his evidence or rebut the evidence presented
against him; and
 (iii) a written notice of termination served on the employee, indicating that upon, due consideration of all the
circumstances, grounds have been established to justify his termination.
x x x

There is no question that TIPI, in dismissing Apostol and Opulencia, complied with the above requirements of
procedural due process. The Court of Appeals even pointed out in its decision some of the documentary proofs
of such compliance. We quote the pertinent portion of the Court of Appeals’ decision, viz:

x x x In the present case, the evidence shows that the private respondent [TIPI] had substantially complied with
the requirements of procedural due process. The private respondent sent the following to the petitioners: (a)
show cause letters addressed to the petitioners [Apostol and Opulencia] requiring them to explain in writing
within 48 hours upon receipt, the discrepancy on the cycle count conducted on the Muñoz warehouse on
August 14-15, 1999 and placing both of them on leave with pay until further notice pending investigation on the
matter; (b) memorandum dated October 22, 1999 addressed to petitioner Apostol showing the findings after the
investigation was conducted by the private respondent, requiring him to explain within 24 hours from receipt
why he should not be terminated from his employment for loss of confidence; and (c) the notices of termination
dated January 21, 2000.

Substantive Due Process- R were dismissed for valid and just cause

Thus, we are left with the question on whether the alleged causes for dismissal of respondents Apostol and
Opulencia are supported by substantial evidence.

Apostol and Opulencia were dismissed mainly on ground of fraud or willful breach of trust. As previously
mentioned, fraud or willful breach of the employer’s trust is a just cause for termination of employment under
Article 282(c) of the Labor Code. This provision is premised on the fact that the employee concerned holds a
position of trust and confidence, a situation which exists where such employee is entrusted by the employer
with confidence on delicate matters, such as care and protection, handling or custody of the employer’s
property. But, in order to constitute a just cause for dismissal, the act complained of must be “work-related”
such as would show the employee concerned to be unfit to continue working for the employer.

Recent decisions of this Court have distinguished the treatment of managerial employees from that of the rank-
and-file personnel, insofar as the application of the doctrine of loss of trust and confidence is concerned. Thus,
with respect to rank-and-file personnel, loss of trust and confidence, as ground for valid dismissal, requires proof
of involvement in the alleged events in question, and that mere uncorroborated assertions and accusations by
the employer will not be sufficient. But as regards a managerial employee, the mere existence of a basis for
believing that such employee has breached the trust of his employer would suffice for his dismissal. Hence, in
the case of managerial employees, proof beyond reasonable doubt is not required. It is sufficient that there is
some basis for the employer’s loss of trust and confidence, such as when the employer has reasonable ground
to believe that the employee concerned is responsible for the purported misconduct, and the nature of his
participation therein renders him unworthy of the trust and confidence demanded of his position. Nonetheless,
the evidence must be substantial and must establish clearly and convincingly the facts on which the loss of
confidence rests and not on the employer’s arbitrariness, whims, and caprices or suspicion.

In this case, Apostol and Opulencia were not ordinary rank and file employees; they were managerial and
supervisory employees. Apostol was TIPI’s assistant manager for warehouse and distribution, while Opulencia
was a warehouse supervisor. They were entrusted with the management and handling of the company’s
warehouse goods.

Thus, respondents were found by TIPI to have made unauthorized and unreported adjusting entries to the
stocklist without proper investigation and reconciliation with the Accounting Department, without prior
authorization by management, and without preparation of formal reports indicating the parties responsible for
the adjustments and those who approved the same. This, according to TIPI, is a clear violation of the company’s
internal control procedures, which resulted to the loss of the company’s trust and confidence in the
respondents.
Respondents do not deny making adjustment entries to the stocklist. In fact, both admitted making such
adjustments in the office memoranda and affidavits submitted as evidence in this case. The question, therefore,
is whether respondents Apostol and Opulencia, in making such adjustments, violated TIPI internal control
procedures.

After a careful evaluation of the evidence on record, we are convinced that the respondents made unauthorized
adjustments in TIPI’s stocklist, in violation of the company’s internal control procedures. This act warrants
respondents’ dismissal for willful breach of employer’s trust.

Considering the foregoing, we find that respondents Apostol and Opulencia were dismissed by TIPI for a valid
and just cause. The relationship of employer and employee, especially where the employee has access to the
employer’s property, necessarily involves trust and confidence. Where the rules laid down by the employer to
protect its property are violated by the very employee who is entrusted and expected to follow and implement
the rules, the employee may be validly dismissed from service.

Finding the dismissal of respondents Apostol and Opulencia, based on willful breach of employer’s trust, valid,
we deem it unnecessary to further rule on TIPI’s other ground for Apostol’s dismissal, i.e., uttering indecent,
abusive and derogatory words against his supervisor. Note, however, that such act of an employee, if
substantially proven, may be considered as serious misconduct which would warrant the termination of his
employment.
5.b. . Martinez v. B&B Fish Broker, G.R. No. 179985, September 18, 2009

Facts:

Odilon L. Martinez (petitioner) was employed as a cashier by B&B Fish Broker, a partnership owned and
managed by respondent Norberto M. Lucinario (Lucinario) and Jose Suico. Lucinario called petitioner’s attention
to his alleged shortages in his cash collections and ordered him to, as he did, take a leave the following day.
When petitioner reported back for work, he was relieved of his position and reassigned as company custodian.

As cashier, petitioner’s duties consisted of issuing receipts on items taken and bought and balancing of the cash
on hand and receipts issued at the close of the business day.

After a few days, petitioner filed an application for a four-day leave effective on even date due to an inflamed
jaw. His application, addressed to Lucinario, was received by a co-employee, Arielle Penaranda.

Subsequently, petitioner discovered that his name had been removed from the company logbook and was
prevented from logging in. And he was informed that his application for a four-day leave of absence had been
denied. The following day petitioner, having understood that the removal of his name from the logbook
amounted to the termination of his employment, tried to confer with Lucinario but to no avail, hence, filed a
complaint against B&B Fish Broker and/or Lucinario, for illegal dismissal, underpayment and non-payment of
wages with prayer for reinstatement, before the Arbitration Branch of the National Labor Relations Commission.

Denying petitioner’s charge that his services were illegally terminated, Lucinario claimed, in effect, that
petitioner abandoned his job.

Issue:

Whether or not Petitioner was illegally dismissed?

Ruling:

The petition is impressed with merit.

While Lucinario contends that petitioner abandoned his job, the bulk of his (Lucinario’s) evidence relates to
petitioner’s incurring of shortages in his collections to justify the transfer of petitioner’s assignment from cashier
to company custodian and his alleged previous suspension. Parenthetically, documentary evidence relating
thereto, which could lend light on petitioner’s performance, was not presented.

On to Lucinario’s claim that petitioner abandoned his employment:

It is axiomatic that in a petition for review on certiorari, only questions of law may be raised. The rule admits of
certain exceptions, however, one of which is when there is variance on the appreciation of facts of the case. In
the present case, the Labor Arbiter ruled that there is no illegal dismissal, yet she ordered petitioner’s
reinstatement. The NLRC found otherwise – that petitioner was illegally dismissed. On appeal, the appellate
court reversed the findings of the NLRC. This constrains the Court to reassess the evidence of the parties.

Abandonment is a form of neglect of duty, one of the just causes for an employer to terminate an employee. It is
a hornbook precept that in illegal dismissal cases, the employer bears the burden of proof. For a valid
termination of employment on the ground of abandonment, Lucinario must prove, by substantial evidence, the
concurrence of petitioner’s failure to report for work for no valid reason and his categorical intention to
discontinue employment.
Lucinario, however, failed to establish any overt act on the part of petitioner to show his intention to abandon
employment. As reflected above, petitioner, after being informed of his alleged shortages in collections and
despite his relegation to that of company custodian, still reported for work. He later applied for a 4-day leave of
absence. On his return, he discovered that his name was erased from the logbook, was refused entry into the
company premises, and learned that his application for a 4-day leave was not approved. He thereupon exerted
efforts to communicate with Lucinario on the status of his employment, but to no avail. To the Court, these
circumstances do not indicate abandonment.

Finally, that petitioner immediately filed the illegal dismissal complaint with prayer for reinstatement should
dissipate any doubts that he wanted to return to work.

What thus surfaces is that petitioner was constructively dismissed. No actual dismissal might have occurred in
the sense that petitioner was not served with a notice of termination, but there was constructive dismissal,
petitioner having been placed in a position where continued employment was rendered impossible and
unreasonable by the circumstances indicated above.
6.
6. Constructive Dismissal/payroll reinstatement

6.a. Ang v. San Joaquin G.R. No. 185549

"The employer's act of tearing to pieces the employee's time card may be considered an outright - not
only symbolic - termination of the parties' employment relationship."

FACTS:

San Joaquin and Fernandez (respondents) were employed by Vicente Ang (petitioner) in his business
as helper and driver respectively.  In a hearing relative to 41 criminal cases filed by his former employee, the
respondents testified against the petitioner.  After that, the latter began to treat them with hostility
andantagonism.

One day, a heated argument between San Joaquin and Ang's wife Rosa took place, in view of the former's
refusal to obey her her instruction to transfer the monobloc chairs in her restaurant.   Upon reporting for
work two days later, he found out that his DTR was torn into pieces by Ang.   He learned that the DTR of
Fernandez also suffered the same fate after they testified in Court.

Fernandez was suspended for a week for insubordination but the act of insubordination was not specified by
Ang in his memorandum to the latter.

Respondents filed complaints for illegal constructive dismissal.

ISSUE:

Whether tearing of DTRs of the employees by the employerconstitutes constructive dismissal.

HELD:

“Constructive dismissal exists where there is  cessationof work because continued employment is rendered
impossible, unreasonable or unlikely, as an offer involving a demotion in rank and a diminution in pay.” It is a
“dismissal in disguise or an act amounting to dismissal but made to appear as if it were not.”Constructive
dismissal may likewise exist if an “act of clear discrimination, insensibility, or disdain by an employer
becomes so unbearable on the part of the employee that it could foreclose any choice by him except to
forego his continued employment.” “Constructive dismissal exists when the employee involuntarily resigns
due to the harsh, hostile, and unfavorable conditions set by the employer.” “The test of constructive
dismissal is whether a reasonable person in the employee’s position would have felt compelled to give up his
position under the circumstances.”

"The CA is correct in its pronouncement that respondents were constructively dismissed from work.
Moreover, by destroying respondents’ time cards, Ang discontinued and severed his relationship with
respondents. The purpose of a time record is to show an employee’s attendance in office for work and to be
paid accordingly, taking intoaccount  the policy of “no work, no pay”. A daily time record is primarily
intended to prevent damage or loss to the employer, which could result in instances where it pays an
employee for no work done; it is a mandatory requirement for inclusion in the payroll, and in theabsence  of
an  employment  agreement,it constitutes evidence of employment. Thus, when Ang tore the respondents’
time cards to pieces, he virtually removed them from Virose’s payroll and erased all vestiges of respondents’
employment; respondents were effectively dismissed from work. The act may be considered an outright – not
only symbolic – termination of the parties’ employment relationship; the “last straw that finally broke the
camel’s back”, as respondents put it in their Position Paper."

6.b.
7.a. . Artificio vs. NLRC, G.R. No. 172988, July 26, 2010

Facts:

Petitioner Jose P. Artificio was employed as security guard by respondent RP Guardians Security Agency, Inc., a
corporation duly organized and existing under Philippine Laws and likewise duly licensed to engage in the
security agency business.

Sometime in June 2002, Artificio had a heated argument with a fellow security guard, Merlino B. Edu (Edu). On
25 July 2002, Edu submitted a confidential report 5 to Antonio A. Andres (Andres), Administration & Operations
Manager, requesting that Artificio be investigated for maliciously machinating Edu's hasty relief from his post
and for leaving his post during night shift duty to see his girlfriend at a nearby beerhouse.

On 29 July 2002, another security guard, Gutierrez Err (Err), sent a report 6 to Andres stating that Artificio
arrived at the office of RP Guardians Security Agency, Inc. on 25 June 2002, under the influence of liquor. When
Artificio learned that no salaries would be given that day, he bad-mouthed the employees of RP Guardians
Security Agency, Inc. and threatened to "arson" their office.

On even date, Andres issued a Memorandum temporarily relieving Artificio from his post and placing him under
preventive suspension pending investigation for conduct unbecoming a security guard, such as, abandonment of
post during night shift duty, light threats and irregularities in the observance of proper relieving time. He also
directed Artificio to report to the office of RP Guardians Security Agency, Inc. and submit his written answer
immediately upon receipt of the memorandum.

In another memorandum, Andres informed Artificio that a hearing will be held on 12 August 2002.

Without waiting for the hearing to be held, Artificio filed on 5 August 2002, a complaint for illegal dismissal,
illegal suspension, non-payment of overtime pay, holiday pay, premium pay for holiday and rest days, 13th
month pay, and damages. He also prayed for payment of separation pay in lieu of reinstatement. 10
Labor Arbiter rendered a decision dated 6 October 2003, finding respondents guilty of illegal suspension and
dismissal. It was also held that Artificio should have been allowed to confront Edu and Err before he was
preventively suspended. Since the complainant does not seek reinstatement, he is entitled to limited backwages
and separation pay.

On appeal, the NLRC, set aside the decision of the Labor Arbiter ruling that the Labor Arbiter erred in considering
preventive suspension as a penalty. The motion for reconsideration filed by Artificio was denied for lack of merit
Artificio next filed a petition for certiorari before the Court of Appeals which rendered a decision affirming the
NLRC decision. Artificio filed a motion for reconsideration which the Court of Appeals again denied.

Issues:
1. Wether or not Petitioner Artificio's preventive suspension was justified
2. Whether or not, he is entitled to backwages and separation pay

Ruling:

1. Yes. Sections 8 and 9 of Rule XXIII, Implementing Book V of the Omnibus Rules Implementing the Labor Code
provides that preventive suspension is justified where the employee's continued employment poses a serious
and imminent threat to the life or property of the employer or of the employee's co-workers. Without this kind
of threat, preventive suspension is not proper.
In this case, Artificio's preventive suspension was justified since he was employed as a security guard tasked
precisely to safeguard respondents' client. His continued presence in respondents' or its client's premises poses
a serious threat to respondents, its employees and client in light of the serious allegation of conduct
unbecoming a security guard such as abandonment of post during night shift duty, light threats and irregularities
in the observance of proper relieving time.

Besides, Management has the prerogative to discipline its employees and to impose appropriate penalties on
erring workers pursuant to company rules and regulations.
This Court has upheld a company's management prerogatives so long as they are exercised in good faith for the
advancement of the employer's interest and not for the purpose of defeating or circumventing the rights of the
employees under special laws or under valid agreements. 20
Significantly, Artificio regrettably chose not to present his side at the administrative hearing scheduled to look
into the factual issues that accompanied the accusation against him. In fact, he avoided the investigation into
the charges by filing his illegal dismissal complaint ahead of the scheduled investigation. He, on his own decided
that his preventive suspension was in fact illegal dismissal and that he is entitled to backwages and separation
pay. Indeed, Artificio would even reject reinstatement revealing his bent to have his own way through his own
means. As aptly noted by the NLRC, Artificio preempted the investigation that could have afforded him the due
process of which he would then say he was denied.

2. Yes for Backwages. No for separation pay.

That resolved, we next proceed to the benefits due Artificio.

Having determined that the imposition on Artificio of preventive suspension was proper and that such
suspension did not amount to illegal dismissal, we see no basis for the grant of backwages.

Nonetheless, given the attendant circumstances in this case, namely, that Artificio had been working with the
company for a period of sixteen (16) years and without any previous derogatory record, the ends of social and
compassionate justice would be served if Artificio be given some equitable relief in the form of separation pay.
22
Artificio is entitled to separation pay considering that while reinstatement is an option, Artificio himself has
never, at anytime after the notice of preventive suspension intended to remain in the employ of private
respondents.
7.b . Garcia v. Molina, G.R. No. 157383, August 18, 2010

Facts:

Respondents Molina and Velasco, both Attorney V of the GSIS, received two separate Memoranda from
petitioner charging them with grave misconduct. Specifically, Molina was charged for allegedly committing the
following acts: 1) directly and continuously helping some alleged disgruntled employees to conduct concerted
protest actions and/or illegal assemblies against the management and the GSIS President and General Manager;
2) leading the concerted protest activities held in the morning of May 22, 2002 during office hours within the
GSIS compound; and 3) continuously performing said activities despite warning from his immediate superiors. In
addition to the charge for grave misconduct for performing the same acts as Molina, Velasco was accused of
performing acts in violation of the Rules on Office Decorum for leaving his office without informing his
supervisor of his whereabouts; and gross insubordination for persistently disregarding petitioner’s instructions
that Velasco should report to the petitioner’s office. These acts, according to petitioner, were committed in open
betrayal of the confidential nature of their positions and in outright defiance of the Rules and Regulations on
Public Sector Unionism.

Considering the gravity of the charges against them, petitioner ordered the preventive suspension of
respondents for ninety (90) days without pay, effective immediately. The following day, a committee was
constituted to investigate the charges against respondents. Respondents filed with the Civil Service Commission
(CSC) an Urgent Petition to Lift Preventive Suspension Order. They contended that the acts they allegedly
committed were arbitrarily characterized as grave misconduct. Consistent with their stand that petitioner could
not act as the complainant, prosecutor and judge at the same time, respondents filed with the CSC a Petition to
Transfer Investigation to This Commission. Despite their urgent motions, the CSC failed to resolve respondents’
motions to lift preventive suspension order and to transfer the case from the GSIS to the CSC. Respondents filed
with the CA a special civil action for certiotari and prohibition with prayer for Temporary Restraining Order
(TRO). Respondents sought the annulment and setting aside of petitioner’s order directing the former to submit
to the jurisdiction of the committee created to hear and investigate the administrative case filed against them.
The CA rendered a decision in favor of respondents: “Public respondents are hereby PERPETUALLY RESTRAINED
from hearing and investigating the administrative case against petitioners, without prejudice to pursuing the
same with the Civil Service Commission or any other agency of government as may be allowed for (sic) by law.”
Aggrieved, petitioner comes before the Court in this petition for review on certiorari under Rule 45 of the Rules
of Court.

In the meantime, the CSC resolved respondents’ Petition to Lift Order of Preventive Suspension and Petition to
Transfer Investigation to the Commission. As to the lifting of the order of preventive suspension, the CSC
considered the issue moot and academic considering that the period had lapsed and respondents had been
allowed to resume their specific functions. This notwithstanding, the CSC opted to discuss the matter by way of
obiter dictum. Without making a definitive conclusion as to the effect thereof in the case against respondents,
the CSC declared that a preliminary investigation is a pre-requisite condition to the issuance of a formal charge.
Aggrieved, respondents appealed to the CA through a Petition for Review under Rule 43 of the Rules of Court.
The CA rendered a Decision in favor of respondents. The CA declared null and void respondents’ formal charges
for lack of the requisite preliminary investigation. In view thereof, the CA disagreed with the CSC that the
question on the propriety of the preventive suspension order had become moot and academic. Rather, it
concluded that the same is likewise void having emanated from the void formal charges. Consequently, the CA
found that respondents were entitled to back salaries during the time of their illegal preventive suspension.

Issue:

Whether the preventive suspension orders issued against respondents Molina and Velasco are valid, well-
founded and duly recognized by law.

Ruling:

The petitions are without merit. DENIED (G.R. No. 157383)/DISMISSED (G.R. No. 174137)
It is likewise undisputed that the formal charges were issued without preliminary or fact-finding investigation.
The filing by petitioner of formal charges against the respondents without complying with the mandated
preliminary investigation or at least give the respondents the opportunity to comment violated the latter's right
to due process. Hence, the formal charges are void ab initio and may be assailed directly or indirectly at anytime.
Although administrative procedural rules are less stringent and often applied more liberally, administrative
proceedings are not exempt from basic and fundamental procedural principles, such as the right to due process
in investigations and hearings.37 In particular, due process in administrative proceedings has been recognized to
include the following: (1) the right to actual or constructive notice to the institution of proceedings which may
affect a respondent's legal rights; (2) a real opportunity to be heard personally or with the assistance of counsel,
to present witnesses and evidence in one's favor, and to defend one's rights; (3) a tribunal vested with
competent jurisdiction and so constituted as to afford a person charged administratively a reasonable guarantee
of honesty as well as impartiality; and (4) a finding by said tribunal which is supported by substantial evidence
submitted for consideration during the hearing or contained in the records or made known to the parties
affected.38

In the procedure adopted by petitioner, respondents were preventively suspended in the same formal charges
issued by the former without the latter knowing that there were pending administrative cases against them. It is
true that prior notice and hearing are not required in the issuance of a preventive suspension order.41 However,
considering that respondents were preventively suspended in the same formal charges that we now declare null
and void, then their preventive suspension is likewise null and void.

Lastly, the CA committed no reversible error in ordering the payment of back salaries during the period of
respondents’ preventive suspension. As the administrative proceedings involved in this case are void, no
delinquency or misconduct may be imputed to respondents and the preventive suspension meted them is
baseless. Consequently, respondents should be awarded their salaries during the period of their unjustified
suspension.42 In granting their back salaries, we are simply repairing the damage that was unduly caused
respondents, and unless we can turn back the hands of time, we can do so only by restoring to them that which
is physically feasible to do under the circumstances.43 The principle of "no work, no pay" does not apply where
the employee himself was unlawfully forced out of job
8.a. Cercado v. Uniprom Inc., G.R. No. 188154, October 13, 2010

Facts:

Petitioner Lourdes A. Cercado (Cercado) started working for respondent UNIPROM on December 15, 1978 as a
ticket seller assigned at Fiesta Carnival, Araneta Center, Quezon City. Later on, she was promoted as cashier and
then as clerk typist. UNIPROM instituted an Employees’ Non-Contributory Retirement Plan which provides that
any participant with twenty (20) years of service, regardless of age, may be retired at his option or at the option
of the company. It amended the retirement plan in compliance with Republic Act (R.A.) No. 7641. Under the
revised retirement plan, UNIPROM reserved the option to retire employees who were qualified to retire under
the program.

UNIPROM implemented a company-wide early retirement program for its 41 employees, including herein
petitioner, who, at that time, was 47 years old, with 22 years of continuous service to the company. She was
offered an early retirement package amounting to P171,982.90, but she rejected the same. UNIPROM exercised
its option under the retirement plan, and decided to retire Cercado effective at the end of business hours on
February 15, 2001. A check of even date in the amount of P100,811.70, representing her retirement benefits
under the regular retirement package, was issued to her. Cercado refused to accept the check. UNIPROM
nonetheless pursued its decision and Cercado was no longer given any work assignment after February 15, 2001.
This prompted Cercado to file a complaint for illegal dismissal before the Labor Arbiter (LA), alleging, among
others, that UNIPROM did not have a bona fide retirement plan, and that even if there was, she did not consent
thereto.

The National Labor Relations Commission (NLRC) affirmed the LA’s decision that Cercado was illegally dismissed.
However, the CA set aside the decisions of the LA and the NLRC. Hence, this petition.

Issue:S:

Whether UNIPROM has a bona fide retirement plan

Whether petitioner was validly retired pursuant thereto

Ruling:

The assailed retirement plan of UNIPROM is not embodied in a CBA or in any employment contract or
agreement assented to by petitioner and her co-employees. On the contrary, UNIPROM’s Employees’ Non-
Contributory Retirement Plan was unilaterally and compulsorily imposed on them. This is evident in the
following provisions of the 1980 retirement plan and its amended version in 2000:
ARTICLE III
ELIGIBILITY FOR PARTICIPATION
Section 1. Any regular employee, as of the Effective Date, shall automatically become a Participant in the Plan,
provided the Employee was hired below age 60.

Verily, petitioner was forced to participate in the plan, and the only way she could have rejected the same was
to resign or lose her job. The assailed CA Decision did not really make a finding that petitioner actually accepted
and consented to the plan. The law demands more than a passive acquiescence on the part of employees,
considering that an employer’s early retirement age option involves a concession of the former’s constitutional
right to security of tenure.

Retirement is the result of a bilateral act of the parties, a voluntary agreement between the employer and the
employee whereby the latter, after reaching a certain age, agrees to sever his or her employment with the
former.
Acceptance by the employees of an early retirement age option must be explicit, voluntary, free, and
uncompelled. While an employer may unilaterally retire an employee earlier than the legally permissible ages
under the Labor Code, this prerogative must be exercised pursuant to a mutually instituted early retirement
plan. In other words, only the implementation and execution of the option may be unilateral, but not the
adoption and institution of the retirement plan containing such option. For the option to be valid, the retirement
plan containing it must be voluntarily assented to by the employees or at least by a majority of them through a
bargaining representative.

Hence, consistent with the Court’s ruling in Jaculbe case, having terminated petitioner merely on the basis of a
provision in the retirement plan which was not freely assented to by her, UNIPROM is guilty of illegal dismissal.
8. b. . Korean Air Co. Ltd. v. Yuson, G.R. No. 170369, June 16, 2010

Facts:

Korean Air hired Yuson as reservations agent. Korean Air promoted Yuson to assistant manager in 1993, and to
passenger sales manager in 1999.

In April 2001, Yuson requested Korean Air that she be transferred from the passenger sales department to the
cargo department, and so Korean Air temporarily transferred Yuson to the cargo department as "cargo
dispatch." Yuson continued to receive the same compensation and exercise the same authority as passenger
sales manager.

In order to cut costs, Korean Air offered its employees an early retirement program (ERP). Yuson accepted the
offer for early retirement.

Suk (manager) informed Yuson that she was excluded from the ERP because she was retiring on 8 January 2002.
Yuson claimed that Korean Air was bound by the perfected contract and accused the company of harassment
and discrimination.

On 28 November 2001, Yuson filed with the arbitration branch of the NLRC a complaint against Korean Air and
Suk for payment of benefit under the ERP, moral damages, exemplary damages, and attorney's fees.

LA denied for lack of merit Yuson's claims and held that the ERP memorandum included only rank-and-file, and
excluded managerial, employees and such memo was reserved to Korean Air discretion in approving
applications for the ERP and that approval of applications for the ERP was a valid exercise of Korean Air's
management prerogative.

A compromise agreement was entered into between Korean Air and Yuson, on 14 February 2003, whereby the
agreement included among others the payment of P1,671,546.92, representing her retirement benefit pursuant
to Article 287 of the Labor Code, as amended.
NLRC affirmed LA decision, however CA set aside the decision.

Issue:

WON Yuson may still claim benefit under the ERP.

Ruling: No, Yuson may no longer claim the benefit under the ERP.

Third paragraph of Article 287 states that:

In the absence of a retirement plan or agreement providing for retirement benefits of employees in the
establishment, an employee upon reaching the age of sixty (60) years or more, but not beyond sixty-five (65)
years which is hereby declared the compulsory retirement age, who has served at least five (5) years in the said
establishment, may retire and shall be entitled to retirement pay equivalent to at least one-half (1/2) month
salary for every year of service, a fraction of at least six (6) months being considered as one whole year.

On 14 February 2003, Yuson accepted P1,671,546.92 as retirement benefit under Article 287. Her claim for
benefit under the ERP became moot when she availed of the optional retirement under Article 287 and
accepted the benefit. By her acceptance of the benefit, Yuson is deemed to have opted to retire under Article
287.

The Court of Appeals held that Yuson may claim benefit under the ERP because "the offer was certain and the
acceptance is absolute; hence, there is a valid contract pursuant to the last paragraph of Article 1315 of the New
Civil Code."
The Court disagrees.

In the present case, the offer is not certain: (1) the 21 August 2001 memorandum clearly states that, "MNLSM
Management, on its discretion, is hereby offering the said early retirement program to its staff"; (2) applications
for the ERP were forwarded to the head office for approval, and further acts on the offeror's part were
necessary before the contract could come into existence; and (3) the 21 August 2001 memorandum clearly
states Korean Air's intention, which was, "to prevent further losses." Korean Air could not have intended to
ministerially approve all applications for the ERP.
 1. Transfer of employees
9.a. Manila Pavilion Hotel vs. Delada, G.R. No. 189947, January 25, 2012

Facts:

Delada was the Union President of the Manila Pavilion Supervisors Association at MPH. He was originally
assigned as Head Waiter of Rotisserie, a fine-dining restaurant operated by petitioner. Pursuant to a supervisory
personnel reorganization program, MPH reassigned him as Head Waiter of Seasons Coffee Shop, another
restaurant operated by petitioner at the same hotel. Respondent declined the inter-outlet transfer and instead
asked for a grievance meeting on the matter, pursuant to their Collective Bargaining Agreement (CBA). He also
requested his retention as Head Waiter of Rotisserie while the grievance procedure was ongoing.

MPH replied and told respondent to report to his new assignment for the time being, without prejudice to the
resolution of the grievance involving the transfer. He adamantly refused to assume his new post at the Seasons
Coffee Shop and instead continued to report to his previous assignment at Rotisserie. Thus, MPH sent him
several memoranda on various dates, requiring him to explain in writing why he should not be penalized for the
following offenses: serious misconduct; willful disobedience of the lawful orders of the employer; gross
insubordination; gross and habitual neglect of duties; and willful breach of trust. Despite the notices from MPH,
Delada persistently rebuffed orders for him to report to his new assignment. According to him, since the
grievance machinery under their CBA had already been initiated, his transfer must be held in abeyance. Thus, on
9 May 2007, MPH initiated administrative proceedings against him.

Issue:

Whether MPH retained the authority to continue with the administrative case against Delada for insubordination
and willful disobedience of the transfer order.

Rulings:

Accordingly, we rule in this case that MPH did not lose its authority to discipline respondent for his continued
refusal to report to his new assignment. In relation to this point, we recall our Decision in Allied Banking
Corporation v. Court of Appeals.

In Allied Banking Corporation, employer Allied Bank reassigned respondent Galanida from its Cebu City branch to
its Bacolod and Tagbilaran branches. He refused to follow the transfer order and instead filed a Complaint before
the Labor Arbiter for constructive dismissal. While the case was pending, Allied Bank insisted that he report to
his new assignment. When he continued to refuse, it directed him to explain in writing why no disciplinary action
should be meted out to him. Due to his continued refusal to report to his new assignment, Allied Bank eventually
terminated his services. When the issue of whether he could validly refuse to obey the transfer orders was
brought before this Court, we ruled thus:

The refusal to obey a valid transfer order constitutes willful disobedience of a lawful order of an employer.
Employees may object to, negotiate and seek redress against employers for rules or orders that they regard as
unjust or illegal. However, until and unless these rules or orders are declared illegal or improper by competent
authority, the employees ignore or disobey them at their peril. For Galanida’s continued refusal to obey Allied
Bank's transfer orders, we hold that the bank dismissed Galanida for just cause in accordance with Article 282(a)
of the Labor Code. Galanida is thus not entitled to reinstatement or to separation pay. (Emphasis supplied,
citations omitted).

It is important to note what the PVA said on Delada’s defiance of the transfer order:

In fact, Delada cannot hide under the legal cloak of the grievance machinery of the CBA or the voluntary
arbitration proceedings to disobey a valid order of transfer from the management of the hotel. While it is true
that Delada’s transfer to Seasons is the subject of the grievance machinery in accordance with the provisions of
their CBA, Delada is expected to comply first with the said lawful directive while awaiting the results of the
decision in the grievance proceedings. This issue falls squarely in the case of Allied Banking Corporation vs. Court
of Appeals x x x.
Pursuant to Allied Banking, unless the order of MPH is rendered invalid, there is a presumption of the validity of
that order. Since the PVA eventually ruled that the transfer order was a valid exercise of management
prerogative, we hereby reverse the Decision and the Resolution of the CA affirming the Decision of the PVA in
this respect. MPH had the authority to continue with the administrative proceedings for insubordination and
willful disobedience against Delada and to impose on him the penalty of suspension. As a consequence,
petitioner is not liable to pay back wages and other benefits for the period corresponding to the penalty of 90-
day suspension.

9.b.
 2. SSS Law

10.a. Atok Big Wedge Company vs. Gison, G.R. No. 169510, August 8, 2011

Facts:

The respondent in this case, Jesus P. Gison, was engaged as part-time consultant of the petitioner, Atok Big
Wedge Company thorugh its then Asst. VP and Acting Resident Manager, Rutillo A. Torres. As a consultant on
retainer basis, the former assisted the petitioner’s retained legal counsel with matters pertaining to the
prosecution of cases against illegal surface occupants within the area covered by the company’s mineral claims.
He also tasked to perform liason work with government agencies which he said his expertise. Respondent is not
required to report to its office on a regular basis, except when occassionally requested by the management to
discuss the matters which needs of his expertise as a consultant. He is paid a retainer fee of 3,000Php a month
and delivered to him either in his residence or in a local restaurant. They have also executed a retainer
agreement however was misplaced and can no longer be found. This kind of arrangement continued on for the
next 11 years. Since respondent was getting old, he requested petitioner to cause his registration with the Social
Security System but petitioner did not accede to his request considering the former only a retainer/consultant.

Respondent herein, filed a complaint with SSS against petitioner’s refusal to cause his registration with the SSS.
The Resident Manager of the petitioner issued then a Memorandum advising respondent that within 30 days
from receipt thereof, petitioner’s services as a retainer/consultant will be terminated since his services are no
longer necessary. As a result, respondent filed a complaint for illegal dismissal, unfair labor practice,
underpayment of wages, non-payment of 13th Month pay, vacation pay and sick leave with the NLRC, Regional
Arbitration Branch and Cordillera Administrative Region against the petitioner.

The Labor Arbiter rendered a decision in favor of the petitioner ruling that there is no employer-employee
relationship and dismissed the complaint for lack of merit. An appeal was made before the NLRC but same was
dismissed and affirmed the decision of the Labor Arbiter. A petition for review was filed under Rule 65 before the
Court of Appeals. The Court of Appeals annuled and has set aside the decision of NLRC. The CA opined that, both
the Labor Arbiter and NLRC overlooked Article 280 of the Labor Code, which distinguishes between the two
kinds of employees, i.e., regular and casual employees. The respondent is deemed a regular employee of the
petitioner after the lapse of one year from his employment. Considering also that the respondent had been
performing services for the petitioner for the last 11 years entitling him to the rights and privileges of a regular
employee. The CA added that although there was an agreement between the parties that the employment of
the respondent will be only temporary, it clearly disregarded the same by repeatedly giving petitioner several
tasks to perform. Moreover, although the respondent may have waived his right to attain a regular status when
he agreed to perform these tasks on a temporary employment status, still it was the law that recognized and
considered him a regular employee after his first year of rendering service to petitioner. As such, the waiver is
ineffective.

Petitioner herein posits that CA erred in applying Article 280 of the Labor Code in determining whether there
exists an employer-employee relationship. Petitioner contends that where the existence of an employer-
employee relationship is in dispute, Article 280 of the Labor Code is inapplicable. The said article only set the
distinction between a casual employee from a regular employee for purposes of determining the rights of an
employee to be entitled to certain benefits.

Issue:
Whether or not CA erred in applying Article 280?

Ruling:
Well-entrenched is the doctrine that the existence of an employer-employee relationship is ultimately a question
of fact and that the findings thereon by the Labor Arbiter and the NLRC shall be accorded not only respect but
even finality when supported by substantial evidence. Being a question of fact, the determination whether such
a relationship exists between petitioner and respondent was well within the province of the Labor Arbiter and
the NLRC. Being supported by substantial evidence, such determination should have been accorded great weight
by the CA in resolving the issue. To ascertain the existence of an employer-employee relationship jurisprudence
has invariably adhered to the four-fold test, to wit: (1) the selection and engagement of the employee; (2) the
payment of wages; (3) the power of dismissal; and (4) the power to control the employee's conduct, or the so-
called "control test." The so-called "control test" is commonly regarded as the most crucial and determinative
indicator of the presence or absence of an employer-employee relationship

Applying the aforementioned test, an employer-employee relationship is apparently absent in the case at bar.
Among other things, respondent was not required to report everyday during regular office hours of petitioner.
Respondent's monthly retainer fees were paid to him either at his residence or a local restaurant. More
importantly, petitioner did not prescribe the manner in which respondent would accomplish any of the tasks in
which his expertise as a liaison officer was needed; respondent was left alone and given the freedom to
accomplish the tasks using his own means and method. Respondent was assigned tasks to perform, but
petitioner did not control the manner and methods by which respondent performed these tasks. Verily, the
absence of the element of control on the part of the petitioner engenders a conclusion that he is not an
employee of the petitioner. Moreover, the absence of the parties' retainership agreement notwithstanding,
respondent clearly admitted that petitioner hired him in a limited capacity only and that there will be no
employer-employee relationship between them.

Respondent was well aware of the agreement that he was hired merely as a liaison or consultant of the
petitioner and he agreed to perform tasks for the petitioner on a temporary employment status only. However,
respondent anchors his claim that he became a regular employee of the petitioner based on his contention that
the "temporary" aspect of his job and its "limited" nature could not have lasted for eleven years unless some
time during that period, he became a regular employee of the petitioner by continually performing services for
the company.

Respondent is not an employee, much more a regular employee of petitioner. The appellate court's premise that
regular employees are those who perform activities which are desirable and necessary for the business of the
employer is not determinative in this case. In fact, any agreement may provide that one party shall render
services for and in behalf of another, no matter how necessary for the latter's business, even without being hired
as an employee. Hence,respondent's length of service and petitioner's repeated act of assigning respondent
some tasks to be performed did not result to respondent's entitlement to the rights and privileges of a regular
employee.
Furthermore, despite the fact that petitioner made use of the services of respondent for eleven years, he still
cannot be considered as a regular employee of petitioner. Article 280 of the Labor Code, in which the lower court
used to buttress its findings that respondent became a regular employee of the petitioner, is not applicable in
the case at bar. Indeed, the Court has ruled that said provision is not the yardstick for determining the existence
of an employment relationship because it merely distinguishes between two kinds of employees, i.e., regular
employees and casual employees, for purposes of determining the right of an employee to certain benefits, to
join or form a union, or to security of tenure; it does not apply where the existence of an employment
relationship is in dispute.It is, therefore, erroneous on the part of the Court of Appeals to rely on Article 280 in
determining whether an employer-employee relationship exists between respondent and the petitioner.
Considering that there is no employer-employee relationship between the parties, the termination of
respondent's services by the petitioner after due notice did not constitute illegal dismissal warranting his
reinstatement and the payment of full backwages, allowances and other benefits.
10.b. Escasinas et al., vs. Shangri-las Mactan Island Resort et al., G.R. No. 178827, March 4, 2009

Facts:

Registered nurses Jeromie D. Escasinas and Evan Rigor Singco (petitioners) were engaged in 1999 and 1996,
respectively, by Dr. Jessica Joyce R. Pepito (respondent doctor) to work in her clinic at respondent Shangri-la’s
Mactan Island Resort (Shangri-la) in Cebu of which she was a retained physician. In late 2002, petitioners filed
with the National Labor Relations Commission (NLRC) Regional Arbitration Branch No. VII (NLRC-RAB No. VII) a
complaint for regularization, underpayment of wages, non-payment of holiday pay, night shift differential and
13th month pay differential against respondents, claiming that they are regular employees of Shangri-la. Shangri-
la claimed, however, that petitioners were not its employees but of respondent doctor whom it retained via
Memorandum of Agreement (MOA) pursuant to Article 157 of the Labor Code, as amended. Respondent doctor
for her part claimed that petitioners were already working for the previous retained physicians of Shangri-la
before she was retained by Shangri-la; and that she maintained petitioners’ services upon their request.

Issue:

Whether or not employer-employee relationship exists

Ruling:

The resolution of the case hinges, in the main, on the correct interpretation of Art. 157 vis a vis Art. 280 and the
provisions on permissible job contracting of the Labor Code, as amended. The Court holds that, contrary to
petitioners’ postulation, Art. 157 does not require the engagement of full-time nurses as regular employees of a
company employing not less than 50 workers. Thus, the Article provides:
ART. 157. Emergency medical and dental services. – It shall be the duty of every employer to furnish his
employees in any locality with free medical and dental attendance and facilities consisting of:
(b) The services of a full-time registered nurse, a part-time physician and dentist, and an emergency clinic, when
the number of employees exceeds two hundred (200) but not more than three hundred (300); and
Under the foregoing provision, Shangri-la, which employs more than 200 workers, is mandated to "furnish" its
employees with the services of a full-time registered nurse, a part-time physician and dentist, and an emergency
clinic which means that it should provide or make available such medical and allied services to its employees, not
necessarily to hire or employ a service provider. As held in Philippine Global Communications vs. De Vera:

x x x while it is true that the provision requires employers to engage the services of medical practitioners in
certain establishments depending on the number of their employees, nothing is there in the law which says that
medical practitioners so engaged be actually hired as employees, adding that the law, as written, only requires
the employer "to retain", not employ, a part-time physician who needed to stay in the premises of the non-
hazardous workplace for two (2) hours. The term "full-time" in Art. 157 cannot be construed as referring to the
type of employment of the person engaged to provide the services, for Article 157 must not be read alongside
Art. 280 in order to vest employer-employee relationship on the employer and the person so engaged. So De
Vera teaches:

x x x For, we take it that any agreement may provide that one party shall render services for and in behalf of
another, no matter how necessary for the latter’s business, even without being hired as an employee. This set-up
is precisely true in the case of an independent contractorship as well as in an agency agreement. Indeed, Article
280 of the Labor Code, quoted by the appellate court, is not the yardstick for determining the existence of an
employment relationship. As it is, the provision merely distinguishes between two (2) kinds of employees, i.e.,
regular and casual. x x x The phrase "services of a full-time registered nurse" should thus be taken to refer to the
kind of services that the nurse will render in the company’s premises and to its employees, not the manner of his
engagement.

As to whether respondent doctor can be considered a legitimate independent contractor, the pertinent sections
of DOLE Department Order No. 10, series of 1997, illuminate:
Sec. 8. Job contracting. – There is job contracting permissible under the Code if the following conditions are met:
(1) The contractor carries on an independent business and undertakes the contract work on his own account
under his own responsibility according to his own manner and method, free from the control and direction of his
employer or principal in all matters connected with the performance of the work except as to the results thereof;
and
(2) The contractor has substantial capital or investment in the form of tools, equipment, machineries, work
premises, and other materials which are necessary in the conduct of his business.
Sec. 9. Labor-only contracting. – (a) Any person who undertakes to supply workers to an employer shall be
deemed to be engaged in labor-only contracting where such person:
(1) Does not have substantial capital or investment in the form of tools, equipment, machineries, work premises
and other materials; and
(2) The workers recruited and placed by such persons are performing activities which are directly related to the
principal business or operations of the employer in which workers are habitually employed.
(b) Labor-only contracting as defined herein is hereby prohibited and the person acting as contractor shall be
considered merely as an agent or intermediary of the employer who shall be responsible to the workers in the
same manner and extent as if the latter were directly employed by him…

The existence of an independent and permissible contractor relationship is generally established by

considering the following determinants: whether the contractor is carrying on an independent business;
the nature and extent of the work; the skill required; the term and duration of the relationship; the right
to assign the performance of a specified piece of work; the control and supervision of the work to
another; the employer's power with respect to the hiring, firing and payment of the contractor's
workers; the control of the premises; the duty to supply the premises, tools, appliances, materials and
labor; and the mode, manner and terms of payment. On the other hand, existence of an employer-
employee relationship is established by the presence of the following determinants: (1) the selection
and engagement of the workers; (2) power of dismissal; (3) the payment of wages by whatever means;
and (4) the power to control the worker's conduct, with the latter assuming primacy in the overall
consideration. Against the above-listed determinants, the Court holds that respondent doctor is a
legitimate independent contractor. That Shangri-la provides the clinic premises and medical supplies for
use of its employees and guests do not necessarily prove that respondent doctor lacks substantial
capital and investment. Besides, the maintenance of a clinic and provision of medical services to its
employees is required under Art. 157, which are not directly related to Shangri-la’s principal business –
operation of hotels and restaurants. As to payment of wages, respondent doctor is the one who
underwrites the following: salaries, SSS contributions and other benefits of the staff; group life, group
personal accident insurance and life/death insurance for the staff with minimum benefit payable at 12
times the employee’s last drawn salary, as well as value added taxes and withholding taxes, sourced
from her P60,000.00 monthly retainer fee and 70% share of the service charges from Shangri-la’s guests
who avail of the clinic services. It is unlikely that respondent doctor would report petitioners as workers,
pay their SSS premium as well as their wages if they were not indeed her employees. With respect to the
supervision and control of the nurses and clinic staff, it is not disputed that a document, "Clinic Policies
and Employee Manual" claimed to have been prepared by respondent doctor exists, to which
petitioners gave their conformity and in which they acknowledged their co-terminus employment
status. It is thus presumed that said document, and not the employee manual being followed by
Shangri-la’s regular workers, governs how they perform their respective tasks and responsibilities.
Contrary to petitioners’ contention, the various office directives issued by Shangri-la’s officers do not
imply that it is Shangri-la’s management and not respondent doctor who exercises control over them or
that Shangri-la has control over how the doctor and the nurses perform their work. The letter addressed
to respondent doctor dated February 7, 2003 from a certain Tata L. Reyes giving instructions regarding
the replenishment of emergency kits is, at most, administrative in nature, related as it is to safety
matters; while the letter dated May 17, 2004 from Shangri-la’s Assistant Financial Controller, Lotlot
Dagat, forbidding the clinic from receiving cash payments from the resort’s guests is a matter of financial
policy in order to ensure proper sharing of the proceeds, considering that Shangri-la and respondent
doctor share in the guests’ payments for medical services rendered. In fine, as Shangri-la does not
control how the work should be performed by petitioners, it is not petitioners’ employer.
 3. GSIS Law

11.a. Garcia v. Molina, G.R. No. 157383, August 18, 2010

Facts:

Respondents Molina and Velasco, both Attorney V of the GSIS, received two separate Memoranda from petitioner charging them with
grave misconduct. Specifically, Molina was charged for allegedly committing the following acts: 1) directly and continuously helping some
alleged disgruntled employees to conduct concerted protest actions and/or illegal assemblies against the management and the GSIS
President and General Manager; 2) leading the concerted protest activities held in the morning of May 22, 2002 during office hours within
the GSIS compound; and 3) continuously performing said activities despite warning from his immediate superiors. In addition to the charge
for grave misconduct for performing the same acts as Molina, Velasco was accused of performing acts in violation of the Rules on Office
Decorum for leaving his office without informing his supervisor of his whereabouts; and gross insubordination for persistently disregarding
petitioner’s instructions that Velasco should report to the petitioner’s office. These acts, according to petitioner, were committed in open
betrayal of the confidential nature of their positions and in outright defiance of the Rules and Regulations on Public Sector Unionism.

Considering the gravity of the charges against them, petitioner ordered the preventive suspension of respondents for ninety (90) days
without pay, effective immediately. The following day, a committee was constituted to investigate the charges against respondents.
Respondents filed with the Civil Service Commission (CSC) an Urgent Petition to Lift Preventive Suspension Order.  They contended that
the acts they allegedly committed were arbitrarily characterized as grave misconduct. Consistent with their stand that petitioner could not
act as the complainant, prosecutor and judge at the same time, respondents filed with the CSC a Petition to Transfer Investigation to This
Commission. Despite their urgent motions, the CSC failed to resolve respondents’ motions to lift preventive suspension order and to
transfer the case from the GSIS to the CSC. Respondents filed with the CA a special civil action for certiotari and prohibition with prayer for
Temporary Restraining Order (TRO). Respondents sought the annulment and setting aside of petitioner’s order directing the former to
submit to the jurisdiction of the committee created to hear and investigate the administrative case filed against them. The CA rendered a
decision in favor of respondents: “Public respondents are hereby PERPETUALLY RESTRAINED from hearing and investigating the
administrative case against petitioners, without prejudice to pursuing the same with the Civil Service Commission or any other agency of
government as may be allowed for (sic) by law.” Aggrieved, petitioner comes before the Court in this petition for review on certiorari under
Rule 45 of the Rules of Court.

In the meantime, the CSC resolved respondents’ Petition to Lift Order of Preventive Suspension and Petition to Transfer Investigation to
the Commission. As to the lifting of the order of preventive suspension, the CSC considered the issue moot and academic considering that
the period had lapsed and respondents had been allowed to resume their specific functions. This notwithstanding, the CSC opted to
discuss the matter by way of obiter dictum. Without making a definitive conclusion as to the effect thereof in the case against respondents,
the CSC declared that a preliminary investigation is a pre-requisite condition to the issuance of a formal charge. Aggrieved, respondents
appealed to the CA through a Petition for Review under Rule 43 of the Rules of Court. The CA rendered a Decision in favor of
respondents. The CA declared null and void respondents’ formal charges for lack of the requisite preliminary investigation. In view thereof,
the CA disagreed with the CSC that the question on the propriety of the preventive suspension order had become moot and academic.
Rather, it concluded that the same is likewise void having emanated from the void formal charges. Consequently, the CA found that
respondents were entitled to back salaries during the time of their illegal preventive suspension.

Issue: Whether the preventive suspension orders issued against respondents Molina and Velasco are valid, well-founded and duly
recognized by law.

Ruling: The petitions are without merit. DENIED (G.R. No. 157383)/DISMISSED (G.R. No. 174137)

It is likewise undisputed that the formal charges were issued without preliminary or fact-finding investigation. The filing by petitioner of
formal charges against the respondents without complying with the mandated preliminary investigation or at least give the respondents the
opportunity to comment violated the latter's right to due process. Hence, the formal charges are void ab initio and may be assailed directly
or indirectly at anytime. Although administrative procedural rules are less stringent and often applied more liberally, administrative
proceedings are not exempt from basic and fundamental procedural principles, such as the right to due process in investigations and
hearings.37 In particular, due process in administrative proceedings has been recognized to include the following: (1) the right to actual or
constructive notice to the institution of proceedings which may affect a respondent's legal rights; (2) a real opportunity to be heard
personally or with the assistance of counsel, to present witnesses and evidence in one's favor, and to defend one's rights; (3) a tribunal
vested with competent jurisdiction and so constituted as to afford a person charged administratively a reasonable guarantee of honesty as
well as impartiality; and (4) a finding by said tribunal which is supported by substantial evidence submitted for consideration during the
hearing or contained in the records or made known to the parties affected. 38

In the procedure adopted by petitioner, respondents were preventively suspended in the same formal charges issued by the former without
the latter knowing that there were pending administrative cases against them. It is true that prior notice and hearing are not required in the
issuance of a preventive suspension order. 41 However, considering that respondents were preventively suspended in the same formal
charges that we now declare null and void, then their preventive suspension is likewise null and void.

Lastly, the CA committed no reversible error in ordering the payment of back salaries during the period of respondents’ preventive
suspension. As the administrative proceedings involved in this case are void, no delinquency or misconduct may be imputed to
respondents and the preventive suspension meted them is baseless. Consequently, respondents should be awarded their salaries during
the period of their unjustified suspension.42 In granting their back salaries, we are simply repairing the damage that was unduly caused
respondents, and unless we can turn back the hands of time, we can do so only by restoring to them that which is physically feasible to do
under the circumstances.43 The principle of "no work, no pay" does not apply where the employee himself was unlawfully forced out of job.
17. ULP – Employer

17.a. Culili v. Eastern Telecommunications Phils., G.R. No. 165381, February 9, 2011
Facts:

Nelson Culili was employed by Eastern Telecommunications a Senior Technician. In 1998, due to business losses, ETPI was compelled to
implement a Right-Sizing Program which consisted of two phases: the first phase involved the reduction of ETPI’s workforce to only those
employees that were necessary and which ETPI could sustain; the second phase entailed a company-wide reorganization which would
result in the transfer, merger, absorption or abolition of certain departments of ETPI. Among the departments abolished was the Service
Quality Department. As a result, Culili’s position was abolished due to redundancy. Upon filing a complaint, the Labor Arbiter rendered a
decision finding ETPI guilty of illegal dismissal and unfair labor practice, which was affirmed by the NLRC. However, the Court of Appeals
found that Culili’s position was validly abolished due to redundancy. It was highly unlikely that ETPI would effect a company-wide
reorganization simply for the purpose of getting rid of Culili. Also, ETPI cannot be held guilty of unfair labor practice as mere contracting out
of services being performed by union members does not per se amount to unfair labor practice unless it interferes with the employees’
right to self-organization.

Issue:

Whether or not there was an illegal dismissal.

Ruling: There was a valid dismissal on the ground of redundancy.

  
There is redundancy when the service capability of the workforce is greater than what is reasonably required to meet the demands of the
business enterprise. A position becomes redundant when it is rendered superfluous by any number of factors such as over-hiring of
workers, decrease in volume of business, or dropping a particular product line. Among the requisites of a valid redundancy program are:
(1) the good faith of the employer in abolishing the redundant position; and (2) fair and reasonable criteria in ascertaining what positions
are to be declared redundant such as but not limited to: preferred status, efficiency, and seniority.

The records show that ETPI had sufficiently established not only its need to reduce its workforce and streamline its organization, but also
the existence of redundancy in the position of a Senior Technician. It was decided that, in the judgment of ETPI management, the
specialized functions of a Senior Technician whose sole function was essentially the repair and servicing of ETPI’s telecommunications
equipment was no longer needed since the Business and Consumer [Accounts] Department had to remain economical and focused yet
versatile enough to meet all the multifarious needs of its small and medium sized clients. It is inconceivable that ETPI would effect a
company-wide reorganization of this scale for the mere purpose of singling out Culili and terminating him. What ETPI did was to abolish
the position itself for being too specialized and limited.

SC finds Culili’s dismissal was for a lawful cause and not an act of unfair labor practice, ETPI, however, was remiss in its duty to observe
procedural due process in effecting the termination of Culili. In Mayon Hotel & Restaurant v. Adana, SC observed that the requirement of
law mandating the giving of notices was intended:

not only to enable the employees to look for another employment and therefore ease the impact of the loss of their jobs and the
corresponding income,
but more importantly, to give the Department of Labor and Employment (DOLE) the opportunity to ascertain the verity of the alleged
authorized cause of termination.

With regard to the impleaded corporate officers, they cannot be held liable for acts done in his official capacity because a corporation, by
legal fiction, has a personality separate and distinct from its officers, stockholders, and members. To pierce this fictional veil, it must be
shown that the corporate personality was used to perpetuate fraud or an illegal act, or to evade an existing obligation, or to confuse a
legitimate issue. In illegal dismissal cases, corporate officers may be held solidarily liable with the corporation if the termination was done
with malice or bad faith.
 
Culili has failed to prove that his dismissal was orchestrated by the individual respondents herein for the mere purpose of getting rid of him.
Hence, the dismissal is declared valid but Eastern Telecommunications Philippines, Inc. is ordered to pay petitioner Nelson A. Culili the
amount of P50,000.00 as nominal damages for non-compliance with statutory due process, in addition to the mandatory separation pay
required under Article 283 of the Labor Code.
17.b. Manila Mining Corp. Employees Association-FFW vs. Manila Mining Corp., G.R. No. 178222-23, September 29, 2010
Facts:

Respondent Manila Mining Corporation (MMC) is a publicly-listed corporation engaged in large-scale mining for gold and copper
ore.  MMC is required by law to maintain a tailings containment facility to store the waste material generated by its mining
operations.  Consequently, MMC constructed several tailings dams to treat and store its waste materials.  One of these dams was Tailings
Pond No. 7 (TP No. 7), which was constructed in 1993 and was operated under a permit issued by the Department of Environment and
Natural Resources (DENR), through its Environmental Management Bureau (EMB) in Butuan City, Agusan del Norte.

Upon expiration of the tailings permit on 25 July 2001, DENR-EMB did not issue a permanent permit due to the inability of MMC to secure
an Environmental Compliance Certificate (ECC).  An essential component of an ECC is social acceptability or the consent of the residents
in the community to allow TP No. 7 to operate, which MMC failed to obtain.  Hence, it was compelled to temporarily shut down its mining
operations, resulting in the temporary lay-off of more than 400 employees in the mine site.

On 30 July 2001, MMC called for the suspension of negotiations on the CBA with the Union until resumption of mining operations.

Among the employees laid-off, complainants Samuel Zuñiga, Myrna Maquio, Doroteo Torre, Arsenio Mark Perez, Edmundo Galvez, Diana
Ruth Rellores, Jonathan Araneta, Teresita Lagman, Reynaldo Anzures, Gerardo Opena, and Edwin Tuazon, together with the Union filed a
complaint before the labor arbiter on even date praying for reinstatement, recognition of the Union as the sole and exclusive representative
of its rank-and-file employees, and payment of moral and exemplary damages and attorney’s fees.

In their Position Paper, complainants challenged the validity of their lay-off on the averment that MMC was not suffering from business
losses. They alleged that MMC did not want to bargain collectively with the Union, so that instead of submitting their counterproposal to the
CBA, MMC decided to terminate all union officers and active members.  Petitioners questioned the timing of their lay-off, and alleged that
first, there was no showing that cost-cutting measures were taken by MMC; second, no criteria were employed in choosing which
employees to lay-off; and third, the individuals laid-off were those who signed the attendance sheet of the union organizational meeting.
Petitioners likewise claimed that they were denied due process because they were not given a 30-day notice informing them of the lay-
off.  Neither was the DOLE informed of this lay-off, as mandated by law.

Respondents justified the temporary lay-off as bona fide in character and a valid management prerogative pending the issuance of the
permit to continuously operate TP No. 7.

The labor arbiter ruled in favor of MMC and held that the temporary shutdown of the mining operation, as well as the temporary lay-off of
the employees, is valid.

On appeal, the National Labor Relations Commission (NLRC) modified the judgment of the labor arbiter and ordered the payment of
separation pay equivalent to one month pay for every year of service.  It ratiocinated that the temporary lay-off, which exceeded more than
six (6) months, had the effect of severance of the employer-employee relationship. 

Issue:

WON there was bad faith on the part of MMC in implementing the temporary lay-off resulting in the complainants’ constructive dismissal

Held:

The lay-off is neither illegal nor can it be considered as unfair labor practice.

Despite all efforts exerted by MMC, it did not succeed in obtaining the consent of the residents of the community where the tailings pond
would operate, one of the conditions imposed by DENR-EMB in granting its application for a permanent permit.  It is precisely MMC’s
faultless failure to secure a permit which caused the temporary shutdown of its mining operations.

For a charge of unfair labor practice to prosper, it must be shown that the employer was motivated by ill-will, bad faith or fraud, or was
oppressive to labor.  The employer must have acted in a manner contrary to morals, good customs, or public policy causing social
humiliation, wounded feelings or grave anxiety.  While the law makes it an obligation for the employer and the employees to bargain
collectively with each other, such compulsion does not include the commitment to precipitately accept or agree to the proposals of the
other. All it contemplates is that both parties should approach the negotiation with an open mind and make reasonable effort to reach a
common ground of agreement.
Even as we declare the validity of the lay-off, we cannot say that MMC has no obligation at all to the laid-off employees. The validity of its
act of suspending its operations does not excuse it from paying separation pay.
Article 286 of the Labor Code allows the bona fide suspension of operations for a period not exceeding six (6) months.  During the
suspension, an employee is not deemed terminated.  As a matter of fact, the employee is entitled to be reinstated once the employer
resumes operations within the 6-month period.  However, Article 286 is silent with respect to the rights of the employee if the suspension of
operations lasts for more than 6 months. Thus is bred the issue regarding the responsibility of MMC toward its employees.
The Court is not impressed with the claim that actual severe financial losses exempt MMC from paying separation benefits to
complainants.  In the first place, MMC did not appeal the decision of the Court of Appeals which affirmed the NLRC’s award of separation
pay to complainants.  MMC’s failure had the effect of making the awards final so that MMC could no longer seek any other affirmative
relief.  In the second place, the non-issuance of a permit forced MMC to permanently cease its business operations, as confirmed by the
Court of Appeals.  Under Article 283, the employer can lawfully close shop anytime as long as cessation of or withdrawal from business
operations is bona fide in character and not impelled by a motive to defeat or circumvent the tenurial rights of employees, and as long as
he pays his employees their termination pay in the amount corresponding to their length of service. The cessation of operations, in the
case at bar is of such nature.  It was proven that MMC stopped its operations precisely due to failure to secure permit to operate a tailings
pond. Separation pay must nonetheless be given to the separated employees.
20. Assumption of Jurisdiction

20.a. . Manila Electric Co. vs. Lim, G.R. No. 184769, October 5, 2010
Facts:

Rosario G. Lim (respondent), also known as Cherry Lim, is an administrative clerk at the Manila Electric Company (MERALCO). On June
4, 2008, an anonymous letter was posted at the door of the Metering Office of the Administration building of MERALCO Plaridel, Bulacan
Sector, at which respondent is assigned, denouncing respondent. The letter reads:
Cherry Lim:
MATAPOS MONG LAMUNIN LAHAT NG BIYAYA NG MERALCO, NGAYON NAMAN AY GUSTO MONG PALAMON ANG BUONG
KUMPANYA SA MGA BUWAYA NG GOBYERNO. KAPAL NG MUKHA MO, LUMAYAS KA RITO, WALANG UTANG NA LOOB

Resource Staffing, directed the transfer of respondent to MERALCO's Alabang Sector in Muntinlupa as "A/F OTMS Clerk," effective July
18, 2008 in light of the receipt of ". . . reports that there were accusations and threats directed against her from unknown individuals and
which could possibly compromise her safety and security."
Respondent, by letter of July 10, 2008 addressed to petitioner Ruben A. Sapitula, Vice-President and Head of MERALCO's Human
Resource Administration, appealed her transfer and requested for a dialogue so she could voice her concerns and misgivings on the
matter, claiming that the "punitive" nature of the transfer amounted to a denial of due process. Citing the grueling travel from her residence
in Pampanga to Alabang and back entails, and violation of the provisions on job security of their Collective Bargaining Agreement (CBA).

Respondent filed a petition for the issuance of a writ of habeas data  against petitioners before the Regional Trial Court (RTC) of Bulacan.
By respondent's allegation, petitioners' unlawful act and omission consisting of their continued failure and refusal to provide her with details
or information about the alleged report which MERALCO purportedly received concerning threats to her safety and security amount to a
violation of her right to privacy in life, liberty and security, correctible by habeas data.

Respondent is essentially questioning the transfer of her place of work by her employer and the terms and conditions of her
employment which arise from an employer-employee relationship over which the NLRC and the Labor Arbiters under Article 217 of the
Labor Code have jurisdiction.

Petitioners moved for the dismissal of the petition and recall of the TRO on the grounds that,  inter alia,  resort to a petition for writ
of habeas data  was not in order; and the RTC lacked jurisdiction over the case which properly belongs to the National Labor Relations
Commission (NLRC). 

Issue:

Whether or not, RTC has jurisdiction.

Ruling:
Respondent's plea that she be spared from complying with MERALCO's Memorandum directing her reassignment to the Alabang Sector,
under the guise of a quest for information or data allegedly in possession of petitioners, does not fall within the province of a writ of  habeas
data.

It is evident that respondent's reservations on the real reasons for her transfer — a legitimate concern respecting the terms and conditions
of one's employment — are what prompted her to adopt the extraordinary remedy of  habeas data.  Jurisdiction over such concerns is
inarguably lodged by law with the NLRC and the Labor Arbiters.
23.a. G.R. No. 168715, September 15, 2010
Medline Management Inc. vs. Roslinda
Medline Management Inc. vs. Roslinda, G.R. No. 168715, September 15, 2010

Facts:

Petitioner Medline Management, Inc. (MMI), on behalf of its foreign principal, petitioner Grecomar Shipping Agency (GSA), hired Juliano
Roslinda (Juliano) to work on board the vessel MV "Victory." Juliano was previously employed by the petitioners under two successive
separate employment contracts of varying durations. His latest contract was approved by the POEA on September 9, 1998 for a duration
of nine months. In accordance with which, he boarded the vessel MV "Victory" on October 25, 1998 as an oiler and, after several months
of extension, was discharged on January 20, 2000. 

Months after his repatriation, or on March 6, 2000, Juliano consulted Dr. Pamela R. Lloren (Dr. Lloren) of Metropolitan Hospital. He
complained about abdominal distention which is the medical term for a patient who vomits previously ingested foods. From March 8 to
August 24, 2000, Juliano has undergone Hemodialysis, a method of removing waste products such as creatinine and urea, as well as
freeing water from the blood, when the kidneys are in renal failure. 

On August 27, 2001, Juliano died. On September 4, 2003, his wife Gliceria Roslinda and son Ariel Roslinda, respondents herein, filed a
complaint against MMI and GSA for payment of death compensation, reimbursement of medical expenses, damages, and attorney's fees
before the Labor Arbitration Branch of the NLRC.

Instead of filing an answer, they filed a Motion to Dismiss on the grounds of prescription, lack of jurisdiction and prematurity. Petitioners
contended that the action has already prescribed because it was filed three years, seven months and 22 days from the time the deceased
seafarer reached the point of hire.

Issue:

Whether or not the claim is not yet barred by prescription despite the fact that it was filed beyond the one-year prescriptive period provided
by the POEA Standard Employment Contract.

Ruling:

The employment contract signed by Juliano stated that "Upon approval, the same shall be deemed an integral part of the Standard
Employment Contract (SEC) for seafarers."  Section 28 of the POEA SEC states:
SECTION 28.JURISDICTION
XXX
Recognizing the peculiar nature of overseas shipboard employment, the employer and the seafarer agree that all claims arising from this
contract shall be made within one (1) year from the date of the seafarer's return to the point of hire. (Emphasis supplied)
On the other hand, the Labor Code states:
ART. 291.Money claims. — All money claims arising from employer-employee relations accruing during the effectivity of this Code shall be
filed within three (3) years from the time the cause of action accrued; otherwise they shall forever be barred.

In Southeastern Shipping v. Navarra, Jr. ,  we ruled that "Article 291 is the law governing the prescription of money claims of seafarers, a
class of overseas contract workers. This law prevails over Section 28 of the Standard Employment Contract for Seafarers which provides
for claims to be brought only within one year from the date of the seafarer's return to the point of hire." We further declared that "for the
guidance of all, Section 28 of the Standard Employment Contract for Seafarers, insofar as it limits the prescriptive period within which the
seafarers may file their money claims, is hereby declared null and void. The applicable provision is Article 291 of the Labor Code, it being
more favorable to the seafarers and more in accord with the State's declared policy to afford full protection to labor. The prescriptive period
in the present case is thus three years from the time the cause of action accrues."

In the present case, the cause of action accrued on August 27, 2001 when Juliano died. Hence, the claim has not yet prescribed, since the
complaint was filed with the arbitration branch of the NLRC on September 4, 2003.
23.b. G.R. No. 179593, September 14, 2011
University of East vs. University of East Employees Assoc.

University of East vs. University of East Employees Assoc., G.R. No. 179593, September 14, 2011

Facts:

Petitioner University of the East (UE) is an educational institution duly organized and existing under Philippine laws. On the other hand,
respondent University of the East Employees' Association (UEEA)  is a duly registered labor union of the rank-and-file employees of UE.

It appears from the records that prior to school year (SY)  1983-1984, the 70% incremental proceeds from tuition fee increases as
mandated by Presidential Decree No. 451 (P.D. No. 451), as amended, was distributed by UE in proportion to the average number of
academic and non-academic personnel. The distribution scheme became the subject of an Agreement dated October 18, 1983 signed by
the management, faculty association and respondent.  Starting SY 1994-1995, however, the 70% incremental proceeds from the tuition fee
increase was distributed by UE to its covered employees based on a new formula of percentage of salary.

On June 19, 1995, a tripartite meeting was held among the representatives of management, faculty union and UEEA. In the said meeting,
it was agreed that the distribution of the incremental proceeds would now be based on percentage of salary, and not anymore on the
average number of personnel. The Minutes of the June 19, 1995 meeting was signed and attested to by UEEA officers who attended. 

On April 27, 1999, UEEA filed a complaint before the NLRC for non-payment/underpayment of the rank-and-file employees' share of the
tuition fee increases against UE pursuant to P.D. No. 451, as amended, and Republic Act (R.A.)  No. 6728 otherwise known as
Government Assistance to Students and Teachers in Private Education Act.

UE asserted that the claim of the UEEA was already barred since it was filed three (3) years from the time its supposed cause of action
accrued.

ISSUE:
Whether or not prescription has already set in.

RULING:

The Court agrees with UE and holds that UEEA's right to question the distribution of the incremental proceeds for SY 1994-1995 has
already prescribed. Article 291 of the Labor Code provides that money claims arising from an employer-employee relationship must be
filed within three (3) years from the time the cause of action accrued. In the present case, the cause of action accrued when the distribution
of the incremental proceeds based on percentage of salary of the covered employees was discussed in the tripartite meeting held on June
19, 1995. UEEA did not question the manner of its distribution and only on April 27, 1999 did it file an action based therein. Hence,
prescription had set in.
25. Wage Distortion

25.a. P.I. MANUFACTURING, INC. vs. P.I. MANUFACTURING SUPERVISORS AND FOREMAN ASSOC.,
et. al.
G.R. No. 167217, February 4, 2008

FACTS: R.A. 6640 was signed into law, providing a wage increase. Subsequently, P.I. Manufacturing, Inc. and P.I.
Manufacturing Supervisors and Foreman Association entered into a new Collective Bargaining Agreement, which
granted supervisors and foremen an increase that was made to retroact to before the passage of the law. A wage
distortion resulted.
ISSUE: WON the wage distortion should be corrected.
HELD: NO. Although there was a wage distortion, the same was cured or remedied when PIMSFA entered
into the new CBA with PIMI after the effectivity of R.A. 6640. A CBA constitutes the law between the parties when
freely and voluntarily entered into.