Labor Law Case Digest Compilation

LABOR RELATIONS LAW
Case Digest Compilation for Midterms
Table of Contents
I. THE APPLICABLE LAWS............................................................................................................................10
II. GENERAL PRINCIPLES..............................................................................................................................10
Singer Sewing Machine vs. NLRC..................................................................................................................10
Manila Golf Club vs. IAC...............................................................................................................................10
Encyclopedia Britanica vs. NLRC...................................................................................................................11
Carungcong vs. Sunlife.................................................................................................................................11
Ramos vs. CA................................................................................................................................................12
Sonza vs. ABS-CBN.......................................................................................................................................12
Lazaro vs. Social Security Commission.........................................................................................................13
Phil. Global Comm. vs. De Vera....................................................................................................................13
ABS-CBN vs. Nazareno.................................................................................................................................14
Francisco vs. NLRC........................................................................................................................................15
Nogales et. al. vs. Capitol Medical Center et. al...........................................................................................16
Coca-Cola Bottlers Phils. vs. Dr. Climaco......................................................................................................16
Calamba Medical Center vs. NLRC et. al.......................................................................................................17
Escasinas et. al. vs. Shangri-la......................................................................................................................18
Tongko vs. The Manufacturer’s Life Insurance Co., Inc. November 7, 2008................................................18
Atok Big Wedge Company vs. Gison............................................................................................................19
Semblante et al., vs. Court of Appeals, et al.................................................................................................20
Jose Mel Bernarte vs. Philippine Basketball Association (PBA), Jose Emmanuel Eala, and Perry Martinez..21
Cesar Lirio vs. Wilmer Genovia.....................................................................................................................22
Charlie Jao vs BBC Products Sales Inc...........................................................................................................23
Legend Hotel (Manila) vs. Realuyo...............................................................................................................25
The New Philippine Skylanders, Inc. vs. Dakila.............................................................................................25
Tesoro et al. vs. Metro Manila Retreaders, Inc. et al...................................................................................26
III. RIGHT TO SECURITY OF TENURE............................................................................................................27
ALU-TUCP vs. NLRC......................................................................................................................................27
Cosmos Bottling Corp., vs NLRC...................................................................................................................28
Pure Foods Corporation vs. NLRC.................................................................................................................28
Phil. Fruit & Vegetable Industries vs. NLRC..................................................................................................29
Philips Semiconductor vs. Fardiquela...........................................................................................................30
Alcira vs. NLRC..............................................................................................................................................31
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LABOR RELATIONS LAW
Mitsubishi Motors Phils. vs. Chrysler Phil Labor Union................................................................................32

Pangilinan vs. General Milling Co.................................................................................................................33
Hacienda Bino/Hortencia Stark vs. Cuenca..................................................................................................34
Philippine Global Communications Inc. vs. De Vera.....................................................................................34
Lacuesta vs. Ateneo de Manila.....................................................................................................................35
Posedion Fishing/Terry De Jesus vs. NLRC...................................................................................................36
Cebu Metal Corp., vs. Saliling.......................................................................................................................37
Hermonias L. Liganza vs. RBL Shipyard Corporation....................................................................................38
Fabeza vs. San Miguel Corporation..............................................................................................................39
Soriano vs. NLRC..........................................................................................................................................40
Caseres vs. Universal Robina Sugar Milling Corp..........................................................................................40
Pier 8 Arrastre & Stevedoring Services, Inc. vs Boclot..................................................................................41
Pacquing vs. Coca-Cola Bottlers Phils., Inc.;.................................................................................................43
Agusan Del Norte Electronic vs. Cagampang................................................................................................44
William Uy Construction et. al vs. Trinidad..................................................................................................44
Dacuital et al, Vs. L.M. Camus Engineering Corp..........................................................................................45
Millennium Erectors Corporation vs. Magallanes........................................................................................46
Exodus International Construction Corp. vs. Biscocho et. Al........................................................................48
Leyte Geothermal Power Progressive Employees Union vs. Phil National Oil Co.........................................49
St. Paul College Quezon City vs. Spouses Ancheta.......................................................................................50
Lanvyl Fishing Enterprises, Inc. vs. Ariola et. al............................................................................................52
D.M. Consunji, Inc. vs. Jasmin......................................................................................................................53
Gapayao vs. Fulo..........................................................................................................................................54
Concrete Solutions, Inc. et al. vs. Cabusas...................................................................................................55
D.M. Consunji vs. Bello.................................................................................................................................56
Herrera-Manaois vs. St. Scholasticas College...............................................................................................57
Universal Robina Sugar Milling Corp. vs. Acibo et al....................................................................................58
Noblejas vs. Italian Maritime Academy Phils...............................................................................................59
Omni Hauling Services Inc v Tortoles...........................................................................................................60
Hacienda Ledd vs. Villegas...........................................................................................................................60
IV. MANAGEMENT PREROGATIVE..............................................................................................................61
Dosch vs. NLRC.............................................................................................................................................61
PT&T vs. Court of Appeals............................................................................................................................62
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LABOR RELATIONS LAW
Mendoza vs. Rural Bank of Lucban..............................................................................................................62

Duncan Association of Detailman vs. Glaxo Wellcome Phils........................................................................63
PLDT vs. Paquio............................................................................................................................................64
Star Paper Corp., vs. Simbol.........................................................................................................................65
Rivera vs. Solidbank.....................................................................................................................................65
Daisy B. Tiu vs.Platinum Plans Phil., Inc........................................................................................................67
Duldulao vs. Court of Appeals......................................................................................................................68
Almario vs. Philippine Airlines......................................................................................................................69
Bisig Manggagawa sa Tryco vs. NLRC...........................................................................................................70
Manila Electric Co. vs. Lim............................................................................................................................70
Bello vs. Bonifacio Security Services, Inc......................................................................................................71
Manila Pavilion Hotel vs. Delada..................................................................................................................73
Barba vs. Liceo de Cagayan University.........................................................................................................74
Best Wear Garments vs. De Lemos..............................................................................................................75
Royal Plant Workers Union vs. Coca-Cola Bottlers Phils., Inc. -Cebu Plant...................................................76
Peckson vs. Robinsons Supermarket Corp...................................................................................................77
V. TERMINATION OF EMPLOYMENT...........................................................................................................77
Retuya vs. NLRC...........................................................................................................................................77
Agabon vs. NLRC..........................................................................................................................................78
Jaka Food Processing vs. Pacot....................................................................................................................79
Mauricio vs. NLRC........................................................................................................................................79
Industrial Timber Corp. vs. Ababon..............................................................................................................80
Equitable Bank vs. Sadac..............................................................................................................................81
Heirs of Sara Lee vs. Rey..............................................................................................................................81
Galaxie Steel Workers Union vs. NLRC.........................................................................................................82
Sy vs. Metrobank.........................................................................................................................................83
King of Kings Transport vs. NLRC..................................................................................................................83
Asian Terminal vs. NLRC...............................................................................................................................85
Smart Communications vs. Astorga.............................................................................................................86
RB Michael Press vs. Galit............................................................................................................................87
School of the Holy Spirit of Q.C. vs. Taguiam...............................................................................................88
John Hancock Life Insurance Corp. vs. Davis................................................................................................89
Yrasuegui vs. Phil. Airlines............................................................................................................................89
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LABOR RELATIONS LAW
Garcia vs. PAL...............................................................................................................................................90

Perez vs. PT&T Co........................................................................................................................................91
Martinez vs. B&B Fish Broker.......................................................................................................................92
Plantation Bay Resort and Spa vs. Dubrico..................................................................................................93
Fulache vs. ABS-CBN Broadcasting Corp......................................................................................................95
Ancheta vs. Destinay Financial Plans, Inc.....................................................................................................96
Javellana, Jr. vs. Belen..................................................................................................................................97
Nacague vs. Sulpicio Lines, Inc.....................................................................................................................98
St. Mary’s Academy of Dipolog City vs. Palacio............................................................................................99
Manila Mining Corp. Employees Assoc.-FFW vs. Manila Mining Corp.........................................................99
Robinsons Galleria/Robinsons Supermarket Corporation vs. Ranchez......................................................100
Morales vs. Harbour Centre Port Terminal................................................................................................101
Mansion Printing vs. Bitara........................................................................................................................103
Manila Electric Company vs. Beltran..........................................................................................................103
Bank Of Lubao, Inc. vs. Manabat................................................................................................................105
Canadian Opportunities Unlimited, Inc. vs. Dalangin, Jr............................................................................106
Manila Electric Company vs. Gala..............................................................................................................108
Aro vs. NLRC...............................................................................................................................................109
Ymbong VS ABS-CBN Broadcasting Corp....................................................................................................111
Blue Sky Trading Company vs. Blas............................................................................................................112
International Management Services vs. Logarta........................................................................................113
Jiao vs. NLRC..............................................................................................................................................114
Realda vs. New Age Graphics Inc...............................................................................................................115
Mirant vs Caro;...........................................................................................................................................116
Kakampi & Its Members, Panuelos, et al. vs. Kingspoint Express and Logistic...........................................117
Waterfront Cebu City Hotel vs. Jimenez....................................................................................................118
Ramirez vs. Mar Fishing Co., Inc.................................................................................................................119
Prudential Guarantee & Assurance Employee Labor Union vs. NLRC........................................................120
Paulino vs. NLRC.........................................................................................................................................121
Manila Electric Co. vs. Dejan......................................................................................................................122
Apo Cement Corporation vs. Baptisma......................................................................................................124
Cosmos Bottling vs. Fermin........................................................................................................................125
Reyes-Ravel vs. Philippine Luen Thai Holdings...........................................................................................126
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LABOR RELATIONS LAW
Omar Verdadero vs. Barney Autolines Group of Companies Transport, Inc..............................................126

Naranjo vs. Biomedica Health Care, Inc.....................................................................................................127
The New Philippine Skylanders, Inc. vs. Dakila...........................................................................................128
Morales Vs. Metropolitan Bank and Trust Company.................................................................................129
Kakampi & Its Members Panuelos et al. vs. Kingspoint Express And Logistics...........................................130
Sampaguita Auto Transport Corp. vs. NLRC...............................................................................................131
Philippine Holdings Inc. vs. Episcope..........................................................................................................132
The Orchard Golf And Country Club vs. Francisco......................................................................................133
Torres vs. Rural Bank of San Juan Inc. et al................................................................................................134
The Orchard Golf & Country Club vs. Francisco.........................................................................................135
Banares vs. Tabaco Womens Transport Service Cooperative....................................................................135
Reyes, et al., vs. RP Guardians security Agency Inc....................................................................................136
Celdran vs. Forza Integrated Services et al.................................................................................................136
Surigao Del Norte Electric Cooperative Inc. vs. Gonzaga...........................................................................137
Univac Developments Inc. vs. Soriano.......................................................................................................139
Unilever Phils vs. Rivera.............................................................................................................................140
Samar-med Distribution vs. NLRC, et al.....................................................................................................140
Naranjo et al, vs. Biomedica Health Care Inc.............................................................................................141
Manila Jockey Club Inc. vs. Trajano............................................................................................................142
Fianza vs. NLRC et al...................................................................................................................................143
Pasos vs. Phil National Construction Corp..................................................................................................144
Universal Robina Corp. vs. Castillo.............................................................................................................145
Martinez vs. Central Pangasinan Electric Cooperative...............................................................................145
Zuellig Pharma Corp vs. Sibal et al.............................................................................................................146
Zuellig Freight & Cargo System vs. NLRC,...................................................................................................147
Abbott Laboratrories Phils et al., Vs. Alcaraz..............................................................................................147
Manila Polo Club Employees Union vs. Manila Polo Club..........................................................................148
Canedo vs. Kampilan Security & Detective Agency Inc. et al......................................................................149
Sanoh Fulton Phils Inc. et al., vs. Bernardo et al........................................................................................150
Daabay vs.Coca-Cola Bottlers Phils............................................................................................................151
MZR Industries et al., vs. Colambot............................................................................................................152
Integrated Micorelctronics Inc. vs. Pionella...............................................................................................153
Asia Brewery Inc. vs. Tunay na Pagkakaisa ng Manggagawa sa Asia..........................................................153
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LABOR RELATIONS LAW
Hormillosa vs. Coca-Cola Bottlers Phils......................................................................................................154

Abbott Laboratories Phils. vs. Alcaraz........................................................................................................155
Gemina Jr vs. bankwise Inc. et al................................................................................................................156
Baguio Central University vs. Gallente,......................................................................................................157
International School Manila et al., vs. International School Alliance of Educators et al.............................158
Dreamland Hotel Resort vs. Johnson.........................................................................................................159
Castillo et al., vs. Prudentialife Plans Inc....................................................................................................161
Unibersidad De Sta Isabel vs. Sambajon, Jr................................................................................................162
Wenphil Corp., vs. Abing, et al...................................................................................................................164
Arabit et al., vs. Jardine Pacific Finance Inc................................................................................................166
Mirant (Philippines) Corp., et al., vs. Caro..................................................................................................168
Libcap Marketing Corp v Baquial................................................................................................................170
Ampeloquio vs. Jaka Distribution Inc.........................................................................................................170
LIM v HMR Phils Inc....................................................................................................................................171
BENSON INDUSTRIES EMPLOYEES UNION-ALU-TUCP AND/OR Vilma Genon et al., vs BENSON
INDUSTRIES, INC........................................................................................................................................172
Montinola vs. PAL,.....................................................................................................................................173
VI. SUSPENSION OF BUSINESS OPERATIONS.............................................................................................174
MINDANAO TERMINAL & BROKERAGE SERVICE, INC. VS. NAGKAHIUSANG MAMUMUO SA MINTERBRO-
SOUTHERN PHILS. FEDERATION OF LABOR................................................................................................174
LEOPARD SECURITY AND INVESTIGATION AGENCY VS. QUITOY................................................................175
SKM ART CRAFT CORP. VS. BAUCA.............................................................................................................175
NAVOTAS SHIPYARD CORP. VS. MONTALLANA..........................................................................................176
EMERITUS SECURITY & MAINTENANCE SYSTEMS, INC. VS. DAILIG............................................................177
Lopez v Irvine Construction Corp...............................................................................................................178
EXOCET SECURITY AND ALLIED SERVICES CORPORATION and/or MA. TERESA MARCELO, VS ARMANDO D.
SERRANO....................................................................................................................................................179
VII. DISEASE AS A GROUND FOR TERMINATION.......................................................................................180
Sy vs. Court of Appeals...............................................................................................................................180
Manly Express, Inc. vs. Payong...................................................................................................................181
Duterte vs. Kingswood Trading Co.............................................................................................................182
Villaruel vs. Yeo Han Guan.........................................................................................................................182
Deoferio vs. Intel Technology Phils.,..........................................................................................................184
VIII. OTHER CAUSES OF SEVERANCE OF EMPLOYMENT RELATION............................................................185
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LABOR RELATIONS LAW
Pantranco North Express, Inc. vs. NLRC.....................................................................................................185

Cainta Catholic School vs. Cainta Catholic School Employees Union.........................................................185
Alpha C. Jaculbe vs. Silliman University......................................................................................................186
Globe Telecom vs. Crisologo......................................................................................................................188
BMG Records Phils. vs. Aparecio................................................................................................................188
Cercado vs. UNIPROM, Inc.........................................................................................................................189
Skippers United Pacific vs. Doza et. al........................................................................................................190
Auza, Jr. et al. vs. Mol Phils., Inc.................................................................................................................191
Gan vs. Galderma Philippines, Inc..............................................................................................................192
Padillo vs. Rural bank of Nabunturan, Inc..................................................................................................193
Intel Technology Phils Inc. vs. NLRC et al...................................................................................................193
Sutherland & Global Services Phils Inc., vs. Labrador.................................................................................194
Chiang Kai Shek College et al., vs. Torres...................................................................................................195
IX. PRESCRIPTION OF CLAIMS...................................................................................................................196
Ludo & Luym vs. Saornido..........................................................................................................................196
Degamo vs. Avant Lard Shipping Lines.......................................................................................................197
Intercontinental Broadcasting Corp., vs. Panganiban................................................................................197
Far East Agricultural Supply, Inc. vs. Lebatique..........................................................................................198
Victory Liner vs. Race; G.R. No. 164820.....................................................................................................199
J.K. Mercado & Sons Agricultural Enterprises vs. Hon. Sto. Tomas............................................................199
Reyes vs. NLRC, CCBPI................................................................................................................................200
LWV Construction Corp. vs. Dupo..............................................................................................................201
PLDT vs. Roberto R. Pingol.........................................................................................................................202
Medline Management, Inc. vs. Roslinda....................................................................................................203
University of the East vs. University of the East Employees' Association...................................................204
X. JURISDICTION OF THE LABOR ARBITER.................................................................................................205
Tolosa vs. NLRC;.........................................................................................................................................205
Austria vs. NLRC;........................................................................................................................................205
Eviota vs. Court of Appeals;.......................................................................................................................207
Dynamic Signmaker Outdoor Advertising Services vs. Potongan;..............................................................208
Metromedia Times Corp. vs. Pastorin;.......................................................................................................209
Yusen Air & Sea Service Phils vs. Villamor;.................................................................................................210
Duty Free Philippines vs. Mojica;...............................................................................................................211
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LABOR RELATIONS LAW
Easycall Communication Phils. vs. King;.....................................................................................................212

San Miguel Foods Inc. vs. San Miguel Corp Employees Union – PTGWO;..................................................213
Leyte IV Electric Cooperative, Inc. vs. LEYECO IV Employees Union-ALU;..................................................214
Atty. Garcia vs. Eastern Telecommunications Phils., et al.;........................................................................217
Halaguena et al., vs. Phil Airlines;..............................................................................................................218
Okol vs. Slimmer’s World International et al.;............................................................................................220
Hugo et al. vs. Light Rail Transit Authority;................................................................................................221
Matling Industrial and Commercial Corporation et. al. vs. Coros;.............................................................222
Manila Electric Company et. al. vs. Rosario Gopez Lim;.............................................................................223
Hongkong and Shanghai Banking Corp. vs. Sps. Broqueza;........................................................................224
Real vs. Sangu Phils, Inc. et. al;...................................................................................................................225
Portillo vs. Rudolf Lietz, Inc. et al.;.............................................................................................................226
Ace Navigation Co., Inc. et al. vs. Fernandez;.............................................................................................227
Cosare vs. Broadcom Asia, Inc....................................................................................................................228
Amecos Innovators Inc. vs lopez................................................................................................................228
XI. 2011 NLRC RULES OF PROCEDURE.......................................................................................................230
ISLRIZ Trading/Lu vs. Capade;....................................................................................................................230
Panlilio et al. vs. RTC Br. 51, City of manila;...............................................................................................231
Ando vs. Campo;........................................................................................................................................232
Exodus International Construction Corp. vs. Biscocho;..............................................................................233
Pfizer, Inc. vs. Velasco;...............................................................................................................................234
Luna vs. Allado Construction Co., Inc.;.......................................................................................................237
Social Security Commission vs. Rizal Poultry et al.;....................................................................................239
University Plans, Inc. vs. Solano;................................................................................................................240
BPI Employees Union – Metro manila vs. Bank of the Phil. Islands;...........................................................241
Aujero vs. Phil. Communications Satellite Corp.;.......................................................................................242
Sarona vs. NLRC;........................................................................................................................................243
Salenga et al. vs. CA;..................................................................................................................................244
Lockheed Detective & Watchman Agency vs. University of the Phils.;......................................................244
3rd Alert Security and Detective Services, Inc. vs. Navia;............................................................................245
Radio Philippines Network, Inc. vs. Yap;....................................................................................................246
Gonzales vs. Solid Cement Corp.;...............................................................................................................247
Martos vs. new San Jose Builders;.............................................................................................................248
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LABOR RELATIONS LAW
Loon et al. vs. Power Masters, Inc.;............................................................................................................249

Lepanto Consolidated Mining Corp. vs. Icao;.............................................................................................252
Building Care Corp. vs. Macaraeg;.............................................................................................................253
CO SAY COCO PRODUCTS PHILS INC. vs BALTAZAR;...................................................................................254
OLORES vs MANILA DOCTORS COLLEGE;...................................................................................................257
Arabit vs Jardine Pacific Finance Inc.;.........................................................................................................262
Mirant vs Caro;...........................................................................................................................................263
Castro Jr. vs. Ateneo de Naga University et al.,..........................................................................................263
Phil. Touristers Inc et al., vs. Mas Transit Workers Union-ANGLO-KMU....................................................264
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LABOR RELATIONS LAW
I. THE APPLICABLE LAWS
II. GENERAL PRINCIPLES

Singer Sewing Machine vs. NLRC
G.R. No. 91307 January 24, 1991
FACTS:
Singer Machine Collectors Union-Baguio (SIMACUBA), the respondent union, filed a petition for direct certification as the sole and
exclusive bargaining agent of all collectors of the Singer Sewing Machine Company, Baguio City branch (hereinafter referred to as "the
Company").
The Company opposed the petition mainly on the ground that the union members are actually not employees but are independent
contractors as evidenced by the collection agency agreement which they signed. The respondent Med-Arbiter, finding that there exists
an employer-employee relationship between the union members and the Company, granted the petition for certification election. On
appeal, Secretary of Labor Franklin M. Drilon affirmed it.
ISSUE:
Whether or not there exists an employee-employer relationship between the parties.
RULING:
SC ruled in favor of petitioner. Private respondents are independent contractors, not employees. As such, they cannot enter into a
collective bargaining agreement with the petitioner.
The present case mainly calls for the application of the control test, which if not satisfied, would lead us to conclude that no employer-
employee relationship exists. Hence, if the union members are not employees, no right to organize for purposes of bargaining, nor to
be certified as such bargaining agent can ever be recognized. The following elements are generally considered in the determination of
the employer-employee relationship; "(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 — although the latter is the most important element".
The nature of the relationship between a company and its collecting agents depends on the circumstances of each particular
relationship. Not all collecting agents are employees and neither are all collecting agents independent contractors. The collectors
could fall under either category depending on the facts of each case.
A thorough examination of the facts of the case leads us to the conclusion that the existence of an employer-employee relationship
between the Company and the collection agents cannot be sustained. The plain language of the agreement reveals that the designation
as collection agent does not create an employment relationship and that the applicant is to be considered at all times as an
independent contractor.
The Court finds that since private respondents are not employees of the Company, they are not entitled to the constitutional right to
join or form a labor organization for purposes of collective bargaining. Accordingly, there is no constitutional and legal basis for their
"union" to be granted their petition for direct certification.
Manila Golf Club vs. IAC

G.R. No. 64948 September 27, 1994
FACTS:
This is originally filed with the Social Security Commission (SSC) via petition of 17 persons who styled themselves as “ Caddies of
Manila Golf and Country Club-PTCCEA” for the coverage and availment of benefits of the Social Security Act as amended, PTCCEA
(Philippine Technical, Clerical, Commercial Employees Association) a labor organization where which they claim for membership.
The same time two other proceedings were filed and pending. These are certification election case filed by PTCCEA on behalf of the
same caddies of Manila Golf and Country club which was in favor of the caddies and compulsory arbitration case involving PTCCEA
and Manila Golf and Country Club which was dismissed and ruled that there was no employer-employee relationship between the
caddies and the club.
ISSUE:
Whether or not persons rendering caddying services for members of golf clubs and their guests in said clubs' courses or premises are
the employees of such clubs and therefore within the compulsory coverage of the Social Security System (SSS).
RULING:
SC ruled in favor of the petitioner. Llamar is not an employee of the Manila Golf and Country Club, Inc. The club is under no obligation
to report him for compulsory coverage to the SSS.
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LABOR RELATIONS LAW
In the very nature of things, caddies must submit to some supervision of their conduct while enjoying the privilege of pursuing their
occupation within the premises and grounds of whatever club they do work in. They work for the club to which they attach
themselves on sufferance but, on the other hand, also without having to observe any working hours, free to leave anytime they please,
to stay away for as long they like.
Encyclopedia Britanica vs. NLRC

G.R. No. 87098 November 4, 1996
FACTS:
Private respondent Benjamin Limjoco was a Sales Division Manager of petitioner Encyclopaedia Britannica and was in charge of
selling petitioner's products through some sales representatives. As compensation, private respondent received commissions from
the products sold by his agents. He was also allowed to use petitioner's name, goodwill and logo. It was, however, agreed upon that
office expenses would be deducted from private respondent's commissions. Petitioner would also be informed about appointments,
promotions, and transfers of employees in private respondent's district. Limjoco resigned from office to pursue his private business.
Then on October 30, 1975, he filed a complaint against petitioner Encyclopaedia Britannica with the Department of Labor and
Employment, claiming for non-payment of separation pay and other benefits, and also illegal deduction from his sales commissions.
ISSUE:
Whether or not there exists an employer-employee relationship between the parties.
RULING:
SC ruled that Limjoco was not an employee of the petitioner company. He was merely an agent or an independent dealer of the
petitioner. The records of the case at bar showed that there was no such relationship. He was free to conduct his work and he was free
to engage in other means of livelihood. At the time he was connected with the petitioner company, private respondent was also a
director and later the president of the Farmers' Rural Bank. Had he been an employee of the company, he could not be employed
elsewhere and he would be required to devote full time for petitioner. If private respondent was indeed an employee, it was rather
unusual for him to wait for more than a year from his separation from work before he decided to file his claims.
Carungcong vs. Sunlife

G.R. No. 118086 December 15, 1997
FACTS:
Susan Carungcong began her career in the insurance industry in 1974 as an agent of Sun Life Assurance Company of Canada. She
signed an Agent Agreement with Sun Life. In virtue of which she was designated the latter’s agent to solicit applications for its
insurance and annuity policies.
This contract was superseded some five years later when she signed two (2) new agreements. The first, denominated Career Agent’s
or Unit Manager’s Agreement, dealt with such matters as the agent’s commissions, his obligations, limitations on his authority, and
termination of the agreement by death, or by written notice with or without cause. The second was titled, Manager’s Supplementary
Agreement. It explicitly described as a “further agreement”. Carungcong and Sun Life executed another Agreement named New
Business Manager with the function generally to manage a New Business Office established. This latest Agreement stressed that the
New Business Manager in performance of his duties defined herein, shall be considered an independent contractor and not an
employee of Sun Life, and that under no circumstance shall the New Business Manager and/or his employees be considered
employees of Sun Life.
Ms. Eleizer Sibayan, Manager of Sun Life’s Internal Audit Department, commenced an inquiry into the special fund availments of
Carungcong and other New Business Managers. Respondent Lance Kemp, had been receiving reports of anomalies in relation thereto
from unit managers and agents. Thereafter, on January 1990, Carungcong was confronted with and asked to explain the discrepancies
set out in Sibayan’s report. She was given a letter signed by Metron V. Deveza, CLU, Director, Marketing, which advised of the
termination of her relationship with Sun Life.
Carungcong promptly instituted proceedings for vindication in the Arbitration Branch of the National Labor Relations Commissions
on January 16, 1990. There she succeeded in obtaining a favorable judgment. Labor Arbiter found that there existed an employer-
employee relationship between her and Sun Life. On appeal, the National Labor Relations Commission reversed the Arbiter’s
judgment. It affirmed that no employment relationship existed between Carungcong and Sun Life.
ISSUE:
RULING:
SC held that Carungcong is not an employee of Sun Life Co. She was an independent contractor.
Noteworthy is that this last agreement which emphasized, like the “Career Agent’s or Unit Manager’s Agreement” first signed by her,
that in performance of her duties defined herein. Carungcong would be considered an independent contractor and not an employee
of Sun Life, and that under no circumstance shall the New Business Manager and/or his employees be considered employees of Sun
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LABOR RELATIONS LAW
Life.
Carungcong is an independent contractor. It was indicated in the very face of the contract. The rules and regulations of the company is
not sufficient to establish an employer-employee relationship. It does not necessarily create any employer-employee relationship
where the employers’ controls have to interfere in the methods and means by which employee would like employ to arrive at the
desired results. Carungcong admitted that she was free to work as she pleases, at the place and time she felt convenient for her to do
so. She was not paid to a fixed salary and was mainly paid by commissions depending on the volume of her performance.
Ramos vs. CA
G.R. No. 124354; April 11, 2002
FACTS:
Petitioner Erlinda Ramos, after seeking professional medical help, was advised to undergo an operation for the removal of a
stone in her gall bladder (cholecystectomy). She was referred to Dr. Hosaka, a surgeon, who agreed to perform the operation on
her. The operation was scheduled for June 17, 1985 at 9:00 in the morning at private respondent De Los Santos Medical Center
(DLSMC). Since neither petitioner Erlinda nor her husband, petitioner Rogelio, knew of any anesthesiologist, Dr. Hosaka
recommended to them the services of Dr. Gutierrez. On the following day, she was ready for operation as early as 7:30 am.
Around 9:30, Dr. Hosaka has not yet arrived. By 10 am, Rogelio wanted to pull out his wife from the operating room. Dr. Hosaka
finally arrived at 12:10 pm more than 3 hours of the scheduled operation.
Dr. Guiterres tried to intubate Erlinda. The nail beds of Erlinda were bluish discoloration in her left hand. At 3 pm, Erlinda was
being wheeled to the Intensive care Unit and stayed there for a month. Since the ill-fated operation, Erlinda remained in
comatose condition until she died.
The family of Ramos sued them for damages.
ISSUE:
Whether or not there exists an employer-employee relationship between the medical center and Drs. Hosaka and Guiterrez.
RULING:
SC ruled that there was no employee-employer relationship between de Los Santos Medical Center and Drs. Hosaka and Gutierrez.
After a careful consideration of the arguments raised by DLSMC, the Court finds that respondent hospital’s position on this issue is
meritorious. There is no employer-employee relationship between DLSMC and Drs. Gutierrez and Hosaka which would hold DLSMC
solidarily liable for the injury suffered by petitioner Erlinda under Article 2180 of the Civil Code.
As explained by respondent hospital, that the admission of a physician to membership in DLSMC’s medical staff as active or visiting
consultant is first decided upon by the Credentials Committee. Neither is there any showing that it is DLSMC which pays any of its
consultants for medical services rendered by the latter to their respective patients. Moreover, the contract between the consultant in
respondent hospital and his patient is separate and distinct from the contract between respondent hospital and said patient. The first
has for its object the rendition of medical services by the consultant to the patient, while the second concerns the provision by the
hospital of facilities and services by its staff such as nurses and laboratory personnel necessary for the proper treatment of the
patient.
The hospital does not hire consultants but it accredits and grants him the privilege of maintaining a clinic and/or admitting patients. It
is the patient who pays the consultants. The hospital cannot dismiss the consultant but he may lose his privileges granted by the
hospital. The hospital’s obligation is limited to providing the patient with the preferred room accommodation and other things that
will ensure that the doctor’s orders are carried out.
Sonza vs. ABS-CBN

G.R. No. 138051; June 10, 2004
FACTS:
Respondent ABS-CBN Broadcasting Corporation ("ABS-CBN") signed an Agreement ("Agreement") with the Mel and Jay Management
and Development Corporation ("MJMDC"). ABS-CBN was represented by its corporate officers while MJMDC was represented by
SONZA, as President and General Manager, and Carmela Tiangco ("TIANGCO"), as EVP and Treasurer. Referred to in the Agreement as
"AGENT," MJMDC agreed to provide SONZA’s services exclusively to ABS-CBN as talent for radio and television.
ABS-CBN agreed to pay for SONZA’s services a monthly talent fee of P310,000 for the first year and P317,000 for the second and third
year of the Agreement. ABS-CBN would pay the talent fees on the 10th and 25th days of the month. SONZA filed a complaint against
ABS-CBN before the Department of Labor and Employment, National Capital Region in Quezon City. SONZA complained that ABS-CBN
did not pay his salaries, separation pay, service incentive leave pay, 13th month pay, signing bonus, travel allowance and amounts due
under the Employees Stock Option Plan ("ESOP").
ISSUE:
Whether Jay Sonza is an employee of ABS-CBN or an independent contractor.
RULING:
SC ruled that Sonza is an independent contractor.
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Selection and Engagement of Employees. Independent contractors often present themselves to possess unique skills, expertise or
talent to distinguish them from ordinary employees. The specific selection and hiring of SONZA, because of his unique skills, talent
and celebrity status not possessed by ordinary employees, is a circumstance indicative, but not conclusive, of an independent
contractual relationship. If SONZA did not possess such unique skills, talent and celebrity status, ABS-CBN would not have entered
into the Agreement with SONZA but would have hired him through its personnel department just like any other employee.
Payment of Wages. All the talent fees and benefits paid to SONZA were the result of negotiations that led to the Agreement. If SONZA
were ABS-CBN’s employee, there would be no need for the parties to stipulate on benefits such as "SSS, Medicare, x x x and 13th
month pay"20 which the law automatically incorporates into every employer-employee contract. Whatever benefits SONZA enjoyed
arose from contract and not because of an employer-employee relationship. SONZA’s talent fees, amounting to P317,000 monthly in
the second and third year, are so huge and out of the ordinary that they indicate more an independent contractual relationship rather
than an employer-employee relationship.
Power of Dismissal. During the life of the Agreement, ABS-CBN agreed to pay SONZA’s talent fees as long as "AGENT and Jay Sonza shall
faithfully and completely perform each condition of this Agreement."24 Even if it suffered severe business losses, ABS-CBN could not
retrench SONZA because ABS-CBN remained obligated to pay SONZA’s talent fees during the life of the Agreement. This circumstance
indicates an independent contractual relationship between SONZA and ABS-CBN.
Power of Control. Applying the control test to the present case, we find that SONZA is not an employee but an independent contractor.
The control test is the most important test our courts apply in distinguishing an employee from an independent contractor.29 This
test is based on the extent of control the hirer exercises over a worker. The greater the supervision and control the hirer exercises, the
more likely the worker is deemed an employee. The converse holds true as well – the less control the hirer exercises, the more likely
the worker is considered an independent contractor.30
Lazaro vs. Social Security Commission

G.R. No. 138254; July 30, 2004
FACTS:
Private respondent Rosalina M. Laudato ("Laudato") filed a petition before the SSC for social security coverage and remittance of
unpaid monthly social security contributions against her three (3) employers. Among the respondents was herein petitioner Angelito
L. Lazaro ("Lazaro"), proprietor of Royal Star Marketing ("Royal Star"), which is engaged in the business of selling home appliances.
Laudato alleged that despite her employment as sales supervisor of the sales agents for Royal Star from April of 1979 to March of
1986, Lazaro had failed during the said period, to report her to the SSC for compulsory coverage or remit Laudato's social security
contributions.
ISSUE:
Whether or not there exists an employee-employer relationship between Laudato and Royal Star Marketing.
RULING:
SC ruled that there exists such relationship between the parties.
It is an accepted doctrine that for the purposes of coverage under the Social Security Act, the determination of employer-employee
relationship warrants the application of the "control test," that is, whether the employer controls or has reserved the right to control
the employee, not only as to the result of the work done, but also as to the means and methods by which the same is accomplished.
Suffice it to say, the fact that Laudato was paid by way of commission does not preclude the establishment of an employer-employee
relationship. The relevant factor remains, as stated earlier, whether the "employer" controls or has reserved the right to control the
"employee" not only as to the result of the work to be done but also as to the means and methods by which the same is to be
accomplished.
Phil. Global Comm. vs. De Vera

G.R. No. 157214; June 7, 2005
FACTS:
Philippine Global Communications inc. is a corporation engaged in the business of communication services and allied activities while
Ricardo de Vera is a physician by profession whom petitioner enlisted to attend to the medical needs of its employees. The
controversy rose when petitioner terminated his engagement.
In 1981, Dr. de Vera offered his services to petitioner. The parties agreed and formalized the respondent’s proposal in a document
denominated as retainership contract which will be for a period of one year, subject to renewal and clearly stated that respondent will
cover the retainership the company previously with Dr. Eulau. The agreement went until 1994, in the years 1995-1996, it was
renewed verbally. The turning point of the parties’ relationship was when petitioner, thru a letter bearing the subject TERMINATION
– RETAINERSHIP CONTRACT, informed Dr. de Vera of its decision to discontinue the latter’s retainer contract because the
management has decided that it would be more practical to provide medical services to its employees through accredited hospitals
near the company premises.
On January 1997, de Vera fileda complaint for illegal dismissal before the NLRC, alleging that he had been actually employed by the
company as its company physician since 1991. The commission rendered decision in favor of Philcom and dismissed the complaint
saying that de Vera was an independent contractor. On appeal to NLRC, it reversed the decision of the Labor Arbiter stating that de
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Vera is a regular employee and directed the company to reinstate him. Philcom appealed to the CA where it rendered decision
deleting the award but reinstating de Vera. Philcom filed this petition involving the difference of a job contracting agreements from
employee-employer relationship.
ISSUE:
Whether or not there exists an employee-employer relationship between the parties.
RULING:
SC ruled that there was no such relationship existing between Dr. de Vera and Phil. Com.
The elements of an employer-employee relationship are wanting in this case. The record are replete with evidence showing that
respondent had to bill petitioner for his monthly professional fees. It simply runs against the grain of common experience to imagine
that an ordinary employee has yet to bill his employer to receive his salary.
The power to terminate the parties’ relationship was mutually vested on both. Either may terminate the arrangement at will, with or
without cause.
Remarkably absent is the element of control whereby the employer has reserved the right to control the employee not only as to the
result of the work done but also as to the means and methods by which the same is to be accomplished.
Petitioner had no control over the means and methods by which respondent went about performing his work at the company
premises. In fine, the parties themselves practically agreed on every terms and conditions of the engagement, which thereby negates
the element of control in their relationship.
ABS-CBN vs. Nazareno

G.R. No. 164156; September 26, 2006
FACTS:
Petitioner ABS-CBN Broadcasting Corporation (ABS-CBN) is engaged in the broadcasting business and owns a network of television
and radio stations, whose operations revolve around the broadcast, transmission, and relay of telecommunication signals. It sells and
deals in or otherwise utilizes the airtime it generates from its radio and television operations. It has a franchise as a broadcasting
company, and was likewise issued a license and authority to operate by the National Telecommunications Commission.
Petitioner employed respondents Nazareno, Gerzon, Deiparine, and Lerasan as production assistants (PAs) on different dates. They
were assigned at the news and public affairs, for various radio programs in the Cebu Broadcasting Station. On December 19, 1996,
petitioner and the ABS-CBN Rank-and-File Employees executed a Collective Bargaining Agreement (CBA) to be effective during the
period from December 11, 1996 to December 11, 1999. However, since petitioner refused to recognize PAs as part of the bargaining
unit, respondents were not included to the CBA.
In October 2000, respondents filed a Complaint for Recognition of Regular Employment Status, Underpayment of Overtime Pay,
Holiday Pay, Premium Pay, Service Incentive Pay, Sick Leave Pay, and 13th Month Pay with Damages against the petitioner before the
NLRC. The Labor Arbiter rendered judgment in favor of the respondents, and declared that they were regular employees of petitioner
as such, they were awarded monetary benefits. NLRC affirmed the decision of the Labor Arbiter. Petitioner filed a motion for
reconsideration but CA dismissed it.
ISSUE:
Whether or not the respondents were considered regular employees of ABS-CBN.
RULING:
SC ruled that Production Assistants (Pas) are regular workers. Thus, they are entitled to the benefits in the CBA between ABS-CBN and
its rank-and-file employees.
It was held that where a person has rendered at least one year of service, regardless of the nature of the activity performed, or where
the work is continuous or intermittent, the employment is considered regular as long as the activity exists, the reason being that a
customary appointment is not indispensable before one may be formally declared as having attained regular status.
The Court states that the primary standard, therefore, of determining regular employment is the reasonable connection between the
particular activity performed by the employee in relation to the usual trade or business of the employer. The test is whether the
former is usually necessary or desirable in the usual business or trade of the employer. The connection can be determined by
considering the nature of work performed and its relation to the scheme of the particular business or trade in its entirety. Also, if the
employee has been performing the job for at least a year, even if the performance is not continuous and merely intermittent, the law
deems repeated and continuing need for its performance as sufficient evidence of the necessity if not indispensability of that activity
to the business. Hence, the employment is considered regular, but only with respect to such activity and while such activity exists.
Additionally, respondents cannot be considered as project or program employees because no evidence was presented to show that
the duration and scope of the project were determined or specified at the time of their engagement. In the case at bar, however, the
employer-employee relationship between petitioner and respondents has been proven. In the selection and engagement of
respondents, no peculiar or unique skill, talent or celebrity status was required from them because they were merely hired through
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petitioner’s personnel department just like any ordinary employee. Respondents did not have the power to bargain for huge talent
fees, a circumstance negating independent contractual relationship. Respondents are highly dependent on the petitioner for
continued work. The degree of control and supervision exercised by petitioner over respondents through its supervisors negates the
allegation that respondents are independent contractors.
The presumption is that when the work done is an integral part of the regular business of the employer and when the worker, relative
to the employer, does not furnish an independent business or professional service, such work is a regular employment of such
employee and not an independent contractor. As regular employees, respondents are entitled to the benefits granted to all other
regular employees of petitioner under the CBA . Besides, only talent-artists were excluded from the CBA and not production assistants
who are regular employees of the respondents. Moreover, under Article 1702 of the New Civil Code: “In case of doubt, all labor
legislation and all labor contracts shall be construed in favor of the safety and decent living of the laborer.”
Francisco vs. NLRC

G.R. No. 170087; August 31, 2006
FACTS:
Angelina Francisco was hired by Kasei Corporation during the incorporation stage. She was designated as accountant and corporate
secretary and was assigned to handle all the accounting needs of the company. She was also designated as Liason Officer to the City of
Manila to secure permits for the operation of the company.
In 1996, Petitioner was designated as Acting Manager. She was assigned to handle recruitment of all employees and perform
management administration functions. In 2001, she was replaced by Liza Fuentes as Manager. Kasei Corporation reduced her salary
to P2,500 per month which was until September. She asked for her salary but was informed that she was no longer connected to the
company. She did not anymore report to work since she was not paid for her salary. She filed an action for constructive dismissal
with the Labor Arbiter.
ISSUE:
Whether or not there was an employer-employee relationship.
RULING:
SC held that there was such relationship. Francisco was constructively dismissed. To ascertain if such relationship exists, the Court
used two-tiered test—control test and economic reality test.
The court held that in this jurisdiction, there has been no uniform test to determine the existence of an employer-employee relation.
Generally, courts have relied on the so-called right of control test where the person for whom the services are performed reserves a
right to control not only the end to be achieved but also the means to be used in reaching such end. In addition to the standard of
right-of-control, the existing economic conditions prevailing between the parties, like the inclusion of the employee in the payrolls,
can help in determining the existence of an employer-employee relationship.
The better approach would therefore be to adopt a two-tiered test involving: (1) the putative employer’s power to control the
employee with respect to the means and methods by which the work is to be accomplished; and (2) the underlying economic realities
of the activity or relationship.
The court observed the need to consider the existing economic conditions prevailing between the parties, in addition to the standard
of right-of-control like the inclusion of the employee in the payrolls, to give a clearer picture in determining the existence of an
employer-employee relationship based on an analysis of the totality of economic circumstances of the worker.
Thus, the determination of the relationship between employer and employee depends upon the circumstances of the whole economic
activity, such as: (1) the extent to which the services performed are an integral part of the employer’s business; (2) the extent of the
worker’s investment in equipment and facilities; (3) the nature and degree of control exercised by the employer; (4) the worker’s
opportunity for profit and loss; (5) the amount of initiative, skill, judgment or foresight required for the success of the claimed
independent enterprise; (6) the permanency and duration of the relationship between the worker and the employer; and (7) the
degree of dependency of the worker upon the employer for his continued employment in that line of business. The proper standard of
economic dependence is whether the worker is dependent on the alleged employer for his continued employment in that line of
business.
By applying the control test, there is no doubt that petitioner is an employee of Kasei Corporation because she was under the direct
control and supervision of Seiji Kamura, the corporation’s Technical Consultant. It is therefore apparent that petitioner is
economically dependent on respondent corporation for her continued employment in the latter’s line of business.
There can be no other conclusion that petitioner is an employee of respondent Kasei Corporation. She was selected and engaged by
the company for compensation, and is economically dependent upon respondent for her continued employment in that line of
business. Her main job function involved accounting and tax services rendered to Respondent Corporation on a regular basis over an
indefinite period of engagement. Respondent Corporation hired and engaged petitioner for compensation, with the power to dismiss
her for cause. More importantly, Respondent Corporation had the power to control petitioner with the means and methods by which
the work is to be accomplished.
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Nogales et. al. vs. Capitol Medical Center et. al.

G.R. No. 142625; December 19, 2006
FACTS:
Pregnant with her fourth child, Corazon Nogales ("Corazon"), who was then 37 years old, was under the exclusive prenatal care of Dr.
Oscar Estrada ("Dr. Estrada") beginning on her fourth month of pregnancy or as early as December 1975. Around midnight of 25 May
1976, Corazon started to experience mild labor pains prompting Corazon and Rogelio Nogales ("Spouses Nogales") to see Dr. Estrada
at his home. After examining Corazon, Dr. Estrada advised her immediate admission to the Capitol Medical Center ("CMC"). t 6:13 a.m.,
Corazon started to experience convulsionsAt 6:22 a.m., Dr. Estrada, assisted by Dr. Villaflor, applied low forceps to extract Corazon's
baby. In the process, a 1.0 x 2.5 cm. piece of cervical tissue was allegedly torn.At 6:27 a.m., Corazon began to manifest moderate vaginal
bleeding which rapidly became profuse. Corazon died at 9:15 a.m. The cause of death was "hemorrhage, post partum.
ISSUE:
Whether or not the Capitol Medical Center is solidarily liable.
RULING:
SC held CMC solidarily liable together with Dr. Estrada. The “doctrine of apparent authority” was used to make CMC vicariously liable
even if Dr. Estrada is an independent contractor.
Private hospitals, hire, fire and exercise real control over their attending and visiting "consultant" staff. The basis for holding an
employer solidarily responsible for the negligence of its employee is found in Article 2180 of the Civil Code which considers a person
accountable not only for his own acts but also for those of others based on the former's responsibility under a relationship of patria
potestas.
In general, a hospital is not liable for the negligence of an independent contractor-physician. There is, however, an exception to this
principle. The hospital may be liable if the physician is the "ostensible" agent of the hospital. This exception is also known as the
"doctrine of apparent authority”.
For a hospital to be liable under the doctrine of apparent authority, a plaintiff must show that: (1) the hospital, or its agent, acted in a
manner that would lead a reasonable person to conclude that the individual who was alleged to be negligent was an employee or
agent of the hospital; (2) where the acts of the agent create the appearance of authority, the plaintiff must also prove that the hospital
had knowledge of and acquiesced in them; and (3) the plaintiff acted in reliance upon the conduct of the hospital or its agent,
consistent with ordinary care and prudence. In the instant case, CMC impliedly held out Dr. Estrada as a member of its medical staff.
Through CMC's acts, CMC clothed Dr. Estrada with apparent authority thereby leading the Spouses Nogales to believe that Dr. Estrada
was an employee or agent of CMC.
Coca-Cola Bottlers Phils. vs. Dr. Climaco

G.R. No. 146881; February 5, 2007
FACTS:
Dr. Climaco is a medical doctor who was hired by the petitioner by virtue of retainer agreement. The agreement states that there is no
employer-employee relationship between the parties. The retainer agreement was renewed annually. The last one expired on Dec. 31,
1993. Despite of the non-renewal of the agreement, respondent continued to perform his functions as company doctor until he
received a letter in March 1995 concluding their retainer agreement.
Respondent filed a complaint before the NLRC seeking recognition as a regular employee of the petitioner company and prayed for
the payment of all benefits of a regular employee. In the decision of the Labor Arbiter, the company lacked control over the
respondent’s performance of his duties. Respondent appealed where it rendered that no employer-employee relationship existed
between the parties.
The CA ruled that an employer-employee relationship existed.
ISSUE:
RULING:
SC ruled that there is no such relationship between the parties.
The Court, in determining the existence of an employer-employee relationship, has invariably adhered to the four-fold test: (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,” considered to be the most important element.
The Court agrees with the finding of the Labor Arbiter and the NLRC that the circumstances of this case show that no employer-
employee relationship exists between the parties. The Comprehensive Medical Plan, provided guidelines merely to ensure that the
end result was achieved, but did not control the means and methods by which respondent performed his assigned tasks. In addition,
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the Court finds that the schedule of work and the requirement to be on call for emergency cases do not amount to such control, but
are necessary incidents to the Retainership Agreement.
Considering that there is no employer-employee relationship between the parties, the termination of the Retainership Agreement,
which is in accordance with the provisions of the Agreement, does not constitute illegal dismissal of respondent.
Calamba Medical Center vs. NLRC et. al.

G.R. No. 176484; November 25, 2008
FACTS:
The Calamba Medical Center (petitioner), a privately-owned hospital, engaged the services of medical doctors-spouses Ronaldo
Lanzanas (Dr. Lanzanas) and Merceditha Lanzanas (Dr. Merceditha) in March 1992 and August 1995, respectively, as part of its team
of resident physicians. Reporting at the hospital twice-a-week on twenty-four-hour shifts, respondents were paid a monthly "retainer"
of P4,800.00 each. It appears that resident physicians were also given a percentage share out of fees charged for out-patient
treatments, operating room assistance and discharge billings, in addition to their fixed monthly retainer.
The work schedules of the members of the team of resident physicians were fixed by petitioner's medical director Dr. Raul Desipeda
(Dr. Desipeda). And they were issued identification cards by petitioner and were enrolled in the Social Security System (SSS). Income
taxes were withheld from them.
Dr. Meluz Trinidad (Dr. Trinidad), also a resident physician at the hospital, inadvertently overheard a telephone conversation of
respondent Dr. Lanzanas with a fellow employee, Diosdado Miscala, through an extension telephone line. Apparently, Dr. Lanzanas
and Miscala were discussing the low "census" or admission of patients to the hospital.
Dr. Trinidad issued to Dr. Lanzanas a memorandum asking her to explain within 24 hours why no disciplinary action should be taken
against him. Pending investigation, he was placed under a 30-day preventive suspension.
Inexplicably, petitioner did not give respondent Dr. Merceditha, who was not involved in the said incident, any work schedule after
sending her husband Dr. Lanzanas the memorandum, nor inform her the reason therefor, albeit she was later informed by the Human
Resource Department (HRD) officer that that was part of petitioner's cost-cutting measures.
Dr. Lanzanas filed a complaint for illegal suspension before the National Labor Relations Commission (NLRC)-Regional Arbitration
Board (RAB) IV. Dr. Merceditha subsequently filed a complaint for illegal dismissal.
ISSUE:
Whether or not there exists an employer-employee relationship between petitioner and the spouses-respondents.
Whether or not the spouses-respondents were legally dismissed.
RULING:
SC held that there exists such relationship. The spouses-respondents were illegally dismissed.
On the first issue
Under the "control test," an employment relationship exists between a physician and a hospital if the hospital controls both the means
and the details of the process by which the physician is to accomplish his task.
As priorly stated, private respondents maintained specific work-schedules, as determined by petitioner through its medical director,
which consisted of 24-hour shifts totaling forty-eight hours each week and which were strictly to be observed under pain of
administrative sanctions.
That petitioner exercised control over respondents gains light from the undisputed fact that in the emergency room, the operating
room, or any department or ward for that matter, respondents' work is monitored through its nursing supervisors, charge nurses and
orderlies. Without the approval or consent of petitioner or its medical director, no operations can be undertaken in those areas. For
control test to apply, it is not essential for the employer to actually supervise the performance of duties of the employee, it being
enough that it has the right to wield the power.
On the second issue
Petitioner thus failed to observe the two requirements,before dismissal can be effected ─ notice and hearing ─ which constitute
essential elements of the statutory process; the first to apprise the employee of the particular acts or omissions for which his
dismissal is sought, and the second to inform the employee of the employer's decision to dismiss him. Non-observance of these
requirements runs afoul of the procedural mandate.
The termination notice sent to and received by Dr. Lanzanas on April 25, 1998 was the first and only time that he was apprised of the
reason for his dismissal. He was not afforded, however, even the slightest opportunity to explain his side. His was a "termination upon
receipt" situation. While he was priorly made to explain on his telephone conversation with Miscala, he was not with respect to his
supposed participation in the strike and failure to heed the return-to-work order.
As for the case of Dr. Merceditha, her dismissal was worse, it having been effected without any just or authorized cause and without
observance of due process. In fact, petitioner never proferred any valid cause for her dismissal except its view that "her marriage to
[Dr. Lanzanas] has given rise to the presumption that her sympath[y] [is] with her husband; [and that when [Dr. Lanzanas] declared
that he was going to boycott the scheduling of their workload by the medical doctor, he was presumed to be speaking for himself
[and] for his wife Merceditha."
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Escasinas et. al. vs. Shangri-la

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 NLRC 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 there was an employee-employer relationship between Shangri-La and the petitioners.
Whether or not Dr. Pepito is an independent contractor
RULING:
SC ruled that there no such relationship. The petitioners are under the direct supervision of Dr. Pepito, an independent contractor.
On the first issue
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. 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. 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[9] in order to vest
employer-employee relationship on the employer and the person so engaged. 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.
On the second issue
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.
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.
Tongko vs. The Manufacturer’s Life Insurance Co., Inc. November 7, 2008

G.R. No. 167622, November 07, 2008
FACTS:
Manufacturers Life Insurance Co. (Phils.), Inc. (Manulife) is a domestic corporation engaged in life insurance business.Renato A. Vergel
De Dios was, during the period material, its President and Chief Executive Officer. Gregorio V. Tongko started his professional
relationship with Manulife on July 1, 1977 by virtue of a Career Agent's Agreement (Agreement) he executed with Manulife. In the
Agreement, it is provided that: It is understood and agreed that the Agent is an independent contractor and nothing contained herein
shall be construed or interpreted as creating an employer-employee relationship between the Company and the Agent. The Company
may terminate this Agreement for any breach or violation of any of the provisions hereof by the Agent by giving written notice to the
Agent within fifteen (15) days from the time of the discovery of the breach. No waiver, extinguishment, abandonment, withdrawal or
cancellation of the right to terminate this Agreement by the Company shall be construed for any previous failure to exercise its right
under any provision of this Agreement.
Either of the parties hereto may likewise terminate his Agreement at any time without cause, by giving to the other party fifteen (15)
days notice in writing. In 1983, Tongko was named as a Unit Manager in Manulife's Sales Agency Organization. In 1990, he became a
Branch Manager. As the CA found, Tongko's gross earnings from his work at Manulife, consisting of commissions, persistency income,
and management overrides. The problem started sometime in 2001, when Manulife instituted manpower development programs in
the regional sales management level. Relative thereto, De Dios addressed a letter dated November 6, 2001 to Tongko regarding an
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October 18, 2001 Metro North Sales Managers Meeting. Stating that Tongko’s Region was the lowest performer (on a per Manager
basis) in terms of recruiting in 2000 and, as of today, continues to remain one of the laggards in this area.
Other issues were:"Some Managers are unhappy with their earnings and would want to revert to the position of agents." And "Sales
Managers are doing what the company asks them to do but, in the process, they earn less." Tongko was then terminated.
Therefrom, Tongko filed a Complaint dated November 25, 2002 with the NLRC against Manulife for illegal dismissal in the Complaint.
In a Decision dated April 15, 2004, Labor Arbiter dismissed the complaint for lack of an employer-employee relationship. The NLRC's
First Division, while finding an employer-employee relationship between Manulife and Tongko applying the four-fold test, held
Manulife liable for illegal dismissal. Thus, Manulife filed an appeal with the CA. Thereafter, the CA issued the assailed Decision dated
March 29, 2005, finding the absence of an employer-employee relationship between the parties and deeming the NLRC with no
jurisdiction over the case.Hence, Tongko filed this petition.
ISSUES:
1.WON Tongko was an employee of Manulife
2.WON Tongko was illegally dismissed.
RULING:
1. Yes
In the instant case, Manulife had the power of control over Tongko that would make him its employee. Several factors contribute to
this conclusion. In the Agreement dated July 1, 1977 executed between Tongko and Manulife, it is provided that: The Agent hereby
agrees to comply with all regulations and requirements of the Company as herein provided as well as maintain a standard of
knowledge and competency in the sale of the Company's products which satisfies those set by the Company and sufficiently meets the
volume of new business required of Production Club membership.Under this provision, an agent of Manulife must comply with three
(3) requirements: (1) compliance with the regulations and requirements of the company; (2) maintenance of a level of knowledge of
the company's products that is satisfactory to the company; and (3) compliance with a quota of new businesses. Among the company
regulations of Manulife are the different codes of conduct such as the Agent Code of Conduct, Manulife Financial Code of Conduct, and
Manulife Financial Code of Conduct Agreement, which demonstrate the power of control exercised by the company over Tongko. The
fact that Tongko was obliged to obey and comply with the codes of conduct was not disowned by respondents. Thus, with the
company regulations and requirements alone, the fact that Tongko was an employee of Manulife may already be established.
Certainly, these requirements controlled the means and methods by which Tongko was to achieve the company's goals.
More importantly, Manulife's evidence establishes the fact that Tongko was tasked to perform administrative duties that establishes
his employment with Manulife. Additionally, it must be pointed out that the fact that Tongko was tasked with recruiting a certain
number of agents, in addition to his other administrative functions, leads to no other conclusion that he was an employee of Manulife.
2. Yes
In its Petition for Certiorari dated January 7, 2005[26] filed before the CA, Manulife argued that even if Tongko is considered as its
employee, his employment was validly terminated on the ground of gross and habitual neglect of duties, inefficiency, as well as willful
disobedience of the lawful orders of Manulife. Manulife stated: In the instant case, private respondent, despite the written reminder
from Mr. De Dios refused to shape up and altogether disregarded the latter's advice resulting in his laggard performance clearly
indicative of his willful disobedience of the lawful orders of his superior. As private respondent has patently failed to perform a very
fundamental duty, and that is to yield obedience to all reasonable rules, orders and instructions of the Company, as well as gross
failure to reach at least minimum quota, the termination of his engagement from Manulife is highly warranted and therefore, there is
no illegal dismissal to speak of. It is readily evident from the above-quoted portions of Manulife's petition that it failed to cite a single
iota of evidence to support its claims. Manulife did not even point out which order or rule that Tongko disobeyed. More importantly,
Manulife did not point out the specific acts that Tongko was guilty of that would constitute gross and habitual neglect of duty or
disobedience. Manulife merely cited Tongko's alleged "laggard performance," without substantiating such claim, and equated the
same to disobedience and neglect of duty. Apropos thereto, Art. 277, par. (b), of the Labor Code mandates in explicit terms that the
burden of proving the validity of the termination of employment rests on the employer. Failure to discharge this evidential burden
would necessarily mean that the dismissal was not justified, and, therefore, illegal. The Labor Code provides that an employer may
terminate the services of an employee for just cause and this must be supported by substantial evidence. The settled rule in
administrative and quasi-judicial proceedings is that proof beyond reasonable doubt is not required in determining the legality of an
employer's dismissal of an employee, and not even a preponderance of evidence is necessary as substantial evidence is considered
sufficient. Substantial evidence is more than a mere scintilla of evidence or relevant evidence as a reasonable mind might accept as
adequate to support a conclusion, even if other minds, equally reasonable, might conceivably opine otherwise. Here, Manulife failed to
overcome such burden of proof. It must be reiterated that Manulife even failed to identify the specific acts by which Tongko's
employment was terminated much less support the same with substantial evidence.To repeat, mere conjectures cannot work to
deprive employees of their means of livelihood. Thus, it must be concluded that Tongko was illegally dismissed. Moreover, as to
Manulife's failure to comply with the twin notice rule, it reasons that Tongko not being its employee is not entitled to such notices.
Since we have ruled that Tongko is its employee, however, Manulife clearly failed to afford Tongko said notices. Thus, on this ground
too, Manulife is guilty of illegal dismissal.
Atok Big Wedge Company vs. Gison

G.R. No. 169510 August 8, 2011
FACTS:
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LABOR RELATIONS LAW
Sometime in February 1992, respondent Jesus P. Gison was engaged as part-time consultant on retainer basis by petitioner Atok Big
Wedge Company, Inc. through its then Asst. Vice-President and Acting Resident Manager, Rutillo A. Torres. As a consultant on retainer
basis, respondent assisted 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. Respondent was likewise tasked to perform liaison work
with several government agencies, which he said was his expertise.
Sometime thereafter, since respondent was getting old, he requested that petitioner cause his registration with the Social Security
System (SSS), but petitioner did not accede to his request. He later reiterated his request but it was ignored by respondent
considering that he was only a retainer/consultant. On February 4, 2003, respondent filed a Complaint with the SSS against petitioner
for the latter's refusal to cause his registration with the SSS.
On the same date, Mario D. Cera, in his capacity as resident manager of petitioner, issued a Memorandum advising respondent that
within 30 days from receipt thereof, petitioner is terminating his retainer contract with the company since his services are no longer
necessary.
On September 26, 2003, after the parties have submitted their respective pleadings, Labor Arbiter Rolando D. Gambito rendered a
Decision ruling in favor of the petitioner. Finding no employer-employee relationship between petitioner and respondent, the Labor
Arbiter dismissed the complaint for lack of merit.
On July 30, 2004, the NLRC, Second Division, issued a Resolution affirming the decision of the Labor Arbiter. Respondent filed a
Motion for Reconsideration, but it was denied in the Resolution dated September 30, 2004.
ISSUES:
Whether or not there was an employer-employee relationship.
HELD:
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." Of these four, the last one is the most important. 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. Under the control test, an employer-employee relationship exists where the person for whom the services are performed
reserves the right to control not only the end achieved, but also the manner and means to be used in reaching that end.
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.
Contrary to the conclusion of the CA, 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.
Semblante et al., vs. Court of Appeals, et al.

G.R. No. 196426 August 15, 2011
FACTS:
Petitioners Marticio Semblante (Semblante) and Dubrick Pilar (Pilar) assert that they were hired by respondents-spouses Vicente and
Maria Luisa Loot, the owners of Gallera de Mandaue (the cockpit), as the official masiador and sentenciador, respectively, of the
cockpit sometime in 1993.
As the masiador, Semblante calls and takes the bets from the gamecock owners and other bettors and orders the start of the cockfight.
He also distributes the winnings after deducting the arriba, or the commission for the cockpit. Meanwhile, as the sentenciador, Pilar
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LABOR RELATIONS LAW
oversees the proper gaffing of fighting cocks, determines the fighting cocks' physical condition and capabilities to continue the
cockfight, and eventually declares the result of the cockfight.
They work every Tuesday, Wednesday, Saturday, and Sunday every week, excluding monthly derbies and cockfights held on special
holidays. Their working days start at 1:00 p.m. and last until 12:00 midnight, or until the early hours of the morning depending on the
needs of the cockpit. Petitioners had both been issued employees' identification cards that they wear every time they report for duty.
They alleged never having incurred any infraction and/or violation of the cockpit rules and regulations.
On November 14, 2003, however, petitioners were denied entry into the cockpit upon the instructions of respondents, and were
informed of the termination of their services effective that date. This prompted petitioners to file a complaint for illegal dismissal
against respondents.
Labor Arbiter Julie C. Rendoque found petitioners to be regular employees of respondents as they performed work that was necessary
and indispensable to the usual trade or business of respondents for a number of years. The Labor Arbiter also ruled that petitioners
were illegally dismissed, and so ordered respondents to pay petitioners their backwages and separation pay.
The respondents filed an Appeal during the 10-day appeal period but was unable to post a cash or surety bond. Thus for an
unperfected appeal the NLRC dismissed the same. It was only on October 11, 2006 they were able to post bond dated October 6, 2006.
The NLRC ruled on the Motion for Reconsideration although there was belated filing of the cash or surety bond. The NLRC held in its
Resolution of October 18, 2006 that there was no employer-employee relationship between petitioners and respondents, respondents
having no part in the selection and engagement of petitioners, and that no separate individual contract with respondents was ever
executed by petitioners.
ISSUES:
1. Whether or not the Appeal has been perfected even after a belated filing of the cash or surety bond.
2. Whether or not there was an employer-employee relationship between the petitioner and respondent.
HELD:
Time and again, however, this Court, considering the substantial merits of the case, has relaxed this rule on, and excused the late
posting of, the appeal bond when there are strong and compelling reasons for the liberality, such as the prevention of miscarriage of
justice extant in the case or the special circumstances in the case combined with its legal merits or the amount and the issue involved.
After all, technical rules cannot prevent courts from exercising their duties to determine and settle, equitably and completely, the
rights and obligations of the parties. This is one case where the exception to the general rule lies.
While respondents had failed to post their bond within the 10-day period provided above, it is evident, on the other hand, that
petitioners are NOT employees of respondents, since their relationship fails to pass muster the four-fold test of employment We have
repeatedly mentioned in countless decisions: (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, which is the most important element.
As found by both the NLRC and the CA, respondents had no part in petitioners' selection and management; petitioners' compensation
was paid out of the arriba (which is a percentage deducted from the total bets), not by petitioners; and petitioners performed their
functions as masiador and sentenciador free from the direction and control of respondents. In the conduct of their work, petitioners
relied mainly on their "expertise that is characteristic of the cockfight gambling," and were never given by respondents any tool
needed for the performance of their work.
Respondents, therefore, could never have been illegally dismissed since they are not employees of the respondents.
Jose Mel Bernarte vs. Philippine Basketball Association (PBA), Jose Emmanuel Eala, and Perry Martinez
G.R. No. 192084. September 14, 2011
FACTS:
Complainants (Jose Mel Bernarte and Renato Guevarra) aver that they were invited to join the PBA as referees. During the term of
Commissioner Eala, however, changes were made on the terms of their employment. Bernarte, for instance, was not made to sign a
contract during the first conference of the All-Filipino Cup which was from February 23, 2003 to June 2003. It was only during the
second conference when he was made to sign a one and a half month contract for the period July 1 to August 5, 2003. On January 15,
2004, Bernarte received a letter from the Office of the Commissioner advising him that his contract would not be renewed citing his
unsatisfactory performance on and off the court. On the other hand, complainant Guevarra alleges that he was invited to join the PBA
pool of referees in February 2001, and signed a contract as a trainee on March 1, 2001. Beginning 2002, he signed a yearly contract as
Regular Class C referee. On May 6, 2003, respondent Martinez issued a memorandum to Guevarra expressing dissatisfaction over his
questioning on the assignment of referees officiating out-of-town games. Beginning February 2004, he was no longer made to sign a
contract.
Respondents aver that complainants were not illegally dismissed because they were not employees of the PBA.
31 March 2005 Decision, the Labor Arbiter declared petitioner an employee whose dismissal by respondents was illegal, ordering
reinstatement of petitioner and the payment of backwages, moral and exemplary damages, and attorney’s fees.
28 January 2008 Decision, the NLRC affirmed the Labor Arbiter's judgment. The Court of Appeals found petitioner an independent
contractor since respondents did not exercise any form of control over the means and methods by which petitioner performed his
work as a basketball referee.
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LABOR RELATIONS LAW
ISSUES:
Whether petitioner is an employee of respondents, which in turn determines whether petitioner was illegally dismissed;
Whether the Labor Arbiter's decision has become final and executory for failure of respondents to appeal with the NLRC within the
reglementary period
RULING:
SC affirmed CA’s decision.
Petitioner failed to present any concrete proof as to how, when and to whom the delivery and receipt of the three notices issued by
the post office was made. The issuance of the notices by the post office is not equivalent to delivery to and receipt by the addressee of
the registered mail. There is no conclusive evidence showing that the post office notices were actually received by respondents,
negating petitioner's claim of constructive service of the Labor Arbiter's decision on respondents. The Postmaster's Certification does
not sufficiently prove that the three notices were delivered to and received by respondents; it only indicates that the post office issued
the three notices. The ends of justice will be better served if we resolve the instant case on the merits rather than allowing the
substantial issue of whether petitioner is an independent contractor or an employee linger and remain unsettled due to procedural
technicalities.
We agree with respondents that once in the playing court, the referees exercise their own independent judgment, based on the rules
of the game, as to when and how a call or decision is to be made. Respondents or any of the PBA officers cannot and do not determine
which calls to make or not to make and cannot control the referee when he blows the whistle because such authority exclusively
belongs to the referees. Petitioner is required to report for work only when PBA games are scheduled or three times a week at two
hours per game. In addition, there are no deductions for contributions to the Social Security System, Philhealth or Pag-Ibig, which are
the usual deductions from employees' salaries. These undisputed circumstances buttress the fact that petitioner is an independent
contractor, and not an employee of respondents. For a hired party to be considered an employee, the hiring party must have control
over the means and methods by which the hired party is to perform his work, which is absent in this case. The continuous rehiring by
PBA of petitioner simply signifies the renewal of the contract between PBA and petitioner, and highlights the satisfactory services
rendered by petitioner warranting such contract renewal. The non-renewal of the contract between the parties does not constitute
illegal dismissal of petitioner by respondents.
Cesar Lirio vs. Wilmer Genovia

G.R. No. 169757. November 23, 2011
FACTS:
July 9, 2002, respondent Wilmer D. Genovia filed a complaint against petitioner Cesar Lirio and/or Celkor Ad Sonicmix Recording
Studio for illegal dismissal, non-payment of commission and award of moral and exemplary damages. He was employed to manage
and operate Celkor and to promote and sell the recording studio's services to music enthusiasts and other prospective clients. He
received a monthly salary of P7,000.00. They also agreed that he was entitled to an additional commission of P100.00 per hour as
recording technician whenever a client uses the studio for recording, editing or any related work. He was made to report for work
from Monday to Friday from 9:00 a.m. to 6 p.m. On Saturdays, he was required to work half-day only, but most of the time, he still
rendered eight hours of work or more.
Respondent stated that a few days after he started working as a studio manager, petitioner approached him and told him about his
project to produce an album for his 15-year-old daughter. Petitioner asked respondent to compose and arrange songs for Celine and
promised that he (Lirio) would draft a contract to assure respondent of his compensation for such services. Petitioner later informed
respondent that he was only entitled to the 20% of the net profit and that the salaries he received would be deducted from the said
20% net profit share. Respondent objected then petitioner verbally terminated the former’s services and instructed the same not to
report for work.
On October 31, 2003, Labor Arbiter Renaldo O. Hernandez rendered a decision, finding that an employer-employee relationship
existed between petitioner and respondent, and that respondent was illegally dismissed.
In a Resolution dated October 14, 2004, the NLRC reversed and set aside the decision of the Labor Arbiter. NLRC held that respondent
failed to proved with substantial evidence that he was selected and engaged by petitioner, that petitioner had the power to dismiss
him, and that they had the power to control him not only as to the result of his work, but also as to the means and methods of
accomplishing his work.
On August 4, 2005, the Court of Appeals rendered a decision reversing and setting aside the resolution of the NLRC, and reinstating
the decision of the Labor Arbiter, with modification in regard to the award of commission and damages. The Court of Appeals deleted
the award of commission and moral and exemplary damages as the same were not substantiated.
ISSUE:
Whether there existed an employer-employee relationship between petitioner and respondent, and whether dismissal of respondent
is illegal.
RULING:
SC affirmed CA’s decision.
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LABOR RELATIONS LAW
It is settled that no particular form of evidence is required to prove the existence of an employer-employee relationship. Any
competent and relevant evidence to prove the relationship may be admitted. In this case, the documentary evidence presented by
respondent to prove that he was an employee of petitioner are as follows: (a) a document denominated as "payroll" (dated July 31,
2001 to March 15, 2002) certified correct by petitioner, which showed that respondent received a monthly salary of P7,000.00
(P3,500.00 every 15th of the month and another P3,500.00 every 30th of the month) with the corresponding deductions due to
absences incurred by respondent; and (2) copies of petty cash vouchers, showing the amounts he received and signed for in the
payrolls. Petitioner failed to prove that his relationship with respondent was one of partnership. Such claim was not supported by any
written agreement.
The Court agrees with the Court of Appeals that the evidence presented by the parties showed that an employer-employee
relationship existed between petitioner and respondent.
In termination cases, the burden is upon the employer to show by substantial evidence that the termination was for lawful cause and
validly made. Article 277 (b) of the Labor Code puts the burden of proving that the dismissal of an employee was for a valid or
authorized cause on the employer, without distinction whether the employer admits or does not admit the dismissal. For an
employee's dismissal to be valid, (a) the dismissal must be for a valid cause, and (b) the employee must be afforded due process.
Procedural due process requires the employer to furnish an employee with two written notices before the latter is dismissed: (1) the
notice to apprise the employee of the particular acts or omissions for which his dismissal is sought, which is the equivalent of a
charge; and (2) the notice informing the employee of his dismissal, to be issued after the employee has been given reasonable
opportunity to answer and to be heard on his defense.
Petitioner failed to comply with these legal requirements; hence, the Court of Appeals correctly affirmed the Labor Arbiter's finding
that respondent was illegally dismissed.
Charlie Jao vs BBC Products Sales Inc.

G.R. No. 163700, April 18, 2012
FACTS:
Petitioner offered the following: (a) BCC Identification Card (ID) issued to him stating his name and his position as “comptroller,” and
bearing his picture, his signature, and the signature of Ty; (b) a payroll of BCC for the period of October 1-15, 1996 that petitioner
approved as comptroller; (c) various bills and receipts related to expenditures of BCC bearing the signature of petitioner; (d) various
checks carrying the signatures of petitioner and Ty, and, in some checks, the signature of petitioner alone; (e) a court order showing
that the issuing court considered petitioner’s ID as proof of his employment with BCC; (f) a letter of petitioner dated March 1, 1997 to
the Department of Justice on his filing of a criminal case for estafa against Ty for non-payment of wages; (g) affidavits of some
employees of BCC attesting that petitioner was their co-employee in BCC; and (h) a notice of raffle dated December 5, 1995 showing
that petitioner, being an employee of BCC, received the notice of raffle in behalf of BCC.
But respondent countered the evidences presented by the petitioner by proving that Charlie Jao is not their employee, as SFC had
installed petitioner as its comptroller in BCC to oversee and supervise SFC’s collections and the account of BCC to protect SFC’s
interest; that their issuance of the ID to petitioner was only for the purpose of facilitating his entry into the BCC premises in relation to
his work of overseeing the financial operations of BCC for SFC; that the ID should not be considered as evidence of petitioner’s
employment in BCC; that petitioner executed an affidavit in March 1996, stating, among others, that he is a CPA presently employed
at SFC.
ISSUE:
WON there exist an employee-employer relationship between the petitioner and respondent.
HELD:
The Supreme Court held that there exist no employee-employer relationship between the two based on the affidavits made by the
petitioner that he is an employee of SFC to oversee and supervise SFC's collection.
Moreover, in determining the presence or absence of an employer-employee relationship, the Court has consistently looked for the
following incidents, to wit: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal;
and (d) the employer’s power to control the employee on the means and methods by which the work is accomplished. The last
element, the so-called control test, is the most important element.
It can be deduced from the March 1996 affidavit of petitioner that respondents challenged his authority to deliver some 158 checks to
SFC. Considering that he contested respondents’ challenge by pointing to the existing arrangements between BCC and SFC, it should
be clear that respondents did not exercise the power of control over him, because he thereby acted for the benefit and in the interest
of SFC more than of BCC.
In addition, petitioner presented no document setting forth the terms of his employment by BCC. The failure to present such
agreement on terms of employment may be understandable and expected if he was a common or ordinary laborer who would not
jeopardize his employment by demanding such document from the employer, but may not square well with his actual status as a
highly educated professional.
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LABOR RELATIONS LAW
Legend Hotel (Manila) vs. Realuyo

GR. No. 153511, July 18, 2012
FACTS:
Respondent was employed in Petitioner’s hotel from September 1992 to August 9, 1999 as a pianist. On July 9, 1999,
Respondent was informed that his services would no longer be needed as a cost cutting measure of the company. Respondent filed a
complaint for alleged unfair labor practice, constructive illegal dismissal, and the underpayment/nonpayment of his premium pay for
holidays, separation pay, service incentive leave pay, and 13 th month pay. He prayed for attorney's fees, moral damages off
P100,000.00 and exemplary damages for P100,000.00. Petitioner contends that there was no employee-employer relationship
therefore it does not fall under the ambit of the Labour Code.
The labour arbiter dismissed Respondent’s complaint agreeing with Petitioner that there was no employee-employer
relationship. Respondent appealed with the NLRC which in turn affirmed the labor arbiter’s decision. Respondent filed a motion for
certiorari in the Court of Appeals which reversed the decision of the NLRC and granted respondent’s petition.
ISSUES:
Whether or not there was employee-employer relationship?
And if there was, was there a valid dismissal?
HELD:
a. Yes there was employee-employer relationship. All four requisites for the existence of employee- employer relationship
exist in this case. The petitioner selects the employee and paid him wages denominated as talent fees and most importantly
exercised control over what he wore and the songs he could play. He also had the power to dismiss as shown in the
memorandum given to the employee.
b. Retrenchment is one of the authorized causes for the dismissal of employees recognized by the Labor Code. It is a
management prerogative resorted to by employers to avoid or to minimize business losses. The Court has laid down the
following standards that an employer should meet to justify retrenchment and to foil abuse, namely:
(a) The expected losses should be substantial and not merely de minimis in extent;
(b) The substantial losses apprehended must be reasonably imminent;
(c) The retrenchment must be reasonably necessary and likely to effectively prevent the expected losses; and
(d) The alleged losses, if already incurred, and the expected imminent losses sought to be forestalled must be
proved by sufficient and convincing evidence
In termination cases, the burden of proving that the dismissal was for a valid or authorized cause rests upon the
employer. The petitioner did not submit evidence of the losses to its business operations and the economic havoc it would
thereby imminently sustain. It only claimed that respondent’s termination was due to its “present business/financial
condition”. This bare statement fell short of the norm to show a valid retrenchment. Indeed, not every loss incurred or
expected to be incurred by an employer can justify retrenchment. The employer must prove, among others, that the losses
are substantial and that the retrenchment is reasonably necessary to avert such losses. Thus, by its failure to present
sufficient and convincing evidence to prove that retrenchment was necessary, respondent’s termination due to
retrenchment is not allowed.
The New Philippine Skylanders, Inc. vs. Dakila

G.R. No. 199547; September 24, 2012
Facts:
Respondent Dakila was employed by petitioner corporation as early as 1987 and terminated for cause in April 1997 when the
corporation was sold. In May 1997, he was rehired as consultant by the petitioners under a Contract for Consultancy Services dated
April 30, 1997.
Thereafter, in a letter dated April 19, 2007, respondent Dakila informed petitioners of his compulsory retirement effective May 2,
2007 and sought for the payment of his retirement benefits pursuant to the Collective Bargaining Agreement. His request, however,
was not acted upon. Instead, he was terminated from service effective May 1, 2007.
Consequently, respondent Dakila filed a complaint for constructive illegal dismissal, non-payment of retirement benefits, under/non-
payment of wages and other benefits of a regular employee, and damages against petitioners.
On the other hand, petitioners, in their position paper, asserted that respondent Dakila was a consultant and not their regular
employee. The latter was not included in petitioners' payroll and paid a fixed amount under the consultancy contract. He was not
required to observe regular working hours and was free to adopt means and methods to accomplish his task except as to the results of
the work required of him. Hence, no employer-employee relationship existed between them.
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LABOR RELATIONS LAW
The Labor Arbiter declared respondent Dakila to be a regular employee on the basis of the unrebutted documentary evidence
showing that he was under the petitioners' direct control and supervision and performed tasks that were either incidental or usually
desirable and necessary in the trade or business of petitioner corporation for a period of ten years.
Issue:
WON there was a valid dismissal.
Held:
The issue of illegal dismissal is premised on the existence of an employer-employee relationship between the parties herein.Records
reveal that both the LA and the NLRC, as affirmed by the CA, have found substantial evidence to show that respondent Dakila was a
regular employee who was dismissed without cause.
Following Article 279 of the Labor Code, an employee who is unjustly dismissed from work is entitled to reinstatement without loss of
seniority rights and other privileges and to his full backwages computed from the time he was illegally dismissed. However,
considering that respondent Dakila was terminated on May 1, 2007, or one (1) day prior to his compulsory retirement on May 2,
2007, his reinstatement is no longer feasible. Accordingly, the NLRC correctly held him entitled to the payment of his retirement
benefits pursuant to the CBA. On the other hand, his backwages should be computed only for days prior to his compulsory retirement
which in this case is only a day.
Tesoro et al. vs. Metro Manila Retreaders, Inc. et al.

G.R. No. 171482; March 12, 2014
Facts:
Petitioners used to work as salesmen for respondents Metro Manila Retreaders, Inc., Northern Luzon Retreaders, Inc., or Power Tire
and Rubber Corporation, apparently sister companies, collectively called “Bandag.” Bandag offered repair and retread services for
used tires. Bandag developed a franchising scheme that would enable others to operate tire and retreading businesses using its trade
name and service system.
Petitioners quit their jobs as salesmen and entered into separate Service Franchise Agreements (SFAs) with Bandag for the operation
of their respective franchises. Under the SFAs, Bandag would provide funding support to the petitioners subject to a regular or
periodic liquidation of their revolving funds. The expenses out of these funds would be deducted from petitioners’ sales to determine
their incomes.
At first, petitioners managed and operated their respective franchises without any problem. However, they began to default on their
obligations to submit periodic liquidations of their operational expenses in relation to the revolving funds Bandag provided them.
Consequently, Bandag terminated their respective SFA.
Aggrieved, petitioners filed a complaint for constructive dismissal, non–payment of wages, incentive pay, 13th month pay and
damages against Bandag with the National Labor Relations Commission (NLRC). Petitioners contend that, notwithstanding the
execution of the SFAs, they remained to be Bandag’s employees, the SFAs being but a circumvention of their status as regular
employees.
For its part, Bandag pointed out that petitioners freely resigned from their employment and decided to avail themselves of the
opportunity to be independent entrepreneurs under the franchise scheme that Bandag had. Thus, no employer–employee relationship
existed between petitioners and Bandag.
Issue: WON petitioners remained to be Bandag’s salesmen under the franchise scheme it entered into with them.
Held:
No.
When petitioners agreed to operate Bandag’s franchise branches in different parts of the country, they knew that this substantially
changed their former relationships. They were to cease working as Bandag’s salesmen, the positions they occupied before they
ventured into running separate Bandag branches.
The tests for determining employer–employee relationship are: (a) the selection and engagement of the employee; (b) the payment of
wages; (c) the power of dismissal; and (d) the employer’s power to control the employee with respect to the means and methods by
which the work is to be accomplished. The last is called the “control test,” the most important element.
It is pointed out that Bandag continued, like an employer, to exercise control over petitioners’ work. It points out that Bandag: (a)
retained the right to adjust the price rates of products and services; (b) imposed minimum processed tire requirement (MPR); (c)
reviewed and regulated credit applications; and (d) retained the power to suspend petitioners’ services for failure to meet service
standards.
But uniformity in prices, quality of services, and good business practices are the essence of all franchises. These business constraints
are needed to maintain collective responsibility for faultless and reliable service to the same class of customers for the same prices.
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This is not the “control” contemplated in employer–employee relationships. Control in such relationships addresses the details of day
to day work like assigning the particular task that has to be done, monitoring the way tasks are done and their results, and
determining the time during which the employee must report for work or accomplish his assigned task.
Franchising involves the use of an established business expertise, trademark, knowledge, and training. As such, the franchisee is
required to follow a certain established system. Accordingly, the franchisors may impose guidelines that somehow restrict the
petitioners’ conduct which do not necessarily indicate “control.” The important factor to consider is still the element of control over
how the work itself is done, not just its end result.
III. RIGHT TO SECURITY OF TENURE
ALU-TUCP vs. NLRC

234 SCRA 678 [1994]
Facts:
National Steel Corporation (NSC) employed petitioners in connection with its Five Year Expansion Program. It undertook this
program with the end in view of expanding the volume and increasing the kinds of products that it may offer for sale to the public.
Petitioners were then terminated. They filed a complaint for unfair labor practice, regularization and monetary benefits. Their
contention was that they should be considered regular employees because their jobs are necessary, desirable and work related to
NSC’s main business which is steel making and that they have rendered service for more than six years.
Issue: Whether or not petitioners were properly characterized as regular employees rather than project employees.
Held:
Petitioners are project employees.
Project employees are those employed for a fixed for a specific project or undertaking the completion or termination of which has
been determined at the time of the engagement of the employee. On the other hand, regular employees are legally entitled to remain
in the service of their employer until that service is terminated by one or another of the recognized modes or termination of service
under the Labor Code. The principal test for determining whether an employee is properly characterized as project employees is
whether or not the project employees were carrying out a specific project or undertaking, the duration and the scope of which were
specified at the time the employees were engaged for that project.
There are two types of project activities. First is that a project could refer to a particular job or undertaking that is within the regular
or usual business of the employer company, but which is distinct and separate and identifiable as such, from the other undertakings of
the company. Such job or undertaking begins and ends at determined or determinable times. Second is a particular job or undertaking
that is not within the regular business of the corporation. Such a job or undertaking must also be identifiably separate and distinct
from the ordinary or regular business operations of the employer. It must also begin and end at determined or determinable times.
The case at bar falls on the second type of project activity. The carrying out of the Five Year Expansion Program constitutes a distinct
undertaking identifiable from the ordinary business and activity of NSC. Each component project, of course, begins and ends at
specified times which had already been determined by the time petitioners were engaged. During the time petitioners rendered
services to NSC, their work was limited to one or another of the specific component projects which made up the Five Year Expansion
Program. They were not hired or assigned to any other purpose.
The services of these project employees may be lawfully terminated at the completion of the project. It is dependent and coterminous
with the completion or termination of the specific undertaking or activity for which the employee was hired which has been pre-
determined at the time of the engagement. Furthermore, the length of service of a project employee is not the controlling test of
employment of tenure. The simple fact that the employment of petitioners as project employees had gone beyond one year does not
detract from or legally dissolve their status as project employees. Whichever type of project employment is found in a particular case,
a common basic requisite is that the designation of named employees as "project employees" and their assignment to a specific
project, are effected and implemented in good faith, and not merely as a means of evading otherwise applicable requirements of labor
laws.
Private respondent NSC was not in the business of constructing buildings and installing plant machinery for the general business
community, i.e., for unrelated, third party, corporations. NSC did not hold itself out to the public as a construction company or as an
engineering corporation.
The present case therefore strictly falls under definition of 'project employees' on paragraph one of Article 280 of the Labor Code, as
amended. Moreover, it has been held that the length of service of a project employee is not the controlling test of employment tenure
but whether or not 'the employment has been fixed for a specific project or undertaking the completion or termination of which has
been determined at the time of the engagement of the employee'.
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Cosmos Bottling Corp., vs NLRC

255 SCRA 358 [1996]
Facts:
Gil C. Castro was employed by Cosmos Bottling Corporation for a specific period. Having satisfactorily served the company for two (2)
terms, Castro was recommended for reemployment with the company’s Maintenance Team for the Davao Project, he was re-hired and
assigned to the Maintenance Division of the Davao Project tasked to install the private respondent’s annex plant machines in its Davao
plant. Castro’s employment was terminated due to the completion of the special project. Cosmos Bottling Corporation in valid exercise
of its management prerogative terminated the services of some 228 regular employees by reason of retrenchment. For obvious
reasons, Castro was not among the list of those regular employees whose services were terminated by reason of retrenchment or
those who voluntarily resigned. Castro filed a complaint for illegal dismissal against Cosmos Bottling Corporation with the Labor
Arbiter contending that being a regular employee, he could not be dismissed without a just and valid cause. The company alleged that
Castro was a mere project employee whose employment was co-terminous with the project for which he was hired.
Issue: WON Castro is a regular employee or was a mere project employee of petitioner Cosmos Bottling Corporation.
Held:
After a careful examination of the records of the case, we find merit in the petition and hold that respondent NLRC gravely abused its
discretion when it rendered the challenged decision finding private respondent a regular employee. Article 280 of the Labor Code
which defines regular, project and casual employment is applicable here. The same reads in full:
Article 280. Regular and Casual Employment. — The provisions of written agreement to the contrary notwithstanding and regardless
of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform
activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has
been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the
engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the
duration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That, any employee who has
rendered at least one year of service whether such service is continuous or broken, shall be considered a regular employee with
respect to the activity in which he is employed and his employment shall continue while such actually exists.
The case at bar presents what appears, to our mind, as a typical example of the first type. Petitioner Cosmos Bottling Corporation is a
duly organized corporation engaged in the manufacture, production, bottling, sale and distribution of beverage. In the course of its
business, it undertakes distinct identifiable projects as it did in the instant case when it formed special teams assigned to install and
dismantle its annex plant machines in various plants all over the country. These projects are distinct and separate, and are identifiable
as such, from its usual business of bottling beverage.
Their duration and scope are made known prior to their undertaking and their specified goal and purpose are fulfilled once the
projects are completed. When private respondent was initially hired for a period of one month and re-hired for another five months,
and then subsequently re-hired for another five months, he was assigned to the petitioner's Maintenance Division tasked with the-
installation and dismantling of its annex plant machines. Evidently, these projects or undertakings, the duration and scope of which
had been determined and made known to private respondent at the time of his employment, can properly be treated as "projects"
within the meaning of the "first" kind. Considered as such, the services rendered by private respondent hired therein for the duration
of the projects may lawfully be terminated at the end or completion of the same.
Clearly, therefore, private respondent being a project employee, or to use the correct term, seasonal employee, considering that his
employment was limited to the installation and dismantling of petitioners annex plant machines after which there was no more work
to do, his employment legally ended upon completion of the project.
Pure Foods Corporation vs. NLRC

G.R. No. 122653. December 12, 1997
Facts:
Pure Foods Corporation hired workers numbering 906 (private respondents) to work for a fixed period of five months at its tuna
cannery plant. Their work consisted in the receiving, skinning, loining, packing, and casing-up of tuna fish which were then exported
by Pure Foods. Their services were terminated after the expiration of their respective contracts of employment. They filed before the
NLRC a complaint for illegal dismissal against the petitioner.
Labor Arbiter dismissed the complaint on the ground that the private respondents were mere contractual workers, and not regular
employees; hence, they could not avail of the law on security of tenure. The termination of their services by reason of the expiration of
their contracts of employment was, therefore, justified. The private respondents appealed from the decision to the NLRC. The NLRC
rendered a decision holding that the private respondents and their co-complainants were regular employees.
Issue: WON the employees hired for a definite period (five-month basis) and whose services are necessary and desirable in the usual
business or trade of the employer considered regular employees
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Held:
YES.
They are regular employees because they performed work usually necessary or desirable in petitioner's business or trade.
The private respondents could not be regarded as having been hired for a specific project or undertaking. The term "specific project
or undertaking" under Article 280 of the Labor Code contemplates an activity which is not commonly or habitually performed or such
type of work which is not done on a daily basis but only for a specific duration of time or until completion; the services employed are then
necessary and desirable in the employer's usual business only for the period of time it takes to complete the project.
The fact that the petitioner repeatedly and continuously hired workers to do the same kind of work as that performed by
those whose contracts had expired negates petitioner's contention that those workers were hired for a specific project or
undertaking only.
On the validity of private respondents' five-month contracts of employment. In the leading case of Brent School, Inc. v. Zamora, which
was reaffirmed in numerous subsequent cases, this Court has upheld the legality of fixed-term employment. It ruled that the decisive
determinant in term employment should not be the activities that the employee is called upon to perform but the day certain agreed
upon by the parties for the commencement and termination of their employment relationship. But, this Court went on to say that
where from the circumstances it is apparent that the periods have been imposed to preclude acquisition of tenurial security by the
employee, they should be struck down or disregarded as contrary to public policy and morals.
Brent also laid down the criteria under which term employment cannot be said to be in circumvention of the law on security of
tenure:
1) The fixed period of employment was knowingly and voluntarily agreed upon by the parties without any force, duress, or
improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent; or
2) It satisfactorily appears that the employer and the employee dealt with each other on more or less equal terms with no moral
dominance exercised by the former or the latter.
None of these criteria had been met in the present case. It was really the practice of the company to hire workers on a uniformly fixed
contract basis and replace them upon the expiration of their contracts with other workers on the same employment duration.
This scheme of the petitioner was apparently designed to prevent the private respondents and the other "casual" employees from
attaining the status of a regular employee. It was a clear circumvention of the employees' right to security of tenure and to other
benefits like minimum wage, cost-of-living allowance, sick leave, holiday pay, and 13th month pay. Indeed, the petitioner succeeded in
evading the application of labor laws. Also, it saved itself from the trouble or burden of establishing a just cause for terminating
employees by the simple expedient of refusing to renew the employment contracts.
The five-month period specified in private respondents' employment contracts having been imposed precisely to circumvent the
constitutional guarantee on security of tenure should, therefore, be struck down or disregarded as contrary to public policy or
morals . To uphold the contractual arrangement between the petitioner and the private respondents would, in effect, permit the
former to avoid hiring permanent or regular employees by simply hiring them on a temporary or casual basis, thereby violating the
employees' security of tenure in their jobs.
Phil. Fruit & Vegetable Industries vs. NLRC

310 SCRA 680
Facts:
Private respondent Philippine Fruit and Vegetable Workers Union-Tupas Local Chapter, for and in behalf of 127 of its members, filed a
complaint for unfair labor practice and/or illegal dismissal with damages against petitioner corporation. Private respondent alleged
that many of its complaining members started working for San Carlos Fruits Corporation which later incorporated into PFVII in
January or February 1983 until their dismissal on different dates in 1985, 1986, 1987 and 1988. They further alleged that the
dismissals were due to complainants' involvement in union activities and were without just cause.
Petitioners argue that PFVII operates on a seasonal basis and the complainants who are members of respondent union are seasonal
workers because they work only during the period that the company is in operation. According to petitioners, its operation starts
only in February with the processing of tomatoes into tomato paste and ceases by the end of the same month when the supply is
consumed. It then resumes operations at the end of April or early May, depending on the availability of supply with the processing of
mangoes into purees and ceases operation in June. The severance of complainants' employment from petitioner corporation was a
necessary consequence of the nature of seasonal employment; and since complainants are seasonal workers as defined by the Labor
Code, they cannot invoke any tenurial benefit.
Issue: Whether or not complaining members of the union are regular employees or are seasonal workers whose employment ceased
during the off-season due to the non-availability of work.
Held:
Yes.
The complaining members of respondent union are regular employees of PFVII having performed functions which are necessary and
desirable in the usual business of PFVII as provided under the first paragraph of Art. 280 of the Labor Code.
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Article 280 of the Labor Code provides:
Regular and Casual Employment.- The provisions of written agreement to the contrary notwithstanding and regardless of the oral
agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities
which are usually necessary or desirable in the usual business or trade of the employers, except where the employment has been fixed
for a specific project.
An employment shall be deemed to be casual if it is not covered by the preceeding paragraph; provided, that, any employee who has
rendered at least one year of service whether such service is continuous or broken, shall be considered a regular employee with
Under above provision, an employment shall be deemed regular where the employee: a) has been engaged to perform activities
which are usually necessary or desirable in the usual business or trade of the employer; or b) has rendered at least one year of
service, whether such service is continuous or broken, with respect to the activity in which he is employed.
In the case at bar, the work of complainants as seeders, operators, sorters, slicers, janitors, drivers, truck helpers, mechanics and office
personnel is without doubt necessary in the usual business of a food processing company like petitioner PFVII. Complainants'
employment has not been fixed for a specific project or undertaking the completion or termination of which has been determined at
the time of their appointment or hiring. Neither is their employment seasonal in nature. While it may be true that some phases of
petitioner company's processing operations is dependent on the supply of fruits for a particular season, the other equally important
aspects of its business, such as manufacturing and marketing are not seasonal. The fact is that large-scale food processing companies
such as petitioner company continue to operate and do business throughout the year even if the availability of fruits and vegetables is
seasonal.
Having determined that private respondents are regular employees under the first paragraph, we need not dwell on the question of
whether or not they had rendered one year of service. This Court has clearly stated in Mercado, Sr. vs. NLRC, that:
The second paragraph of Article 280 demarcates as “casual” employees, all other employees who do not fall under the definition of the
preceding paragraph. The proviso, in said second paragraph, deems as regular employees those “casual” employees who have
rendered at least one year of service regardless of the fact that such service may be continuous or broken. Hence, the proviso is
applicable only to the employees who are deemed “casuals” but not to the “project” employees nor the regular employees treated in
paragraph one of Art. 280.
Philips Semiconductor vs. Fardiquela

G.R. No. 141717, April 14, 2004
Facts:
Aside from contractual employees, the petitioner employs 1,029 regular workers. The employees were subjected to periodic
performance appraisal based on output, quality, attendance and work attitude. One was required to obtain a performance rating of at
least 3.0 for the period covered by the performance appraisal to maintain good standing as an employee.
On May 8, 1992, respondent Eloisa Fadriquela executed a Contract of Employment with the petitioner in which she was hired as a
production operator with a daily salary of P118. Her initial contract was for a period of three months up to August 8, 1992, but was
extended for two months when she garnered a performance rating of 3.15. Her contract was again renewed for two months or up to
December 16, 1992, when she received a performance rating of 3.8.After the expiration of her third contract, it was extended anew,
for three months, that is, from January 4, 1993 to April 4, 1993. After garnering a performance rating of 3.4, the respondent’s contract
was extended for another three months, that is, from April 5, 1993 to June 4, 1993. She, however, incurred five absences in the month
of April, three absences in the month of May and four absences in the month of June. Line supervisor Shirley F. Velayo asked the
respondent why she incurred the said absences, but the latter failed to explain her side.
The respondent was warned that if she offered no valid justification for her absences, Velayo would have no other recourse but to
recommend the non-renewal of her contract. The respondent still failed to respond, as a consequence of which her performance
rating declined to 2.8. Velayo recommended to the petitioner that the respondent’s employment be terminated due to habitual
absenteeism, in accordance with the Company Rules and Regulations. Thus, the respondent’s contract of employment was no longer
renewed.
Issue: Whether or not the respondent was still a contractual employee of the petitioner as of June 4, 1993.
Held:
The two kinds of regular employees under the law are (1) those engaged to perform activities which are necessary or desirable in the
usual business or trade of the employer; and (2) those casual employees who have rendered at least one year of service, whether
continuous or broken, with respect to the activities in which they are employed.
The primary standard to determine a regular employment is the reasonable connection between the particular activity performed by
the employee in relation to the business or trade of the employer. The test is whether the former is usually necessary or desirable in
the usual business or trade of the employer. If the employee has been performing the job for at least one year, even if the performance
is not continuous or merely intermittent, the law deems the repeated and continuing need for its performance as sufficient evidence
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of the necessity, if not indispensability of that activity to the business of the employer. Hence, the employment is also considered
regular, but only with respect to such activity and while such activity exists.
The law does not provide the qualification that the employee must first be issued a regular appointment or must be declared as such
before he can acquire a regular employee status.In this case, the respondent was employed by the petitioner on May 8, 1992 as
production operator. She was assigned to wirebuilding at the transistor division. There is no dispute that the work of the respondent
was necessary or desirable in the business or trade of the petitioner. She remained under the employ of the petitioner without any
interruption since May 8, 1992 to June 4, 1993 or for one (1) year and twenty-eight (28) days. The original contract of employment
had been extended or renewed for four times, to the same position, with the same chores.
Such a continuing need for the services of the respondent is sufficient evidence of the necessity and indispensability of her services to
the petitioner’s business. By operation of law, then, the respondent had attained the regular status of her employment with the
petitioner, and is thus entitled to security of tenure as provided for in Article 279 of the Labor Code which reads:
Alcira vs. NLRC

G.R. No. 149859, June 9, 2004
Facts:
Middleby Philippines Corp. hired petitioner as engineering support services supervisor on a probationary basis for six months. On 20
November 1996, a senior officer of Middleby withheld his time card and did not allow him to work. Alcira filed with the NLRC a
complaint for illegal dismissal on the contention that he had become a regular employee when he was illegally dismissed. In their
defense, respondents claim that, during petitioner’s probationary employment, he showed poor performance in his assigned tasks,
incurred ten absences, was late several times and violated company rules on the wearing of uniform. Since he failed to meet company
standards, petitioner’s application to become a regular employee was disapproved and his employment was terminated.
Issue: Whether petitioner was allowed to work beyond his probationary period and was therefore already a regular employee at the
time of his alleged dismissal.
Held:
Petitioner insists that he already attained the status of a regular employee when he was dismissed on November 20, 1996 because,
having started work on May 20, 1996, the six-month probationary period ended on November 16, 1996. According to petitioner’s
computation, since Article 13 of the Civil Code provides that one month is composed of thirty days, six months total one hundred
eighty days. As the appointment provided that petitioner’s status was “probationary (6 mos.)” without any specific date of
termination, the 180th day fell on November 16, 1996. Thus, when he was dismissed on November 20, 1996, he was already a regular
employee. Petitioner’s contention is incorrect. Our computation of the 6-month probationary period is reckoned from the date of
appointment up to the same calendar date of the 6th month following. In short, since the number of days in each particular month was
irrelevant, petitioner was still a probationary employee when respondent Middleby opted not to “regularize” him on November 20,
1996.
In the instant case, petitioner cannot successfully say that he was never informed by private respondent of the standards that he must
satisfy in order to be converted into regular status. This runs counter to the agreement between the parties that after five months of
service the petitioner’s performance would be evaluated. It is only but natural that the evaluation should be made vis-à-vis the
performance standards for the job. Private respondent Trifona Mamaradlo speaks of such standard in her affidavit referring to the
fact that petitioner did not perform well in his assigned work and his attitude was below par compared to the company’s standard
required of him.
However, even if probationary employees do not enjoy permanent status, they are accorded the constitutional protection of security
of tenure. This means they may only be terminated for just cause or when they otherwise fail to qualify as regular employees in
accordance with reasonable standards made known to them by the employer at the time of their engagement. But this constitutional
protection ends on the expiration of the probationary period. On that date, the parties are free to either renew or terminate their
contract of employment. This development has rendered moot the question of whether there was a just cause for the dismissal of the
petitioners. Middleby exercised its option not to renew the contract when it informed petitioner on the last day of his probationary
employment that it did not intend to grant him a regular status.
Although we can regard petitioner’s severance from work as dismissal, the same cannot be deemed illegal. As found by the labor
arbiter, the NLRC and the Court of Appeals, petitioner (1) incurred ten absences (2) was tardy several times (3) failed to wear the
proper uniform many times and (4) showed inferior supervisory skills. Petitioner failed to satisfactorily refute these substantiated
allegations. Taking all this in its entirety, respondent Middleby was clearly justified to end its employment relationship with
petitioner.
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Mitsubishi Motors Phils. vs. Chrysler Phil Labor Union

G.R. No. 148738, June 29, 2004
Facts:
Nelson Paras first worked for Mitsubishi Motors Philippines Corporation (MMPC) as a shuttle bus driver from March 19, 1976 to June
16, 1982, when he resigned to work abroad. After working in Saudi Arabia, he was re-hired as a welder-fabricator at the MMPC
tooling shop from October 3, 1994 to October 31, 1994. On October 29, 1994, his contract was renewed from November 1, 1994 up to
March 3, 1995.
Sometime in May of 1996, Paras was re-hired on a probationary basis as a manufacturing trainee at the Plant Engineering
Maintenance Department. He and the new and re-hired employees were given an orientation on May 15, 1996 by Emma P. Aninipot,
respecting the company's history, corporate philosophy, organizational structure, and company rules and regulations, including the
company standards for regularization, code of conduct and company-provided benefits.
Paras started reporting for work on May 27, 1996. He was assigned at the paint ovens, air make-up and conveyors. As part of the
MMPC's policy, Paras was evaluated by his immediate supervisors Lito R. Lacambacal and Wilfredo J. Lopez after six (6) months, and
received an average rating. Later, Lacambacal informed Paras that based on his performance rating, he would be regularized.
However, the Department and Division Managers reviewed the performance evaluation made on Paras. They unanimously agreed,
along with Paras' immediate supervisors, that the performance of Paras was unsatisfactory. As a consequence, Paras was not
considered for regularization. On November 26, 1996, he received a Notice of Termination dated November 25, 1996, informing him
that his services were terminated effective the said date since he failed to meet the required company standards for regularization.
Issue: Whether or not Paras was already a regular employee when he was terminated.
Held:
Yes.
Indeed, an employer, in the exercise of its management prerogative, may hire an employee on a probationary basis in order to
determine his fitness to perform work. Under Article 281 of the Labor Code, the employer must inform the employee of the standards
for which his employment may be considered for regularization. Such probationary period, unless covered by an apprenticeship
agreement, shall not exceed six (6) months from the date the employee started working. The employee’s services may be terminated
for just cause or for his failure to qualify as a regular employee based on reasonable standards made known to him. Respondent Paras
was employed as a management trainee on a probationary basis. During the orientation conducted on May 15, 1996, he was apprised
of the standards upon which his regularization would be based. He reported for work on May 27, 1996. As per the company’s policy,
the probationary period was from three (3) months to a maximum of six (6) months.
Applying Article 13 of the Civil Code, the probationary period of six (6) months consists of one hundred eighty (180) days.This is in
conformity with paragraph one, Article 13 of the Civil Code, which provides that the months which are not designated by their names
shall be understood as consisting of thirty (30) days each. The number of months in the probationary period, six (6), should then be
multiplied by the number of days within a month, thirty (30); hence, the period of one hundred eighty (180) days.
As clearly provided for in the last paragraph of Article 13, in computing a period, the first day shall be excluded and the last day
included. Thus, the one hundred eighty (180) days commenced on May 27, 1996, and ended on November 23, 1996. The termination
letter dated November 25, 1996 was served on respondent Paras only at 3:00 a.m. of November 26, 1996. He was, by then, already a
regular employee of the petitioner under Article 281 of the Labor Code.
The basis for which respondent Paras' services were terminated was his alleged unsatisfactory rating arising from poor performance.
It is a settled doctrine that the employer has the burden of proving the lawfulness of his employee's dismissal. The validity of the
charge must be clearly established in a manner consistent with due process.
Under Article 282 of the Labor Code, an unsatisfactory rating can be a just cause for dismissal only if it amounts to gross and habitual
neglect of duties. Gross negligence has been defined to be the want or absence of even slight care or diligence as to amount to a
reckless disregard of the safety of person or property. It evinces a thoughtless disregard of consequences without exerting any effort
to avoid them. A careful perusal of the records of this case does not show that respondent Paras was grossly negligent in the
performance of his duties.
In the present case, the immediate supervisor of respondent Paras gave him an average performance rating and found him fit for
regularization. Thereafter, his immediate supervisor and the department head reviewed the said rating, which was duly noted by the
personnel manager. However, in a complete turn around, the petitioner made it appear that after the performance evaluation of
respondent Paras was reviewed by the department and division heads, it was unanimously agreed that the respondent's performance
rating was unsatisfactory, making him unfit for regularization.
There is no showing that respondent Paras was informed of the basis for the volte face of the management group tasked to review his
performance rating. His immediate supervisor even told him that he had garnered a satisfactory rating and was qualified for
regularization, only to later receive a letter notifying him that his employment was being terminated.
Considering that respondent Paras was not dismissed for a just or authorized cause, his dismissal from employment was illegal.
Furthermore, the petitioner's failure to inform him of any charges against him deprived him of due process. Clearly, the termination of
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his employment based on his alleged unsatisfactory performance rating was effected merely to cover up and "deodorize" the illegality
of his dismissal.
Pangilinan vs. General Milling Co.

G.R. No. 149329, July 2, 2004
Facts:
General Milling Corporation is a domestic corporation engaged in the production and sale of livestock and poultry. It is, likewise, the
distributor of dressed chicken to various restaurants and establishments nationwide. As such, it employs hundreds of employees,
some on a regular basis and others on a casual basis, as "emergency workers."
The petitioners were employed by the respondent on different dates as emergency workers at its poultry plant under separate
"temporary/casual contracts of employment" for a period of five months. Most of them worked as chicken dressers, while the others
served as packers or helpers. Upon the expiration of their respective contracts, their services were terminated. They later filed
separate complaints for illegal dismissal and non-payment of holiday pay, 13 th month pay, night-shift differential and service incentive
leave pay against the respondent.
The petitioners alleged that their work as chicken dressers was necessary and desirable in the usual business of the respondent. They
stressed that based on the nature of their work, they were regular employees of the respondent; hence, could not be dismissed from
their employment unless for just cause and after due notice.
Issue: Whether or not petitioners are regular employees and, thus, cannot be dismissed without just cause and the required due
process.
Held:
Article 280 of the Labor Code comprehends three kinds of employees: (a) regular employees or those whose work is necessary or
desirable to the usual business of the employer; (b) project employees or those whose employment has been fixed for a specific
project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or
where the work or services to be performed is seasonal in nature and the employment is for the duration of the season; and, (c) casual
employees or those who are neither regular nor project employees. A regular employee is one who is engaged to perform activities
which are necessary and desirable in the usual business or trade of the employer as against those which are undertaken for a specific
project or are seasonal. There are two separate instances whereby it can be determined that an employment is regular: (1) if the
particular activity performed by the employee is necessary or desirable in the usual business or trade of the employer; and, (2) if the
employee has been performing the job for at least a year.
In the case of St. Theresa’s School of Novaliches Foundation vs. NLRC, 43 we held that Article 280 of the Labor Code does not
proscribe or prohibit an employment contract with a fixed period. We furthered that it does not necessarily follow that where the
duties of the employee consist of activities usually necessary or desirable in the usual business of the employer, the parties are
forbidden from agreeing on a period of time for the performance of such activities. There is thus nothing essentially contradictory
between a definite period of employment and the nature of the employee’s duties.
Indeed, in the leading case of Brent School Inc. v. Zamora, 44 we laid down the guideline before a contract of employment may be held
as valid, to wit:
. . . [S]tipulations in employment contracts providing for term employment or fixed period employment are valid when the period
were agreed upon knowingly and voluntarily by the parties without force, duress or improper pressure, being brought to bear upon
the employee and absent any other circumstances vitiating his consent, or where it satisfactorily appears that the employer and
employee dealt with each other on more or less equal terms with no moral dominance whatever being exercised by the former over
the latter.
The records reveal that the stipulations in the employment contracts were knowingly and voluntarily agreed to by the petitioners
without force, duress or improper pressure, or any circumstances that vitiated their consent. Similarly, nothing therein shows that
these contracts were used as a subterfuge by the respondent GMC to evade the provisions of Articles 279 and 280 of the Labor Code.
The petitioners were hired as "emergency workers" and assigned as chicken dressers, packers and helpers at the Cainta Processing
Plant. The respondent GMC is a domestic corporation engaged in the production and sale of livestock and poultry, and is a distributor
of dressed chicken. While the petitioners' employment as chicken dressers is necessary and desirable in the usual business of the
respondent, they were employed on a mere temporary basis, since their employment was limited to a fixed period. As such, they
cannot be said to be regular employees, but are merely "contractual employees." Consequently, there was no illegal dismissal when
the petitioners' services were terminated by reason of the expiration of their contracts. Lack of notice of termination is of no
consequence, because when the contract specifies the period of its duration, it terminates on the expiration of such period. A contract
for employment for a definite period terminates by its own term at the end of such period.
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Hacienda Bino/Hortencia Stark vs. Cuenca

G.R. No. 150478, April 15, 2005, citing 2003 Hacienda Fatima
Facts:
Hortencia L. Starke, herein petitioner, is the owner and operator of the Hacienda Bino. During the off milling season of 1996 he issued
an Order or Notice which stated, that all Hacienda Employees who signed in favor of CARP are expressing their desire to get out of
employment on their own volition and wherefore, only those who did not sign for CARP will be given employment by the hacienda.
Herein respondents are employees of the hacienda performing various works, such as cultivation, planting of cane points, fertilization,
watering, weeding, harvesting and loading of harvested sugarcanes to cargo trucks are those who signed in favor of CARP. They allege
that they are regular and permanent workers of the hacienda and that they were dismissed without just and lawful cause. They
further alleged that they were dismissed because they applied as beneficiaries under the Comprehensive Agrarian Reform Program
(CARP) over the land owned by petitioner Starke. Petitioner Starke alleged that in there was little work in the plantation as it was off-
season; and so, on account of the seasonal nature of the work, she issued the order giving preference to those who supported the re-
classification. She pointed out that when the milling season began, the work was plentiful again and she issued notices to all workers,
including the respondents, informing them of the availability of work. However, the respondents refused to report back to work.
Issue: Whether or not the respondents are regular employee
Held:
Petitioner Starke contends that the established doctrine that seasonal employees are regular employees had been overturned and
abandoned by Mercado, Sr. v. NLRC. 18 She stresses that in that case, the Court held that petitioners therein who were sugar workers,
are seasonal employees and their employment legally ends upon completion of the project or the season.
On the substantial issue of whether the respondents are regular or seasonal employees, the petitioners contend that the CA violated
the doctrine of stare decisis by not applying the ruling in the Mercado case that sugar workers are seasonal employees. We hold
otherwise. Under the doctrine of stare decisis, when a court has laid down a principle of law as applicable to a certain state of facts, it
will adhere to that principle and apply it to all future cases in which the facts are substantially the same. 22 Where the facts are
essentially different, however, stare decisis does not apply, for a perfectly sound principle as applied to one set of facts might be
entirely inappropriate when a factual variance is introduced.
The disparity in facts between the Mercado case and the instant case is best exemplified by the fact that the former decision ruled on
the status of employment of farm laborers, who, as found by the labor arbiter, work only for a definite period for a farm worker, after
which they offer their services to other farm owners, considering the area in question being comparatively small, comprising of
seventeen and a half (17 1/2) hectares of land, such that the planting of rice and sugar cane thereon could not possibly entail a whole
year operation. The herein case presents a different factual condition as the enormity of the size of the sugar hacienda of petitioner,
with an area of two hundred thirty-six (236) hectares, simply do not allow for private respondents to render work only for a definite
period.
Indeed, in a number of cases, the Court has recognized the peculiar facts attendant in the Mercado case.
Primary standard for determining regular employment is the reasonable connection between the particular activity performed by the
employee in relation to the usual trade or business of the employer. 28 There is no doubt that the respondents were performing work
necessary and desirable in the usual trade or business of an employer. Hence, they can properly be classified as regular employees.
For respondents to be excluded from those classified as regular employees, it is not enough that they perform work or services that
are seasonal in nature. They must have been employed only for the duration of one season. 29 While the records sufficiently show
that the respondents' work in the hacienda was seasonal in nature, there was, however, no proof that they were hired for the duration
of one season only. In fact, the payrolls, 30 submitted in evidence by the petitioners, show that they availed the services of the
respondents since 1991. Absent any proof to the contrary, the general rule of regular employment should, therefore, stand. It bears
stressing that the employer has the burden of proving the lawfulness of his employee's dismissal.
Philippine Global Communications Inc. vs. De Vera

G.R. No. 157214, June 7, 2005
Facts:
Ricardo De Vera is a physician by profession whom petitioner enlisted to attend to the medical needs of its employees. At the crux of
the controversy is Dr. De Vera's status vis a vis petitioner when the latter terminated his engagement.
It appears that on 15 May 1981, De Vera, via a letter dated 15 May 1981, 3 offered his services to the petitioner, therein proposing his
plan of works required of a practitioner in industrial medicine, to include the following:
1. Application of preventive medicine including periodic check-up of employees;
2. Holding of clinic hours in the morning and afternoon for a total of five (5) hours daily for consultation services to
employees;
3. Management and treatment of employees that may necessitate hospitalization including emergency cases and accidents;
4. Conduct pre-employment physical check-up of prospective employees with no additional medical fee;
5. Conduct home visits whenever necessary;
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6. Attend to certain medical administrative function such as accomplishing medical forms, evaluating conditions of employees
applying for sick leave of absence and subsequently issuing proper certification, and all matters referred which are medical
in nature.
The parties agreed and formalized respondent's proposal in a document denominated as RETAINERSHIP CONTRACT 4 which will be
for a period of one year subject to renewal, it being made clear therein that respondent will cover "the retainership the Company
previously had with Dr. K. Eulau" and that respondent's "retainer fee" will be at P4,000.00 a month. Said contract was renewed yearly.
5 The retainership arrangement went on from 1981 to 1994 with changes in the retainer's fee. However, for the years 1995 and 1996,
renewal of the contract was only made verbally. However, in December 1996 when Philcom, thru a letter bearing on the subject
boldly written as "TERMINATION — RETAINERSHIP CONTRACT", informed De Vera of its decision to discontinue the latter's
"retainer's contract with the Company effective at the close of business hours of December 31, 1996" because management has
decided that it would be more practical to provide medical services to its employees through accredited hospitals near the company
premises.
Issue: WON an employer-employee relationship exists between petitioner and respondent
Held:
Applying the four-fold test to this case, we initially find that it was respondent himself who sets the parameters of what his duties
would be in offering his services to petitioner. We note, too, that the power to terminate the parties' relationship was mutually vested
on both. Either may terminate the arrangement at will, with or without cause.
The tenor of this letter indicates that the complainant was proposing to extend his time with the respondent and seeking additional
compensation for said extension. This shows that the respondent PHILCOM did not have control over the schedule of the complainant
as it [is] the complainant who is proposing his own schedule and asking to be paid for the same. This is proof that the complainant
understood that his relationship with the respondent PHILCOM was a retained physician and not as an employee. If he were an
employee he could not negotiate as to his hours of work.
The labor arbiter added the indicia, not disputed by respondent, that from the time he started to work with petitioner, he never was
included in its payroll; was never deducted any contribution for remittance to the Social Security System (SSS); and was in fact
subjected by petitioner to the ten (10%) percent withholding tax for his professional fee, in accordance with the National Internal
Revenue Code, matters which are simply inconsistent with an employer-employee relationship. Clearly, the elements of an employer-
employee relationship are wanting in this case. We may add that the records are replete with evidence showing that respondent had
to bill petitioner for his monthly professional fees. 19 It simply runs against the grain of common experience to imagine that an
ordinary employee has yet to bill his employer to receive his salary.
Finally, remarkably absent from the parties' arrangement is the element of control, whereby the employer has reserved the right to
control the employee not only as to the result of the work done but also as to the means and methods by which the same is to be
accomplished. Here, petitioner had no control over the means and methods by which respondent went about performing his work at
the company premises. He could even embark in the private practice of his profession, not to mention the fact that respondent's work
hours and the additional compensation therefor were negotiated upon by the parties.
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. It does not
apply where, as here, the very existence of an employment relationship is in dispute.
Lacuesta vs. Ateneo de Manila

G.R. No. 152777, December 9, 2005
Facts:
Respondent Ateneo de Manila University (Ateneo) hired, on a contractual basis, petitioner Lolita R. Lacuesta as a part-time lecturer in
its English Department for the second semester of school year 1988-1989. She was re-hired, still on a contractual basis, for the first
and second semesters of school year 1989-1990. On July 13, 1990, the petitioner was first appointed as full-time instructor on
probation, in the same department effective June 1, 1990 until March 31, 1991. Thereafter, her contract as faculty on probation was
renewed effective April 1, 1991 until March 31, 1992. She was again hired for a third year effective April 1, 1992 until March 31,
1993. During these three years she was on probation status. Respondent Dr. Leovino Ma. Garcia, Dean of Ateneo’s Graduate School
and College of Arts and Sciences, notified petitioner that her contract would no longer be renewed because she did not integrate well
with the English Department.Petitioner filed a complaint for illegal dismissal with prayer for reinstatement, back wages, and moral
and exemplary damages. She contends that Articles 280 and 281 of the Labor Code, not the Manual of Regulations for Private Schools,
is the applicable law to determine whether or not an employee in an educational institution has acquired regular or permanent
status. She argues that (1) under Article 281, probationary employment shall not exceed six (6) months from date of employment
unless a longer period had been stipulated by an apprenticeship agreement; (2) under Article 280, if the apprenticeship agreement
stipulates a period longer than one year and the employee rendered at least one year of service, whether continuous or broken, the
employee shall be considered as regular employee with respect to the activity in which he is employed while such activity exists; and
(3) it is with more reason that petitioner be made regular since she had rendered services as part-time and full-time English teacher
for four and a half years, services which are necessary and desirable to the usual business of Ateneo.
Issue:
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(1) Whether or not the Court of Appeals erred in ruling that it is the Manual of Regulations For Private Schools, not the Labor Code,
that determines the acquisition of regular or permanent status of faculty members in an educational institution;
(2) Whether or not after completing the three-year probation with an above-average performance, petitioner already acquired
permanent status.
Held:
(1) The Manual of Regulations for Private Schools, and not the Labor Code, determines whether or not a faculty member in an
educational institution has attained regular or permanent status. Under Policy Instructions No. 11 issued by the Department of Labor
and Employment, “the probationary employment of professors, instructors and teachers shall be subject to the standards established
by the Department of Education and Culture.”
Section 93 of the 1992 Manual of Regulations for Private Schools provides that full-time teachers who have satisfactorily completed
their probationary period shall be considered regular or permanent. Moreover, for those teaching in the tertiary level, the
probationary period shall not be more than six consecutive regular semesters of satisfactory service.The requisites to acquire
permanent employment, or security of tenure, are
(1) the teacher is a full-time teacher;
(2) the teacher must have rendered three consecutive years of service; and
(3) such service must have been satisfactory.
(2) A part-time teacher cannot acquire permanent status.
Only when one has served as a full-time teacher can he acquire permanent or regular status. The petitioner was a part-time lecturer
before she was appointed as a full-time instructor on probation. As a part-time lecturer, her employment as such had ended when her
contract expired. Thus, the three semesters she served as part-time lecturer could not be credited to her in computing the number of
years she has served to qualify her for permanent status. And completing the probation period does not automatically qualify her to
become a permanent employee of the university. Petitioner could only qualify to become a permanent employee upon fulfilling the
reasonable standards for permanent employment as faculty member.
Consistent with academic freedom and constitutional autonomy, an institution of higher learning has the prerogative to provide
standards for its teachers and determine whether these standards have been met.At the end of the probation period, the decision to
re-hire an employee on probation, belongs to the university as the employer alone.
Posedion Fishing/Terry De Jesus vs. NLRC

G.R. No. 168052, February 20, 2006
Facts:
Private respondent was employed by Poseidon Fishing in January 1988 as Chief Mate. After five years, he was promoted to Boat
Captain. In 1999, petitioners, without reason, demoted respondent from Boat Captain to Radio Operator of petitioner Poseidon. 4 As a
Radio Operator, he monitored the daily activities in their office and recorded in the duty logbook the names of the callers and time of
their calls.
On 3 July 2000, private respondent failed to record a 7:25 a.m. call in one of the logbooks. However, he was able to record the same in
the other logbook. Consequently, when he reviewed the two logbooks, he noticed that he was not able to record the said call in one of
the logbooks so he immediately recorded the 7:25 a.m. call after the 7:30 a.m. entry. Around 9:00 o'clock in the morning of 4 July
2000, petitioner Terry de Jesus detected the error in the entry in the logbook. Subsequently, she asked private respondent to prepare
an incident report to explain the reason for the said oversight. At around 2:00 o'clock in the afternoon of that same day, petitioner
Poseidon's secretary, namely Nenita Laderas, summoned private respondent to get his separation pay amounting to Fifty-Five
Thousand Pesos (P55,000.00). However, he refused to accept the amount as he believed that he did nothing illegal to warrant his
immediate discharge from work.
Rising to the occasion, private respondent filed a complaint for illegal dismissal on 11 July 2000
Issue:
WON respondent was a contractual or regular employee at the time he was terminated
Held:
In the case under consideration, the agreement has such an objective — to frustrate the security of tenure of private respondent- and
fittingly, must be nullified. In this case, petitioners' intent to evade the application of Article 280 of the Labor Code is unmistakable. In
a span of 12 years, private respondent worked for petitioner company first as a Chief Mate, then Boat Captain, and later as Radio
Operator. His job was directly related to the deep-sea fishing business of petitioner Poseidon. His work was, therefore, necessary and
important to the business of his employer. Such being the scenario involved, private respondent is considered a regular employee of
petitioner under Article 280 of the Labor Code.
Ostensibly, in the case at bar, at different times, private respondent occupied the position of Chief Mate, Boat Captain, and Radio
Operator. In petitioners' interpretation, however, this act of hiring and re-hiring actually highlight private respondent's contractual
status saying that for every engagement, a fresh contract was entered into by the parties at the outset as the conditions of
employment changed when the private respondent filled in a different position. But to this Court, the act of hiring and re-hiring in
various capacities is a mere gambit employed by petitioner to thwart the tenurial protection of private respondent. Such pattern of re-
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LABOR RELATIONS LAW
hiring and the recurring need for his services are testament to the necessity and indispensability of such services to petitioners'
business or trade.
Petitioners next assert that deep-sea fishing is a seasonal industry because catching of fish could only be undertaken for a limited
duration or seasonal within a given year. Thus, according to petitioners, private respondent was a seasonal or project employee.
As correctly pointed out by the Court of Appeals, the "activity of catching fish is a continuous process and could hardly be considered
as seasonal in nature." In Philex Mining Corp. v. National Labor Relations Commission, 34 we defined project employees as those
workers hired (1) for a specific project or undertaking, and (2) the completion or termination of such project has been determined at
the time of the engagement of the employee. The principal test for determining whether particular employees are "project employees"
as distinguished from "regular employees," is whether or not the "project employees" were assigned to carry out a "specific project or
undertaking," the duration and scope of which were specified at the time the employees were engaged for that project. In this case,
petitioners have not shown that private respondent was informed that he will be assigned to a "specific project or undertaking." As
earlier noted, neither has it been established that he was informed of the duration and scope of such project or undertaking at the
time of their engagement.
More to the point, in Maraguinot, Jr. v. National Labor Relations Commission, 35 we ruled that once a project or work pool
employee has been: (1) continuously, as opposed to intermittently, re-hired by the same employer for the same tasks or nature of
tasks; and (2) these tasks are vital, necessary and indispensable to the usual business or trade of the employer, then the employee
must be deemed a regular employee.
Cebu Metal Corp., vs. Saliling

G.R. No. 154463, September 5, 2006
Facts:
Cebu Metal Corporation is a corporation engaged in buying and selling of scrap iron. In the Bacolod branch it has (3) regular
employees holding such positions as Officer-in-Charge, a scaler, and a yardman, whose salaries are paid directly by its main office in
Cebu. The complainants, Gregorio Saliling, Elias Bolido, Manuel Alquiza, Benjie Amparado are the one who undertakes pakiao work in
the unloading of scrap iron. The Bacolod buying station is mainly a stockyard where scrap metal delivered by its suppliers are
stockpiled. The supply of scrap metal is not steady as it depends upon many factors, such as availability of supplies, price, competition
and demand among others. There are weeks were there are no delivery while there are weeks were quite a number of trucks are
delivered to the stockyard. The arrivals of these trucks and the deliveries of scrap metal iron are not regular and the schedules of
deliveries to the stockyard are not known before hand by the respondent Cebu Metal Corporation. These trucks have their own driver
and truck boys employed by the different suppliers. Sometimes, these trucks do not have any truck boys, and in these instances, the
corporation hires the services of people for the unloading of the scrap metal from these trucks. It is for this reason that the unloaders
hired by the respondent to unload are basically seasonal workers. They are hired whenever there are trucks of suppliers do not have
any accompanying truck boys. Whoever is available and whoever are willing to help unload on a particular occasion are hired to
unload. Usually, there is a leader for a particular group who is tasked to unload the scrap metal from a particular truck. It is this leader
who distributes the individual takes of each member of the particular group unloading the scrap metal from a particular work The
complainants maintained that they are hired by Cebu Metal Corparation as employees and filed on January 10, 1997 a complaint with
the regional arbitration in Bacolod City for underpayment of wages and non-payment of the following benefits 1. 13 th month pay; 2.
holiday pay; 3. service incentive leave pay. On March 6, 1998 includes the claim for illegal dismissal because they were dismissed after
the filing of the complaint. The Labor Arbiter rendered a decision in favor of the complainants. Aggrieved, Cebu Metal Corporation
filed an appeal with the NLRC. The NLRC reversed and set aside the decision of the Labor Arbiter and held that the complainants were
not regular employees, thus, they could not have been illegally dismissed. The order of the reversal was based on the Commission’s
finding that the petty cash vouchers submitted by Cebu Metal Corporation confirmed the fact that unloaders were paid on “pakiao” or
task basis at Php 15.00 per metric ton. The Commission further rationalized that with the irregular nature of the work involved in the
stoppage and resumption of which depended solely on the availability or supply of scrap metal, it necessarily follows that after the job
of unloading was completed and unloaders are paid the contract price, the latter’s working relationship with Cebu Metal Corporation
legally ended. They were then free to offer their services to others.
The complainants challenged the decision of the NLRC with the Court of Appeals, and it rendered the decision annulling the decision
of the NLRC and reinstated the decision made by the Labor Arbiter. Hence, this petition.
Issue: Whether or not the complainant respondents are regular employees.
Held:
The above findings validate respondent's position as to the nature of complainants' work. Their services are needed only when scrap
metals are delivered which occurs only one or twice a week or sometimes no delivery at all in a given week. The irregular nature of
work, stoppage of work and then work again depending on the supply of scrap metal has not been denied by complainants. On the
contrary they even admitted the same in their Reply to respondent's Appeal. . . . . Indeed, it would be unjust to require respondent to
maintain complainants in the payroll even if there is no more work to be done. To do so would make complainants privileged
retainers who collect payment from their employer for work not done. This is extremely unfair and amount to cuddling of labor at the
expense of management.
The Supreme Court ruled there can be no illegal dismissal to speak of. Besides, the complainants cannot claim regularity in the hiring
every time a truck comes loaded with scrap metal. This is confirmed in the Petty Cash Vouchers which are in the names of different
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LABOR RELATIONS LAW
leaders who are apportion the amount earned among its members. And, quite telling is the fact that not every truck delivery of scrap
metal requires the services of respondent complainants when particular truck is accompanied by its own unloader. And whenever
required, respondent complainants were not always the ones contracted to undertake the unloading of the trucks since the work was
offered to whomever were available at a given time. It should be remembered that the Philippine Constitution, while inexorably
committed towards the protection of the working class from exploitation and unfair treatment, nevertheless mandates the policy of
social justice so as to strike a balance between an avowed predilection for labor, on the one hand, and the maintenance of the legal
rights of capital, the proverbial hen that lays the golden egg, on the other. Indeed we should not be mindful of the legal norm that
justice is in every case for the deserving, to be dispensed with in the light of established facts, the applicable law, an existing
jurisprudence.
Hermonias L. Liganza vs. RBL Shipyard Corporation

G.R. NO. 159862, October 17, 2006
Facts:
After working as a carpenter for respondent since August 1991, petitioner's employment was terminated on 30 October 1999. This
prompted petitioner to file a complaint for illegal dismissal, alleging that on said date he was verbally informed that he was already
terminated from employment and barred from entering the premises. On the same occasion, he was told to look for another job. Thus,
he claimed that he was unceremoniously terminated from employment without any valid or authorized cause. On the other hand,
respondent insisted that petitioner was a mere project employee who was terminated upon completion of the project for which he
was hired.
Issue: WON petitioner is a project employee and whether his termination was illegal.
Held:
Before an employee hired on a per project basis can be dismissed, a report must be made to the nearest employment office of the
termination of the services of the workers every time it completed a project, pursuant to Policy Instruction No. 20.
Petitioner claims he is a regular employee since he worked for respondent continuously and without interruption from 13 August
1991 up to 30 October 1999 and that his work as a carpenter was necessary and desirable to the latter's usual business of
shipbuilding and repair. He asserts that when he was hired by respondent in 1991, there was no employment contract fixing a definite
period or duration of his engagement, and save for the contract covering the period 20 September 1999 to 19 March 2000,
respondent had been unable to show the other project employment contracts ever since petitioner started working for the company.
Furthermore, respondent failed to file as many termination reports as there are completed projects involving petitioner, he adds.
On the other hand, respondent insists that petitioner is a project employee as evidenced by the project employment contracts it
signed with him and employee termination reports it submitted to the DOLE.
In the instant case, respondent seeks to prove the status of petitioner's employment through four (4) employment contracts covering
a period of only two (2) years to declare petitioner as a project employee.
Respondent failed to present the contracts purportedly covering petitioner's employment from 1991 to July 1997, spanning six (6)
years of the total eight (8) years of his employment. To explain its failure in this regard, respondent claims that the records and
contracts covering said period were destroyed by rains and flashfloods that hit the company's office.
The four employment contracts are not sufficient to reach the conclusion that petitioner was, and has been, a project employee earlier
since 1991. The Court is not satisfied with the explanation that the other employment contracts were destroyed by floods and rains.
Respondent could have used other evidence to prove project employment, but it did not do so, seemingly content with the convenient
excuse of "destroyed documents."
This Court has held that an employment ceases to be co-terminous with specific projects when the employee is continuously rehired
due to the demands of employer's business and re-engaged for many more projects without interruption. In Maraguinot, Jr. v. NLRC
(Second Division), 21 the Court ruled that "once a project or work pool employee has been: (1) continuously, as opposed to
intermittently, rehired by the same employer for the same tasks or nature of tasks; and (2) these tasks are vital, necessary and
indispensable to the usual business or trade of the employer, then the employee must be deemed a regular employee, pursuant to
Article 280 of the Labor Code and jurisprudence."
All considered, there are serious doubts in the evidence on record that petitioner is a project employee, or that he was terminated for
just cause. These doubts shall be resolved in favor of petitioner, in line with the policy of the law to afford protection to labor and
construe doubts in favor of labor.
It is well-settled that the employer must affirmatively show rationally adequate evidence that the dismissal was for a justifiable cause.
When there is no showing of a clear, valid and legal cause for the termination of employment, the law considers the matter a case of
illegal dismissal and the burden is on the employer to prove that the termination was for a valid or authorized cause. For failure to
prove otherwise, the Court has no recourse but to grant the petition.
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Fabeza vs. San Miguel Corporation

G.R. No. 150658, February 9, 2007
Facts:
Petitioners, along with Joselito de Lara and John Alovera, were hired by respondent San Miguel Corporation (SMC) as "Relief
Salesmen" for the Greater Manila Area (GMA) under separate but almost similarly worded "Contracts of Employment With Fixed
Period." After having entered into successive contracts of the same nature with SMC, the services of petitioners, as well as de Lara and
Alovera, were terminated after SMC no longer agreed to forge another contract with them.
Respondent SMC and its co-respondent Arman Hicarte, who was its Human Resources Manager, claimed that the hiring of petitioners
was not intended to be permanent, as the same was merely occasioned by the need to fill in a vacuum arising from SMC's gradual
transition to a new system of selling and delivering its products. Claiming that they were illegally dismissed, petitioners, as well as de
Lara and Alovera, filed separate complaints for illegal dismissal against respondents.
Issue: Whether they were hired for a fixed period, as claimed by respondents, or as regular employees who may not be dismissed
except for just or authorized causes.
Held:
An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That any employee who has
rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with
respect to the activity in which he is employed and his employment shall continue while such activity actually exists.
Although Article 280 does not expressly recognize employment for a fixed period, which is distinct from employment which has been
fixed for a specific project or undertaking, Brent School, Inc. v. Zamora 11 has clarified that employment for a fixed period is not in
itself illegal.
Thus, even if the duties of an employee consist of activities usually necessary or desirable in the usual business of the employer, it
does not necessarily follow that the parties are forbidden from agreeing on a period of time for the performance of such activities
through a contract of employment for a fixed term.
Albeit the Court of Appeals ruled in respondents' favor on the basis of a finding that petitioners were validly hired as project
employees, respondents deny that petitioners were project employees, asserting that they were hired only as fixed-term employees.
Since respondents attribute the termination of petitioners' employment to the expiration of their respective contracts, a
determination of whether petitioners were hired as project or seasonal employees, or as fixed-term employees without any force,
duress or improper pressure having been exerted against them is in order. If petitioners fall under any of these categories, then
indeed their termination follows from the expiration of their contracts.
Since, as earlier stated, respondents themselves deny that petitioners were project employees, and they do not allege that they were
seasonal employees, what remains for determination is whether petitioners were fixed-term employees under the Brent doctrine.
Significantly, both the Labor Arbiter and the NLRC found that petitioners were all regular employees. The NLRC even explicitly stated
that the periods stated in petitioners' contracts were fixed not because of temporary exigencies but because of a scheme to preclude
petitioners from acquiring tenurial security.
Brent instructs that a contract of employment stipulating a fixed-term, even if clear as regards the existence of a period, is invalid if it
can be shown that the same was executed with the intention of circumventing security of tenure, and should thus be ignored.
Indeed, substantial evidence exists in the present case showing that the subject contracts were utilized to deprive petitioners of their
security of tenure.
As Brent pronounces, a fixed-term employment is valid only under certain circumstances, such as when the employee himself insists
upon the period, or where the nature of the engagement is such that, without being seasonal or for a specific project, a definite date of
termination is a sine qua non.
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Soriano vs. NLRC

G.R. No. 165594, April 23, 2007 citing 2005 Filipina Pre-fabricated Bldg. System (Filisystem)
Facts:
Petitioner and certain individuals namely Sergio Benjamin (Benjamin), Maximino Gonzales (Gonzales), and Noel Apostol (Apostol)
were employed by the respondent as Switchman Helpers in its Tondo Exchange Office (TEO). After participating in several trainings
and seminars, petitioner, Benjamin, and Gonzales were promoted as Switchmen. Apostol, on the other hand, was elevated to the
position of Frameman. One of their duties as Switchmen and Frameman was the manual operation and maintenance of the Electronic
Mechanical Device (EMD) of the TEO.
In November 1995, respondent PLDT implemented a company-wide redundancy program. Subsequently, the respondent PLDT gave
separate letters dated 15 July 1996 to petitioner, Benjamin, Gonzales, and Apostol informing them that their respective positions were
deemed redundant due to the above-cited reasons and that their services will be terminated on 16 August 1996. They requested the
respondent PLDT for transfer to some vacant positions but their requests were denied since all positions were already filled up.
Hence, on 16 August 1996, respondent PLDT dismissed the four from employment.
Held:
Redundancy exists when the service capability of the workforce is in excess of what is reasonably needed to meet the demands of the
business enterprise. A position is redundant where it is superfluous, and superfluity of a position or positions may be the outcome of a
number of factors such as over-hiring of workers, decrease in volume of business, or dropping a particular product line or service
activity previously manufactured or undertaken by the enterprise.
The records show that respondent PLDT had sufficiently established the existence of redundancy in the position of Switchman.
Generally, deeds of release, waiver or quitclaims cannot bar employees from demanding benefits to which they are legally entitled or
from contesting the legality of their dismissal since quitclaims are looked upon with disfavor and are frowned upon as contrary to
public policy. Where, however, the person making the waiver has done so voluntarily, with a full understanding thereof, and the
consideration for the quitclaim is credible and reasonable, the transaction must be recognized as being a valid and binding
undertaking.
The requisites for a valid quitclaim are: 1) that there was no fraud or deceit on the part of any of the parties; 2) that the consideration
for the quitclaim is credible and reasonable; and 3) that the contract is not contrary to law, public order, public policy, morals or good
customs or prejudicial to a third person with a right recognized by law.
It cannot be gainfully said that the petitioner did not fully understand the consequences of signing the "Receipt, Release, and
Quitclaim" dated 15 August 1996. Petitioner is not an illiterate person who needs special protection. He held responsible positions in
the office of the respondent PLDT and had attended and passed various training courses for his position. It is thus assumed that he
comprehended the contents of the "Receipt, Release, and Quitclaim" which he signed on 15 August 1996. There is also no showing
that the execution thereof was tainted with deceit or coercion.
Given the foregoing circumstances, the "Receipt, Release, and Quitclaim" dated 15 August 1996 should be considered as legal and
binding on petitioner. It is settled that a legitimate waiver which represents a voluntary and reasonable settlement of a worker's claim
should be respected as the law between the parties.
Caseres vs. Universal Robina Sugar Milling Corp.

G.R. No. 159343, September 28, 2007
Facts:
Universal Robina Sugar Milling Corporation (respondent) is a corporation engaged in the cane sugar milling business. Pedy Caseres
(petitioner Caseres) started working for respondent in 1989, while Andito Pael (petitioner Pael) in 1993. At the start of their
respective employments, they were made to sign a Contract of Employment for Specific Project or Undertaking. Petitioners' contracts
were renewed from time to time; until May 1999 when they were informed that their contracts will not be renewed anymore.
Petitioners filed a complaint for illegal dismissal, regularization, incentive leave pay, 13th month pay, damages and attorney’s fees.
Issue: Whether or not the petitioners are seasonal/project/term employees and not regular employees of respondents
Held:
ART. 280. Regular and Casual Employees. – The provision of written agreement to the contrary notwithstanding and regardless of the
oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform
activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has
engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the
duration of the season.
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The foregoing provision provides for three kinds of employees: (a) regular employees or those who have been “engaged to perform
activities which are usually necessary or desirable in the usual business or trade of the employer”; (b) project employees or those
“whose employment has been fixed for a specific project or undertaking, the completion or termination of which has been determined
at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the
employment is for the duration of the season”; and (c) casual employees or those who are neither regular nor project employees.
The principal test for determining whether an employee is a project employee or a regular employee is whether the employment has
been fixed for a specific project or undertaking, the completion or termination of which has been determined at the time of the
engagement of the employee. 10 A project employee is one whose employment has been fixed for a specific project or undertaking,
the completion or termination of which has been determined at the time of the engagement of the employee or where the work or
service to be performed is seasonal in nature and the employment is for the duration of the season. A true project employee should be
assigned to a project which begins and ends at determined or determinable times, and be informed thereof at the time of hiring.
In the case at bar, We note that complainants never bothered to deny that they voluntarily, knowingly and willfully executed the
contracts of employment. Neither was there any showing that respondents exercised moral dominance on the complainants, . . . it is
clear that the contracts of employment are valid and binding on the complainants.
The execution of these contracts in the case at bar is necessitated by the peculiar nature of the work in the sugar industry which has
an off milling season. The very nature of the terms and conditions of complainants' hiring reveals that they were required to perform
phases of special projects for a definite period after, their services are available to other farm owners. This is so because the planting
of sugar does not entail a whole year operation, and utility works are comparatively small during the off-milling season.
The fact that petitioners were constantly re-hired does not ipso facto establish that they became regular employees. Their respective
contracts with respondent show that there were intervals in their employment. In petitioner Caseres's case, while his employment
lasted from August 1989 to May 1999, the duration of his employment ranged from one day to several months at a time, and such
successive employments were not continuous. With regard to petitioner Pael, his employment never lasted for more than a month at a
time. These support the conclusion that they were indeed project employees, and since their work depended on the availability of
such contracts or projects, necessarily the employment of respondent's work force was not permanent but co-terminous with the
projects to which they were assigned and from whose payrolls they were paid.
Accordingly, petitioners cannot complain of illegal dismissal inasmuch as the completion of the contract or phase thereof for which
they have been engaged automatically terminates their employment.
Pier 8 Arrastre & Stevedoring Services, Inc. vs Boclot

G.R. No. 173849, September 28, 2007
Facts:
Petitioner Pier 8 Arrastre and Stevedoring Services, Inc. (PASSI) is a domestic corporation engaged in the business of providing
arrastre and stevedoring services[5] at Pier 8 in the Manila North Harbor. PASSI has been rendering arrastre and stevedoring
services at the port area since 1974 and employs stevedores who assist in the loading and unloading of cargoes to and from the
vessels. Petitioner Eliodoro C. Cruz is its Vice-President and General Manager. Respondent Jeff B. Boclot was hired by PASSI to
perform the functions of a stevedore starting 20 September 1999.
On 15 April 2000, the Philippine Ports Authority (PPA) seized the facilities and took over the operations of PASSI through its Special
Takeover Unit, absorbing PASSI workers as well as their relievers. By virtue of a Decision dated 9 January 2001 of the Court of
Appeals, petitioners were able to regain control of their arrastre and stevedoring operations at Pier 8 on 12 March 2001.
On 9 May 2003, respondent filed a Complaint with the Labor Arbiter of the NLRC, claiming regularization; payment of service
incentive leave and 13th month pays; moral, exemplary and actual damages; and attorney's fees. Respondent alleged that he was
hired by PASSI in October 1999 and was issued company ID No. 304, 8 a PPA Pass and SSS documents. In fact, respondent contended
that he became a regular employee by April 2000, since it was his sixth continuous month in service in PASSI's regular course of
business. He argued on the basis of Articles 280 9 and 281 10 of the Labor Code. He maintains that under paragraph 2 of Article 280,
he should be deemed a regular employee having rendered at least one year of service with the company. In opposition thereto,
petitioners alleged that respondent was hired as a mere "reliever" stevedore and could thus not become a regular employee
Held:
Under the 1987 Philippine Constitution, the State affords full protection to labor, local and overseas, organized and unorganized; and
the promotion of full employment and equality of employment opportunities for all. The State affirms labor as a primary social
economic force and guarantees that it shall protect the rights of workers and promote their welfare.
The Labor Code, which implements the foregoing Constitutional mandate, draws a fine line between regular and casual employees to
protect the interests of labor. 19 "Its language evidently manifests the intent to safeguard the tenurial interest of the worker who may
be denied the rights and benefits due a regular employee by virtue of lopsided agreements with the economically powerful employer
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LABOR RELATIONS LAW
who can maneuver to keep an employee on a casual status for as long as convenient." Thus, the standards for determining whether an
employee is a regular employee or a casual or project employee have been delineated in Article 280 of the Labor Code.
respect to the activity in which he is employed and his employment shall continue while such actually exist.
Under the foregoing provision, a regular employee is (1) one who is either engaged to perform activities that are necessary or
desirable in the usual trade or business of the employer except for project 21 or seasonal employees; or (2) a casual employee who
has rendered at least one year of service, whether continuous or broken, with respect to the activity in which he is employed. 22
Additionally, Article 281 of the Labor Code further considers a regular employee as one who is allowed to work after a probationary
period. Based on the aforementioned, although performing activities that are necessary or desirable in the usual trade or business of
the employer, an employee such as a project or seasonal employee is not necessarily a regular employee. The situation of respondent
is similar to that of a project or seasonal employee, albeit on a daily basis.
Under the second paragraph of the same provision, all other employees who do not fall under the definition of the preceding
paragraph are casual employees. However, the second paragraph also provides that it deems as regular employees those casual
employees who have rendered at least one year of service regardless of the fact that such service may be continuous or broken.
The primary standard, therefore, of determining a regular employment is the reasonable connection between the particular activity
performed by the employee in relation to the usual business or trade of the employer. The test is whether the former is usually
necessary or desirable in the usual business or trade of the employer. The connection can be determined by considering the nature of
the work performed and its relation to the scheme of the particular business or trade in its entirety. Also, if the employee has been
performing the job for at least one year, even if the performance is not continuous or merely intermittent, the law deems the repeated
and continuing need for its performance as sufficient evidence of the necessity if not indispensability of that activity to the business.
Hence, the employment is also considered regular, but only with respect to such activity and while such activity exists. (Emphasis
supplied.)
PASSI is engaged in providing stevedoring and arrastre services in the port area in Manila. Stevedoring, dock and arrastre operations
include, but are not limited to, the opening and closing of a vessel's hatches; discharging of cargoes from ship to truck or dock, lighters
and barges, and vice-versa; movement of cargoes inside vessels, warehouses, terminals and docks; and other related work. In line
with this, petitioners hire stevedores who assist in the loading and unloading of cargoes to and from the vessels.
Based on the circumstances of the instant case, this Court agrees. It takes judicial notice 24 that it is an industry practice in port
services to hire "reliever" stevedores in order to ensure smooth-flowing 24-hour stevedoring and arrastre operations in the port area.
No doubt, serving as a stevedore, respondent performs tasks necessary or desirable to the usual business of petitioners. However, it
should be deemed part of the nature of his work that he can only work as a stevedore in the absence of the employee regularly
employed for the very same function. Bearing in mind that respondent performed services from September 1999 until June 2003 for a
period of only 228.5 days in 36 months, or roughly an average of 6.34 days a month; while a regular stevedore working for
petitioners, on the other hand, renders service for an average of 16 days a month, demonstrates that respondent's employment is
subject to the availability of work, depending on the absences of the regular stevedores. Moreover, respondent does not contest that
he was well aware that he would only be given work when there are absent or unavailable employees. Respondent also does not
allege, nor is there any showing, that he was disallowed or prevented from offering his services to other cargo handlers in the other
piers at the North Harbor other than petitioners. As aforestated, the situation of respondent is akin to that of a seasonal or project or
term employee, albeit on a daily basis
The second paragraph thereof stipulates in unequivocal terms that all other employees who do not fall under the definitions in the
first paragraph of regular, project and seasonal employees, are deemed casual employees. 25 Not qualifying under any of the kinds of
employees covered by the first paragraph of Article 280 of the Labor Code, then respondent is a casual employee under the second
paragraph of the same provision.
The same provision, however, provides that a casual employee can be considered as regular employee if said casual employee has
rendered at least one year of service regardless of the fact that such service may be continuous or broken. Section 3, Rule V, Book II of
the Implementing Rules and Regulations of the Labor Code clearly defines the term "at least one year of service" to mean service
within 12 months, whether continuous or broken, reckoned from the date the employee started working, including authorized
absences and paid regular holidays, unless the working days in the establishment as a matter of practice or policy, or that provided in
the employment contract, is less than 12 months, in which case said period shall be considered one year. 26 If the employee has been
performing the job for at least one year, even if the performance is not continuous or merely intermittent, the law deems the repeated
and continuing need for its performance as sufficient evidence of the necessity, if not indispensability, of that activity to the business
of the employer. 27 Applying the foregoing, respondent, who has performed actual stevedoring services for petitioners only for an
accumulated period of 228.5 days does not fall under the classification of a casual turned regular employee after rendering at least
one year of service, whether continuous or intermittent.
Where from the circumstances it is apparent that periods have been imposed to preclude acquisition of tenurial security by an
employee, such imposition should be struck down or disregarded as contrary to public policy and morals. 30 However, we take this
occasion to emphasize that the law, while protecting the rights of the employees, authorizes neither the oppression nor the
destruction of the employer. When the law tilts the scale of justice in favor of labor, the scale should never be so tilted if the result
would be an injustice to the employer. Thus, this Court cannot be compelled to declare respondent as a regular employee when by the
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nature of respondent's work as a reliever stevedore and his accumulated length of service of only eight months do not qualify him to
be declared as such under the provisions of the Labor Code alone.
In light of the foregoing, petitioners must accord respondent the status of a regular employee.
Pacquing vs. Coca-Cola Bottlers Phils., Inc.;

G.R. No. 157966, January 31, 2008
citing Magsalin vs. National Organization of Workingmen, G.R. No. 148492, May 9, 2003
Facts:
Eddie Pacquing, Roderick Centeno, Juanito M. Guerra, Claro Dupilad, Jr., Louie Centeno, David Reblora, Raymundo Andrade
(petitioners) were sales route helpers or cargadores-pahinantes of Coca-Cola Bottlers Philippines, Inc.
Petitioners were part of a complement of three personnel comprised of a driver, a salesman and a regular route helper, for every
delivery truck. They worked exclusively at respondent's plants, sales offices, and company premises. On October 22, 1996, petitioners
filed a Complaint against respondent for unfair labor practice and illegal dismissal with claims for regularization, recovery of benefits
under the Collective Bargaining Agreement (CBA), moral and exemplary damages, and attorney's fees. In their Position Paper,
petitioners alleged that they should be declared regular employees of respondent since the nature of their work as cargadores-
pahinantes was necessary or desirable to respondent's usual business and was directly related to respondent's business and trade. In
its Position Paper, respondent denied liability to petitioners and countered that petitioners were temporary workers who were
engaged for a five-month period to act as substitutes for an absent regular employee.
Held:
WON the respondent's sales route helpers or cargadores or pahinantes are regular workers of respondent has already been resolved
in Magsalin v. National Organization of Working Men.
The basic law on the case is Article 280 of the Labor Code.
In determining whether an employment should be considered regular or non-regular, the applicable test is the reasonable connection
between the particular activity performed by the employee in relation to the usual business or trade of the employer. The standard,
supplied by the law itself, is whether the work undertaken is necessary or desirable in the usual business or trade of the employer, a
fact that can be assessed by looking into the nature of the services rendered and its relation to the general scheme under which the
business or trade is pursued in the usual course. It is distinguished from a specific undertaking that is divorced from the normal
activities required in carrying on the particular business or trade. But, although the work to be performed is only for a specific project
or seasonal, where a person thus engaged has been performing the job for at least one year, even if the performance is not continuous
or is merely intermittent, the law deems the repeated and continuing need for its performance as being sufficient to indicate the
necessity or desirability of that activity to the business or trade of the employer. The employment of such person is also then deemed
to be regular with respect to such activity and while such activity exists.
The argument of petitioner that its usual business or trade is softdrink manufacturing and that the work assigned to respondent
workers as sales route helpers so involves merely â €œpost production activities, one which is not indispensable in the manufacture of
its products, scarcely can be persuasive. If, as so argued by petitioner company, only those whose work are directly involved in the
production of softdrinks may be held performing functions necessary and desirable in its usual business or trade, there would have
then been no need for it to even maintain regular truck sales route helpers. The nature of the work performed must be viewed from a
perspective of the business or trade in its entirety and not on a confined scope.
The repeated rehiring of respondent workers and the continuing need for their services clearly attest to the necessity or desirability
of their services in the regular conduct of the business or trade of petitioner company . The Court of Appeals has found each of
respondents to have worked for at least one year with petitioner company. While this Court, in Brent School, Inc. vs. Zamora,has
upheld the legality of a fixed-term employment, it has done so, however, with a stern admonition that where from the circumstances it
is apparent that the period has been imposed to preclude the acquisition of tenurial security by the employee, then it should be struck
down as being contrary to law, morals, good customs, public order and public policy. The pernicious practice of having employees,
workers and laborers, engaged for a fixed period of few months, short of the normal six-month probationary period of employment,
and, thereafter, to be hired on a day-to-day basis, mocks the law. Any obvious circumvention of the law cannot be countenanced. The
fact that respondent workers have agreed to be employed on such basis and to forego the protection given to them on their security of
tenure, demonstrate nothing more than the serious problem of impoverishment of so many of our people and the resulting
unevenness between labor and capital. A contract of employment is impressed with public interest. The provisions of applicable
statutes are deemed written into the contract, and the parties are not at liberty to insulate themselves and their relationships from the
impact of labor laws and regulations by simply contracting with each other.
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Agusan Del Norte Electronic vs. Cagampang

G.R. No. 167627, October 10, 2008
Facts:
Respondents Joel Cagampang and Glenn Garzon started working as linemen for petitioner Agusan del Norte Electric Cooperative, Inc.
(ANECO) on October 1, 1990, under an employment contract which was for a period not exceeding three months.
When the contract expired, the two were laid-off for one to five days and then ordered to report back to work but on the basis of job
orders. After several renewals of their job contracts in the form of job orders for similar employment periods of about three months
each, the said contracts eventually expired on April 31, 1998 and July 30, 1999. Respondents' contracts were no longer renewed,
resulting in their loss of employment.
Thus, on January 11, 2001, respondents filed an illegal dismissal case against petitioners
Issue: WON the respondents were illegally dismissed.
Held:
After considering the facts and the submissions of the parties, we are in agreement that respondents were illegally dismissed, and that
the petition by the employer lacks merit.
There is no dispute that the respondents' work as linemen was necessary or desirable in the usual business of ANECO. Additionally,
the respondents have been performing the job for at least one year. The law deems the repeated and continuing need for its
performance as sufficient evidence of the necessity, if not indispensability, of that activity to the business.
The test to determine whether employment is regular or not is the reasonable connection between the particular activity performed
by the employee in relation to the usual business or trade of the employer. Also, if the employee has been performing the job for at
least one year, even if the performance is not continuous or merely intermittent, the law deems the repeated and continuing need for
its performance as sufficient evidence of the necessity, if not indispensability of that activity to the business. Thus, we held that where
the employment of project employees is extended long after the supposed project has been finished, the employees are removed from
the scope of project employees and are considered regular employees.
While length of time may not be the controlling test for project employment, it is vital in determining if the employee was hired for a
specific undertaking or tasked to perform functions vital, necessary and indispensable to the usual business or trade of the employer.
Here, private respondent had been a project employee several times over. His employment ceased to be coterminous with specific
projects when he was repeatedly re-hired due to the demands of petitioner's business. Where from the circumstances it is apparent
that periods have been imposed to preclude the acquisition of tenurial security by the employee, they should be struck down as
contrary to public policy, morals, good customs or public order.
Respondents in the present case being regular employees, ANECO as the employer had the burden of proof to show that the
respondents' termination was for a just cause. Unfortunately, however, what petitioners did was merely to refuse, without justifiable
reason, to renew respondents' work contracts for the performance of what would otherwise be regular jobs in relation to the trade or
business of the former. 13 Such conduct dismally falls short of the requirements of our labor laws regarding dismissals. No twin
notices of termination were issued to the employees, hence the employer did not observe due process in dismissing them from their
employment. Their dismissals were patently illegal.
In termination cases, the burden of proof rests upon the employer to show that the dismissal is for just and valid cause; failure to do
so would necessarily mean that the dismissal was illegal. The employer's case succeeds or fails on the strength of its evidence and not
on the weakness of the employee's defense. If doubt exists between the evidence presented by the employer and the employee, the
scales of justice must be tilted in favor of the latter. Moreover, the quantum of proof required in determining the legality of an
employee's dismissal is only substantial evidence. Substantial evidence is more than a mere scintilla of evidence or relevant evidence
as a reasonable mind might accept as adequate to support a conclusion, even if other minds, equally reasonable, might conceivably
opine otherwise.
William Uy Construction et. al vs. Trinidad

GR No. 183250, March 10, 2010
Facts:
Jorge R. Trinidad filed a complaint for illegal dismissal and unpaid benefits against petitioner William Uy Construction Corporation.
Trinidad claimed that he had been working with the latter company for 16 years since 1988 as driver of its service vehicle, dump
truck, and transit mixer. He had signed several employment contracts with the company that identified him as a project employee
although he had always been assigned to work on one project after another with some intervals. Respondent Trinidad further alleged
that petitioner company terminated him from work after it shut down operations because of lack of projects. He learned later,
however, that although it opened up a project in Batangas, it did not hire him back for that project.
Petitioner company countered http://sc.judiciary.gov.ph/jurisprudence/2010/march2010/183250.htm - _ftn1 that it

was in the construction business. By the nature of such business, it had to hire and engage the services of project construction
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LABOR RELATIONS LAW
workers, including respondent Trinidad, whose employments had to be co-terminous with the completion of specific company
projects. For this reason, every time the company employed Trinidad, he had to execute an employment contract with it, called
Appointment as Project Worker. Petitioner company stressed that employment intervals or gaps were inherent in the construction
business. In compliance with labor rules, the company submitted an establishment termination report to the Department of Labor and
Employment (DOLE).
The Labor Arbiter rendered a decision, dismissing respondent Trinidad’s complaint for unjust dismissal. The Labor Arbiter, however,
ordered petitioner company to pay Trinidad P1,500.00 in unpaid service incentive leave, taking into consideration the three-year
prescriptive period for money claims. http://sc.judiciary.gov.ph/jurisprudence/2010/march2010/183250.htm -
_ftn2 The Labor Arbiter held that, since Trinidad was a project employee and since his company submitted the appropriate
establishment termination report to DOLE, his loss of work cannot be regarded as unjust dismissal.
Issue: Whether or not petitioner company’s repeated rehiring of respondent Trinidad over several years as project employee for its
various projects automatically entitled him to the status of a regular employee.
Held:
The test for distinguishing a “project employee” from a “regular employee” is whether or not he has been assigned to carry out a
“specific project or undertaking,” with the duration and scope of his engagement specified at the time his service is
contracted.http://sc.judiciary.gov.ph/jurisprudence/2010/march2010/183250.htm - _ftn5
Here, it is not disputed that petitioner company contracted respondent Trinidad’s service by specific projects with the duration of his
work clearly set out in his employment
contracts.http://sc.judiciary.gov.ph/jurisprudence/2010/march2010/183250.htm - _ftn6 He remained a project
employee regardless of the number of years and the various projects he worked for the
company.http://sc.judiciary.gov.ph/jurisprudence/2010/march2010/183250.htm - _ftn7
Generally, length of service provides a fair yardstick for determining when an employee initially hired on a temporary basis becomes
a permanent one, entitled to the security and benefits of regularization. But this standard will not be fair, if applied to the
construction industry, simply because construction firms cannot guarantee work and funding for its payrolls beyond the life of each
project. And getting projects is not a matter of course.
Construction companies have no control over the decisions and resources of project proponents or owners. There is no construction
company that does not wish it has such control but the reality, understood by construction workers, is that work depended on
decisions and developments over which construction companies have no say. Respondent Trinidad’s series of employments with
petitioner company were co-terminous with its projects. When its Boni Serrano-Katipunan Interchange Project was finished,
Trinidad’s employment ended with it. He was not dismissed. His employment contract simply ended with the project for which he
had signed up.
His employment history belies the claim that he continuously worked for the company. Intervals or gaps separated one contract from
another.http://sc.judiciary.gov.ph/jurisprudence/2010/march2010/183250.htm - _ftn9 Petitioner company needed
only to show the last status of Trinidad’s employment, namely, that of a project employee under a contract that had ended and the
company’s compliance with the reporting requirement for the termination of that employment. Indeed, both the Labor Arbiter and
the NLRC were satisfied that the fact of petitioner company’s compliance with DOLE Order 19 had been proved in this case.
Dacuital et al, Vs. L.M. Camus Engineering Corp.

G.R. No. 176748, September 1, 2010
Facts:
Petitioners (LMCEC Employees) filed a complaint for illegal dismissal and non-payment of monetary benefits against respondent LM
Camus Engineering Corp. before the National Labor Relations Commission (NLRC). The employees alleged that they were illegally
dismissed from employment and that their employer failed to pay them their holiday pay, premium pay for holiday, rest day, service
incentive leave pay, and 13th month pay during the existence and duration of their employment. They also averred that they were not
provided with sick and vacation leaves.
Respondents denied that petitioners were illegally dismissed from employment. They claimed that petitioners were project employees
and, upon the completion of each project, they were served notices of project completion. They clarified that the termination of
petitioners’ employment was due to the completion of the projects for which they were hired. Petitioners, however, countered that
they were regular employees as they had been engaged to perform activities which are usually necessary or desirable in the usual
business or trade of LMCEC. They denied that they were project or contractual employees because their employment was continuous
and uninterrupted for more than one (1) year. Finally, they maintained that they were part of a work pool from which LMCEC drew its
workers for its various projects.
The Labor Arbiter rendered a decision declaring the dismissal of the complainant-employees as ILLEGAL and the complainants are
entitled to reinstatement without back wages. The NLRC modified the decision of the Labor Arbiter and ordered the reinstatement of
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the complainants with limited backwages. The respondents appealed the decision to the Court of Appeals and the appellate court held
that the complainants are PROJECT EMPLOYEES and hence, there was no illegal dismissal.
Issue: WON petitioners are PROJECT EMPLOYEES and that their dismissal from employment was legal.
Held:
No.
Article 280 of the Labor Code distinguishes a "project employee" from a "regular employee" in this wise:
Article 280. Regular and casual employment.—The provisions of written agreement to the contrary notwithstanding and regardless of
the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform
activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment
has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time
of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for
the duration of the season...xxx
The principal test used to determine whether employees are project employees is whether or not the employees were assigned to
carry out a specific project or undertaking, the duration or scope of which was specified at the time the employees were engaged for
that project.
Even though the absence of a written contract does not by itself grant regular status to petitioners, such a contract is evidence that
petitioners were informed of the duration and scope of their work and their status as project employees . In this case, where no
other evidence was offered, the absence of the employment contracts raises a serious question of whether the employees were
properly informed at the onset of their employment of their status as project employees.
While it is true that respondents presented the employment contract of Dacuital, the contract does not show that he was informed of
the nature, as well as the duration of his employment. In fact, the duration of the project for which he was allegedly hired was not
specified in the contract.
Hence, the Dismissal of the petitioners are declared ILLEGAL.
Millennium Erectors Corporation vs. Magallanes

G.R. No. G.R. No. 184362, November 15, 2010
Facts:
Respondent Virgilio Magallanes started working in 1988 as a utility man for Laurencito Tiu (Tiu), Chief Executive Officer of
Millennium Erectors Corporation (petitioner), Tiu's family, and Kenneth Construction Corporation. He was assigned to different
construction projects undertaken by petitioner in Metro Manila, the last of which was for a building in Libis, Quezon City. In July of
2004 he was told not to report for work anymore allegedly due to old age, prompting him to file on August 6, 2004 an illegal dismissal
complaint 1 before the Labor Arbiter.
Issue: Whether or not Magallanes’ dismissal violates security of tenure.
Arguments:
MEC
1.) Respondent was a project employee whom it hired for a building project in Libis on January 30 and which was in near
completion on August 3, 2004, when services were terminated. Said all DOLE requirements were complied.
2.) Petitioner moved for reconsideration of the NLRC decision, contending that respondent's motion for reconsideration
which it treated as an appeal was not perfected, it having been belatedly filed; that there was no statement of the date of
receipt of the appealed decision; and that it lacked verification and copies thereof were not furnished the adverse parties
Held:
1. A project employee is one whose "employment has been fixed for a specific project or undertaking, the completion or
termination of which has been determined at the time of the engagement of the employee or where the work or service to be
performed is seasonal in nature and the employment is for the duration of the season."
As the Court has consistently held, the service of project employees are coterminus [sic] with the project and may be terminated upon
the end or completion of that project or project phase for which they were hired. Regular employees, in contrast, enjoy security of
tenure and are entitled to hold on to their work or position until their services are terminated by any of the modes recognized under
the Labor Code.
Assuming arguendo that petitioner hired respondent initially on a per project basis, his continued rehiring, as shown by the sample
payrolls converted his status to that of a regular employee
2. In labor cases, rules of procedure should not be applied in a very rigid and technical sense. Technicalities should not be
permitted to stand in the way of equitably and completely resolving the rights and obligations of the parties. Where the ends of
substantial justice shall be better served, the application of technical rules of procedure may be relaxed.
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As to the defective verification in the appeal memorandum before the NLRC, the same liberality applies. After all, the requirement
regarding verification of a pleading is formal, not jurisdictional.
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Exodus International Construction Corp. vs. Biscocho et. Al

G.R. No. 166109, February 23, 2011
Facts:
Exodus International Construction Corporation obtained a contract from Dutch Boy Philippines, Inc. for the painting of the Imperial
Sky Garden located in Binondo, Manila. Dutch Boy awarded another contract to Exodus for the painting of Pacific Plaza, Towers in
Fort Bonifacio, Taguig City. In the furtherance of its business, Exodus hired respondents as painters on different dates.
On November 27, 2000, respondents filed a complaint for illegal dismissal and non-payment of holiday pay, service incentive leave
pay, 13th month pay and night-shift differential pay.
Petitioners denied respondents' allegations. As regards Gregorio, petitioners averred that he absented himself from work and applied
as a painter with SAEI-EEI which is the general building contractor of Pacific Plaza Towers. Since then, he never reported back to
work.
Guillermo absented himself from work without leave. When he reported for work the following day, he was reprimanded so he
worked only half-day and thereafter was unheard of until the filing of the instant complaint.
Fernando, Ferdinand, and Miguel were caught eating during working hours for which they were reprimanded by their foreman. Since
then they no longer reported for work.
The Labor Arbiter exonerated Exodus from the charge of illegal dismissal as respondents chose not to report for work. Since there is
neither illegal dismissal nor abandonment of job, respondents were ordered be reinstated but without any backwages.
Issues: WON respondents were illegally dismissed for abandonment of work

WON they are regular employees, thus entitled to reinstatement
Held:
(1) No. There was no dismissal, much less illegal, and there was also no abandonment of job to speak of.
As found by the Labor Arbiter, there was no evidence that respondents were dismissed nor were they prevented from returning to
their work. It was only respondents' unsubstantiated conclusion that they were dismissed. As a matter of fact, respondents could not
name the particular person who effected their dismissal and under what particular circumstances. Absent any showing of an overt or
positive act proving that petitioners had dismissed respondents, the latters' claim of illegal dismissal cannot be sustained. Indeed, a
cursory examination of the records reveal no illegal dismissal to speak of.
The Labor Arbiter is also correct in ruling that there was no abandonment on the part of respondents that would justify their
dismissal from their employment.
Abandonment is the deliberate and unjustified refusal of an employee to resume his employment. It is a settled rule that mere absence
or failure to report for work is not enough to amount to abandonment of work. To constitute abandonment of work, two elements
must concur:
1. the employee must have failed to report for work or must have been absent without valid or justifiable reason and
2. there must have been a clear intention on the part of the employee to sever the employer-employee relationship manifested
by some overt act.
It is the employer who has the burden of proof to show a deliberate and unjustified refusal of the employee to resume his employment
without any intention of returning." It is therefore incumbent upon petitioners to ascertain the respondents' interest or non-interest
in the continuance of their employment. However, petitioners failed to do so.
Petitioners posit that the reinstatement of respondents to their former positions, which were no longer existing, is impossible, highly
unfair and unjust. The project was already completed by petitioners, having completed their tasks, their positions automatically
ceased to exist. Consequently, there were no more positions where they can be reinstated as painters.
(2) Respondents are regular employees of petitioners.

It is clear from the records that when one project is completed, respondents were automatically transferred to the next project
awarded to petitioners. There was no employment agreement given to respondents which clearly spelled out the duration of their
employment, the specific work to be performed and that such is made clear to them at the time of hiring. It is now too late for
petitioners to claim that respondents are project employees whose employment is coterminous with each project or phase of the
project to which they are assigned.
Nonetheless, assuming that respondents were initially hired as project employees, a project employee may acquire the status of a
regular employee.
The evidence on record shows that respondents were employed and assigned continuously to the various projects of petitioners. As
painters, they performed activities which were necessary and desirable in the usual business of petitioners, who are engaged in
subcontracting jobs for painting of residential units, condominium and commercial buildings. As regular employees, respondents are
entitled to be reinstated without loss of seniority rights.
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Respondents are also entitled to their money claims such as the payment of holiday pay, service incentive leave pay, and 13th month
pay. However, they cannot be entitled to backwages. In cases where there is no evidence of dismissal, the remedy is reinstatement
but without backwages.
Leyte Geothermal Power Progressive Employees Union vs. Phil National Oil Co.
G.R. No. 176351, March 30, 2011
Facts:
Respondent Philippine National Oil Corporation-Energy Development Corporation [PNOC-EDC] is a government-owned and
controlled corporation engaged in exploration, development, utilization, generation and distribution of energy resources like
geothermal energy. Petitioner is a legitimate labor organization, duly registered with the Department of Labor and Employment
(DOLE) Regional Office No. VIII, Tacloban City. Among [respondent's] geothermal projects is the Leyte Geothermal Power Project
located at the Greater Tongonan Geothermal Reservation in Leyte. The said Project is composed of the Tongonan 1 Geothermal
Project (T1GP) and the Leyte Geothermal Production Field Project (LGPF) which provide the power and electricity needed not only in
the provinces and cities of Central and Eastern Visayas (Region VII and VIII), but also in the island of Luzon as well. Thus, the
[respondent] hired and employed hundreds of employees on a contractual basis, whereby, their employment was only good up to the
completion or termination of the project and would automatically expire upon the completion of such project. Majority of the
employees hired by [respondent] in its Leyte Geothermal Power Projects had become members of petitioner. In view of that
circumstance, the petitioner demands from the [respondent] for recognition of it as the collective bargaining agent of said employees
and for a CBA negotiation with it. However, the [respondent] did not heed such demands of the petitioner. Sometime in 1998 when
the project was about to be completed, the [respondent] proceeded to serve Notices of Termination of Employment upon the
employees who are members of the petitioner. On December 28, 1998, the petitioner filed a Notice of Strike with DOLE against the
[respondent] on the ground of purported commission by the latter of unfair labor practice for "refusal to bargain collectively, union
busting and mass termination." On the same day, the petitioner declared a strike and staged such strike. To avert any work stoppage,
then Secretary of Labor Bienvenido E. Laguesma intervened and issued the Order, dated January 4, 1999, certifying the labor dispute
to the NLRC for compulsory arbitration. Accordingly, all the striking workers were directed to return to work within twelve (12)
hours from receipt of the Order and for the [respondent] to accept them back under the same terms and conditions of employment
prior to the strike. Further, the parties were directed to cease and desist from committing any act that would exacerbate the situation.
However, despite earnest efforts on the part of the Secretary of Labor and Employment to settle the dispute amicably, the petitioner
remained adamant and unreasonable in its position, causing the failure of the negotiation towards a peaceful compromise. In effect,
the petitioner did not abide by [the] assumption order issued by the Secretary of Labor. Consequently, on January 15, 1999, the
[respondent] filed a Complaint for Strike Illegality, Declaration of Loss of Employment and Damages at the NLRC-RAB VIII in Tacloban
City and at the same time, filed a Petition for Cancellation of Petitioner's Certificate of Registration with DOLE, Regional Office No. VIII.
The two cases were later on consolidated pursuant to the New NLRC Rules of Procedure. The consolidated case was docketed as NLRC
Certified Case No. V-02-99 (NCMB-RAB VIII-NS-12-0190-98; RAB Case No. VIII-1-0019-99). The said certified case was indorsed to
the NLRC 4th Division in Cebu City on June 21, 1999 for the proper disposition thereof.
Issues:
1. Whether the officers and members of petitioner Union are project employees of respondent; and
2. Whether the officers and members of petitioner Union engaged in an illegal strike.
Held:
On the first issue, petitioner Union contends that its officers and members performed activities that were usually necessary and
desirable to respondent's usual business. In fact, petitioner Union reiterates that its officers and members were assigned to the
Construction Department of respondent as carpenters and masons, and to other jobs pursuant to civil works, which are usually
necessary and desirable to the department. Petitioner Union likewise points out that there was no interval in the employment
contract of its officers and members, who were all employees of respondent, which lack of interval, for petitioner Union, "manifests
that the `undertaking' is usually necessary and desirable to the usual trade or business of the employer."
The distinction between a regular and a project employment is provided in Article 280, paragraph 1, of the Labor Code:
ART. 280. Regular and Casual Employment.-- The provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the
employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the
employer, except where the employment has been fixed for a specific project or undertaking the completion or termination
of which has been determined at the time of the engagement of the employee or where the work or service to be performed is
seasonal in nature and the employment is for the duration of the season.
The foregoing contemplates four (4) kinds of employees: (a) regular employees or those who have been "engaged to perform
activities which are usually necessary or desirable in the usual business or trade of the employer"; (b) project employees or those
"whose employment has been fixed for a specific project or undertaking[,] the completion or termination of which has been
determined at the time of the engagement of the employee"; (c) seasonal employees or those who work or perform services which are
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seasonal in nature, and the employment is for the duration of the season; and (d) casual employees or those who are not regular,
project, or seasonal employees. Jurisprudence has added a fifth kind-- a fixed-term employee.
Article 280 of the Labor Code, as worded, establishes that the nature of the employment is determined by law, regardless of any
contract expressing otherwise. The supremacy of the law over the nomenclature of the contract and the stipulations contained therein
is to bring to life the policy enshrined in the Constitution to "afford full protection to labor." Thus, labor contracts are placed on a
higher plane than ordinary contracts; these are imbued with public interest and therefore subject to the police power of the State.
However, notwithstanding the foregoing iterations, project employment contracts which fix the employment for a specific project or
undertaking remain valid under the law: x x x By entering into such a contract, an employee is deemed to understand that his
employment is coterminous with the project. He may not expect to be employed continuously beyond the completion of the project. It
is of judicial notice that project employees engaged for manual services or those for special skills like those of carpenters or masons,
are, as a rule, unschooled. However, this fact alone is not a valid reason for bestowing special treatment on them or for invalidating a
contract of employment. Project employment contracts are not lopsided agreements in favor of only one party thereto. The
employer's interest is equally important as that of the employee[s'] for theirs is the interest that propels economic activity. While it
may be true that it is the employer who drafts project employment contracts with its business interest as overriding consideration,
such contracts do not, of necessity, prejudice the employee. Neither is the employee left helpless by a prejudicial employment
contract. After all, under the law, the interest of the worker is paramount.
In the case at bar, the records reveal that the officers and the members of petitioner Union signed employment contracts indicating
the specific project or phase of work for which they were hired, with a fixed period of employment. The NLRC correctly disposed of
this issue: A deeper examination also shows that [the individual members of petitioner Union] indeed signed and accepted the
[employment contracts] freely and voluntarily. No evidence was presented by [petitioner] Union to prove improper pressure or
undue influence when they entered, perfected and consummated [the employment] contracts. In fact, it was clearly established in the
course of the trial of this case, as explained by no less than the President of [petitioner] Union, that the contracts of employment were
read, comprehended, and voluntarily accepted by them. x x x.
As clearly shown by [petitioner] Union's own admission, both parties had executed the contracts freely and voluntarily without force,
duress or acts tending to vitiate the worker[s'] consent. Thus, we see no reason not to honor and give effect to the terms and
conditions stipulated therein. x x x.
Thus, we are hard pressed to find cause to disturb the findings of the NLRC which are supported by substantial evidence.
It is well-settled in jurisprudence that factual findings of administrative or quasi-judicial bodies, which are deemed to have acquired
expertise in matters within their respective jurisdictions, are generally accorded not only respect but even finality, and bind the Court
when supported by substantial evidence. Rule 133, Section 5 defines substantial evidence as "that amount of relevant evidence which
a reasonable mind might accept as adequate to justify a conclusion."
Consistent therewith is the doctrine that this Court is not a trier of facts, and this is strictly adhered to in labor cases. We may take
cognizance of and resolve factual issues, only when the findings of fact and conclusions of law of the Labor Arbiter or the NLRC are
inconsistent with those of the CA.
In the case at bar, both the NLRC and the CA were one in the conclusion that the officers and the members of petitioner Union were
project employees. Nonetheless, petitioner Union insists that they were regular employees since they performed work which was
usually necessary or desirable to the usual business or trade of the Construction Department of respondent.
Policy Instruction No. 12 of the Department of Labor and Employment discloses that the concept of regular and casual employees was
designed to put an end to casual employment in regular jobs, which has been abused by many employers to prevent so - called casuals
from enjoying the benefits of regular employees or to prevent casuals from joining unions. The same instructions show that the
proviso in the second paragraph of Art. 280 was not designed to stifle small-scale businesses nor to oppress agricultural land owners
to further the interests of laborers, whether agricultural or industrial. What it seeks to eliminate are abuses of employers against their
employees and not, as petitioners would have us believe, to prevent small-scale businesses from engaging in legitimate methods to
realize profit. Hence, the proviso is applicable only to the employees who are deemed "casuals" but not to the "project" employees nor
the regular employees treated in paragraph one of Art. 280.
Clearly, therefore, petitioners being project employees, or, to use the correct term, seasonal employees, their employment legally ends
upon completion of the project or the [end of the] season. The termination of their employment cannot and should not constitute an
illegal dismissal.
St. Paul College Quezon City vs. Spouses Ancheta

G.R. No. 169905, September 7, 2011
Facts:
Remigio Michael Ancheta was a full-time probationary teacher in the School Year 1996-1997 which was renewed in the following SY
1997-1998. His wife, Cynthia was hired as a part time teacher of the Mass Communication Department in the second semester of SY
1996-1997 and her appointment was renewed for SY 1997-1998.
On February 13, 1998, respondents signified their intentions to renew their contracts for SY 1998-1999. They were later sent two
letters informing them that the school is extending to them new contracts for SY 1998-1999.
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Thereafter, a letter was written to Remigio Michael, enumerating the departmental and instructional policies that spouses failed to
comply with, such as the late submission of final grades, failure to submit final test questions to the Program Coordinator, the giving of
tests in the essay form instead of the multiple choice format as mandated by the school, failure to report to work on time; the high
number of students with failing grades in the classes that they handled, and not being open to suggestions to improve themselves as
teachers, among others.
Thereafter, Sr. Bernadette (Department Coordinator) endorsed the immediate termination of the teaching services of the spouses.
Respondent spouses were given an opportunity to comment on the letter-recommendation. Subsequently however, they received
their respective letters of termination. Thus, spouses filed a Complaint for illegal dismissal.
St. Paul contends that it did not extend the contracts of respondent spouses. Although, it has sent letters to the spouses informing
them that the school is extending to them new contracts for the coming school year, the letters do not constitute as actual
employment contracts but merely offers to teach on the said school year.
Issues: WON respondents were considered regular employees

WON they were illegally dismissed
Held:
(1) Employment on probationary status of teaching personnel is that they are not governed purely by the Labor Code. The
Labor Code is supplemented with respect to the period of probation by special rules found in the Manual of Regulations for Private
Schools. On the matter of probationary period, Section 92 of these regulations provides:
Section 92.Probationary Period. — Subject in all instances to compliance with the Department and school requirements, the
probationary period for academic personnel shall not be more than three (3) consecutive years of satisfactory service for those in the
elementary and secondary levels, six (6) consecutive regular semesters of satisfactory service for those in the tertiary level, and nine
(9) consecutive trimesters of satisfactory service for those in the tertiary level where collegiate courses are offered on a trimester
basis.
A probationary employee or probationer is one who is on trial for an employer, during which the latter determines whether or not he
is qualified for permanent employment. The probationary employment is intended to afford the employer an opportunity to observe
the fitness of a probationary employee while at work, and to ascertain whether he will become an efficient and productive employee.
While the employer observes the fitness, propriety and efficiency of a probationer to ascertain whether he is qualified for permanent
employment, the probationer, on the other hand, seeks to prove to the employer that he has the qualifications to meet the reasonable
standards for permanent employment. Thus, the word probationary, as used to describe the period of employment, implies the
purpose of the term or period, not its length.
The common practice is for the employer and the teacher to enter into a contract, effective for one school year. At the end of the
school year, the employer has the option not to renew the contract, particularly considering the teacher's performance. If the contract
is not renewed, the employment relationship terminates. If the contract is renewed, usually for another school year, the probationary
employment continues. Again, at the end of that period, the parties may opt to renew or not to renew the contract. If renewed, this
second renewal of the contract for another school year would then be the last year — since it would be the third school year — of
probationary employment. At the end of this third year, the employer may now decide whether to extend a permanent appointment
to the employee, primarily on the basis of the employee having met the reasonable standards of competence and efficiency set by the
employer. For the entire duration of this three-year period, the teacher remains under probation. Upon the expiration of his contract
of employment, being simply on probation, he cannot automatically claim security of tenure and compel the employer to renew his
employment contract.
(2) No.
Section 91 of the Manual of Regulations for Private Schools, states that:
Section 91.Employment Contract. — Every contract of employment shall specify the designation, qualification, salary rate, the period
and nature of service and its date of effectivity, and such other terms and condition of employment as may be consistent with laws and
rules, regulations and standards of the school. A copy of the contract shall be furnished the personnel concerned.
It is important that the contract of probationary employment specify the period or term of its effectivity. The failure to stipulate its
precise duration could lead to the inference that the contract is binding for the full three-year probationary period. Therefore, the
letters sent by petitioner Sr. Bernadette, which were void of any specifics cannot be considered as contracts. The closest they can
resemble to are that of informal correspondence among the said individuals. As such, petitioner school has the right not to renew the
contracts of the respondents, the old ones having been expired at the end of their terms.
Assuming, arguendo, that the employment contracts between the school and the spouses were renewed, this Court finds that there
was a valid and just cause for their dismissal. The Labor Code commands that before an employer may legally dismiss an employee
from the service, the requirement of substantial and procedural due process must be complied with. Under the requirement of
substantial due process, the grounds for termination of employment must be based on just or authorized causes.
Of the charges against Remigio Michael, his spouse also shared the same defenses and admissions as to the charges against her.
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The plain admissions of the charges against them were the considerations taken into account by the petitioner school in their decision
not to renew the respondent spouses' employment contracts. This is a right of the school that is mandated by law and jurisprudence.
It is the prerogative of the school to set high standards of efficiency for its teachers since quality education is a mandate of the
Constitution. As long as the standards fixed are reasonable and not arbitrary, courts are not at liberty to set them aside. Schools
cannot be required to adopt standards which barely satisfy criteria set for government recognition. The same academic freedom
grants the school the autonomy to decide for itself the terms and conditions for hiring its teacher, subject of course to the overarching
limitations under the Labor Code. The authority to hire is likewise covered and protected by its management prerogative — the right
of an employer to regulate all aspects of employment, such as hiring, the freedom to prescribe work assignments, working methods,
process to be followed, regulation regarding transfer of employees, supervision of their work, lay-off and discipline, and dismissal and
recall of workers.
Lanvyl Fishing Enterprises, Inc. vs. Ariola et. al.

G.R. No. 181974, February 1, 2012
Facts:
Petitioner Lynvil Fishing Enterprises, Inc. (Lynvil) is engaged in deep-sea fishing. Respondents’ services were engaged in various
capacities: Andres G. Ariola, captain; Jessie D. Alcovendas, chief mate; Jimmy B. Calinao, chief engineer; Ismael G. Nubla, cook; Elorde
Bañ ez, oiler; and Leopoldo G. Sebullen, bodegero.
On Aug. 1, 1998, Lynvil received a report from Ramonito Clarido, one of its employees, that on July 31, 1998, he witnessed that while
on board the company vessel Analyn VIII, respondents conspired with one another and stole eight tubs of “pampano” and “tangigue”
fish and delivered them to another vessel.
Petitioner filed a criminal complaint against respondents before the office of the City Prosecutor of Malabon City which found
probable cause for indictment of respondents for the crime of qualified theft. Relying on the finding and Nasipit Lumber Company v.
NLRC, 257 Phil. 937 (1989), Lynvil asserted there was sufficient basis for valid termination of employment of respondents based on
serious misconduct and/or loss of trust and confidence.
Issues: Whether a finding of the city prosecutor of probable cause to indict employees of qualified theft is sufficient basis for valid
termination for serious misconduct and/or loss of trust or confidence
Whether the employees were validly terminated
Held:
On the first issue, the Supreme Court ruled in the negative. We ruled that proof beyond reasonable doubt of an employee’s misconduct
is not required when loss of confidence is the ground for dismissal. It is sufficient if the employer has “some basis” to lose confidence
or that the employer has reasonable ground to believe or to entertain the moral conviction that the employee concerned is
responsible for the misconduct and that the nature of his participation therein rendered him absolutely unworthy of the trust and
confidence demanded by his position.
Lynvil cannot argue that since the Office of the Prosecutor found probable cause for theft the Labor Arbiter must follow the finding as
a valid reason for the termination of respondents’ employment. The proof required for purposes that differ from one and the other are
likewise different.
(2) On the second question, the Court stated that nonetheless, even without reliance on the prosecutor’s finding, we find that
there was valid cause for respondents’ dismissal.
Just cause is required for a valid dismissal. The Labor Code provides that an employer may terminate an employment based on fraud
or willful breach of the trust reposed on the employee. Such breach is considered willful if it is done intentionally, knowingly, and
purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. It must
also be based on substantial evidence and not on the employer’s whims or caprices or suspicions otherwise, the employee would
eternally remain at the mercy of the employer. Loss of confidence must not be indiscriminately used as a shield by the employer
against a claim that the dismissal of an employee was arbitrary. And, in order to constitute a just cause for dismissal, the act
complained of must be work-related and shows that the employee concerned is unfit to continue working for the employer. In
addition, loss of confidence as a just cause for termination of employment is premised on the fact that the employee concerned holds a
position of responsibility, trust and confidence or that the employee concerned is entrusted with confidence with respect to delicate
matters, such as the handling or care and protection of the property and assets of the employer. The betrayal of this trust is the
essence of the offense for which an employee is penalized. Breach of trust is present in this case.
However, Lynvil contends that it cannot be guilty of illegal dismissal because the private respondents were employed under a fixed-
term contract which expired at the end of the voyage. Contrarily, the private respondents (employees) contend that they became
regular employees by reason of their continuous hiring and performance of tasks necessary and desirable in the usual trade and
business of Lynvil.
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Jurisprudence, laid two conditions for the validity of a fixed-contract agreement between the employer and employee: first, the fixed
period of employment was knowingly and voluntarily agreed upon by the parties without any force, duress, or improper pressure
being brought to bear upon the employee and absent any other circumstances vitiating his consent; or second, it satisfactorily appears
that the employer and the employee dealt with each other on more or less equal terms with no moral dominance exercised by the
former or the latter.
In the context of the facts that: (1) the respondents were doing tasks necessarily to Lynvil’s fishing business with positions ranging
from captain of the vessel to bodegero; (2) after the end of a trip, they will again be hired for another trip with new contracts; and (3)
this arrangement continued for more than ten years, the clear intention is to go around the security of tenure of the respondents as
regular employees. And respondents are so by the express provisions of the second paragraph of Article 280, thus: xxx Provided, That
any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a
regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists.
Having found that respondents are regular employees who may be, however, dismissed for cause as we have so found in this case,
there is a need to look into the procedural requirement of due process in Section 2, Rule XXIII, Book V of the Rules Implementing the
Labor Code. It is required that the employer furnish the employee with two written notices: (1) a written notice served on the
employee specifying the ground or grounds for termination, and giving to said employee reasonable opportunity within which to
explain his side; and (2) 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. In this case, it is clear that the employees were not given the
final written notices of dismissal.
The Court ruled that since employees were dismissed for just cause, they were not entitle to separation pay and backwages. However,
they were to be granted nominal damages for failure of the employer to comply with statutory due process.
D.M. Consunji, Inc. vs. Jasmin

GR NO 912594, April 18, 2012
Facts:
On December 17, 1968, petitioner D.M. Consunji, Inc. (DMCI), a construction company, hired respondent Estelito L. Jamin as a laborer.
Sometime in 1975, Jamin became a helper carpenter. Since his initial hiring, Jamin’s employment contract had been renewed a
number of times. On March 20, 1999, his work at DMCI was terminated due to the completion of the SM Manila project. This
termination marked the end of his employment with DMCI as he was not rehired again.
On April 5, 1999, Jamin filed a complaint for illegal dismissal, with several money claims (including attorney’s fees), against DMCI and
its President/General Manager, David M. Consunji. Jamin alleged that DMCI terminated his employment without a just and authorized
cause at a time when he was already 55 years old and had no independent source of livelihood. He claimed that he rendered service to
DMCI continuously for almost 31 years. In addition to the schedule of projects (where he was assigned) submitted by DMCI to the
labor arbiter, he alleged that he worked for three other DMCI projects: Twin Towers, Ritz Towers, from July 29, 1980 to June 12, 1982;
New Istana Project, B.S.B. Brunei, from June 23, 1982 to February 16, 1984; and New Istana Project, B.S.B. Brunei, from January 24,
1986 to May 25, 1986.
DMCI denied liability. It argued that it hired Jamin on a project-to-project basis, from the start of his engagement in 1968 until the
completion of its SM Manila project on March 20, 1999 where Jamin last worked. With the completion of the project, it terminated
Jamin’s employment. It alleged that it submitted a report to the Department of Labor and Employment (DOLE) everytime it
terminated Jamin’s services.
Issue: Whether there was violation of security of tenure.
Held:
Jamin worked for DMCI for almost 31 years, initially as a laborer and, for the most part, as a carpenter. Through all those years, DMCI
treated him as a project employee, so that he never obtained tenure. On the surface and at first glance, DMCI appears to be correct.
Jamin entered into a contract of employment (actually an appointment paper to which he signified his conformity) with DMCI either
as a field worker, a temporary worker, a casual employee, or a project employee everytime DMCI needed his services and a
termination of employment paper was served on him upon completion of every project or phase of the project where he worked.
The CA pierced the cover of Jamin’s project employment contract and declared him a regular employee who had been dismissed
without cause and without notice. To reiterate, the CA’s findings were based on: (1) Jamin’s repeated and successive engagements in
DMCI’s construction projects, and (2) Jamin’s performance of activities necessary or desirable in DMCI’s usual trade or business.
We agree with the CA. In Liganza v. RBL Shipyard Corporation, the Court held that "[a]ssuming, without granting[,] that [the]
petitioner was initially hired for specific projects or undertakings, the repeated re-hiring and continuing need for his services for over
eight (8) years have undeniably made him a regular employee." We find the Liganza ruling squarely applicable to this case,
considering that for almost 31 years, DMCI had repeatedly, continuously and successively engaged Jamin’s services since he was hired
on December 17, 1968 or for a total of 38 times — 35 as shown by the schedule of projects submitted by DMCI to the labor arbiter and
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three more projects or engagements added by Jamin, which he claimed DMCI intentionally did not include in its schedule so as to
make it appear that there were wide gaps in his engagements.
We reviewed Jamin’s employment contracts as the CA did and we noted that while the contracts indeed show that Jamin had been
engaged as a project employee, there was an almost unbroken string of Jamin’s rehiring from December 17, 1968 up to the
termination of his employment on March 20, 1999. While the history of Jamin’s employment (schedule of projects) relied upon by
DMCI shows a gap of almost four years in his employment for the period between July 28, 1980 (the supposed completion date of the
Midtown Plaza project) and June 13, 1984 (the start of the IRRI Dorm IV project), the gap was caused by the company’s omission of
the three projects.
For not disclosing that there had been other projects where DMCI engaged his services, Jamin accuses the company of suppressing
vital evidence that supports his contention that he rendered service in the company’s construction projects continuously and
repeatedly for more than three decades. The non-disclosure might not have constituted suppression of evidence — it could just have
been overlooked by the company — but the oversight is unfair to Jamin as the non-inclusion of the three projects gives the impression
that there were substantial gaps not only of several months but years in his employment with DMCI.
To reiterate, Jamin’s employment history with DMCI stands out for his continuous, repeated and successive rehiring in the company’s
construction projects. In all the 38 projects where DMCI engaged Jamin’s services, the tasks he performed as a carpenter were
indisputably necessary and desirable in DMCI’s construction business. He might not have been a member of a work pool as DMCI
insisted that it does not maintain a work pool, but his continuous rehiring and the nature of his work unmistakably made him a
regular employee. In Maraguinot, Jr. v. NLRC, the Court held that once a project or work pool employee has been: (1) continuously, as
opposed to intermittently, rehired by the same employer for the same tasks or nature of tasks; and (2) these tasks are vital, necessary
and indispensable to the usual business or trade of the employer, then the employee must be deemed a regular employee.
Further, as we stressed in Liganza, "[r]espondent capitalizes on our ruling in D.M. Consunji, Inc. v. NLRC which reiterates the rule that
the length of service of a project employee is not the controlling test of employment tenure but whether or not ‘the employment has
engagement of the employee.’"
"Surely, length of time is not the controlling test for project employment. Nevertheless, it is vital in determining if the employee was
hired for a specific undertaking or tasked to perform functions vital, necessary and indispensable to the usual business or trade of the
employer. Here, [private] respondent had been a project employee several times over. His employment ceased to be coterminous with
specific projects when he was repeatedly re-hired due to the demands of petitioner’s business." Without doubt, Jamin’s case fits
squarely into the employment situation just quoted.
Gapayao vs. Fulo

G.R. No. 193493; June 13, 2013
Facts:
Jaime Fulo (deceased) died of "acute renal failure secondary to 1st degree burn 70% secondary electrocution" 5 while doing repairs at
the residence and business establishment of petitioner.
Thereafter, private respondent filed a claim for social security benefits with the Social Security System (SSS)–Sorosogon
Branch.8 However, upon verification and evaluation, it was discovered that the deceased was not a registered member of the SSS.
respondent filed a Petition before the SSC on 17 February 2003. In her Petition, she sought social security coverage and payment of
contributions in order to avail herself of the benefits accruing from the death of her husband.
On 6 May 2003, petitioner filed an Answer disclaiming any liability on the premise that the deceased was not the former’s
employee, but was rather an independent contractor whose tasks were not subject to petitioner’s control and supervision.
Issue: Won there exists between the deceased Jaime Fulo and petitioner an employer-employee relationship that would merit an
award of benefits in favor of private respondent under social security laws.
Held:
In asserting the existence of an employer-employee relationship, private respondent alleges that her late husband had been in the
employ of petitioner for 14 years, from 1983 to 1997. During that period, he was made to work as a laborer in the agricultural
landholdings, a harvester in the abaca plantation, and a repairman/utility worker in several business establishments owned
by petitioner.
Lastly, petitioner alleges that the deceased is a freelance worker. Since he was engaged on a pakyaw basis and worked for a short
period of time, in the nature of a farm worker every season, he was not precluded from working with other persons and in fact
worked for them. Under Article 280 of the Labor Code, seasonal employees are not covered by the definitions of regular and
casual employees.
Farm workers may be considered regular seasonal employees.
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Jurisprudence has identified the three types of employees mentioned in the provision: (1) regular employees or those who have been
engaged to perform activities that are usually necessary or desirable in the usual business or trade of the employer; (2) project
employees or those whose employment has been fixed for a specific project or undertaking, the completion or termination of which
has been determined at the time of their engagement, or those whose work or service is seasonal in nature and is performed for the
duration of the season; and (3) casual employees or those who are neither regular nor project employees.
Farm workers generally fall under the definition of seasonal employees.

We have consistently held that seasonal employees may be considered as regular employees.
Regular seasonal employees are those called to work from time to time.
For regular employees to be considered as such, the primary standard used is the reasonable connection between the particular
activity they perform and the usual trade or business of the employer.
Hence, the employment is also considered regular, but only with respect to such activity and while such activity exists.
A reading of the records reveals that the deceased was indeed a farm worker who was in the regular employ of petitioner. From year
to year, starting January 1983 up until his death, the deceased had been working on petitioner’s land by harvesting abaca and
coconut, processing copra, and clearing weeds. His employment was continuous in the sense that it was done for more than one
harvesting season. Moreover, no amount of reasoning could detract from the fact that these tasks were necessary or desirable in the
usual business of petitioner.
Pakyaw workers are considered employees for as long as their employers exercise control over them
Concrete Solutions, Inc. et al. vs. Cabusas

G.R. No. 177812; June 19, 2013
Facts:
Respondent Arthur Cabusas (respondent) was hired by petitioner Primary Structures Corporation (PSC) as transit mixer driver for
petitioner Concrete Solutions Inc. (CSI) – Batching Plant Project.
The appointment letter stated:
xxx the status of his employment was that of a project employee and, as such, his employment was co-terminus with the
completion of the project or any phase thereof; that upon completion of the particular project or phase, he was free to seek
other employment of his choice; xxxx
He was accused of theft in the company, investigations were conducted, he sought assistance of counsel.
On June 12, 2001, petitioners, thru Manager Ardiente, sent respondent a termination letter 15 reading as follows:
Starting on May 6, 2001, you were absent from work without filing a Leave of Absence. A Notice of Abandonment was sent to you on
May 25, 2001 via telegram. Likewise, you were required to report or notify the company as soon as possible. However, two weeks
already elapsed from the time the notice was sent to you but you continued defying said request. Due to this, we are constrained to
TERMINATE your services effective on the date you abandoned your work with a strong belief that you are no longer interested to
come back to your work anymore.
Issue: WON there was valid termination.
Held:
It is well settled that in termination cases, the burden of proof rests upon the employer to show that the dismissal was for a just and
valid cause, and failure to discharge the same would mean that the dismissal is not justified and, therefore, illegal
To constitute abandonment, two elements must concur, to wit: (1) the failure to report for work or absence without valid or justifiable
reason; and (2) a clear intention to sever the employer-employee relationship, with the second element as the more determinative
factor and being manifested by some overt acts.
Respondent explained that his absence from work was due to the fact that he and his counsel had asked and were waiting for
a copy of result of the investigation on his alleged act of theft or dishonesty conducted on May 4, 2001 but were not given at
all. We find his absence from work not sufficient to establish that he already had intention of abandoning his job. Besides, settled is the
rule that mere absence or failure to report for work is not tantamount to abandonment of work.
Reinstatement and backwages.

Petitioners contend that respondent was a project employee and the project to which he was hired was already completed, thus he
could not be reinstated anymore.
Considering that respondent was dismissed prior to the expiration of the duration of his employment and without a valid or just
cause, his termination was therefore illegal.
However, respondent could no longer be reinstated since the project he was assigned to was already completely finished. However, we find
that he is entitled to the salary corresponding to the unexpired portion of his employment.
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D.M. Consunji vs. Bello

G.R. No. 159371; July 19, 2013
Facts:
Bello brought a complaint for illegal dismissal and damages against DMCI and/or Rachel Consunji. He claimed that DMCI had
employed him as a mason without any interruption from February 1, 1990 until October 10, 1997 at an hourly rate of P25.081; that he
had been diagnosed to be suffering from pulmonary tuberculosis, thereby necessitating his leave of absence; that upon his recovery,
he had reported back to work, but DMCI had refused to accept him and had instead handed to him a termination paper that the cause
had not been explained to him.
DMCI’s projects had not yet been completed.

DMCI contended that Bello had only been a project employee, as borne out by his contract of employment and appointment
papersand that although his last project employment contract had been set to expire on October 7, 1997, he had tendered his
voluntary resignation on October 4, 1997 for health reasons that had rendered him incapable of performing his job, per his
resignation letter.
Issues:
1. WHETHER OR NOT PRIVATE RESPONDENT WAS A REGULAR EMPLOYEE; AND
2. WHETHER OR NOT PRIVATE RESPONDENT WAS DISMISSED OR VOLUNTARILY RESIGNED.
Held:
In the context of the law, Bello was a project employee of DMCI at the beginning of their employer-employee relationship. The project
employment contract they then entered into clearly gave notice to him at the time of his engagement about his employment being for
a specific project or phase of work. He was also thereby notified of the duration of the project, and the determinable completion date
of the project.
However, the history of Bello’s appointment and employment showed that he performed his tasks as a mason in DMCI’s various
constructions projects, Tthus, Bello acquired in time the status of a regular employee by virtue of his continuous work as a mason of
DMCI.
It is settled that the extension of the employment of a project employee long after the supposed project has been completed
removes the employee from the scope of a project employee and makes him a regular employee. In this regard, the length of
time of the employee’s service, while not a controlling determinant of project employment, is a strong factor in determining whether
he was hired for a specific undertaking or in fact tasked to perform functions vital, necessary and indispensable to the usual business
or trade of the employer.1
Voluntary resignation
Yet, even had the letter been actually signed by him, the voluntariness of the resignation could not be assumed from such fact alone.
His claim that he had been led to believe that the letter would serve only as the means of extending his sick leave from work should
have alerted DMCI to the task of proving the voluntariness of the resignation.
Under the circumstances, DMCI became burdened with the obligation to prove the due execution and genuineness of the document as
a letter of resignation, which it failed to prove.
Colegio del Santisimo Rosario et al. vs. Rojo

G.R. No. 170388; September 4, 2013
Facts:
Petitioner Colegio del Santisimo Rosario (CSR) hired respondent as a high school teacher on probationary basis for the school years
1992-1993, 1993-19947 and 1994-1995. On April 5, 1995, CSR, through petitioner Sr. Zenaida S. Mofada, OP (Mofada), decided not to
renew respondent’s services.
Respondent filed a Complaint for illegal dismissal. He alleged that since he had served three consecutive school years which is the
maximum number of terms allowed for probationary employment, he should be extended permanent employment. Citing paragraph
75 of the 1970 Manual of Regulations for Private Schools (1970 Manual), respondent asserted that "full- time teachers who have
rendered three (3) consecutive years of satisfactory services shall be considered permanent."
Petitioners maintain that upon the expiration of the probationary period, both the school and the respondent were free to renew the
contract or let it lapse. Petitioners insist that a teacher hired for three consecutive years as a probationary employee does not
automatically become a regular employee upon completion of his third year of probation. It is the positive act of the school – the
hiring of the teacher who has just completed three consecutive years of employment on probation for the next school year – that
makes the teacher a regular employee of the school.
Held:
In Mercado v. AMA Computer College-Parañ aque City, Inc., we had occasion to rule that cases dealing with employment on
probationary status of teaching personnel are not governed solely by the Labor Code as the law is supplemented, with respect to the
period of probation, by special rules found in the Manual of Regulations for Private Schools (the Manual).
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With regard to the probationary period, Section 92 of the 1992 Manual provides:
Section 92. Probationary Period. – Subject in all instances to compliance with the Department and school requirements, the
probationary period for academic personnel shall not be more than three (3) consecutive years of satisfactory service for those in the
elementary and secondary levels, six (6) consecutive regular semesters of satisfactory service for those in the tertiary level, and nine
(9) consecutive trimesters of satisfactory service for those in the tertiary level where collegiate courses are offered on a trimester
basis.
In this case, petitioners’ teachers who were on probationary employment were made to enter into a contract effective for one school
year. Thereafter, it may be renewed for another school year, and the probationary employment continues. At the end of the second
fixed period of probationary employment, the contract may again be renewed for the last time.
Such employment for fixed terms during the teachers’ probationary period is an accepted practice in the teaching profession.
That teachers on probationary employment also enjoy the protection afforded by Article 281 of the Labor Code is supported by
Section 93 of the 1992 Manual which provides:
Sec. 93. Regular or Permanent Status. - Those who have served the probationary period shall be made regular or permanent. Full-time
teachers who have satisfactorily completed their probationary period shall be considered regular or permanent.
The above provision clearly provides that full-time teachers become regular or permanent employees once they have satisfactorily
completed the probationary period of three school years. The use of the term satisfactorily necessarily connotes the requirement for
schools to set reasonable standards to be followed by teachers on probationary employment. For how else can one determine if
probationary teachers have satisfactorily completed the probationary period if standards therefor are not provided?
As such, "no vested right to a permanent appointment shall accrue until the employee has completed the prerequisite three-year
period necessary for the acquisition of a permanent status. [However, it must be emphasized that] mere rendition of service for three
consecutive years does not automatically ripen into a permanent appointment. It is also necessary that the employee be a full-time
teacher, and that the services he rendered are satisfactory.
However, for teachers on probationary employment, in which case a fixed term contract is not specifically used for the fixed term it
offers, it is incumbent upon the school to have not only set reasonable standards to be followed by said teachers in determining
qualification for regular employment, the same must have also been communicated to the teachers at the start of the probationary
period, or at the very least, at the start of the period when they were to be applied. These terms, in addition to those expressly
provided by the Labor Code, would serve as the just cause for the termination of the probationary contract.
In this case, glaringly absent from petitioners’ evidence are the reasonable standards that respondent was expected to meet that could
have served as proper guidelines for purposes of evaluating his performance. Nowhere in the Teacher’s Contract could such standards
be found. Neither was it mentioned that the same were ever conveyed to respondent. Even assuming that respondent failed to meet
the standards set forth by CSR and made known to the former at the time he was engaged as a teacher on probationary status, still, the
termination was flawed for failure to give the required notice to respondent.
Herrera-Manaois vs. St. Scholasticas College

G.R. No. 188914; December 11, 2013
Facts:
SSC, situated in the City of Manila, is a private educational institution offering elementary, secondary, and tertiary education. Manaois
graduated from SSC in October 1992 with a degree in Bachelor of Arts in English. In 1994, she returned to her alma mater as a part-
time English teacher. After taking a leave of absence for one year, she was again rehired by SSC for the same position. Four years into
the service, she was later on recommended by her Department Chairperson to become a full-time faculty member of the English
Department.
Manaois thus applied for a position as full-time instructor for school year 2000-2001.
She mentioned in her application letter that she had been taking the course Master of Arts in English Studies, Major in Creative
Writing, at the University of the Philippines, Diliman (UP); that she was completing her master's thesis; and that her oral defense was
scheduled for June 2000. In a reply letter 4 dated 17 April 2000, the Dean of Arts and Sciences informed her of the SSC Administrative
Council's approval of her application. SSC hired her as a probationary full-time faculty member with the assigned task of instructor for
the school year 2000-2001. Her probationary employment continued for a total of three consecutive years.
Because of the forthcoming completion of her third year of probationary employment, Manaois wrote the Dean of Arts and Sciences
requesting an extension of her teaching load for the school year 2003-2004. Manaois eventually received a letter from the Dean of
College and Chairperson of the Promotions and Permanency Board officially informing her of the board's decision not to renew her
contract.
Issue: Whether the completion of a master's degree is required in order for a tertiary level educator to earn the status of permanency
in a private educational institution.
Held:
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Probationary employment refers to the trial stage or period during which the employer examines the competency and qualifications
of job applicants, and determines whether they are qualified to be extended permanent employment status. Such an arrangement
affords an employer the opportunity — before the full force of the guarantee of security of tenure comes into play — to fully
scrutinize and observe the fitness and worth of probationers while on the job and to determine whether they would become proper
and efficient employees. It also gives the probationers the chance to prove to the employer that they possess the necessary qualities
and qualifications to meet reasonable standards for permanent employment.
Viewed next to the statements and actions of Manaois — i.e., the references to obtaining a master's degree in her application letter, in
the subsequent correspondences between her and SSC, and in the letter seeking the extension of a teaching load for the school year
2003-2004; and her submission of certifications from UP and from her thesis adviser — we find that there is indeed substantial
evidence proving that she knew about the necessary academic qualifications to obtain the status of permanency.
At this juncture, we reiterate the rule that mere completion of the three-year probation, even with an above-average performance,
does not guarantee that the employee will automatically acquire a permanent employment status. It is settled jurisprudence that the
probationer can only qualify upon fulfillment of the reasonable standards set for permanent employment as a member of the teaching
personnel.
Thus, pursuant to the 1992 Manual, private educational institutions in the tertiary level may extend "full-time faculty" status only to
those who possess, inter alia, a master's degree in the field of study that will be taught. This minimum requirement is neither subject
to the prerogative of the school nor to the agreement between the parties. For all intents and purposes, this qualification must be
deemed impliedly written in the employment contracts between private educational institutions and prospective faculty members.
The issue of whether probationers were informed of this academic requirement before they were engaged as probationary employees
is thus no longer material, as those who are seeking to be educators are presumed to know these mandated qualifications. In the light
of the failure of Manaois to satisfy the academic requirements for the position, she may only be considered as a part-time instructor
pursuant to Section 45 of the 1992 Manual.
Universal Robina Sugar Milling Corp. vs. Acibo et al.

G.R No. 186439; January 15, 2014
Facts:
URSUMCO is a domestic corporation engaged in the sugar cane milling business; Cabati is URSUMCO's Business Unit General Manager.
The complainants were employees of URSUMCO. They were hired on various dates (between February 1988 and April 1996) and on
different capacities, 8 i.e., drivers, crane operators, bucket hookers, welders, mechanics, laboratory attendants and aides, steel
workers, laborers, carpenters and masons, among others. At the start of their respective engagements, the complainants signed
contracts of employment for a period of one (1) month or for a given season. URSUMCO repeatedly hired the complainants to perform
the same duties and, for every engagement, required the latter to sign new employment contracts for the same duration of one month
or a given season.
The complainants filed before the LA complaints for regularization, entitlement to the benefits under the existing Collective
Bargaining Agreement (CBA), and attorney's fees.
Issue: Whether or not respondents are regular employees of URSUMCO
Held:
We find the respondents to be regular seasonal employees of URSUMCO.
Seasonal employment operates much in the same way as project employment, albeit it involves work or service that is seasonal in
nature or lasting for the duration of the season. As with project employment, although the seasonal employment arrangement
involves work that is seasonal or periodic in nature, the employment itself is not automatically considered seasonal so as to prevent
the employee from attaining regular status. To exclude the asserted "seasonal" employee from those classified as regular employees,
the employer must show that: (1) the employee must be performing work or services that are seasonal in nature; and (2) he had been
employed for the duration of the season. Hence, when the "seasonal" workers are continuously and repeatedly hired to perform the
same tasks or activities for several seasons or even after the cessation of the season, this length of time may likewise serve as badge of
regular employment. In fact, even though denominated as "seasonal workers," if these workers are called to work from time to time
and are only temporarily laid off during the off-season, the law does not consider them separated from the service during the off-
season period. The law simply considers these seasonal workers on leave until re-employed.
The nature of the employment depends on the nature of the activities to be performed by the employee, considering the nature of the
employer's business, the duration and scope to be done, and, in some cases, even the length of time of the performance and its
continued existence. In light of the above legal parameters laid down by the law and applicable jurisprudence, the respondents are
neither project, seasonal nor fixed-term employees, but regular seasonal workers of URSUMCO.
(1) The respondents were made to perform various tasks that did not at all pertain to any specific phase of URSUMCO's strict
milling operations that would ultimately cease upon completion of a particular phase in the milling of sugar; rather, they
were tasked to perform duties regularly and habitually needed in URSUMCO's operations during the milling season.
(2) The respondents were regularly and repeatedly hired to perform the same tasks year after year.
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Noblejas vs. Italian Maritime Academy Phils

GR No. 207888, June 9, 2014
FACTS:
A. The Parties to the Case
Petitioner Dionarto Q. Noblejas (Noblejas) filed a complaint for illegal dismissal, tax refund, moral and exemplary damages, non-
payment of 13th month pay, food, gasoline and schooling allowances, health insurance, monetized leave, and attorney’s fees, against
Italian Maritime Academy Phils., Inc. (IMAPI), Capt. Nicolo S. Terrei (Capt. Terrei), Raceli S. Ferrez (Ferrez), and Ma. Teresa R.
Mendoza (Mendoza).
IMAPI was a training center for seamen and an assessment center for determination of the qualifications and competency of seamen
and officers for possible promotion. Capt. Terrei was the Managing Director of IMAPI while Ferrez was his secretary. Mendoza was the
company’s Administrative Manager.
B. The Conflict
Record shows that Procerfina SA. Terrei, IMAPI President, wrote a letter3 to Noblejas informing him that he had been appointed as
training instructor/assessor of the company on a contractual basis for a period of three (3) months effective May 20, 2009, with a
monthly salary of 75,000.00 inclusive of tax. After the expiration of the 3-month period, IMAPI hired Noblejas anew as training
instructor/assessor with the same salary rate, but no written contract was drawn for his rehiring.4
The absence of a written contract to cover the renewal of his employment became Noblejas’ major concern. To address all his
apprehensions, he wrote Capt. Terrei a letter, dated March 9, 2010, requesting that a new contract be executed to reflect the following
provisions that they had allegedly agreed upon during their conversation on May 19, 2009, to wit: 1] that his monthly salary would
be ?75,000.00, tax excluded, and that 50% of his SSS premium would be shouldered by the company; and 2] that after the completion
of his 3-month contract, he would be given the option to choose either - a) to be regularly employed as an instructor of IMAPI; or b) to
go on board a vessel with the company extending him financial aid for the processing of pertinent documents, which amount would be
later on deducted from his salary. Likewise in the same letter, Noblejas intimated that he was electing to continue working for the
company as its regular instructor.
Noblejas averred that the company did not act on his letter-request, so he sought an audience with Capt. Terrei on March 16, 2010.
During the meeting, an altercation between them ensued. He claimed that after that incident, Capt. Terrei instructed Ferrez to dismiss
him from employment. He claimed that when he asked from Ferrez for a copy of his old contract, she allegedly replied, “No, you better
pack up all your things now and go, you are now dismissed and you are no longer part in this office – clearly, you are terminated from
this day on.”5
ISSUES:
A. WON he was a regular employee
B. WON he was illegally dismissed
HELD:
1. Yes, Noblejas is a regular employee of IMAPI.
Pursuant to Article 280 of the Labor Code, there are two kinds of regular employees, namely:
(1) those who are engaged to perform activities which are usually necessary or desirable in the usual business or trade of the
employer; and
(2) those who have rendered at least one year of service, whether continuous or broken, with respect to the activities in which
they are employed.13
Regular employees are further classified into:
(1) regular employees - by nature of work and
(2) regular employees - by years of service.14
The regular employees by nature of work refers to those employees who perform a particular function which is necessary or
desirable in the usual business or trade of the employer, regardless of their length of service; while regular employees by years of
service refers to those employees who have been performing the job, regardless of its nature thereof, for at least a year.15
In the case at bench, Noblejas was employed by IMAPI as a training instructor/assessor for a period of three (3) months effective May
20, 2009. After the end of the 3-month period, he was rehired by IMAPI for the same position and continued to work as such until
March 16, 2010. There is no dispute that the work of Noblejas was necessary or desirable in the business or trade of IMAPI, a training
and assessment center for seamen and officers of vessels. Moreover, such continuing need for his services is sufficient evidence of the
necessity and indispensability of his services to IMAPI’s business. Taken in this light, Noblejas had indeed attained the status of a
regular employee at the time he ceased to report for work on March 17, 2010.
2. No illegal dismissal because no substantial evidence was furnished by the employee.
Fair evidentiary rule dictates that before employers are burdened to prove that they did not commit illegal dismissal, it is incumbent
upon the employee to first establish by substantial evidence the fact of his or her dismissal.16
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Aside from his mere assertion, no corroborative and competent evidence was adduced by Noblejas to substantiate his claim that he
was dismissed from employment. The record is bereft of any indication that he was prevented from returning to work or otherwise
deprived of any work assignment. It is also noted that no evidence was submitted to show that respondent Ferrez, the secretary of
Capt. Terrei, was actually authorized by IMAPI to terminate the employment of the company’s employees or that Ferrez was indeed
instructed by Capt. Terrei to dismiss him from employment.
The Court finds it odd that, instead of clarifying from Capt. Terrei what he heard from Ferrez, Noblejas immediately instituted an
illegal dismissal case against the respondents the day following the alleged incident and never reported back for work since then.
Respondents’ refusal to grant complainant’s demands does not constitute an overt act of dismissal.
Let it be underscored that the fact of dismissal must be established by positive and overt acts of an employer indicating the intention
to dismiss.21 Indeed, a party alleging a critical fact must support his allegation with substantial evidence, for any decision based on
unsubstantiated allegation cannot stand without offending due process.22 Here, there is no sufficient proof showing that Noblejas
was actually laid off from work. In any event, his filing of a complaint for illegal dismissal, irrespective of whether reinstatement or
separation pay was prayed for, could not by itself be the sole consideration in determining whether he has been illegally dismissed. All
circumstances surrounding the alleged termination should also be taken into account.
Omni Hauling Services Inc v Tortoles

GR No. 199388, September 3, 2014
Facts:
Petitioner Omni Hauling Services, was awarded a one (1) year service contract by the local government of Quezon City to provide
garbage hauling services for the period July 1, 2002 to June 30, 2003. For this purpose, Omni hired respondents as garbage truck
drivers who were then paid on a per trip basis.
When the service contract was renewed for another year, July 1, 2003 to June 30, 2004, petitioners required each of the respondents
to sign employment contracts which provided that they will be “re-hired” only for the duration of the same period. However,
respondents refused to sign the employment contracts, claiming that they were regular employees since they were engaged to
perform activities which were necessary and desirable to Omni’s usual business or trade. For this reason, Omni terminated the
employment of respondents which, in turn, resulted in the filing of cases for illegal dismissal, nonpayment of Emergency Cost of Living
Allowance (ECOLA) and 13th month pay, and actual, moral, and exemplary damages.
During the mandatory conference before the Labor Arbiter (LA), Omni offered to re-employ respondents on the condition that they
sign the employment contracts but respondents refused such offer.
ISSUE: Whether or not respondents were project employees?
HELD: No, respondents are not project employees, but regular employees. Employers claiming that their workers are project
employees should not only prove that the duration and scope of the employment was specified at the time they were engaged, but
also that there was indeed a project. Respondents were not clearly and knowingly informed of their employment status as mere
project employees, with the duration and scope of the project specified at the time they were engaged. As such, the presumption of
regular employment should be accorded in their favor pursuant to Article 280 of the Labor
Code which provides that “[employees] who have rendered at least one year of service, whether such service is continuous or broken
shall be considered as [regular employees with respect to the activity in which they are employed and their employment shall
continue while such activity actually exists.”.
Hacienda Ledd vs. Villegas

GR No. 179654, Sept. 22, 2014
FACTS:
Villegas is an employee at the Hacienda Leddy as early as 1960, when it was still named Hacienda Teresa. Later on named Hacienda
Leddy owned by Ricardo Gamboa Sr., the same was succeeded by his son Ricardo Gamboa, Jr. During his employment up to the time of
his dismissal, Villegas performed sugar farming job 8 hours a day, 6 days a week work, continuously for not less than 302 days a year,
and for which services he was paid P45.00 per day. He likewise worked in petitioner's coconut lumber business where he was paid
P34.00 a day for 8 hours work.
On June 9, 1993, Gamboa went to Villegas' house and told him that his services were no longer needed without prior notice or valid
reason. Hence, Villegas filed the instant complaint for illegal dismissal.
ISSUE:
Whether or not herein respondent classified as regular employee and thus entitled to security of tenure under Article 279?
RULING:
Respondent is a regular employee entitled to security of tenure.
The Labor Code draws a fine line between regular and casual employees to protect the interests of labor.
Villegas is entitled to security of tenure under Article 279 of the Labor Code and can only be removed for cause. We found no valid
cause attending to his dismissal and found also that his dismissal was without due process. Article 277(b) of the Labor Code provides
that: Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a
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just and authorized cause and without prejudice to the requirement of notice under Article 283 of this Code, the employer shall
furnish the worker whose employment is sought to be terminated a written notice containing a statement of the causes for
termination and shall afford the latter ample opportunity to be heard and to defend himself with the assistance of his representative if
he so desires in accordance with company rules and regulations promulgated pursuant to guidelines set by the Department of Labor
and Employment.
The failure of the petitioner to comply with these procedural guidelines renders its dismissal of Villegas illegal. An illegally dismissed
employee should be entitled to either reinstatement if viable, or separation pay if reinstatement is no longer viable, plus backwages in
either instance. Considering that reinstatement is no longer feasible because of strained relations between the employee and the
employer, separation pay should be granted.
IV. MANAGEMENT PREROGATIVE
Dosch vs. NLRC

G.R. No. L-51182. July 5, 1983
Facts:
Helmut Dosch, an American citizen, married to a Filipina, was the resident Manager of Northwest Airlines, Inc. in the Philippines. He
has to his credit 11 years of continuous service with the company, including 9 years as Northwest Manager with station at Manila. He
received an inter-office communication from R.C. Jenkins, Northwest's Vice President for Orient Region based in Tokyo, promoting
him to the position of Director of International Sales and transferring him to Northwest's General Office in Minneapolis, U.S.A.,
effective immediately.
Dosch in his letter, expressed appreciation for the promotion and at the same time regretted that "for personal reasons and reasons
involving his family, he is unable to accept a transfer from the Philippines and that he would, therefore, prefer to remain in his
position, of Manager-Philippines until such time that his services in that capacity are no longer required by the company. Petitioner
tried to resume his duties as Manager after an authorized vacation but the Vice-President for the Orient Region of Northwest advised
petitioner that in view of his letter, his status as an employee of the company ceased on the close of business and the company therefore
considers his letter to be a resignation without notice.
Issue: Whether or not the employer’s letter constitute a transfer as a valid exercise of a management prerogative.
Held:
No. The Supreme Court treats the Jenkins letter as directing the promotion of the petitioner from his position as Philippine manager
to Director of International Sales in Minneapolis, U.S.A. It is not merely a transfer order but "it is more in the nature of a promotion
that a transfer, the latter being merely incidental to such promotion." The inter-office communication of Vice President Jenkins is
captioned "Transfer" but it is basically and essentially a promotion for the nature of an instrument is characterized not by the title
given to it but by its body and contents. The communication informed the petitioner that effective August 18, 1975, he was to be
promoted to the position of Director of International Sales, and his compensation would be upgraded and the payroll accordingly
adjusted. Petitioner was, therefore, advanced to a higher position and rank and his salary was increased and that is a promotion.
There is no law that compels an employee to accept a promotion, as a promotion is in the nature of a gift or a reward, which a person
has a right to refuse. When petitioner refused to accept his promotion to Director of International Sales, he was exercising a right and
he cannot be punished for it as qui jure suo utitur neminem laedit. He who uses his own legal right injures no one. While it may be
true that the right to transfer or reassign an employee is an employer's exclusive right and the prerogative of management, such right
is not absolute. The right of an employer to freely select or discharge his employee is limited by the paramount police power for the
relations between capital and labor are not merely contractual but impressed with public interest (Article 1700, New Civil Code). And
neither capital nor labor shall act oppressively against each other. The Court did not agree to Northwest's submission that petitioner
was guilty of disobedience and insubordination which respondent Commission sustained. Petitioners acknowledgment of his
promotion and the way he expressed his desire to remain in his position in the Philippines for reasons involving his family, the Court
could not discern even the slightest hint of defiance, much less imply insubordination on the part of petitioner.
The Court emphasized the long and faithful years of service that petitioner had rendered to respondent company, eleven good years,
nine of which as Manager with station at Manila. It is plainly abusive of the company and oppressive to the petitioner that the latter is
peremptorily dismissed on the shallow claim of "resignation without notice,". The Court ordered petitioner's reinstatement to his
former position with full backwages for three (3) years without loss of seniority rights and other benefits recognized by law, including
attorney's fees equivalent to 10% of the total monetary benefits which the petitioner may recover, and ordered petitioners
reinstatement.
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PT&T vs. Court of Appeals

G.R. No. 152057. September 29, 2003
Facts:
PT&T is a domestic corporation engaged in the business of providing telegraph and communication services thru its branches all over
the country. Sometime in 1997, after conducting several studies, PT and T came up with a Relocation and Restructuring Program that
aimed to (a) sustain its retail operations (b) decongest surplus workforce in some branches, to promote efficiency and productivity;
(c) lower expenses incidental to hiring and training new personnel; and (d) avoid retrenchment of employees occupying redundant
positions. The company offered relocation benefits/allowances to employees who would agree to be transferred to new PT and T
branches in the provinces. Moreover, employees who would agree to the transfer would be considered promoted.
In line with the petitioner’s program, seven employees were directed by the company to “relocate” to their new PT&T branches. The
seven employees however rejected the petitioner company’s offer on the reason that the said transfers involved distant places which
would require their separation from their families.
Due to the employee’s refusal, the company dismissed the seven employees on the ground that their refusal amounted to
insubordination and willful disobedience to a lawful order. As the seven employees were all members of a registered labor union,
their union in behalf of them, filed with the Labor Arbiter a complaint for unfair labor practice and illegal dismissal against PT&T.
The petitioner company’s defense was that the transfers were valid exercise of management prerogative. The Labor Arbiter dismissed
the complaint and upheld the company, but on appeal, the National Labor Relations Commission declared the employee’s dismissal as
illegal. The Court of Appeals affirmed the NLRC’s ruling.
Issue:
(1) Whether or not the transfers initiated by petitioner PT and T to its employees were in the nature of a promotion.
(2) Whether or not the dismissal of the employees was valid on the ground that there was insubordination and willful disobedience to
a lawful order.
Held:
(1) The employee’s transfers are promotions in nature even if they were not accompanied by an increase in salary.
It was petitioner company itself that admitted to this fact as was stated in their position paper submitted to the Labor Arbiter. With or
without a corresponding increase in salary, the respective transfers of the private respondents were in fact promotions, following the
ruling enunciated in Homeowners Savings and Loan Association, Inc. v. NLRC:
… [P]romotion, as we defined in Millares v, Subido, is “the advancement from one position to another with an increase in duties and
responsibilities as authorized by law, and usually accompanied by an increase in salary.” Apparently, the indispensable element for
there to be a promotion is that there must be“advancement from one position to another” or an upward vertical movement of the
employee’s rank or position. Any increase in salary should only be considered incidental but never determinative of whether or not a
promotion is bestowed upon an employee.
(2) An employee cannot be promoted, even if merely as a result of transfer, without his consent. A transfer that results in promotion
or demotion, advancement or reduction or a transfer that aims to ‘lure the employee away from his permanent position cannot be
done without the employees’ consent.
There is no law that compels an employee to accept a promotion for the reason that a promotion is in the nature of a gift or reward,
which a person has a right to refuse. Hence, the exercise by the private respondents of their right cannot be considered in law as
insubordination, or willful disobedience of a lawful order of the employer. As such, there was no valid cause for the private
respondents’ dismissal.
As the questioned dismissal is not based on any of the just or valid grounds under Article 282 of the Labor Code, the NLRC correctly
ordered the private respondents’ reinstatement without loss of seniority rights and the payment of back wages from the time of their
dismissal up to their actual reinstatement.
Mendoza vs. Rural Bank of Lucban

G.R. No. 155421, July 7, 2004
Facts:
On April 25, 1999, the Board of Directors of the Rural Bank of Lucban, Inc., issued Board Resolution Nos. 99-52 and 99-53, ordering
the reshuffling of its and employees in line with the policy of the bank to familiarize bank employees with the various phases of bank
operations and further strengthen the existing internal control system.
In that Board resolution, Mendoza was assigned to Clerk-Meralco collection from the position of Appraiser. Petitioner in an undated
letter to the Bank’s Board Chairman stated that the transfer was in effect a demotion on his part without legal basis and is a blatant
harassment on from the employer as a prelude petitioners termination in due time. That it resulted to unfair labor practice.
The Board’s Chairman in his reply, only reiterated that the reason behind the resolution on the reshuffling of its employees was
merely familiarize bank employees with the various phases of bank operations and further strengthen the existing internal control
system.
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On June 7, 2009, petitioner in a letter applied for leave of absence due to an ailment good for ten days, and another was submitted for
30 days. Within this period, petitioner filed a complaint before Arbitration Branch No. IV of the National Labor Relations Commission
against the Rural Bank of Lucban for illegal dismissal, underpayment, separation pay and damages. The Labor Arbiter upheld
petitioner’s claims but then it was reversed by the NLRC on appeal. The Court of Appeals also found no grave abuse of discretion on
the part of the NLRC.
Issue: Whether or not the reshuffling or transfer is deemed to be a demotion on petitioner’s position.
Held:
Constructive dismissal is defined as an involuntary resignation resorted to when continued employment is rendered impossible,
unreasonable or unlikely; when there is a demotion in rank or a diminution of pay; or when a clear discrimination, insensibility or
disdain by an employer becomes unbearable to the employee.
In the pursuit of its legitimate business interest, management has the prerogative to transfer or assign employees from one office or
area of operation to another — provided there is no demotion in rank or diminution of salary, benefits, and other privileges; and the
action is not motivated by discrimination, made in bad faith, or effected as a form of punishment or demotion without sufficient cause.
This privilege is inherent in the right of employers to control and manage their enterprise effectively. The right of employees to
security of tenure does not give them vested rights to their positions to the extent of depriving management of its prerogative to
change their assignments or to transfer them. Managerial prerogatives, however, are subject to limitations provided by law, collective
bargaining agreements, and general principles of fair play and justice.
Management Prerogative to Transfer Employees. Jurisprudence recognizes the exercise of management prerogatives. For this reason,
courts often decline to interfere in legitimate business decisions of employers. Indeed, labor laws discourage interference in
employers’ judgments concerning the conduct of their business. The law must protect not only the welfare of employees, but also the
right of employers. In the pursuit of its legitimate business interest, management has the prerogative to transfer or assign employees
from one office or area of operation to another -- provided there is no demotion in rank or diminution of salary, benefits, and other
privileges; and the action is not motivated by discrimination, made in bad faith, or effected as a form of punishment or demotion
without sufficient cause. This privilege is inherent in the right of employers to control and manage their enterprise effectively. The
right of employees to security of tenure does not give them vested rights to their positions to the extent of depriving management of
its prerogative to change their assignments or to transfer them.
Petitioner’s Transfer Lawful. Petitioner’s transfer was made in pursuit of respondent’s policy to “familiarize bank employees with the
various phases of bank operations and further strengthen the existing internal control system” of all officers and employees. We have
previously held that employees may be transferred -- based on their qualifications, aptitudes and competencies -- to positions in
which they can function with maximum benefit to the company. There appears no justification for denying an employer the right to
transfer employees to expand their competence and maximize their full potential for the advancement of the establishment. Petitioner
was not singled out; other employees were also reassigned without their express consent. Neither was there any demotion in the rank
of petitioner; or any diminution of his salary, privileges and other benefits. This fact is clear in respondent’s Board Resolutions, the
April 30, 1999 letter of Bank President Daya to Branch Manager Cada, and the May 10, 1999 letter of Daya to petitioner.
Duncan Association of Detailman vs. Glaxo Wellcome Phils.

G.R. 162994, September 17, 2004
Facts:
Petitioner Tecson was hired by respondent Glaxo Wellcome Phils. as a medical representative. Tecson signed a contract of
employment, which stipulates among others, that he agrees to disclose existing or future relationship with co-employees and
employees of competing companies that should such relationship poses a conflict of interest, to resign from the company. Despite
repeated warnings, Tecson and Bettsy, an employee of a competing company, got married. Glaxo transferred Tecson to Butuan, but he
defied such orders and continued acting as medical representative in Camarines area. The National Conciliation and Mediation board
rendered as valid the policy and the right to transfer.
Issue: Whether or not the policy constitutes a prohibition against marriage.
Held:
No.
Glaxo’s policy prohibiting an employee from having a relationship is a valid exercise of management prerogatives as relationships of
that nature might compromise the interests of the company. Glaxo has a right to guard its trade secrets, manufacturing formulas,
marketing strategies and other confidential programs and information for competitors.
The right to protect its economic interests is recognized by the constitution which recognizes the right of enterprises to adopt and
enforce such a policy to protect its right to reasonable returns on investments and for expansion and growth. Indeed, while our laws
endeavor to give life to the constitutional policy on social justice and the protection of labor, it does not mean that every labor dispute
will be decided in favor of the workers.
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The law also recognized that management has rights which are also entitled to respect and enforcement in the interest of fair play.
The challenged company policy does not violate the equal protection clause of the constitution as such clause is addressed only to the
state or those acting under color of its authority.
The policy being questioned is not a policy against marriage. An employee of the company remains free to marry anyone of his or her
choosing. The policy is aimed at restricting a personal prerogative that belongs only to the individual. However, an employee’s
personal decision does not detract the employer from exercising management prerogatives to ensure maximum profit and business
success.
PLDT vs. Paquio

G.R. No. 152689, October 12, 2005
Facts:
In 1994, PLDT assessed the performance of the 27 Exchanges comprising the GMM Network. Upon receipt of the ratings, Alfredo
Paguio, Head of the Garnet Exchange, sent a letter to his immediate supervisor and Asst. VP criticizing the PLDT criteria for
performance rating as unfair because they depended on manpower after receiving its appraisal rating. He also suggested that the
criteria failed to recognize that exchanges with new plants could easily meet the objectives of GMM compared to those with old plants.
Despite Paguio’s criticism, Garnet Exchange, the oldest plant in GMM, obtained the top rating in the GMM. Nevertheless, Paguio
reiterated his letter to Santos and objected to the performance rating as it was based only on the attainment of objectives, without
considering other relevant factors. Two years later on June 1996, PLDT rebalanced the manpower of the East Center. Paguio wrote
Santos and requested reconsideration of the manpower rebalancing, claiming it was unfair to Garnet Exchange because as the oldest
exchange in the East Center, it was disallowed to use contractors for new installations and was not made beneficiary of the cut-over
bonus.
He was then was reassigned as Head for Special Assignment at the Office of the GMM East Center and asked to turn over his functions
as Garnet Exchange Head to Tessie Go. Believing that his transfer was a disciplinary action, Paguio requested the first VP for a formal
hearing of the charges against him and asked that his reassignment be deferred. He also filed a complaint against his supervisor for
grave abuse of authority and manipulation of the East Center performance. Findings were that the memo was in order as it was based
on the finding that Paguio was not a team player and cannot accept decisions of management, which is short of insubordination. He
was then advised to transfer to any group in the company that may avail of his services. Likewise, another memo informed Paguio
that his transfer was not in the nature of a disciplinary action that required investigation and that he agreed with the reasons of the
transfer. Aggrieved, Paguio files a complaint for illegal dismissal with prayer for reinstatement and damages which was later amended
to illegal demotion with prayer for reversion to old position, damages and attorney’s fees.
Issue: Whether or not the transfer of Paguio is legal.
Held:
PLDT alleges that the NLRC ruling would allow a change of cause of action since the complaint alleged “illegal demotion” while the
decision involved “illegal transfer.” Prefatorily, we note from the records that there has been no change of cause of action from “illegal
demotion” to “illegal transfer.” Illegal demotion is a type of illegal transfer. Moreover, it is familiar and fundamental doctrine that it is
not the title of the action but the allegations in the pleading that determines the nature of the action. An employer is free to regulate,
according to his own discretion and judgment, all aspects of employment, including the transfer of employees. It is the employer’s
prerogative, based on its assessment and perception of its employees’ qualifications, aptitudes, and competence, to deploy its
employees in the various areas of its business operations in order to ascertain where they will function with maximum benefit to the
company. An employee’s right to security of tenure does not give him such a vested right in his position as would deprive the
company of its prerogative to change his assignment or transfer him where he will be most useful.
Nonetheless, there are limits to the management prerogative. While it may be conceded that management is in the best position to
know its operational needs, the exercise of management prerogative cannot be utilized to circumvent the law and public policy on
labor and social justice. That prerogative accorded management should not defeat the very purpose for which our labor laws exist: to
balance the conflicting interests of labor and management. By its very nature, management prerogative must be exercised always
with the principles of fair play and justice. In particular, the employer must be able to show that the transfer is not unreasonable,
inconvenient or prejudicial to the employee; nor does it involve a demotion in rank or a diminution of his salaries, privileges and
other benefits. The employer bears the burden of proving that the transfer of the employee has complied with the foregoing test.
In the present case, we see no credible reason for Paguio’s transfer except his criticisms of the company’s performance evaluation
methods. Based on the undisputed facts, Garnet Exchange was doing well and excelled in the performance rating. In the same way,
Paguio’s performance was consistently rated as outstanding. There was also no proof that Paguio refused to comply with any
management policy. Patently, his transfer could not be due to poor performance. Neither was it because he was needed in the new
post for the new assignment was functionless and it was nothing but a title. Paguio’s transfer could only be caused by the
management’s negative reception of his comments. It is prejudicial to Paguio because it left him out for a possible promotion as he
was assigned to a functionless position with neither office nor staff.
Hence, transfer was not valid.
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Star Paper Corp., vs. Simbol

G.R. No. 164774, April 12, 2006
Facts:
Petitioner Star Paper Corporation is a corporation engaged in trading, principally of paper products. Josephine Ongsitco is its Manager
of the Personnel and Administration Department while Sebastian Chua is its Managing Director.
Respondents Ronaldo D. Simbol (Simbol), Wilfreda N. Comia (Comia) and Lorna E. Estrella (Estrella) were all regular employees of the
company. Simbol was employed by the company on October 1993 and met Alma Dayrit, also an employee of the company, whom he
married on June 1998. Prior to the marriage, Ongsitco advised the couple that should they decide to get married, one of them should
resign pursuant to a company policy. Simbol resigned on June 20, 1998 pursuant to the company policy.
Comia was hired by the company on February 1997. She met Howard Comia, a co-employee, whom she married on June 1, 2000.
Ongsitco likewise reminded them that pursuant to company policy, one must resign should they decide to get married. Comia
resigned on June 30, 2000.
Estrella was hired on July 29, 1994. She met Luisito Zuñ iga (Zuñ iga), also a co-worker. Petitioners stated that Zuñ iga, a married man,
got Estrella pregnant. The company allegedly could have terminated her services due to immorality but she opted to resign on
December 21, 1999.
The respondents signed a Release and Confirmation Agreement and stated therein that they have no money and property
accountabilities in the company. Respondents offer a different version of their dismissal. Respondents later filed a complaint for
unfair labor practice, constructive dismissal, separation pay and attorney’s fees. They averred that the aforementioned company
policy is illegal and contravenes Article 136 of the Labor Code.
Labor Arbiter dismissed the complaint and states that the company policy was decreed pursuant to what the respondent corporation
perceived as management prerogative. On appeal to the NLRC, the Commission affirmed the decision of the Labor Arbiter. In its
assailed Decision dated August 3, 2004, the Court of Appeals reversed the NLRC decision.
Issue: Whether such company policy violates the Labor Code.
Held:
Such policy violates the fundamental right of an employee. Art 136 of the Labor Code provides:
Art. 136. It shall be unlawful for an employer to require as a condition of employment or continuation of employment that a woman
employee shall not get married, or to stipulate expressly or tacitly that upon getting married a woman employee shall be deemed
resigned or separated, or to actually dismiss, discharge, discriminate or otherwise prejudice a woman employee merely by reason of
her marriage.
With more women entering the workforce, employers are also enacting employment policies specifically prohibiting spouses from
working for the same company. We note that two types of employment policies involve spouses: policies banning only spouses from
working in the same company (no-spouse employment policies), and those banning all immediate family members, including spouses,
from working in the same company (anti-nepotism employment policies).
It utilizes two theories of employment discrimination: the disparate treatment and the disparate impact. Under the disparate
treatment analysis, the plaintiff must prove that an employment policy is discriminatory on its face. No-spouse employment policies
requiring an employee of a particular sex to either quit, transfer, or be fired are facially discriminatory. On the other hand, to establish
disparate impact, the complainants must prove that a facially neutral policy has a disproportionate effect on a particular class.
Rivera vs. Solidbank

G.R. No. 163269, April 19, 2006
Facts:
Rivera started working with Solidbank Corporation as an audit clerk since July 1, 1977. Then he was promoted as credit investigator,
senior clerk, assistant accountant, and finally as assistant manager. Prior to his retirement, he became the Manager of the bank’s
Credit Investigation and Appraisal Division of the Consumer's Banking Group. In the meantime, Rivera and his brother-in-law put up a
poultry business in Cavite.
In December 1994, Solidbank offered two retirement programs to its employees: (a) the Ordinary Retirement Program (ORP), under
which an employee would receive 85% of his monthly basic salary multiplied by the number of years in service; and (b) the Special
Retirement Program (SRP), under which a retiring employee would receive 250% of the gross monthly salary multiplied by the
number of years in service. Rivera decided to devote his time and attention to his poultry business in Cavite and applied for
retirement under the SRP. Solidbank approved the application and confirmed his separation from Solidbank on February 25, 1995.
However, Solidbank required Rivera to sign an undated Release, Waiver and Quitclaim, which was notarized on March 1, 1995. He
acknowledged receipt of the net proceeds of his separation and retirement benefits and promised that "he would not, at any time, in
any manner whatsoever, directly or indirectly engage in any unlawful activity prejudicial to the interest of Solidbank, its parent,
affiliate or subsidiary companies, their stockholders, officers, directors, agents or employees, and their successors-in-interest and will
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not disclose any information concerning the business of Solidbank, its manner or operation, its plans, processes, or data of any kind."
He also signed in an Undertaking upon which he promised that "not to seek employment with a competitor bank or financial
institution within one (1) year from February 28, 1995, and that any breach of the Undertaking or the provisions of the Release,
Waiver and Quitclaim would entitle Solidbank to a cause of action against him before the appropriate courts of law”.
But on May 1, 1995, Rivera got employed with Equitable Banking Corporation (Equitable) as Manager of its Credit Investigation and
Appraisal Division of its Consumers' Banking Group. Upon learning this, Solidbank wrote a letter dated May 18, 1995, informing
Rivera that he had violated the Undertaking and demanded the return of all the monetary benefits he received in consideration of the
SRP within five (5) days from receipt; otherwise, appropriate legal action would be taken against him.
Issue: Whether the employment ban incorporated in the Undertaking which petitioner executed upon his retirement is unreasonable,
oppressive, hence, contrary to public policy.
Held:
The SC held that Article 1306 of the New Civil Code provides that the contracting parties may establish such stipulations, clauses,
terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order or
public policy. The freedom of contract is both a constitutional and statutory right. A contract is the law between the parties and
courts have no choice but to enforce such contract as long as it is not contrary to law, morals, good customs and against public policy.
The well-entrenched doctrine is that the law does not relieve a party from the effects of an unwise, foolish or disastrous contract,
entered into with full awareness of what he was doing and entered into and carried out in good faith. Such a contract will not be
discarded even if there was a mistake of law or fact. Courts have no jurisdiction to look into the wisdom of the contract entered into
by and between the parties or to render a decision different therefrom. They have no power to relieve parties from obligation
voluntarily assailed, simply because their contracts turned out to be disastrous deals.
In the present case, there is no factual basis to agree with the contention of the respondent bank. On the face of the Undertaking, the
post-retirement competitive employment ban is unreasonable because it has no geographical limits; respondent is barred from
accepting any kind of employment in any competitive bank within the proscribed period. Although the period of one year may appear
reasonable, the matter of whether the restriction is reasonable or unreasonable cannot be ascertained with finality solely from the
terms and conditions of the Undertaking, or even in tandem with the Release, Waiver and Quitclaim.
Undeniably, petitioner retired under the SRP and received P963,619.28 from respondent. However, petitioner is not proscribed, by
waiver or estoppel, from assailing the post-retirement competitive employment ban since under Article 1409 of the New Civil Code,
those contracts whose cause, object or purpose is contrary to law, morals, good customs, public order or public policy are inexistent
or void from the beginning.
Respondent, as employer, is burdened to establish that a restrictive covenant barring an employee from accepting a competitive
employment after retirement or resignation is not an unreasonable or oppressive, or in undue or unreasonable restraint of trade,
thus, unenforceable for being repugnant to public policy. There are two principal grounds on which the doctrine is founded that a
contract in restraint of trade is void as against public policy. One is, the injury to the public by being deprived of the restricted party’s
industry; and the other is, the injury to the party himself by being precluded from pursuing his occupation, and thus being prevented
from supporting himself and his family.
In cases where an employee assails a contract containing a provision prohibiting him or her from accepting competitive employment
as against public policy, the employer has to adduce evidence to prove that the restriction is reasonable and not greater than
necessary to protect the employer’s legitimate business interests. The restraint may not be unduly harsh or oppressive in curtailing
the employee’s legitimate efforts to earn a livelihood and must be reasonable in light of sound public policy.
Courts should carefully scrutinize all contracts limiting a man’s natural right to follow any trade or profession anywhere he pleases
and in any lawful manner. But it is just as important to protect the enjoyment of an establishment in trade or profession, which its
employer has built up by his own honest application to every day duty and the faithful performance of the tasks which every day
imposes upon the ordinary man. What one creates by his own labor is his. Freedom to contract must not be unreasonably abridged.
Neither must the right to protect by reasonable restrictions that which a man by industry, skill and good judgment has built up, be
denied.
The Court reiterates that the determination of reasonableness is made on the particular facts and circumstances of each case. The
question of reasonableness of a restraint requires a thorough consideration of surrounding circumstances, including the subject
matter of the contract, the purpose to be served, the determination of the parties, the extent of the restraint and the specialization of
the business of the employer. The court has to consider whether its enforcement will be injurious to the public or cause undue
hardships to the employee, and whether the restraint imposed is greater than necessary to protect the employer.
Consideration must be given to the employee’s right to earn a living and to his ability to determine with certainty the area within
which his employment ban is restituted. A provision on territorial limitation is necessary to guide an employee of what constitutes as
violation of a restrictive covenant and whether the geographic scope is co-extensive with that in which the employer is doing
business. In considering a territorial restriction, the facts and circumstances surrounding the case must be considered.
Thus, in determining whether the contract is reasonable or not, the trial court should consider the following factors: (a) whether the
covenant protects a legitimate business interest of the employer; (b) whether the covenant creates an undue burden on the employee;
(c) whether the covenant is injurious to the public welfare; (d) whether the time and territorial limitations contained in the covenant
are reasonable; and (e) whether the restraint is reasonable from the standpoint of public policy.
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We are not impervious of the distinction between restrictive covenants barring an employee to accept a post-employment
competitive employment or restraint on trade in employment contracts and restraints on post-retirement competitive employment in
pension and retirement plans either incorporated in employment contracts or in collective bargaining agreements between the
employer and the union of employees, or separate from said contracts or collective bargaining agreements which provide that an
employee who accepts post retirement competitive employment will forfeit retirement and other benefits or will be obliged to
restitute the same to the employer. The strong weight of authority is that forfeitures for engaging in subsequent competitive
employment included in pension and retirement plans are valid even though unrestricted in time or geography.
A post-retirement competitive employment restriction is designed to protect the employer against competition by former employees
who may retire and obtain retirement or pension benefits and, at the same time, engage in competitive employment.
Daisy B. Tiu vs.Platinum Plans Phil., Inc.

G.R. No. 163512 February 28, 2007
Facts:
Tiu was a division marketing director of Platinum plans, a domestic corp. engaged in the pre need- industry. Tiu was then rehired as
senior vice president and territorial operations head in charge of Hongkong and ASEAN operations. Respondent and petitioner agreed
on and executed a five year contract of employment, on of the salient features thereof being a non- involvement provision to the effect
that during the employee’s engagement, and two years after separation form the company, the employee will not engage in or be
involved with any corporation or entity whether directly or indirectly, which is engaged in the same business or belongs to the same
pre-need industry as the employee. Any breach of this provision by the employee will render him liable to the employer for liquidated
damages in the sum of P100.000.
On September 16 1995, petitioner stopped working for respondent. In November 1995, she became the Vice- president for sales of
another company engaged in the pre – need industry, the Professional Pension’s Plans, Inc. So, respondent filed a complaint for
damages against petitioner before the RTC of Pasig for violation of non- involvement clause in the contract of employment.
In response, petitioner argued that the non- involvement clause was unenforceable for being against public order and public policy
because first, it is a restraint much greater than what is necessary to afford respondent a fair and reasonable protection; Second,
respondent did not invest in petitioners training and improvement as at the time she was hired she already possessed the knowledge
and expertise required in the industry and respondent benefited tremendously from it; third, a strict application of the clause would
deprive her of the right to engage in the only work she knew.
Issue: Whether or not the said clause is valid.
Held:
As early as 1916, we already had the occasion to discuss the validity of a non-involvement clause. In Ferrazzini v. Gsell, we said that
such clause was unreasonable restraint of trade and therefore against public policy. InFerrazzini, the employee was prohibited from
engaging in any business or occupation in the Philippines for a period of five years after the termination of his employment contract
and must first get the written permission of his employer if he were to do so. The Court ruled that while the stipulation was indeed
limited as to time and space, it was not limited as to trade. Such prohibition, in effect, forces an employee to leave the Philippines to
work should his employer refuse to give a written permission.
In G. Martini, Ltd. v. Glaiserman, we also declared a similar stipulation as void for being an unreasonable restraint of trade. There, the
employee was prohibited from engaging in any business similar to that of his employer for a period of one year. Since the employee
was employed only in connection with the purchase and export of abaca, among the many businesses of the employer, the Court
considered the restraint too broad since it effectively prevented the employee from working in any other business similar to his
employer even if his employment was limited only to one of its multifarious business activities.
However, in Del Castillo v. Richmond, we upheld a similar stipulation as legal, reasonable, and not contrary to public policy. In the said
case, the employee was restricted from opening, owning or having any connection with any other drugstore within a radius of four
miles from the employer’s place of business during the time the employer was operating his drugstore. We said that a contract in
restraint of trade is valid provided there is a limitation upon either time or place and the restraint upon one party is not greater than
the protection the other party requires.
Finally, in Consulta v. Court of Appeals, we considered a non-involvement clause in accordance with Article 1306 of the Civil Code.
While the complainant in that case was an independent agent and not an employee, she was prohibited for one year from engaging
directly or indirectly in activities of other companies that compete with the business of her principal. We noted therein that the
restriction did not prohibit the agent from engaging in any other business, or from being connected with any other company, for as
long as the business or company did not compete with the principal’s business. Further, the prohibition applied only for one year after
the termination of the agent’s contract and was therefore a reasonable restriction designed to prevent acts prejudicial to the
employer.
Conformably then with the aforementioned pronouncements, a non-involvement clause is not necessarily void for being in restraint
of trade as long as there are reasonable limitations as to time, trade, and place.
In this case, the non-involvement clause has a time limit: two years from the time petitioner’s employment with respondent ends. It is
also limited as to trade, since it only prohibits petitioner from engaging in any pre-need business akin to respondent’s.
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More significantly, since petitioner was the Senior Assistant Vice-President and Territorial Operations Head in charge of respondent’s
Hongkong and Asean operations, she had been privy to confidential and highly sensitive marketing strategies of respondent’s
business. To allow her to engage in a rival business soon after she leaves would make respondent’s trade secrets vulnerable especially
in a highly competitive marketing environment. In sum, we find the non-involvement clause not contrary to public welfare and not
greater than is necessary to afford a fair and reasonable protection to respondent.
In any event, Article 1306 of the Civil Code provides that parties to a contract may establish such stipulations, clauses, terms and
conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy.
Article 1159 of the same Code also provides that obligations arising from contracts have the force of law between the contracting
parties and should be complied with in good faith. Courts cannot stipulate for the parties nor amend their agreement where the same
does not contravene law, morals, good customs, public order or public policy, for to do so would be to alter the real intent of the
parties, and would run contrary to the function of the courts to give force and effect thereto. 15 Not being contrary to public policy, the
non-involvement clause, which petitioner and respondent freely agreed upon, has the force of law between them, and thus, should be
complied with in good faith.
Duldulao vs. Court of Appeals

G.R. No. 164893, March 1, 2007
Facts:
Constancia P. Duldulao was hired by respondent Baguio Colleges Foundation (BCF) as secretary/clerk-typist and assigned to the
College of Law sometime in June of 1987.
In August 1996, a certain law student filed a complaint against petitioner for alleged irregularities in the performance of her work.
Petitioner was told to submit her answer to the complaint and given several extensions within which to do so. Despite the extensions,
she failed to submit her answer. On 1 October 1996, Dean Honorato V. Aquino of the College of Law informed respondent’s President,
Atty. Edilberto B. Tenefrancia, of petitioner’s failure to file her answer and recommended the assignment of petitioner outside the
College of Law, not only because of such failure to answer but also her having admitted fraternizing with students of the College. On
the same day, respondent’s Vice President for Administration, Leonardo S. dela Cruz, issued a Department Order to Mrs. Duldulao
informing her of her transfer to the Office of the Principals of the High School and Elementary Departments.
On 21 January 1997, the Administrative Investigating Committee found the Department Order appropriate since it was intended to
prevent the controversy between petitioner and the complaining student from adversely affecting a harmonious relationship within
the College of Law among all its constituents. On 17 February 1997, petitioner filed a complaint for constructive dismissal with prayer
for moral and exemplary damages and attorney’s fees before the NLRC Regional Arbitration Branch-Cordillera Administrative Region.
She stated that aside from being tainted with procedural lapses in violation of her right to due process, the transfer also amounted to
her demotion in rank. The NLRC dismissed the complaint for lack of merit which decision was affirmed by the Court of Appeals.
Issue:
Whether petitioner’s transfer as secretary/clerk-typist from the College of Law to the High School and Elementary Departments
amounts to constructive dismissal.
Held:
There was no constructive dismissal.
The SC held that there is constructive dismissal if an act of clear discrimination, insensibility, or disdain by an employer becomes so
unbearable on the part of the employee that it would foreclose any choice by him except to forego his continued employment. It exists
where there is cessation of work because “continued employment is rendered impossible, unreasonable or unlikely, as an offer
involving a demotion in rank and a diminution in pay.”
The factual milieu in this case is different. It is the employer’s prerogative, based on its assessment and perception of its employees’
qualifications, aptitudes, and competence, to move them around in the various areas of its business operations in order to ascertain
where they will function with maximum benefit to the company. An employee’s right to security of tenure does not give him such a
vested right in his position as would deprive the company of its prerogative to change his assignment or transfer him where he will be
most useful.
When his transfer is not unreasonable, nor inconvenient, nor prejudicial to him, and it does not involve a demotion in rank or a
diminution of his salaries, benefits, and other privileges, the employee may not complain that it amounts to a constructive dismissal.
The transfer of petitioner does not amount to a demotion in rank and status.
At the onset, it must be stressed that petitioner has no vested right to the position of secretary/clerk-typist of the College of Law that
may operate to deprive respondent of its prerogative to change or transfer her assignment to another department where she will
be most useful in its judgment. After all, petitioner was employed by respondent which is the BCF system itself, not the College of Law
only, which is but a component part of the system. Thus, to respondent belongs the prerogative to reassign petitioner to any of its
departments as it sees fit, provided that such reassignment is made in good faith.
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Petitioner was a secretary/clerk-typist of the College of Law. As such secretary/clerk-typist, she would only have to perform the same
duties in the Office of the Principals of the High School and Elementary Departments. Petitioner was not denied due process.
Reassignments made by management pending investigation of irregularities allegedly committed by an employee fall within the ambit
of management prerogative. The transfer, while incidental to the pending charges against petitioner, was not meant to be a penalty,
but rather a preventive measure to avoid further damage to the College of Law. The purpose of reassignments is no different from that
of preventive suspension which management could validly impose as a measure of protection of the company’s property pending
investigation of any malfeasance or misfeasance committed by the employee.
Almario vs. Philippine Airlines

G.R. No. 170928, September 11, 2007
Facts:
This is a complaint for reimbursement of training costs filed by PAL against its pilot, Almario.
Almario was initially hired as a Boeing 747 Systems Engineer. Later on, he successfully bid for the higher position of Airbus 300 First
Officer, for which he was given additional training at PAL’s expense. After completing the course,Almario served as A-300 First Officer
of PAL but after eight months of service, he tendered his resignation for “personal reasons.”
PAL then wrote him a letter, stating that they invested heavily on his professional training on the basis that he continue to serve the
Company for a definite period of time which is approximately 3 yrs. In short, PAL wanted Almario to reconsider his resignation,
otherwise they would be compelled to ask reimbursement for the training costs from him. Despite this,Almario pushed through with
his resignation. Hence, a reimbursement case was filed.
In the lower court, PAL invoked the existence of an innominate contract of do ut facias (I give that you may do) withAlmario in that
by spending for his training, he would render service to it until the costs of training were recovered in at least 3 yrs. They based the
period of “3 yrs” to a decision of the Secretary of Labor concerning PAL’s CBA with its employee-union.
For his part, Almario denied the existence of any agreement with PAL that he would render service to it for three years after
his training, failing which he would reimburse the training costs. The lower court ruled in favor of Almario. On appeal, CA
found Almario liable under the CBA and under Article 22 of the Civil Code.
Issue: Whether or not Almario is obliged to reimburse the costs incurred by PAL for his training
Held:
The petition fails.
The rationale of the three-year period is the prohibitive training costs. At an earlier time, when the CBA between PAL and
its employees were still negotiated, the Secretary of Labor basically ruled that PAL should be allowed a return on investment for their
pilots’ training expenses. Thus, the provisions that pilots 57 years of age shall be frozen and pilots less than 57, provided they have
previously qualified in any company’s turbo-jet aircraft, shall be permitted to occupy anyposition in the company’s turbo-jet fleet,
were incorporated in later incarnations of the CBA.
When Almario took the training course, he was about 39 yrs old, 21 yrs away from the retirement age of 60. Hence, with the maturity,
expertise and experience he gained from the training course, he was expected to serve PAL for at least three yrs to offset “the
prohibitive costs” thereof.
Article 22 of the Civil Code applies. This provision on unjust enrichment recognizes the principle that one may not enrich himself at
the expense of another.
Enrichment of the defendant consists in every patrimonial, physical, or moral advantage, so long as it is appreciable in money. It may
consist of some positive pecuniary value incorporated into the patrimony of the defendant, such as: (1) the enjoyment of a thing
belonging to the plaintiff; (2) the benefits from service rendered by the plaintiff to the defendant; (3) the acquisition of a right,
whether real or personal; (4) the increase of value of property of the defendant; (5) the improvement of a right of the defendant, such
as the acquisition of a right of preference; (6) the recognition of the existence of a right in the defendant; and (7) the improvement of
the conditions of life of the defendant.
The enrichment of the defendant must have a correlative prejudice, disadvantage, or injury to the plaintiff. This prejudice may consist,
not only of the loss of property or the deprivation of its enjoyment, but also of non-payment of compensation for a prestation or
service rendered to the defendant without intent to donate on the part of the plaintiff, or the failure to acquire something which the
latter would have obtained. The injury to the plaintiff, however, need not be the cause of the enrichment of the defendant. It is enough
that there be some relation between them, that theenrichment of the defendant would not have been produced had it not been for the
fact from which the injury to the plaintiff is derived.
In the present case, PAL invested for the training of Almario on the expectation that they may recover by availing ofAlmario’s services
for at least three years. This expectation was not fully realized, however, due to Almario’s resignation after only eight months of
service following the completion of his training course. He cannot, therefore, refuse to reimburse the costs of training without
violating the principle of unjust enrichment.
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Bisig Manggagawa sa Tryco vs. NLRC

G.R. No. 151309, Oct. 15, 2008
Facts:
Petitioners are employees of Tryco Pharmaceuticals Corporation, maker of veterinary medicines and products. Tryco and the
petitioners signed a Memorandum of Agreement (MOA), providing for a compressed workweek schedule to be implemented in the
company effective May 20, 1996. The MOA was entered into pursuant to Department of Labor and Employment Department Order
(D.O.) No. 21, Series of 1990, Guidelines on the Implementation of Compressed Workweek.
As provided in the MOA, 8:00 a.m. to 6:12 p.m., from Monday to Friday, shall be considered as the regular working hours, and no
overtime pay shall be due and payable to the employee for work rendered during those hours. The MOA specifically stated that the
employee waives the right to claim overtime pay for work rendered after 5:00 p.m. until 6:12 p.m. from Monday to Friday considering
that the compressed workweek schedule is adopted in lieu of the regular workweek schedule which also consists of 46 hours.
However, should an employee be permitted or required to work beyond 6:12 p.m., such employee shall be entitled to overtime pay.
Tryco informed the Bureau of Working Conditions of the Department of Labor and Employment of the implementation of a
compressed workweek in the company. In January 1997, BMT and Tryco negotiated for the renewal of their collective bargaining
agreement (CBA) but failed to arrive at a new agreement. Meantime, Tryco received the Letter dated March 26, 1997 from the Bureau
of Animal Industry of the Department of Agriculture reminding it that its production should be conducted in San Rafael, Bulacan, not
in Caloocan City since its operating permit was licensed there. Accordingly, Tryco issued a Memorandum dated April 7, 1997 which
directed petitioners to report to the company's plant site in Bulacan. BMT opposed the transfer of its members to San Rafael, Bulacan,
contending that it constitutes unfair labor practice. In protest, BMT declared a strike on May 26, 1997. Petitioners then filed their
complaints to the labor arbiter alleging that Tryco negotiated in bad faith and unfair labor practice of Tryco by transferring the
members of the union in order to paralyze it and that therefore it amounted to constructive dismissal.
Issue: WON there was constructive dismissal due to the transfer of the petitioners from Caloocan City to San Rafael Bulacan
Held:
The petition has no merit.
Tryco's decision to transfer its production activities to San Rafael, Bulacan, regardless of whether it was made pursuant to the letter of
the Bureau of Animal Industry, was within the scope of its inherent right to control and manage its enterprise effectively. While the
law is solicitous of the welfare of employees, it must also protect the right of an employer to exercise what are clearly management
prerogatives. The free will of management to conduct its own business affairs to achieve its purpose cannot be denied.
This prerogative extends to the management's right to regulate, according to its own discretion and judgment, all aspects of
employment, including the freedom to transfer and reassign employees according to the requirements of its business.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. The employer
must show that the transfer is not unreasonable, inconvenient, or prejudicial to the employee; nor does it involve a demotion in rank
or a diminution of his salaries, privileges and other benefits.
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. Petitioners, therefore, anchor their objection solely on the ground that it would cause them great
inconvenience since they are all residents of Metro Manila and they would incur additional expenses to travel daily from Manila to
Bulacan.
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.
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
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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 NLRC.
Issue: Whether or not, RTC has jurisdiction.
Held:
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.
Bello vs. Bonifacio Security Services, Inc.

G.R. No. 188086; August 3, 2011
Facts:
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, North
Harbor, 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, North Harbor 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), 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.
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; Bello abandoned
his job when he went on an indefinite leave of absence and did not report for work.
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.
In its March 26, 2008 resolution, the NLRC affirmed the labor arbiter's decision, finding that Bello had 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.
The CA nullified the NLRC resolutions, finding the records bereft of evidence substantiating the labor arbiter's and the NLRC's
conclusions that Bello had been constructively dismissed. 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, paving the way
for the present petition.
Issue: Whether or not, Bello was illegally dismissed.
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Held:
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.
Other than his bare and self-serving allegations, Bello has 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, 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. We see this to be the case in the present dispute so that the consequent reassignment of Bello to a traffic marshal post was
well within the scope of the BSSI's management prerogative.
Alert Security vs. Pasawilan

G.R. No. 182397, September 14, 2011
Facts:
Respondents Saidali Pasawilan, Wilfredo Verceles and Melchor Bulusan were all employed by petitioner Alert Security and
Investigation Agency, Inc. (Alert Security) as security guards beginning March 31, 1996, January 14, 1997, and January 24, 1997,
respectively. They were paid 165.00 pesos a day as regular employees, and assigned at the Department of Science and Technology
(DOST) pursuant to a security service contract between the DOST and Alert Security.
Respondents aver that because they were underpaid, they filed a complaint for money claims against Alert Security and its president
and general manager, petitioner Manuel D. Dasig, before Labor Arbiter Ariel C. Santos. As a result of their complaint, they were
relieved from their posts in the DOST and were not given new assignments despite the lapse of six months. On January 26, 1999, they
filed a joint complaint for illegal dismissal against petitioners.
Petitioners, on the other hand, deny that they dismissed the respondents. Petitioners presented "Duty Detail Orders" that Alert
Security issued to show that respondents were in fact assigned to LRTA. Respondents, however, failed to report at the LRTA and
instead kept loitering at the DOST and tried to convince other security guards to file complaints against Alert Security. Thus, on
August 3, 1998, Alert Security filed a "termination report" with the Department of Labor and Employment relative to the termination
of the respondents.
Issue: Whether respondents were illegally dismissed
Held:
We rule in the affirmative.
As a rule, employment cannot be terminated by an employer without any just or authorized cause. No less than the 1987 Constitution
in Section 3, Article 13 guarantees security of tenure for workers and because of this, an employee may only be terminated for just or
authorized causes that must comply with the due process requirements mandated by law. Hence, employers are barred from
arbitrarily removing their workers whenever and however they want. The law sets the valid grounds for termination as well as the
proper procedure to take when terminating the services of an employee.
Although we recognize the right of employers to shape their own work force, this management prerogative must not curtail the basic
right of employees to security of tenure. There must be a valid and lawful reason for terminating the employment of a worker.
Otherwise, it is illegal and would be dealt with by the courts accordingly.
The Labor Code, as amended, enumerates several just and authorized causes for a valid termination of employment. An employee
asserting his right and asking for minimum wage is not among those causes. Dismissing an employee on this ground amounts to
retaliation by management for an employee’s legitimate grievance without due process. Such stroke of retribution has no place in
Philippine Labor Laws.
On the element of the failure of the employee to report for work, we also cannot accept the allegations of petitioners that respondents
unjustifiably refused to report for duty in their new posts. A careful review of the records reveals that there is no showing that
respondents were notified of their new assignments. Granting that the "Duty Detail Orders" were indeed issued, they served no
purpose unless the intended recipients of the orders are informed of such.
The employer cannot simply conclude that an employee is ipso facto notified of a transfer when there is no evidence to indicate that
the employee had knowledge of the transfer order. Hence, the failure of an employee to report for work at the new location cannot be
taken against him as an element of abandonment.
We acknowledge and recognize the right of an employer to transfer employees in the interest of the service. This exercise is a
management prerogative which is a lawful right of an employer. However, like all rights, there are limitations to the right to transfer
employees. As ruled in the case of Blue Dairy Corporation v. NLRC:
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x x x The managerial prerogative to transfer personnel must be exercised without grave abuse of discretion, bearing in mind the basic
elements of justice and fair play. Having the right should not be confused with the manner in which that right is exercised. Thus, it
cannot be used as a subterfuge by the employer to rid himself of an undesirable worker. In particular, the employer must be able to
show that the transfer is not unreasonable, inconvenient or prejudicial to the employee; nor does it involve a demotion in rank or a
diminution of his salaries, privileges and other benefits. x x x
In addition to these tests for a valid transfer, there should be proper and effective notice to the employee concerned. It is the
employer’s burden to show that the employee was duly notified of the transfer. Verily, an employer cannot reasonably expect an
employee to report for work in a new location without first informing said employee of the transfer. Petitioners’ insistence on the
sufficiency of mere issuance of the transfer order is indicative of bad faith on their part.
Manila Pavilion Hotel vs. Delada

G.R. No. 189947, January 25, 2011
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: WON MPH retained the authority to continue with the administrative case against Delada for insubordination and willful
disobedience of the transfer order.
Held:
MPH did not lose its authority to discipline respondent for his continued refusal to report to his new assignment.
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. 1âwphi1 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.
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.
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Barba vs. Liceo de Cagayan University

G.R. No. 193857; November 28, 2012
Facts:
Petitioner started working for respondent on July 8, 1993 as medical officer/school physician for a period of one school year or until
March 31, 1994and she was chosen by respondent to be the recipient of a scholarship grant to pursue a three-year residency training
in Rehabilitation Medicine at the Veterans Memorial Medical Center (VMMC) provided that after the duration of her study and
training the petitioner shall serve the SCHOOL in whatever position the SCHOOL desires related to the SCHOLAR's studies for a period
of not less than ten (10) years;
After completing her residency training with VMMC in June 1997, petitioner returned to continue working for respondent until she
was appointed as Dean of Physical Therapy effective July 1, 2002 for a period of three (3) years unless sooner revoked for a valid
cause.
Due to the low number of enrollees, respondent decided to freeze the operation of the College of Physical Therapy indefinitely thus,
respondent's President Dr. Rafaelita Pelaez-Golez wrote petitioner a letter dated March 16, 2005 informing her that her services as
dean of the said college will end at the close of the school year. Thereafter, the College of Physical Therapy ceased operations on
March 31, 2005, and petitioner went on leave without pay starting on April 9, 2005.
Subsequently, respondent’s Executive Vice President, Dr. Marian M. Lerin, through Dr. Glory S. Magdale, respondent's Vice President
for Academic Affairs repeatedly sent letters to the petitioner directing her to report to the College of Nursing for her teaching load to
wit:
 Letter dated April 27, 2005 instructing petitioner to return to work on June 1, 2005 wherein the latter responded that she
has not committed to teach in the College of Nursing and that as far as she can recall, her employment is not dependent on
any teaching load.
 Letter dated June 21, 2005, directing petitioner to report for work and to teach her assigned subjects on or before June 23,
2005, otherwise, she will be dismissed from employment on the ground of abandonment wherein the latter replied through
counsel, that teaching in the College of Nursing is in no way related to her scholarship and training in the field of
rehabilitation medicine. Petitioner added that coercing her to become a faculty member from her position as College Dean is
a great demotion which amounts to constructive dismissal.
 Letter dated June 24, 2005 ordering her to report for work as she was still bound by the Scholarship Contract to serve
respondent for two more years which petitioner refused to heed.
On June 22, 2005, , petitioner filed a complaint before the Labor Arbiter for illegal dismissal, payment of separation pay and
retirement benefits against respondent, Dr. Magdale and Dr. Golez. She alleged that her transfer to the College of Nursing as a faculty
member is a demotion amounting to constructive dismissal.
June 28, 2005, Dr. Magdale sent petitioner a notice terminating her services on the ground of abandonment.
Issue: Whether or not the petitioner’s transfer to the College of Nursing as faculty member is a demotion amounting to constructive
dismissal
Held:
In constructive dismissal cases, the employer has the burden of proving that its conduct and action or the transfer of an employee are
for valid and legitimate grounds such as genuine business necessity. Particularly, for a transfer not to be considered a constructive
dismissal, the employer must be able to show that such transfer is not unreasonable, inconvenient, or prejudicial to the employee. In
this case, petitioner's transfer was not unreasonable, inconvenient or prejudicial to her. On the contrary, the assignment of a teaching
load in the College of Nursing was undertaken by respondent to accommodate petitioner following the closure of the College of
Physical Therapy. Respondent further considered the fact that petitioner still has two years to serve the university under the
Scholarship Contract.
Petitioner's subsequent transfer to another department or college is not tantamount to demotion as it was a valid transfer. There is
therefore no constructive dismissal to speak of. That petitioner ceased to enjoy the compensation, privileges and benefits as College
Dean was but a logical consequence of the valid revocation or termination of such fixed-term position. Indeed, it would be absurd and
unjust for respondent to maintain a deanship position in a college or department that has ceased to exist. Under the circumstances,
giving petitioner a teaching load in another College/Department that is related to Physical Therapy — thus enabling her to serve and
complete her remaining two years under the Scholarship Contract — is a valid exercise of management prerogative on the part of
respondent.
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Best Wear Garments vs. De Lemos

G.R. no. 191281; December 5, 2012
Facts:
Petitioner Best Wear Garments is a sole proprietorship represented by its General Manager Alex Sitosta. Respondents Cecile M.
Ocubillo and Adelaida B. De Lemos were hired as sewers on piece-rate basis by petitioners on October 27, 1993 and July 12, 1994,
respectively.
De Lemos claimed that after two months in her new assignment, she was able to adjust but Sitosta again transferred her to a "different
operation where she could not earn much as before because by-products require long period of time to finish." She averred that the
reason for her transfer was her refusal "to render [overtime work] up to 7:00 p.m."
On her part, Ocubillo alleged that her transfer was precipitated by her having "incurred excessive absences since 2001." Her absences
were due to the fact that her father became very sick since 2001 until his untimely demise on November 9, 2003; aside from this, she
herself became very sickly. She claimed that from September to October 2003, Sitosta assigned her to different machines "whichever
is available" and that "there were times, she could not earn for a day because there was no available machine to use."
On May 20, 2004, De Lemos filed a complaint for illegal dismissal with prayer for backwages and other accrued benefits, separation
pay, service incentive leave pay and attorney's fees. A similar complaint was filed by Ocubillo on June 10, 2004. Both alleged in their
position paper that in August 2003, Sitosta arbitrarily transferred them to other areas of operation of petitioner's garments company,
which they said amounted to constructive dismissal as it resulted in less earnings for them.
Respondent company points out that it is engaged in the business of garments manufacturing as a sub-contractor. That, the kind of
work it performs is dependent into with its client which specifies the work it has to perform . And, that corollary thereto, the work to
be performed by its employees will depend on the work specifications in the contract. Thus, if complainants have been assigned to
different operations, it was pursuant to the requirements of its contracts. As to the allegation of respondents that the reason for their
transfer was their refusal to render overtime work until 7:00 p.m., petitioners asserted that respondents are piece-rate workers and
hence they are not paid according to the number of hours worked.
Issue: Whether or not deployment of sewers to work on different types of garments as is arbitrary and constitute constructive
dismissal
Held:
The right of employees to security of tenure does not give them vested rights to their positions to the extent of depriving management
of its prerogative to change their assignments or to transfer them. Thus, an employer may transfer or assign employees from one
office or area of operation to another, provided there is no demotion in rank or diminution of salary, benefits, and other privileges,
and the action is not motivated by discrimination, made in bad faith, or effected as a form of punishment or demotion without
sufficient cause.
In Blue Dairy Corporation v. NLRC, we held that:
The managerial prerogative to transfer personnel must be exercised without grave abuse of discretion, bearing in mind the basic
elements of justice and fair play. Having the right should not be confused with the manner in which that right is exercised. Thus, it
cannot be used as a subterfuge by the employer to rid himself of an undesirable worker. In particular, the employer must be able to
show that the transfer is not unreasonable, inconvenient or prejudicial to the employee; nor does it involve a demotion in rank or a
diminution of his salaries, privileges and other benefits. Should the employer fail to overcome this burden of proof, the employee's
transfer shall be tantamount to constructive dismissal, which has been defined as a quitting because continued employment is
rendered impossible, unreasonable or unlikely; as an offer involving a demotion in rank and diminution in pay. Likewise, constructive
dismissal exists when an act of clear discrimination, insensibility or disdain by an employer has become so unbearable to the
employee leaving him with no option but to forego with his continued employment.
Being piece-rate workers assigned to individual sewing machines, respondents' earnings depended on the quality and quantity of
finished products. That their work output might have been affected by the change in their specific work assignments does not
necessarily imply that any resulting reduction in pay is tantamount to constructive dismissal. Workers under piece-rate employment
have no fixed salaries and their compensation is computed on the basis of accomplished tasks. As admitted by respondent De Lemos,
some garments or by-products took a longer time to finish so they could not earn as much as before. Also, the type of sewing jobs
available would depend on the specifications made by the clients of petitioner company. Under these circumstances, it cannot be said
that the transfer was unreasonable, inconvenient or prejudicial to the respondents. Such deployment of sewers to work on different
types of garments as dictated by present business necessity is within the ambit of management prerogative which, in the absence of
bad faith, ill motive or discrimination, should not be interfered with by the courts.
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Royal Plant Workers Union vs. Coca-Cola Bottlers Phils., Inc. -Cebu Plant
G.R. No. 198783, April 15, 2013
Facts:
Under the employ of each bottling plant are bottling operators. In the case of the plant in Cebu City, there are 20 bottling operators
who work for its Bottling Line 1 while there are 12-14 bottling operators who man its Bottling Line 2. All of them are male and they
are members of herein respondent Royal Plant Workers Union (ROPWU).
The bottling operators work in two shifts. The first shift is from 8 a.m. to 5 p.m. and the second shift is from 5 p.m. up to the time
production operations is finished. Thus, the second shift varies and may end beyond eight (8) hours. However, the bottling operators
are compensated with overtime pay if the shift extends beyond eight (8) hours. For Bottling Line 1, 10 bottling operators work for
each shift while 6 to 7 bottling operators work for each shift for Bottling Line 2.
Each shift has rotations of work time and break time. Prior to September 2008, the rotation is this: after two and a half (2 1/2) hours
of work, the bottling operators are given a 30-minute break and this goes on until the shift ends. In September 2008 and up to the
present, the rotation has changed and bottling operators are now given a 30-minute break after one and one half (1 1/2) hours of
work.
In 1974, the bottling operators of then Bottling Line 2 were provided with chairs upon their request. In 1988, the bottling operators of
then Bottling Line 1 followed suit and asked to be provided also with chairs. Their request was likewise granted. Sometime in
September 2008, the chairs provided for the operators were removed pursuant to a national directive of petitioner. With this task of
moving constantly to check on the machinery and equipment assigned to him, a bottling operator does not need a chair anymore,
hence, petitioner's directive to remove them. Furthermore, CCBPI rationalized that the removal of the chairs is implemented so that
the bottling operators will avoid sleeping, thus, prevent injuries to their persons.
The bottling operators took issue with the removal of the chairs.
Issue: Whether or not the removal of the bottling operators' chairs from CCBPI's production/manufacturing lines a valid exercise of a
management prerogative
Held:
Yes.
The Court has held that management is free to regulate, according to its own discretion and judgment, all aspects of employment,
including hiring, work assignments, working methods, time, place, and manner of work, processes to be followed, supervision of
workers, working regulations, transfer of employees, work supervision, lay-off of workers, and discipline, dismissal and recall of
workers. The exercise of management prerogative, however, is not absolute as it must be exercised in good faith and with due regard
to the rights of labor.
In the present controversy, it cannot be denied that CCBPI removed the operators' chairs pursuant to a national directive and in line
with its "I Operate, I Maintain, I Clean" program, launched to enable the Union to perform their duties and responsibilities more
efficiently. The chairs were not removed indiscriminately. They were carefully studied with due regard to the welfare of the members
of the Union. The removal of the chairs was compensated by: a) a reduction of the operating hours of the bottling operators from a
two-and-one-half (2 1/2)-hour rotation period to a one-and-a-half (1 1/2) hour rotation period; and b) anincrease of the break
period from 15 to 30 minutes between rotations.
Apparently, the decision to remove the chairs was done with good intentions as CCBPI wanted to avoid instances of operators
sleeping on the job while in the performance of their duties and responsibilities and because of the fact that the chairs were not
necessary considering that the operators constantly move about while working. In short, the removal of the chairs was designed to
increase work efficiency. Hence, CCBPI's exercise of its management prerogative was made in good faith without doing any harm to
the workers' rights.
The rights of the Union under any labor law were not violated. There is no law that requires employers to provide chairs for bottling
operators. Further, The operators' chairs cannot be considered as one of the employee benefits covered in Article 100 of the Labor
Code. In the Court's view, the term "benefits" mentioned in the non-diminution rule refers to monetary benefits or privileges given to
the employee with monetary equivalents. Such benefits or privileges form part of the employees' wage, salary or compensation
making them enforceable obligations
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Peckson vs. Robinsons Supermarket Corp.

G.R. No. 198534, July 3, 2013
Facts:
The petitioner first joined the Robinsons Supermarket Corporation (RSC) as a Sales Clerk on November 3, 1987. On October 26, 2006,
she was holding the position of Category Buyer when respondent Roena Sarte (Sarte), RSC's Assistant Vice-President for
Merchandising, reassigned her to the position of Provincial Coordinator, effective November 1, 2006. Claiming that her new
assignment was a demotion because it was non-supervisory and clerical in nature, the petitioner refused to turn over her
responsibilities to the new Category Buyer, or to accept her new responsibilities as Provincial Coordinator.
Issue: Whether or not petitioner’s lateral transfer from Category Buyer to Provincial Coordinator is considered a demotion
amounting to constructive dismissal
Held:
Under the doctrine of management prerogative, every employer has the inherent right to regulate, according to his own discretion
and judgment, all aspects of employment, including hiring, work assignments, working methods, the time, place and manner of work,
work supervision, transfer of employees, lay-off of workers, and discipline, dismissal, and recall of employees. The only limitations to
the exercise of this prerogative are those imposed by labor laws and the principles of equity and substantial justice.
Concerning the transfer of employees, these are the following jurisprudential guidelines: (a) a transfer is a movement from one
position to another of equivalent rank, level or salary without break in the service or a lateral movement from one position to another
of equivalent rank or salary; (b) the employer has the inherent right to transfer or reassign an employee for legitimate business
purposes; (c) a transfer becomes unlawful where it is motivated by discrimination or bad faith or is effected as a form of punishment
or is a demotion without sufficient cause; (d) the employer must be able to show that the transfer is not unreasonable, inconvenient,
or prejudicial to the employee.
If the transfer of an employee is not unreasonable, or inconvenient, or prejudicial to him, and it does not involve a demotion in rank
or a diminution of his salaries, benefits and other privileges, the employee may not complain that it amounts to a constructive
dismissal.
The respondents had the burden of proof that the transfer of the petitioner was not tantamount to constructive dismissal. The
respondents have discharged the burden of proof that the transfer of the petitioner was not tantamount to constructive dismissal.

In the case at bar, we agree with the appellate court that there is substantial showing that the transfer of the petitioner from Category
Buyer to Provincial Coordinator was not unreasonable, inconvenient, or prejudicial to her. The petitioner failed to dispute that the job
classifications of Category Buyer and Provincial Coordinator are similar, or that they command a similar salary structure and
responsibilities. We agree with the NLRC that the Provincial Coordinator's position does not involve mere clerical functions but
requires the exercise of discretion from time to time, as well as independent judgment, since the Provincial Coordinator gives
appropriate recommendations to management and ensures the faithful implementation of policies and programs of the company. It
even has influence over a Category Buyer because of its recommendatory function that enables the Category Buyer to make right
decisions on assortment, price and quantity of the items to be sold by the store.
V. TERMINATION OF EMPLOYMENT
Retuya vs. NLRC
G.R. No. 148848. August 5, 2003
Facts:
Private respondent, Insular Builders, Inc., is a family-owned corporation managed and operated principally by Antonio Murillo, father,
and his son, Rodolfo Murillo. It is engaged in the construction business. Petitioners, on the other hand, were workers who have
rendered services in various corporations of private respondents, namely Mindanao Integrated Builders, Inc., Sta. Clara Plywood, Inc.,
Insular Builders, Inc. and Queen City Builders, Inc. Early 1993, at the height of the feud between private respondents Antonio Murillo
and Rodolfo Murillo, the former discharged the latter from his position as manager of Insular Builders, Inc. and assumed control of the
company. Petitioners found themselves in the middle of the crossfire and were told to temporarily stop working. Later, or on July 26,
1993, private respondent Antonio Murillo dismissed petitioners and reported the matter to the DOLE. Petitioners were however
made to continue their work, rendering the same services, in the same place, locality and at the same office but under a different
company, the Queen City Builders, Inc., managed and controlled by private respondent Rodolfo Murillo. On August 3, 1993, petitioners
filed with the NLRC-RAB X, a complaint for illegal dismissal, non-payment of wages, 13th month pay, and retirement pay as regards
petitioner Abdon Dayson. Petitioners averred that they were terminated from employment on July 26, 1993 without prior notice and
also in absence of any valid cause. They alleged that their termination was an off-shoot of the supposed personal rift and
disagreements between private respondents Antonio Murillo and Rodolfo Murillo. On the other hand, private respondents Insular
Builders, Inc. and Antonio Murillo deny having employed petitioners Baltazar Quilat, Abdon Dayson and Eleuterio Ensalada as they
were personal employees of and rendering services to private respondent Rodolfo Murillo.
Issue:
Whether or not petitioners are entitled to full back wages and separation pay considering they were found to be illegally dismissed?
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LABOR RELATIONS LAW
Ruling:
The SC held that illegally dismissed employees were entitled to full back wages that should not be diminished or reduced by
the amount they had earned from another employment during the period of their illegal dismissal. While litigating, employees must
still earn a living. Furthermore, as penalty for their illegal dismissal, their employers must pay them full back wages.
In the present case, petitioners were dismissed because of a "change of management." They were not given any prior written notice,
but simply told that their services were terminated on the day they stopped working for Insular Builders, Inc. Under the
circumstances, the CA was correct in upholding the labor arbiter's finding that they had been illegally dismissed. Having been illegally
dismissed, petitioners should be awarded back wages in accordance with Bustamante v. NLRC. The fact that they worked for a sister
company immediately after being dismissed from Insular Builders, Inc. should not preclude such award.
The Court deems it appropriate, however, to reconsider such earlier ruling on the computation of backwages as enunciated in said
Pines City Educational Center case, by now holding that comfortably with the evident legislative intent as expressed in Rep. Act. No.
6715, above-quoted, backwages to be awarded to an illegally dismissed employee, should not, as a general rule, be diminished or
reduced by the earnings derived by him elsewhere during the period of his illegal dismissal. The underlying reason for this ruling is
that the employee, while litigating the legality (illegality) of his dismissal, must still earn a living to support himself and family, while
full backwages have to be paid by the employer as part of the price or penalty he has to pay for illegally dismissing his employee. The
clear legislative intent of the amendment in Rep. Act No. 6715 is to give more benefits to workers than was previously given them
under the Mercury Drug rule or the 'deduction of earnings elsewhere' rule. Therefore, in accordance with R.A. No. 6715, petitioners
are entitled to their full backwages, inclusive of allowances and other benefits or their monetary equivalent, from the time their actual
compensation was withheld from them up to the time of their actual reinstatement.
While it may be true that petitioners continued to work in the same place and office as in their previous employment, it is equally true
that they had in fact been illegally dismissed by their previous employer. Thus, they lost their former work status and benefits in a
manner violative of the law. They became new employees of the latter firm and, as such, were deprived of seniority and other
employment benefits they had when they were still with their former employer. Moreover, petitioners are entitled to separation pay.
As provided by Article 279 of the Labor Code, an illegally dismissed employee is entitled to the twin reliefs of 1) either reinstatement
or separation pay, if reinstatement is no longer feasible; and 2) back wages. These are distinct and separate reliefs given to alleviate
the economic setback brought about by the employee's dismissal. The award of one does not bar the other. Back wages may be
awarded without reinstatement, and reinstatement may be ordered without awarding back wages. Petition for backwages and
separation is granted.
Agabon vs. NLRC

GR No. 158693. November 17, 2003
Facts:
Private respondent Riviera Home Improvements, Inc. is engaged in the business of selling and installing ornamental and construction
materials. It employed petitioners Virgilio Agabon and Jenny Agabon as gypsum board and cornice installers on January 2, 1992 until
February 23, 1999 when they were dismissed for abandonment of work. Petitioners then filed a complaint for illegal dismissal and
payment of money claims and on December 28, 1999, the Labor Arbiter rendered a decision declaring the dismissals illegal and
ordered private respondent to pay the monetary claims and, in lieu of reinstatement to pay them their separation pay of one (1)
month for every year of service from date of hiring up to November 29, 1999.
Petitioners assert that they were dismissed because the private respondent refused to give them assignments unless they agreed to
work on a "pakyaw" basis when they reported for duty on February 23, 1999. They did not agree on this arrangement because it
would mean losing benefits as Social Security System (SSS) members. Petitioners also claim that private respondent did not comply
with the twin requirements of notice and hearing.
Private respondent, on the other hand, maintained that petitioners were not dismissed but had abandoned their work. In fact, private
respondent sent two letters to the last known addresses of the petitioners advising them to report for work. Private respondent's
manager even talked to petitioner Virgilio Agabon by telephone sometime in June 1999 to tell him about the new assignment at
Pacific Plaza Towers involving 40,000 square meters of cornice installation work. However, petitioners did not report for work
because they had subcontracted to perform installation work for another company. Petitioners also demanded for an increase in their
wage to P280.00 per day. When this was not granted, petitioners stopped reporting for work and filed the illegal dismissal case.
Issue:
Whether or not petitioners abandoned their work.
Ruling:
Abandonment is the deliberate and unjustified refusal of an employee to resume his employment. 14 It is a form of neglect of duty,
hence, a just cause for termination of employment by the employer. 15 For a valid finding of abandonment, these two factors should
be present: (1) the failure to report for work or absence without valid or justifiable reason; and (2) a clear intention to sever
employer-employee relationship, with the second as the more determinative factor which is manifested by overt acts from which it
may be deduced that the employees has no more intention to work. The intent to discontinue the employment must be shown by clear
proof that it was deliberate and unjustified.
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In February 1999, petitioners were frequently absent having subcontracted for an installation work for another company.
Subcontracting for another company clearly showed the intention to sever the employer-employee relationship with private
respondent. This was not the first time they did this. In January 1996, they did not report for work because they were working for
another company. Private respondent at that time warned petitioners that they would be dismissed if this happened again. Petitioners
disregarded the warning and exhibited a clear intention to sever their employer-employee relationship. The record of an employee is
a relevant consideration in determining the penalty that should be meted out to him.
The dismissal should be upheld because it was established that the petitioners abandoned their jobs to work for another company.
Private respondent, however, did not follow the notice requirements and instead argued that sending notices to the last known
addresses would have been useless because they did not reside there anymore. Unfortunately for the private respondent, this is not a
valid excuse because the law mandates the twin notice requirements to the employee's last known address. Thus, it should be held
liable for non-compliance with the procedural requirements of due process.
Jaka Food Processing vs. Pacot

G.R. No. 151378. March 28, 2005
Facts:
Respondents Darwin Pacot, Robert Parohinog, David Bisnar, Marlon Domingo, Rhoel Lescano and Jonathan Cagabcab were earlier
hired by petitioner JAKA Foods Processing Corporation (JAKA, for short) until the latter terminated their employment on August 29,
1997 because the corporation was "in dire financial straits". It is not disputed, however, that the termination was effected without
JAKA complying with the requirement under Article 283 of the Labor Code regarding the service of a written notice upon the
employees and the Department of Labor and Employment at least one (1) month before the intended date of termination.
In time, respondents separately filed with the Regional Arbitration Branch of the National Labor Relations Commission (NLRC)
complaints for illegal dismissal, underpayment of wages and nonpayment of service incentive leave and 13th month pay against JAKA
and its HRD Manager, Rosana Castelo. After due proceedings, the Labor Arbiter rendered a decision 3 declaring the termination illegal
and ordering JAKA and its HRD Manager to reinstate respondents with full backwages, and separation pay if reinstatement is not
possible.
Issue: What are the legal implications of a situation where an employee is dismissed for cause but such dismissal was effected
without the employer's compliance with the notice requirement under the Labor Code.
Ruling:
In the very recent case of Agabon vs. NLRC, 8 we had the opportunity to resolve a similar question. Therein, we found that the
employees committed a grave offense, i.e., abandonment, which is a form of a neglect of duty which, in turn, is one of the just causes
enumerated under Article 282 of the Labor Code. In said case, we upheld the validity of the dismissal despite non-compliance with the
notice requirement of the Labor Code. However, we required the employer to pay the dismissed employees the amount of P30,000.00,
representing nominal damages for non-compliance with statutory due process. The difference between Agabon and the instant case is
that in the former, the dismissal was based on a just cause under Article 282 of the Labor Code while in the present case, respondents
were dismissed due to retrenchment, which is one of the authorized causes under Article 283 of the same Code. A dismissal for just
cause under Article 282 implies that the employee concerned has committed, or is guilty of, some violation against the employer, i.e.
the employee has committed some serious misconduct, is guilty of some fraud against the employer, or, as in Agabon, he has neglected
his duties. Thus, it can be said that the employee himself initiated the dismissal process.
On another breath, a dismissal for an authorized cause under Article 283 does not necessarily imply delinquency or culpability on the
part of the employee. Instead, the dismissal process is initiated by the employer's exercise of his management prerogative, i.e. when
the employer opts to install labor saving devices, when he decides to cease business operations or when, as in this case, he undertakes
to implement a retrenchment program. Accordingly, it is wise to hold that: (1) if the dismissal is based on a just cause under Article
282 but the employer failed to comply with the notice requirement, the sanction to be imposed upon him should be tempered because
the dismissal process was, in effect, initiated by an act imputable to the employee; and (2) if the dismissal is based on an authorized
cause under Article 283 but the employer failed to comply with the notice requirement, the sanction should be stiffer because the
dismissal, process was initiated by the employer's exercise of his management prerogative.
It is, therefore, established that there was ground for respondents' dismissal, i.e., retrenchment, which is one of the authorized causes
enumerated under Article 283 of the Labor Code. Likewise, it is established that JAKA failed to comply with the notice requirement
under the same Article. Considering the factual circumstances in the instant case and the above ratiocination, we, therefore, deem it
proper to fix the indemnity at P50,000.00.
Mauricio vs. NLRC

G.R. No.164635. November 17, 2005
Facts:
Petitioner, Majurine L. Mauricio, started working as an Administrative Assistant in the Legal Department of the Manila Banking
Corporation on July 1, 1999 as a probationary employee. As a pre-employment requirement, the bank directed the submission by
petitioner of, among other things, a 1x1 ID picture, 2 x 2 ID picture, two reference letters, and clearance from the employee’s previous
employment. Petitioner failed to submit the required documents, however. The bank thus gave her up to December 15, 1999 to
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comply, and advised her that the processing of her regularization as employee would be held in abeyance. Despite the deadline given
her, petitioner still failed to comply with the requirements, drawing the bank to send her a Memorandum dated December 27, 1999
signed by its Vice-President for Personnel Department Clarence D. Guerrero (Guerrero), giving her until December 29, 1999 to submit
the requirements, and informing that her failure to do so would cause the termination of her employment effective December 29,
1999.
Petitioner, by letter of December 28, 1999, informed the bank that she could not secure a clearance from her previous employer, the
Manila Bankers Life Insurance Corporation (MBLIC), as she had a pending case with it. She thus requested that any action relative to
her employment be held in abeyance as she was still following up the early resolution of the case. Said request was denied by the
bank. Petitioner thus filed on January 21, 2000 a complaint for illegal dismissal, unpaid salary, and moral and exemplary damages
against the bank and Guerrero.
Issue:
Whether or not petitioner was illegally dismissed?
Ruling:
The SC held that the CA was correct when it ruled that in terminating petitioner’s probationary employment due to her failure to
submit a certificate of clearance from her previous employer, the bank was merely exercising its management prerogative.
Industrial Timber Corp. vs. Ababon

G.R. No. 164518. January 25, 2006
Facts:
Industrial Plywood Group Corporation (IPGC) is the owner of a plywood plant located at Agusan, Pequeñ o, Butuan City, leased to
Industrial Timber Corporation (ITC) on August 30, 1985 for a period of five years. Thereafter, ITC commenced operation of the
plywood plant and hired 387 workers.On March 16, 1990, ITC notified the Department of Labor and Employment (DOLE) and its
workers that effective March 19, 1990 it will undergo a "no plant operation" due to lack of raw materials and will resume only after it
can secure logs for milling. Meanwhile, IPGC notified ITC of the expiration of the lease contract in August 1990 and its intention not to
renew the same. On June 26, 1990, ITC notified the DOLE and its workers of the plant's shutdown due to the non-renewal of anti-
pollution permit that expired in April 1990. 6 This fact and the alleged lack of logs for milling constrained ITC to lay off all its workers
until further notice. This was followed by a final notice of closure or cessation of business operations on August 17, 1990 with an
advice for all the workers to collect the benefits due them under the law and CBA. On October 15, 1990, IPGC took over the plywood
plant after it was issued a Wood Processing Plant Permit No. WPR-1004-081791-042, 8 which included the anti-pollution permit, by
the Department of Environment and Natural Resources (DENR) coincidentally on the same day the ITC ceased operation of the plant.
This prompted Virgilio Ababon, et al. to file a complaint against ITC and IPGC for illegal dismissal, unfair labor practice and damages.
They alleged, among others, that the cessation of ITC's operation was intended to bust the union and that both corporations are one
and the same entity being controlled by one owner. On January 20, 1992, after requiring both parties to submit their respective
position papers, Labor Arbiter Irving A. Petilla rendered a decision which refused to pierce the veil of corporate fiction for lack of
evidence to prove that it was used to perpetuate fraud or illegal act; upheld the validity of the closure; and ordered ITC to pay
separation pay of 1/2 month for every year of service.
Ababon, et al. appealed to the NLRC. On May 20, 1993, the NLRC set aside the decision of the Labor Arbiter and ordered the
reinstatement of the employees to their former positions, and the payment of full back wages, damages and attorney's fees. On the
second Petition for Relief, the NLRC set aside all its prior decision and resolutions.
Issue: Whether Ababon, et al. were illegally dismissed due to the closure of ITC's business; and whether they are entitled to
separation pay, backwages, and other monetary awards.
Ruling:
Work is a necessity that has economic significance deserving legal protection. The social justice and protection to labor provisions in
the Constitution dictate so. On the other hand, employers are also accorded rights and privileges to assure their self-determination
and independence, and reasonable return of capital. This mass of privileges comprises the so-called management prerogatives.
Although they may be broad and unlimited in scope, the State has the right to determine whether an employer's privilege is exercised
in a manner that complies with the legal requirements and does not offend the protected rights of labor. One of the rights accorded an
employer is the right to close an establishment or undertaking. The right to close the operation of an establishment or undertaking is
one of the authorized causes in terminating employment of workers, the only limitation being that the closure must not be for the
purpose of circumventing the provisions on termination of employment embodied in the Labor Code.
A reading of Article 283 of the Labor Code shows that a partial or total closure or cessation of operations of establishment or
undertaking may either be due to serious business losses or financial reverses or otherwise. Under the first kind, the employer must
sufficiently and convincingly prove its allegation of substantial losses, while under the second kind, the employer can lawfully close
shop anytime as long as cessation of or withdrawal from business operations was 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. Just as no law forces anyone to go into business, no law can compel anybody to continue the
same.
It would be stretching the intent and spirit of the law if a court interferes with management's prerogative to close or cease its business
operations just because the business is not suffering from any loss or because of the desire to provide the workers continued
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employment. Having established that ITC's closure of the plywood plant was done in good faith and that it was due to causes beyond
its control, the conclusion is inevitable that said closure is valid.
Consequently, Ababon, et al. could not have been illegally dismissed to be entitled to full backwages.
Equitable Bank vs. Sadac

G.R. No. 164772. June 8, 2006
Facts:
Respondent Sadac was appointed Vice President of the Legal Department of petitioner Bank effective 1 August 1981, and
subsequently General Counsel on 8 December 1981. On 26 June 1989, nine lawyers of petitioner Bank’s Legal Department, in a letter-
petition to the Chairman of the Board of Directors, accused respondent Sadac of abusive conduct, and ultimately, petitioned for a
change in leadership of the department.
On the ground of lack of confidence in respondent Sadac, under the rules of client and lawyer relationship, petitioner Bank instructed
respondent Sadac to deliver all materials in his custody in all cases in which the latter was appearing as its counsel of record. In
reaction thereto, respondent Sadac requested for a full hearing and formal investigation but the same remained unheeded. On 9
November 1989, respondent Sadac filed a complaint for illegal dismissal with damages against petitioner Bank and individual
members of the Board of Directors thereof. After learning of the filing of the complaint, petitioner Bank terminated the services of
respondent Sadac. Finally, on 10 August 1989, respondent Sadac was removed from his office and ordered disentitled to any
compensation and other benefits.
Issue: Whether or not Respondent Sadac was illegally dismissed?
Ruling:
The SC held that respondent Sadac was dismissal illegal. The existence of the employer-employee relationship between petitioner
Bank and respondent Sadac had been duly established bringing the case within the coverage of the Labor Code. Sec. 26, Rule 138 of
the Rules of Court is not applicable, as claimed by the petitioner, that the association between the parties was one of a client-lawyer
relationship, and, thus, it could terminate at any time the services of respondent Sadac. Respondent Sadac’s dismissal was grounded
on any of the causes stated in Article 282 of the Labor Code. Petitioner Bank disregarded the procedural requirements in terminating
respondent Sadac’s employment as so required by Section 2 and Section 5, Rule XIV, Book V of the Implementing Rules of the Labor
Code.
Decision of the NLRC is affirmed.
Heirs of Sara Lee vs. Rey

G.R. No. 1499013. August 31, 2006
Facts:
The House of Sara Lee (petitioner) is engaged in the direct selling of a variety of product lines for men and women. In the pursuit of its
business, the petitioner engages and contracts with dealers to sell the aforementioned merchandise. These dealers, known either as
"Independent Business Managers" (IBMs) or "Independent Group Supervisors" (IGSs), depending on whether they sell individually or
through their own group, would obtain at discounted rates the merchandise from the petitioner on credit and then sell the same
products to their own customers at fixed prices also determined by the petitioner. Under existing company policy, the dealers must
remit to the petitioner the proceeds of their sales within a designated credit period, which would either be 38 days for IGSs or 52 days
for IBMs, counted from the day the said dealers acquired the merchandise from the petitioner.
Cynthia Rey (respondent), at the time of her dismissal from employment, or on June 25, 1996, held the position of Credit
Administration Supervisor or CAS at the Cagayan de Oro City branch of the petitioner. While respondent was still working in Butuan
City, she allegedly instructed the Accounts Receivable Clerk of the Cagayan de Oro outlet, to change the credit term of one of the IBMs
of the petitioner, who happens to be respondent’s sister-in-law, from the 52-day limit to an "unauthorized" term of 60 days. The
respondent made the instruction, just before the computer data for the computation of the Service Fee accruing to Ms. Rey-Petilla was
about to be generated. Ms. Mendoza then reported this allegedly unauthorized act of respondent to her Branch Operations Manager,
Mr. Villagracia. Acting on the report, as the petitioner alleges, BOM Villagracia discreetly verified the records and discovered that it
was not only the 52-day credit term of IBM Rey-Petilla that had been extended by the respondent, but there were several other IBMs
whose credit terms had been similarly extended beyond the periods allowed by company policy. BOM Villagracia then summoned the
respondent and required her to explain the unauthorized credit extensions.
On the basis of the hearing, the alleged voluntary admissions of respondent, and the findings of the auditor’s report, the petitioner, on
June 25, 1996, formally dismissed the respondent for breach of trust and confidence.
Issue: Whether or not the petitioner validly terminated respondent’s employment on the ground of loss of trust and confidence.
Ruling:
Contrary to the findings of the NLRC and the CA, the Court holds that respondent was dismissed for a just cause.
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Loss of confidence as a just cause for dismissal is premised on the fact that an employee concerned holds a position of trust and
confidence. This situation applies where a person is entrusted with confidence on delicate matters, such as the custody, handling, or
care and protection of the employer’s property. But, in order to constitute a just cause for dismissal, the act complained of must be
"work-related," such that the employee concerned is unfit to continue working for the employer.
The nature of her work requires a substantial amount of trust and confidence on the part of the employer. Being the Credit
Administration Supervisor of the Cagayan de Oro and Butuan City branches of the petitioner, respondent occupied a highly sensitive
and critical position and may thus be dismissed on the ground of loss of trust and confidence. Clearly, respondent’s position involves a
high degree of responsibility requiring trust and confidence. The position carried with it the duty to observe proper company
procedures in the fulfillment of her job, as it relates closely to the financial interests of the company. Respondent’s unauthorized
extensions of the credit periods of the dealers are prejudicial to the interest of the petitioner and bear serious financial implications
Well-settled is the rule that separation pay shall be allowed only in those instances where the employee is validly dismissed for causes
other than serious misconduct or those reflecting on her moral character. Inasmuch as the reason for which the respondent was
validly separated involves her integrity, which is required for the position of Credit Administration Supervisor, she is not worthy of
compassion as to deserve separation pay for her length of service.
Galaxie Steel Workers Union vs. NLRC

G.R. No. 165757. October 17, 2006
Facts:
Respondent Galaxie Steel Corporation (Galaxie) is a corporation engaged in the business of manufacturing and sale of re-bars and
steel billets which are used primarily in the construction of high-rise buildings. On account of serious business losses which occurred
in 1997 up to mid-1999 totaling around P127,000,000.00, Galaxie decided to close down its business operations.
Galaxie thus filed on July 30, 1999 a written notice with the Department of Labor and Employment (DOLE) informing the latter of its
intended closure and the consequent termination of its employees effective August 31, 1999. And it posted the notice of closure on the
corporate bulletin board
Galaxie thus filed on July 30, 1999 a written notice with the Department of Labor and Employment (DOLE) informing the latter of its
intended closure and the consequent termination of its employees effective August 31, 1999. And it posted the notice of closure on the
corporate bulletin board. Petitioners Galaxie Steel Workers Union and Galaxie employees filed a complaint for illegal dismissal, unfair
labor practice, and money claims against Galaxie.
Issue: Whether or not there was a valid termination of employment of petitioners due to closure on account of serious losses.
Ruling:
In this case, the Labor Arbiter, the NLRC, and the Court of Appeals were unanimous in ruling that Galaxie’s closure or cessation of
business operations was due to serious business losses or financial reverses, and not because of any alleged anti-union position. This
Court finds no reason to Respecting petitioners’ claim for separation pay, modify such finding.
Where, the closure then is due to serious business losses, the Labor Code does not impose any obligation upon the employer to pay
separation benefits. Explaining the policy distinction in Article 283 of the Labor Code, this Court, in Cama v. Joni’s Food Services, Inc.,
declared:16
The Constitution, while affording full protection to labor, nonetheless, recognizes "the right of enterprises to reasonable returns on
investments, and to expansion and growth." In line with this protection afforded to business by the fundamental law, Article 283 of
the Labor Code clearly makes a policy distinction. It is only in instances of "retrenchment to prevent losses and in cases of closures or
cessation of operations of establishment or undertaking not due to serious business losses or financial reverses" that employees
whose employment has been terminated as a result are entitled to separation pay. In other words, Article 283 of the Labor Code does
not obligate an employer to pay separation benefits when the closure is due to serious losses. To require an employer to be generous
when it is no longer in a position to do so, in our view, would be unduly oppressive, unjust, and unfair to the employer. Ours is a
system of laws, and the law in protecting the rights of the working man, authorizes neither the oppression nor the self-destruction of
the employer
Finally, with regard to the notice requirement, the Labor Arbiter found, and it was upheld by the NLRC and the Court of Appeals, that
the written notice of closure or cessation of Galaxie’s business operations was posted on the company bulletin board one month prior
to its effectivity. The mere posting on the company bulletin board does not, however, meet the requirement under Article 283 of
"serving a written notice on the workers." The purpose of the written notice is to inform the employees of the specific date of
termination or closure of business operations, and must be served upon them at least one month before the date of effectivity to give
them sufficient time to make the necessary arrangements. Nevertheless, the validity of termination of services can exist
independently of the procedural infirmity in the dismissal. After analyzing the consequences of the divergent doctrines on
employment termination, the Court held that in cases involving dismissals for cause, but without observance of statutory due process,
the better rule is to abandon the Serrano doctrine and to follow Wenphil by declaring that the dismissal was for cause but imposing
sanctions on the employer. By so doing, dispensing justice not just to employees but to employers as well is achieved.
Under the facts and circumstances attendant to the case, this Court finds the amount of P20,000 in nominal damages sufficient to
vindicate each petitioner’s right to due process.
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Sy vs. Metrobank
GR No. 160618. November 2, 2006
Facts:
Petitioner Dennis D. Sy, as the branch manager in Bajada, Davao City, of respondent Metropolitan Bank and Trust Company.
Under the bank’s Retirement Plan, an employee must retire upon reaching the age of 55 years or after rendering 30 years of service,
whichever comes first. Sy would have rendered 30 years of service by August 18, 1999. However, on February 5, 1999, he was
reappointed as branch manager for a term of one year starting August 18, 1999 until August 18, 2000. His monthly compensation was
accordingly increased from P50,400 to P54,500, effective August 16, 1999.
Meanwhile, on November 10 and 15, 1999, the bank released the results of the audit conducted in its Bajada branch. The bank alleged
that Sy allowed spouses Gorgonio and Elizabeth Ong to conduct "kiting" activities in their account with the bank. Thus, the bank
placed Sy under preventive suspension and gave him 48 hours to submit a written explanation. In response, Sy wrote a letter
explaining that he only made a wrong credit judgment. Unconvinced, the bank dismissed Sy on December 15, 1999.
Issue:
(1) Whether or not the petitioner was illegally terminated? If his dismissal was valid, would he still be entitled to retirement benefits?
Ruling:
We hold that petitioner Sy was validly dismissed on the ground of fraud and willful breach of trust under Article 282 of the Labor
Code. Records show that as bank manager, he authorized "kiting" or drawing of checks against uncollected funds in wanton violation
of the bank’s policies. It was sufficient basis for the bank to lose trust in him.
Petitioner’s conduct betrays his culpability. Shortly after the audit conducted in the Bajada branch, he tendered an "irrevocable letter
of retirement." In the said letter, he requested that his retirement be made effective December 1, 1999. Said request arouses suspicion
considering that he had previously agreed to the extension of his employment as branch manager until August 18, 2000. Petitioner’s
evident failure to offer any reasonable explanation for such sudden shift in his plans is prejudicial to his cause. As for the requirement
of due process, records show that it has been fully satisfied in the instant case. The bank had complied with the two-notice
requirement, i.e.: (a) a written notice of the cause for his dismissal to afford him ample opportunity to be heard and to defend himself
with the assistance of counsel, if he so desires; and (b) a written notice of the decision to terminate him, stating clearly the reason
therefor.
Is petitioner nevertheless entitled to retirement benefits?
Under the Labor Code, only unjustly dismissed employees are entitled to retirement benefits and other privileges including
reinstatement and backwages. Since petitioner’s dismissal was for a just cause, he is not entitled to any retirement benefit. To hold
otherwise would be to reward acts of willful breach of trust by the employee. It would also open the floodgate to potential anomalous
banking transactions by bank employees whose employments have been extended. Since a bank’s operation is essentially imbued
with public interest, it owes great fidelity to the public it deals with. In turn, it cannot be compelled to continue in its employ a person
in whom it has lost trust and confidence and whose continued employment would patently be inimical to the bank’s interest. While
the scale of justice is tilted in favor of workers, the law does not authorize blind submission to the claim of labor regardless of merit.
While the Court commiserates with petitioner who has spent with the bank the best three decades of his employable life, we find no
room to accord him compassionate justice. Records showed that he violated the bank policies prior to his compulsory retirement.
Thus, there can be no earned retirement benefits to speak of. No such provision is provided for by the Labor Code. In fact, even the
Civil Service Law imposes forfeiture of retirement benefits in valid dismissal cases.
King of Kings Transport vs. NLRC

G.R. NO 166208 JUNE 29, 2007
Facts:
Petitioner KKTI is a corporation engaged in public transportation and managed by Claire Dela Fuente and Melissa Lim. Respondent
Mamac was hired as bus conductor of Don Mariano Transit Corporation (DMTC) on April 29, 1999.
The KKTI employees later organized the Kaisahan ng mga Kawani sa King of Kings (KKKK) which was registered with DOLE.
Respondent was elected KKKK president.
Respondent was required to accomplish a “Conductor’s Trip Report” and submit it to the company after each trip. As a background,
this report indicates the ticket opening and closing for the particular day of duty. After submission, the company audits the reports.
Once an irregularity is discovered, the company issues an “Irregularity Report” against the employee, indicating the nature and details
of the irregularity. Thereafter, the concerned employee is asked to explain the incident by making a written statement or counter-
affidavit at the back of the same Irregularity Report. After considering the explanation of the employee, the company then makes a
determination of whether to accept the explanation or impose upon the employee a penalty for committing an infraction. That
decision shall be stated on said Irregularity Report and will be furnished to the employee.
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Upon audit of the October 28, 2001 Conductor’s Report of respondent, KKTI noted an irregularity. It discovered that respondent
declared several sold tickets as returned tickets causing KKTI to lose an income of eight hundred and ninety pesos. While no
irregularity report was prepared on the October 28, 2001 incident, KKTI nevertheless asked respondent to explain the discrepancy.
In his letter,[3] respondent said that the erroneous declaration in his October 28, 2001 Trip Report was unintentional. He explained
that during that day’s trip, the windshield of the bus assigned to them was smashed; and they had to cut short the trip in order to
immediately report the matter to the police. As a result of the incident, he got confused in making the trip report.
On November 26, 2001, respondent received a letter terminating his employment effective November 29, 2001. The dismissal letter
alleged that the October 28, 2001 irregularity was an act of fraud against the company. KKTI also cited as basis for respondent’s
dismissal the other offenses he allegedly committed since 1999.
On December 11, 2001, respondent filed a Complaint for illegal dismissal, illegal deductions, nonpayment of 13th-month pay, service
incentive leave, and separation pay. He denied committing any infraction and alleged that his dismissal was intended to bust union
activities. Moreover, he claimed that his dismissal was effected without due process.
In its April 3, 2002 Position Paper,[5] KKTI contended that respondent was legally dismissed after his commission of a series of
misconducts and misdeeds. It claimed that respondent had violated the trust and confidence reposed upon him by KKTI. Also, it
averred that it had observed due process in dismissing respondent and maintained that respondent was not entitled to his money
claims such as service incentive leave and 13th-month pay because he was paid on commission or percentage basis. On September
16, 2002, Labor Arbiter Ramon Valentin C. Reyes rendered judgment dismissing respondent’s Complaint for lack of merit. Affirming
the NLRC, the CA held that there was just cause for respondent’s dismissal. It ruled that respondent’s act in “declaring sold tickets as
returned tickets x x x constituted fraud or acts of dishonesty justifying his dismissal.
Issue:
Whether the Honorable Court of Appeals erred in ruling that KKTI did not comply with the requirements of procedural due process
before dismissing the services of the complainant/private respondent.
Ruling:
The petition is partly meritorious.
The disposition of the first assigned error depends on whether petitioner KKTI complied with the due process requirements in
terminating respondent’s employment; thus, it shall be discussed secondly.
Non-compliance with the Due Process Requirements
Due process under the Labor Code involves two aspects: first, substantive––the valid and authorized causes of termination of
employment under the Labor Code; and second, procedural––the manner of dismissal. In the present case, the CA affirmed the
findings of the labor arbiter and the NLRC that the termination of employment of respondent was based on a “just cause.” This ruling
is not at issue in this case. The question to be determined is whether the procedural requirements were complied with.
Art. 277 of the Labor Code provides the manner of termination of employment, thus:
Art. 277. Miscellaneous Provisions.––x x x

(b) Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a just
and authorized cause without prejudice to the requirement of notice under Article 283 of this Code, the employer shall furnish the
worker whose employment is sought to be terminated a written notice containing a statement of the causes for termination and shall
afford the latter ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires in
accordance with company rules and regulations promulgated pursuant to guidelines set by the Department of Labor and
Employment. Any decision taken by the employer shall be without prejudice to the right of the worker to contest the validity or
legality of his dismissal by filing a complaint with the regional branch of the National Labor Relations Commission. The burden of
proving that the termination was for a valid or authorized cause shall rest on the employer.
Accordingly, the implementing rule of the aforesaid provision states:
SEC. 2. Standards of due process; requirements of notice.––In all cases of termination of employment, the following standards of due
process shall be substantially observed:
I. For termination of employment based on just causes as defined in Article 282 of the Code:
(a) 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.
(b) 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.
(c) 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. [13]
In case of termination, the foregoing notices shall be served on the employee’s last known address.[14]
To clarify, the following should be considered in terminating the services of employees:
(1) The first written notice to be served on the employees should contain the specific causes or grounds for termination against
them, and a directive that the employees are given the opportunity to submit their written explanation within a reasonable period.
“Reasonable opportunity” under the Omnibus Rules means every kind of assistance that management must accord to the employees
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to enable them to prepare adequately for their defense.[15] This should be construed as a period of at least five (5) calendar days
from receipt of the notice to give the employees an opportunity to study the accusation against them, consult a union official or
lawyer, gather data and evidence, and decide on the defenses they will raise against the complaint. Moreover, in order to enable the
employees to intelligently prepare their explanation and defenses, the notice should contain a detailed narration of the facts and
circumstances that will serve as basis for the charge against the employees. A general description of the charge will not suffice.
Lastly, the notice should specifically mention which company rules, if any, are violated and/or which among the grounds under Art.
282 is being charged against the employees.
(2) After serving the first notice, the employers should schedule and conduct a hearing or conference wherein the employees
will be given the opportunity to: (1) explain and clarify their defenses to the charge against them; (2) present evidence in support of
their defenses; and (3) rebut the evidence presented against them by the management. During the hearing or conference, the
employees are given the chance to defend themselves personally, with the assistance of a representative or counsel of their choice.
Moreover, this conference or hearing could be used by the parties as an opportunity to come to an amicable settlement.
(3) After determining that termination of employment is justified, the employers shall serve the employees a written notice of
termination indicating that: (1) all circumstances involving the charge against the employees have been considered; and (2) grounds
have been established to justify the severance of their employment.
In the instant case, KKTI admits that it had failed to provide respondent with a “charge sheet.”[16] However, it maintains that it had
substantially complied with the rules, claiming that “respondent would not have issued a written explanation had he not been
informed of the charges against him.”[17]
We are not convinced.
First, respondent was not issued a written notice charging him of committing an infraction. The law is clear on the matter. A verbal
appraisal of the charges against an employee does not comply with the first notice requirement. In Pepsi Cola Bottling Co. v. NLRC,
[18] the Court held that consultations or conferences are not a substitute for the actual observance of notice and hearing. Also, in
Loadstar Shipping Co., Inc. v. Mesano,[19] the Court, sanctioning the employer for disregarding the due process requirements, held
that the employee’s written explanation did not excuse the fact that there was a complete absence of the first notice.
Second, even assuming that petitioner KKTI was able to furnish respondent an Irregularity Report notifying him of his offense, such
would not comply with the requirements of the law. We observe from the irregularity reports against respondent for his other
offenses that such contained merely a general description of the charges against him. The reports did not even state a company rule
or policy that the employee had allegedly violated. Likewise, there is no mention of any of the grounds for termination of employment
under Art. 282 of the Labor Code. Thus, KKTI’s “standard” charge sheet is not sufficient notice to the employee.
Third, no hearing was conducted. Regardless of respondent’s written explanation, a hearing was still necessary in order for him to
clarify and present evidence in support of his defense. Moreover, respondent made the letter merely to explain the circumstances
relating to the irregularity in his October 28, 2001 Conductor’s Trip Report. He was unaware that a dismissal proceeding was already
being effected. Thus, he was surprised to receive the November 26, 2001 termination letter indicating as grounds, not only his
October 28, 2001 infraction, but also his previous infractions.
Asian Terminal vs. NLRC

GR No. 158458. December 19, 2007
Facts:
Romeo Labrague (respondent) was a stevedore antigo employed with Asian Terminals, Inc. since the 1980's. Beginning September 9,
1993, respondent failed to report for work allegedly because he was arrested and placed in detention for reasons not related to his
work. After respondent had been absent for more than one year, Asian Terminals, Inc., through Atty. Rodolfo G. Corvite, Jr.,
(petitioners) sent him (respondent) a letter, dated December 27, 1994, at his last known address at Area H, Parola, Tondo, Manila,
requiring him to explain within 72 hours why he should not suffer disciplinary penalty for his prolonged absence. The following
month, petitioner sent respondent another notice of similar tenor.
Finally, on February 8, 1995, petitioner terminated Labrague’s employment.
Following his acquittal and release from detention, respondent reported for work on July 3, 1996 but was advised by petitioners to
file a new application so that he may be rehired. Thus, respondent filed with the NLRC a complaint for illegal dismissal, separation
pay, non-payment of labor standard benefits, damages and attorney's fees.
Issue: Whether or not there was abandonment of work on the part of the respondent to justify his dismissal from work.
Ruling:
To justify the dismissal of respondent for abandonment, petitioners should have established by concrete evidence the concurrence of
two elements: first, that respondent had the intention to deliberately and without justification abandon his employment or refuse to
resume his work; and second, that respondent performed overt acts from which it may be deduced that he no longer intended to
work.
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Absences incurred by an employee who is prevented from reporting for work due to his detention to answer some criminal charge is
excusable if his detention is baseless, in that the criminal charge against him is not at all supported by sufficient evidence. In Magtoto
v. National Labor Relations Commission as well as Pedroso v. Castro, we declared such absences as not constitutive of abandonment,
and held the dismissal of the employee-detainee invalid
Respondent herein was prevented from reporting for work by reason of his detention. That his detention turned out to be without
basis, as the criminal charge upon which said detention was ordered was later dismissed for lack of evidence, made the absences he
incurred as a consequence thereof not only involuntary but also excusable. It was certainly not the intention of respondent to absent
himself, or his fault that he was detained on an erroneous charge. In no way may the absences he incurred under such circumstances
be likened to abandonment. The CA, therefore, correctly held that the dismissal of respondent was illegal, for the absences he incurred
by reason of his unwarranted detention did not amount to abandonment.
His dismissal being illegal, respondent is entitled to backwages as a matter of right provided by law.
Smart Communications vs. Astorga

GR No. 148142, January 28, 2008
Facts:
Regina M. Astorga (Astorga) was employed by respondent Smart Communications, Incorporated (SMART) on May 8, 1997 as District
Sales Manager of the Corporate Sales Marketing Group/ Fixed Services Division (CSMG/FSD). She was receiving a monthly salary of
P33,650.00. As District Sales Manager, Astorga enjoyed additional benefits, namely, annual performance incentive equivalent to 30%
of her annual gross salary, a group life and hospitalization insurance coverage, and a car plan in the amount of P455,000.00.
In February 1998, SMART launched an organizational realignment to achieve more efficient operations. This was made known to the
employees on February 27, 1998. Part of the reorganization was the outsourcing of the marketing and sales force. Thus, SMART
entered into a joint venture agreement with NTT of Japan, and formed SMART-NTT Multimedia, Incorporated (SNMI). Since SNMI
was formed to do the sales and marketing work, SMART abolished the CSMG/FSD, Astorga’s division.
Despite the abolition of the CSMG/FSD, Astorga continued reporting for work. But on March 3, 1998, SMART issued a memorandum
advising Astorga of the termination of her employment on ground of redundancy, effective April 3, 1998. Astorga received it on
March 16, 1998.
Issue: Whether or not Astorga was validly terminated on the ground of redundancy.
Ruling:
Astorga was terminated due to redundancy, which is one of the authorized causes for the dismissal of an employee. The
characterization of an employee’s services as superfluous or no longer necessary and, therefore, properly terminable, is an exercise of
business judgment on the part of the employer. The wisdom and soundness of such characterization or decision is not subject to
discretionary review provided, of course, that a violation of law or arbitrary or malicious action is not shown.
Astorga claims that the termination of her employment was illegal and tainted with bad faith. She asserts that the reorganization was
done in order to get rid of her. But except for her barefaced allegation, no convincing evidence was offered to prove it. This Court
finds it extremely difficult to believe that SMART would enter into a joint venture agreement with NTT, form SNMI and abolish
CSMG/FSD simply for the sole purpose of easing out a particular employee, such as Astorga. Moreover, Astorga never denied that
SMART offered her a supervisory position in the Customer Care Department, but she refused the offer because the position carried a
lower salary rank and rate. If indeed SMART simply wanted to get rid of her, it would not have offered her a position in any
department in the enterprise.
Astorga also states that the justification advanced by SMART is not true because there was no compelling economic reason for
redundancy. But contrary to her claim, an employer is not precluded from adopting a new policy conducive to a more economical and
effective management even if it is not experiencing economic reverses. Neither does the law require that the employer should suffer
financial losses before he can terminate the services of the employee on the ground of redundancy.
But while tilting the scales of justice in favor of workers, the fundamental law also guarantees the right of the employer to reasonable
returns for his investment. In this light, we must acknowledge the prerogative of the employer to adopt such measures as will
promote greater efficiency, reduce overhead costs and enhance prospects of economic gains, albeit always within the framework of
existing laws. Accordingly, we sustain the reorganization and redundancy program undertaken by SMART.
However, as aptly found by the CA, SMART failed to comply with the mandated one (1) month notice prior to termination. The record
is clear that Astorga received the notice of termination only on March 16, 1998 or less than a month prior to its effectivity on April 3,
1998. Likewise, the Department of Labor and Employment was notified of the redundancy program only on March 6, 1998.
Be that as it may, this procedural infirmity would not render the termination of Astorga’s employment illegal. However, we find the
need to modify, by increasing, the indemnity awarded by the CA to Astorga, as a sanction on SMART for non-compliance with the one-
month mandatory notice requirement. We deem it proper to increase the amount of the penalty on SMART to P50,000.00.
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RB Michael Press vs. Galit

G.R. No. 153510, February 13, 2008
Facts:
On May 1, 1997, 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 PhP 230 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, February 23, 1999, 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 wills
determine your employment status with this company.
(SGD) ANNALENE REYES-ESCOBIA

Manager[1]
On February 24, 1999, respondent was terminated from employment. Respondent subsequently filed a complaint for illegal dismissal
and money claims before the National Labor Relations Commission (NLRC) Regional Arbitration Branch No. IV, which was docketed
as NLRC Case No. RAB IV-2-10806-99-C. On October 29, 1999, the labor arbiter rendered a Decision,
Issue: WHETHER OR OR NOT THERE WAS AN ILLEGAL DISMISSAL
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.
In resolving the issue on tardiness, the labor arbiter ruled that petitioners cannot use respondent’s habitual tardiness and
unauthorized absences to justify his dismissal since they had already deducted the corresponding amounts from his salary.
Furthermore, the labor arbiter explained that since respondent was not subjected to any admonition or penalty for tardiness,
petitioners then had condoned the offense or that the infraction is not serious enough to merit any penalty. The CA then supported
the labor arbiter’s ruling by ratiocinating that petitioners cannot draw on respondent’s habitual tardiness in order to dismiss him
since there is no evidence which shows that he had been warned or reprimanded for his excessive and habitual tardiness.
We find the ruling incorrect.
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
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relinquishment or abandonment of a known legal right or privilege.[9] 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.”[10] Hence, the management prerogative to discipline employees and impose punishment is a legal right
which cannot, as a general rule, be impliedly waived.
Insubordination or willful disobedience
While the CA is correct that the charge of serious misconduct was not substantiated, the charge of insubordination however is
meritorious.
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.
Respondent’s excuse that he was not feeling well that day is unbelievable and obviously an afterthought. He failed to present any
evidence other than his own assertion that he was sick. Also, if it was true that he was then not feeling well, he would have taken the
day off, or had gone home earlier, on the contrary, he stayed and continued to work all day, and even tried to go to work the next day,
thus belying his excuse, which is, at most, a self-serving statement.
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 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.[15]
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.
In view of the infirmities in the proceedings, we conclude that termination of respondent was railroaded in serious breach of his right
to due process. And as a consequence of the violation of his statutory right to due process and following Agabon, petitioners are liable
jointly and solidarily to pay nominal damages to the respondent in the amount of PhP 30,000.
School of the Holy Spirit of Q.C. vs. Taguiam

G.R. No. 165565. June 7, 2004
Facts:
Respondent Corazon P. Taguiam was the Class Adviser of Grade 5-Esmeralda of the petitioner, School of the Holy Spirit of Quezon City.
On March 10, 2000, the class president, wrote a letter to the grade school principal requesting permission to hold a year-end
celebration at the school grounds. The principal authorized the activity and allowed the pupils to use the swimming pool. In this
connection, respondent distributed the parent's/guardian's permit forms to the pupils.
Respondent admitted that Chiara Mae Federico's permit form was unsigned. Nevertheless, she concluded that Chiara Mae was
allowed by her mother to join the activity since her mother personally brought her to the school with her packed lunch and swimsuit.
Before the activity started, respondent warned the pupils who did not know how to swim to avoid the deeper area. However, while
the pupils were swimming, two of them sneaked out. Respondent went after them to verify where they were going.
Unfortunately, while respondent was away, Chiara Mae drowned. When respondent returned, the maintenance man was already
administering cardiopulmonary resuscitation on Chiara Mae. She was still alive when respondent rushed her to the General Malvar
Hospital where she was pronounced dead on arrival.
Petitioners dismissed respondent on the ground of gross negligence resulting to loss of trust and confidence. Respondent in turn filed
a complaint against the school and/or Sr. Crispina Tolentino for illegal dismissal, with a prayer for reinstatement with full backwages
and other money claims, damages and attorney's fees.
Issue: Whether or not respondent's dismissal on the ground of gross negligence resulting to loss of trust and confidence was valid.
Ruling:
Under Article 282 of the Labor Code, gross and habitual neglect of duties is a valid ground for an employer to terminate an employee.
Gross negligence implies a want or absence of or a failure to exercise slight care or diligence, or the entire absence of care. It evinces a
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thoughtless disregard of consequences without exerting any effort to avoid them. Habitual neglect implies repeated failure to perform
one's duties for a period of time, depending upon the circumstances.
As a result of gross negligence in the present case, petitioners lost its trust and confidence in respondent. Loss of trust and confidence
to be a valid ground for dismissal must be based on a willful breach of trust and founded on clearly established facts. A breach is
willful if it is done intentionally, knowingly and purposely, without justifiable excuse, as distinguished from an act done carelessly,
thoughtlessly, heedlessly or inadvertently.
As a teacher who stands in loco parentis to her pupils, respondent should have made sure that the children were protected from all
harm while in her company. Respondent should have known that leaving the pupils in the swimming pool area all by themselves may
result in an accident. A simple reminder "not to go to the deepest part of the pool" was insufficient to cast away all the serious
dangers that the situation presented to the children, especially when respondent knew that Chiara Mae cannot swim.
All told, there being a clear showing that respondent was culpable for gross negligence resulting to loss of trust and confidence, her
dismissal was valid and legal. It was error for the Court of Appeals to reverse and set aside the resolution of the NLRC.
John Hancock Life Insurance Corp. vs. Davis

G.R. No. 169549. October 18, 2000
Facts:
Respondent Joanna Cantre Davis was agency administration officer of petitioner John Hancock Life Insurance Corporation.
On October 18, 2000, Patricia Yuseco, petitioner's corporate affairs manager, discovered that her wallet was missing. She immediately
reported the loss of her credit cards to AIG and BPI Express. To her surprise, she was informed that "Patricia Yuseco" had just made
substantial purchases using her credit cards in various stores in the City of Manila. She was also told that a proposed transaction in
Abenson's-Robinsons Place was disapproved because "she" gave the wrong information upon verification.
Because loss of personal property among its employees had become rampant in its office, petitioner sought the assistance of the
National Bureau of Investigation (NBI). The NBI, in the course of its investigation, obtained a security video from Abenson's showing
the person who used Yuseco's credit cards. Yuseco and other witnesses positively identified the person in the video as respondent.
Consequently, the NBI and Yuseco filed a complaint for qualified theft against respondent in the office of the Manila city prosecutor.
But because the affidavits presented by the NBI (identifying respondent as the culprit) were not properly verified, the city prosecutor
dismissed the complaint due to insufficiency of evidence.
Meanwhile, petitioner placed respondent under preventive suspension and instructed her to cooperate with its ongoing investigation.
Instead of doing so, however, respondent filed a complaint for illegal dismissal alleging that petitioner terminated her employment
without cause.
Issue:
Whether or not petitioner substantially proved the presence of valid cause for respondent's termination.
Ruling:
Article 282. Termination by Employer. - An employer may terminate an employment for any of the following causes:
(a) Serious misconduct or willful disobendience by the employee of the lawful orders of his employer or his representatives in
connection with his work;
(e) Other causes analogous to the foregoing.
Misconduct involves "the transgression of some established and definite rule of action, forbidden act, a dereliction of duty, willful in
character, and implies wrongful intent and not mere error in judgment." For misconduct to be serious and therefore a valid ground for
dismissal, it must be:
1. of grave and aggravated character and not merely trivial or unimportant and
2. connected with the work of the employee.
In this case, petitioner dismissed respondent based on the NBI's finding that the latter stole and used Yuseco's credit cards. But since
the theft was not committed against petitioner itself but against one of its employees, respondent's misconduct was not work-related
and therefore, she could not be dismissed for serious misconduct.
Nonetheless, Article 282(e) of the Labor Code talks of other analogous causes or those which are susceptible of comparison to another
in general or in specific detail. For an employee to be validly dismissed for a cause analogous to those enumerated in Article 282, the
cause must involve a voluntary and/or willful act or omission of the employee.
A cause analogous to serious misconduct is a voluntary and/or willful act or omission attesting to an employee's moral depravity.
Theft committed by an employee against a person other than his employer, if proven by substantial evidence, is a cause analogous to
serious misconduct.
All things considered, petitioner validly dismissed respondent for cause analogous to serious misconduct.
Yrasuegui vs. Phil. Airlines

GR NO. 168081. OCTOBER 17, 2008
Facts:
An international flight steward was dismissed for "his failure to adhere to the weight standards of the airline company."
In consequence thereof, petitioner filed a complaint for illegal dismissal against PAL before LA. The LA ruled that petitioner was
illegally dismissed. NLRC affirmed LA's decision. Respondent PAL appealed to the CA. CA reversed the NLRC case.
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Issue: WON the dismissal was valid.
Ruling:
Yes, the dismissal was valid.
The Court found that obesity of petitioner is a ground for dismissal under Article 282(e) of the Labor Code. It found that the weight
standards of PAL “constitute a continuing qualification of an employee in order to keep the job.” And “an employee may be dismissed
the moment he is unable to comply with his ideal weight as prescribed by the weight standards.” Hence a dismissal of the employee
falls under Article 282(e) [1] of the Labor Code.
The Court held that the obesity of petitioner, in the context of his work as flight attendant, “becomes an analogous cause under Article
282(e) of the Labor Code that justifies his dismissal from the service.” His obesity may not be intentional but it is “voluntary.” This
element runs through all just causes under Article 282.
The weight standards of PAL are reasonable. PAL being a common carrier “is bound to observe extraordinary diligence for the safety
of the passengers it transports.” The weight standards of PAL show its effort to comply with these exacting obligations. PAL “has
committed itself to safely transport its passengers. In order to achieve this, it must necessarily rely on its employees, most particularly
the cabin flight deck crew who are on board the aircraft.”
Flight safety was given primary importance by the court, stating that: It cannot be gainsaid that cabin attendants must maintain agility
at all times in order to inspire passenger confidence on their ability to care for the passengers when something goes wrong. It is not
farfetched to say that airline companies, just like all common carriers, thrive due to public confidence on their safety records. People,
especially the riding public, expect no less than that airline companies transport their passengers to their respective destinations
safely and soundly.”
Cabin crew do not only serve meals or attend to passengers’ whims. Their “most important activity” is “to care for the safety of
passengers and the evacuation of the aircraft when an emergency occurs. Passenger safety goes to the core of the job of a cabin
attendant. Truly, airlines need cabin attendants who have the necessary strength to open emergency doors, the agility to attend to
passengers in cramped working conditions, and the stamina to withstand grueling flight schedules.” And the “body weight and size of
a cabin attendant are important factors to consider in case of emergency. Aircrafts have constricted cabin space, and narrow aisles
and exit doors.” Airline companies cannot be compelled to reconfigure the aircraft just for overweight cabin attendants.
He was also found to be in estoppel since the weight standards were made known to him prior to his employment. He never
questioned the authority of PAL when he was asked to trim down his weight.
Nevertheless the Court granted him separation pay even if normally, a legally dismissed employee is not entitled to separation pay.
But it may be awarded as an act “social justice,” or based on “equity”, if the dismissal is not for serious misconduct and does not reflect
on the moral character of the employee. He was thus given separation pay equivalent to one-half (1/2) month’s pay for every year of
service.
Garcia vs. PAL

G.R. No. 160798. June 8, 2005
Facts:
The case stemmed from the administrative charge filed by PAL against its employees-herein petitioners after they were allegedly
caught in the act of sniffing shabu when a team of company security personnel and law enforcers raided the PAL Technical Center’s
Toolroom Section on July 24, 1995.
After due notice, PAL dismissed petitioners on October 9, 1995 for transgressing the PAL Code of Discipline, prompting them to file a
complaint for illegal dismissal and damages which was, by Decision of January 11, 1999, resolved by the Labor Arbiter in their favor,
thus ordering PAL to, inter alia, immediately comply with the reinstatement aspect of the decision.
Prior to the promulgation of the Labor Arbiter’s decision, the Securities and Exchange Commission (SEC) placed PAL (hereafter
referred to as respondent), which was suffering from severe financial losses, under an Interim Rehabilitation Receiver, who was
subsequently replaced by a Permanent Rehabilitation Receiver on June 7, 1999.
Issue: Whether or not petitioners may collect their wages during the period between the Labor Arbiter’s order of reinstatement
pending appeal and the NLRC decision overturning that of the Labor Arbiter, now that respondent has exited from rehabilitation
proceedings.
Ruling:
In any event, the decision of the Labor Arbiter reinstating a dismissed or separated employee, insofar as the reinstatement aspect is
concerned, shall immediately be executory, pending appeal. The employee shall either be admitted back to work under the same
terms and conditions prevailing prior to his dismissal or separation or, at the option of the employer, merely reinstated in the payroll.
The posting of a bond by the employer shall not stay the execution for reinstatement provided herein.
The view as maintained in a number of cases is that:
Even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory on the part of the employer to reinstate
and pay the wages of the dismissed employee during the period of appeal until reversal by the higher court. On the other hand, if the
employee has been reinstated during the appeal period and such reinstatement order is reversed with finality, the employee is not
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required to reimburse whatever salary he received for he is entitled to such, more so if he actually rendered services during the
period.
The opposite view is articulated in Genuino which states:
If the decision of the labor arbiter is later reversed on appeal upon the finding that the ground for dismissal is valid, then the employer
has the right to require the dismissed employee on payroll reinstatement to refund the salaries s/he received while the case was
pending appeal, or it can be deducted from the accrued benefits that the dismissed employee was entitled to receive from his/her
employer under existing laws, collective bargaining agreement provisions, and company practices. However, if the employee was
reinstated to work during the pendency of the appeal, then the employee is entitled to the compensation received for actual services
rendered without need of refund.
Considering that Genuino was not reinstated to work or placed on payroll reinstatement, and her dismissal is based on a just cause,
then she is not entitled to be paid the salaries stated in item no. 3 of the fallo of the September 3, 1994 NLRC Decision.
The provision of Article 223 is clear that an award [by the Labor Arbiter] for reinstatement shall be immediately executory even
pending appeal and the posting of a bond by the employer shall not stay the execution for reinstatement. The legislative intent is quite
obvious, i.e., to make an award of reinstatement immediately enforceable, even pending appeal. To require the application for and
issuance of a writ of execution as prerequisites for the execution of a reinstatement award would certainly betray and run counter to
the very object and intent of Article 223, i.e., the immediate execution of a reinstatement order. The reason is simple. An application
for a writ of execution and its issuance could be delayed for numerous reasons. A mere continuance or postponement of a scheduled
hearing, for instance, or an inaction on the part of the Labor Arbiter or the NLRC could easily delay the issuance of the writ thereby
setting at naught the strict mandate and noble purpose envisioned by Article 223. In other words, if the requirements of Article 224
[including the issuance of a writ of execution] were to govern, as we so declared in Maranaw, then the executory nature of a
reinstatement order or award contemplated by Article 223 will be unduly circumscribed and rendered ineffectual.
The Court reaffirms the prevailing principle that even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is
obligatory on the part of the employer to reinstate and pay the wages of the dismissed employee during the period of appeal until
reversal by the higher court. It settles the view that the Labor Arbiter's order of reinstatement is immediately executory and the
employer has to either re-admit them to work under the same terms and conditions prevailing prior to their dismissal, or to reinstate
them in the payroll, and that failing to exercise the options in the alternative, employer must pay the employee’s salaries.
After the labor arbiter’s decision is reversed by a higher tribunal, the employee may be barred from collecting the accrued wages, if it
is shown that the delay in enforcing the reinstatement pending appeal was without fault on the part of the employer.
The test is two-fold: (1) there must be actual delay or the fact that the order of reinstatement pending appeal was not executed prior
to its reversal; and (2) the delay must not be due to the employer’s unjustified act or omission. If the delay is due to the employer’s
unjustified refusal, the employer may still be required to pay the salaries notwithstanding the reversal of the Labor Arbiter’s decision.
Perez vs. PT&T Co.

G.R. No. 152048. April 7, 2009
Facts:
Petitioners Felix B. Perez and Amante G. Doria were employed by respondent Philippine Telegraph and Telephone Company (PT&T)
as shipping clerk and supervisor, respectively, in PT&T’s Shipping Section, Materials Management Group.
Acting on an alleged unsigned letter regarding anomalous transactions at the Shipping Section, respondents formed a special audit
team to investigate the matter. It was discovered that the Shipping Section jacked up the value of the freight costs for goods shipped
and that the duplicates of the shipping documents allegedly showed traces of tampering, alteration and superimposition.
On September 3, 1993, petitioners were placed on preventive suspension for 30 days for their alleged involvement in the anomaly.
Their suspension was extended for 15 days twice: first on October 3, 1993 and second on October 18, 1993.
On October 29, 1993, a memorandum with the following tenor was issued by respondents:
In line with the recommendation of the AVP-Audit as presented in his report of October 15, 1993 (copy attached) and the subsequent
filing of criminal charges against the parties mentioned therein, [Mr. Felix Perez and Mr. Amante Doria are] hereby dismissed from the
service for having falsified company documents.
On November 9, 1993, petitioners filed a complaint for illegal suspension and illegal dismissal. They alleged that they were dismissed
on November 8, 1993, the date they received the above-mentioned memorandum.
Issue: Whether or not the dismissal was legal.
Ruling:
Willful breach by the employee of the trust reposed in him by his employer or duly authorized representative is a just cause for
termination.
The burden of proof rests on the employer to establish that the dismissal is for cause in view of the security of tenure that employees
enjoy under the Constitution and the Labor Code. The employer’s evidence must clearly and convincingly show the facts on which the
loss of confidence in the employee may be fairly made to rest. It must be adequately proven by substantial evidence. Respondents
failed to discharge this burden.
Respondents’ illegal act of dismissing petitioners was aggravated by their failure to observe due process. To meet the requirements of
due process in the dismissal of an employee, an employer must furnish the worker with two written notices: (1) a written notice
specifying the grounds for termination and giving to said employee a reasonable opportunity to explain his side and (2) another
written notice indicating that, upon due consideration of all circumstances, grounds have been established to justify the employer's
decision to dismiss the employee.
This Court has consistently ruled that the due process requirement in cases of termination of employment does not require an actual
or formal hearing.Where the dismissal was without just or authorized cause and there was no due process, Article 279 of the Labor
Code, as amended, mandates that the employee is entitled to reinstatement without loss of seniority rights and other privileges and
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full backwages, inclusive of allowances, and other benefits or their monetary equivalent computed from the time the compensation
was not paid up to the time of actual reinstatement. In this case, however, reinstatement is no longer possible because of the length of
time that has passed from the date of the incident to final resolution. Fourteen years have transpired from the time petitioners were
wrongfully dismissed. To order reinstatement at this juncture will no longer serve any prudent or practical purpose.
Martinez vs. B&B Fish Broker

GR. No. 179985. September 18, 2009
Facts:
Odilon L. Martinez (petitioner) was employed as a cashier on February 2000 by B&B Fish Broker, a partnership owned and managed
by respondent Norberto M. Lucinario (Lucinario) and Jose Suico. On November 24, 2002, 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.
On December 2, 2002, petitioner filed an application for a four-day leave effective on even date due to an inflamed jaw. On December
9, 2002, 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 filed on December 2, 2002 for a four-day leave of absence had been denied. The following day or on
December 10, 2002, 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 on December 19, 2002 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 NLRC. Denying petitioner’s charge that his services were illegally terminated, Lucinario claimed, in effect, that
petitioner abandoned his job.
Issue: WON Martinez abandoned his job.
Ruling:
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.
Indeed, 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.
Flight Attendants and Steward Assoc. of the Phils. Vs. Phil. Airlines
GR No. 178083. October 2, 2009, see main decision of July 22, 2008
Facts:
FASAP is the duly certified collective bargaining representative of PAL flight attendants and stewards. On June 1998, PAL retrenched
5,000 of its employees, including more than 1,400 of its cabin crew personnel. It adopted the retrenchment scheme allegedly to cut
costs and mitigate huge financial losses as a result of a downturn in the airline industry brought about by the Asian financial crisis.
PAL was adjudged guilty of illegal dismissal for failing to comply with the requirements of a valid retrenchment. First, it failed to
substantiate its claim of actual and imminent substantial losses which would justify the retrenchment of more than 1,400 of its cabin
crew personnel. Second, it implemented its retrenchment program in an arbitrary manner and with evident bad faith, which
prejudiced the tenurial rights of the cabin crew personnel. Finally, in assessing the overall performance of each cabin crew personnel,
PAL only considered the year 1997 which made the evaluation of each cabin attendant’s efficiency rating capricious and prejudicial to
PAL employees covered by it. Now, PAL comes before the Court via a motion for reconsideration. PAL has all the time tried to
convince the Court that its decision to downsize its flight fleet was the principal reason why it undertook a corresponding downsizing
of cabin crew personnel. This time, however, it significantly changed stance and blamed the June 5, 1998 pilots’ strike as the real
culprit which drove it to undertake the massive retrenchment under scrutiny characterizing the retrenchment scheme and the
downsizing of aircraft as mere necessary reactions to or unfortunate consequences of the pilots’ strike, which it claims likewise
necessitated a disregard of all previous negotiations for the implementation of cost-cutting measures that could have rendered the
retrenchment scheme unnecessary, and which cost-cutting measures it no longer found necessary to undertake.
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Ruling:
The Court finds no reason to disturb its finding that the retrenchment of the flight attendants was illegally executed. As held in the
Decision sought to be reconsidered, PAL failed to observe the procedure and requirements for a valid retrenchment.
The strike was a temporary occurrence that did not necessitate the immediate and sweeping retrenchment of 1,400 cabin or flight
attendants. Some of the striking pilots went back to work less than one month after the strike began. Moreover, PAL admitted that it
remedied the situation by employing “management pilots.” It could have hired new pilots as well. It could have implemented the cost-
cutting measures being discussed as a temporary measure to obviate the adverse effects of the pilots’ strike. There was no reason to
drastically implement a permanent retrenchment scheme in response to a temporary strike, which could have ended at any time, or
remedied promptly, if management acted with alacrity. Juxtaposed with its failure to implement the required cost-cutting measures,
the retrenchment scheme was a knee-jerk solution to a temporary problem that beset PAL at the time.
PAL cannot just blame the striking pilots for causing the massive retrenchment of cabin personnel. Using them as scapegoats to
validate a comprehensive retrenchment scheme of cabin personnel without observing the requirements set by law is both unfair and
underhanded. PAL must still prove that it implemented cost-cutting measures to obviate retrenchment, which under the law should
be the last resort. By its own admission, however, the cabin personnel retrenchment scheme was one of the first remedies it resorted
to, even before it could complete the proposed downsizing of its aircraft fleet. It admittedly dropped all plans of implementing cost-
cutting measures as soon as the pilots went on strike, and right away it sent notices of termination to its cabin personnel. This knee-
jerk reaction would explain why it had to eventually recall and rehire some of the cabin attendants almost immediately after it
retrenched them, because the retrenchment simply was not commensurate with the downsizing of aircraft fleet size. This only shows
that the decision to retrench came even before a final determination of how many aircraft were needed to be retained or discarded, or
even before the rehabilitation plan could be approved.
In order for a retrenchment scheme to be valid, all of the following elements under Article 283 of the Labor Code must concur or be
present, to wit:
(1) That retrenchment is reasonably necessary and likely to prevent business losses which, if already incurred, are not merely
de minimis, but substantial, serious, actual and real, or if only expected, are reasonably imminent as perceived objectively and in good
faith by the employer;
(2) That the employer served written notice both to the employees and to the Department of Labor and Employment at least
one month prior to the intended date of retrenchment;
(3) That the employer pays the retrenched employees separation pay equivalent to one (1) month pay or at least one-half (½)
month pay for every year of service, whichever is higher;
(4) That the employer exercises its prerogative to retrench employees in good faith for the advancement of its interest and not
to defeat or circumvent the employees’ right to security of tenure; and,
(5) That the employer uses fair and reasonable criteria in ascertaining who would be dismissed and who would be retained
among the employees, such as status, efficiency, seniority, physical fitness, age, and financial hardship for certain workers.
In the absence of one element, the retrenchment scheme becomes an irregular exercise of management prerogative. The employer’s
obligation to exhaust all other means to avoid further losses without retrenching its employees is a component of the first element as
enumerated above. To impart operational meaning to the constitutional policy of providing full protection to labor, the employer’s
prerogative to bring down labor costs by retrenching must be exercised essentially as a measure of last resort, after less drastic means
have been tried and found wanting.
Here, PAL admitted that since the pilots’ strike allegedly created a situation of extreme urgency, it no longer implemented cost-cutting
measures and proceeded directly to retrench. This being so, it clearly did not abide by all the requirements under Art. 283. At the time
it was implemented, the retrenchment scheme under scrutiny was not triggered directly by any financial difficulty PAL was
experiencing at the time, nor borne of an actual implementation of its proposed downsizing of aircraft. It was brought about by – and
resorted to as an immediate reaction to – a pilots’ strike which, in strict point of law, may not be considered as a valid reason to
retrench, nor may it be used to excuse PAL for its non-observance of the requirements of the law on retrenchment under the Labor
Code.
Plantation Bay Resort and Spa vs. Dubrico

G.R. No. 182216. December 4, 2009
Facts:
Efren Belarmino (Belarmino) challenge the Court of Appeals Resolution dismissing their petition and affirming the Resolutions of the
National Labor Relations Commission (NLRC)in favor of herein respondents.
Dubrico, Villaflor and Ngujo are former employees of Plantation Bay located in Cebu, of which Belarmino is the Manager. On several
dates Plantation Bay issued a series of memoranda and conducted seminars relative to its drug-free workplace policy, Plantation Bay,
in compliance with Republic Act No. 9165 (Comprehensive Dangerous Drugs Act of 2002), conducted surprise random drug tests on
its employees. The drug tests, said to have been carried out with the assistance of the Philippine National Police-Scene of Crime
Operations (SOCO), were administered on about 122 employees by the Martell Medical Trade and Lab Services (Martell), a drug
testing laboratory. And confirmatory tests were conducted by the Philippine Drug Screening Laboratory, Inc. (Phil. Drug), a
Department of Health-accredited laboratory.
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Dubrico failed to take the drug test conducted, hence, he was issued a memorandum requiring him to appear in a mandatory
conference. Before the scheduled conference, Dubrico explained in writing his failure to undergo the drug test, he averring that, inter
alia, the procedure for the random drug testing was not followed such that he was not informed about his selection; and that he was
at the appointed time and place for the pre-test meeting but that the duty manager was not around, hence, he left and failed to be
tested. Dubrico was later tested and found positive for use of methamphetamine hydrochloride (shabu).Twenty other employees
were found positive for use of shabu including Godfrey Ngujo (Ngujo) and Julius Villaflor (Villaflor).
In compliance with separate memoranda issued by the management of Plantation Bay, the employees submitted their explanations on
the result of the tests, which explanations were found unsatisfactory, hence, Plantation Bay dismissed them.
Dubrico, Ngujo and Villaflor and three others filed their respective complaints for illegal dismissal, questioning the conduct of the
drug tests without the presence of the DOLE Regional Director or his representative. Labor Arbiter dismissed the employees’
complaints, holding that in testing positive for the use of shabu, they were guilty of serious misconduct, hence, Plantation Bay validly
terminated their employment; and that they were afforded due process, they having been issued memoranda as to the mandatory
investigation and given the chance to, as they did refute the results of the drug tests by submitting results of recent drug tests.
The Labor Arbiter discredited the drug test results presented by the employees as the tests were taken more than 72 hours after the
conduct of the random drug tests. On appeal, the NLRC, affirmed the Decision of the Labor Arbiter. Upon motion for reconsideration,
it, however, reversed its Decision and declared that respondents were illegally dismissed.
NLRC held that the results of the confirmatory drug tests cannot be given credence since they were conducted prior to the conduct by
the employer of the drug tests. It ratiocinated:
Considering the indubitable documentary evidence on record notably submitted by respondents [petitioners herein] themselves, we
agree with complainants that either or both drug tests and confirmatory tests conducted on them were fabricated, farce or sham. For
how could one “confirm” some thing which was yet to be established or discovered? Needless to say, the drug testing should always
come ahead of the confirmatory testing, not the other way around. We thus agree with complainants that if the drug tests against
them were true, the supposed confirmatory tests conducted on them were not based on their urine samples that were the subject of
the drug tests. Or that is the confirmatory tests were correct, these could not have been gotten from their urine samples which were
yet to undergo drug testing. At any rate, there is not only doubt that on the version of respondents but also their conduct is highly
suspicious based on their own evidence. Thus, we now rule that respondents were not really into drugs.
On the issue of due process, the NLRC abandoned its earlier statement that it was the SOCO which conducted the drug tests, this time
declaring that it was Martell which actually administered them. It added that respondents were not given the opportunity to examine
the evidence and confront the witnesses against them through their counsel.
Plantation Bay appealed to the Court of Appeals, in which the appellate court affirmed the NLRC Resolution with modification by
deleting the award of damages. Hence, Plantation Bay elevate the matter to the SC.
Issue: Whether or not the termination of the services of respondents, relied on the results of the random drug tests undertaken by an
accredited and licensed drug testing facility, and if the results turned out to be questionable or erroneous, they should not be made
liable therefore.
Ruling:
The petition is bereft of merit.
While it is a well-settled rule, also applicable in labor cases, that Issue not raised below cannot be raised for the first time on appeal,
there are exceptions thereto among which are for reasons of public policy or interest.
The NLRC did not err in considering the issue of the veracity of the confirmatory tests even if the same was raised only in
respondents’ Motion for Reconsideration of its Decision, it being crucial in determining the validity of respondents’ dismissal from
their employment. Technical rules of procedure are not strictly adhered to in labor cases. In the interest of substantial justice, new
or additional evidence may be introduced on appeal before the NLRC. Such move is proper, provided due process is observed, as was
the case here, by giving the opposing party sufficient opportunity to meet and rebut the new or additional evidence introduced.
The Constitution no less directs the State to afford full protection to labor. To achieve this goal, technical rules of procedure shall be
liberally construed in favor of the working class in accordance with the demands of substantial justice. On the merits, the petition
just the same fails. The importance of the confirmatory test is underscored in Plantation Bay’s own “Policy and Procedures,” in
compliance with Republic Act No. 9165, requiring that a confirmatory test must be conducted if an employee is found positive for
drugs in the Employee’s Prior Screening Test, and that both tests must arrive at the same positive result.
Records show the following timeline, based on the reports on respondents’ respective drug tests administered by Martell and
confirmatory tests undertaken by the Phil. Drug:
Name Drug TestConfirmatory Test
Romel Dubrico Urine sample received on 09/29/04 at 5:14 p.m. Issued on 09/29/04 at 3:57 p.m.
Godfrey Ngujo Urine sample received on 09/29/04 at 5:24 p.m. Issued on 09/29/04 at 3:57 p.m.
Julius Villaflor Urine sample received on 09/29/04 at 5:32 p.m. Issued on 09/29/04 at 4:15 p.m.
As reflected in the above matrix, the confirmatory test results were released earlier than those of the drug test, thereby casting
doubts on the veracity of the confirmatory results.
Indeed, how can the presence of shabu be confirmed when the results of the initial screening were not yet out?
Plantation Bay’s arguments that it should not be made liable thereof and that the doubt arising from the time of the conduct of the
drug and confirmatory tests was the result of the big volume of printouts being handled by Martell do not thus lie. It was Plantation
Bay’s responsibility to ensure that the tests would be properly administered, the results thereof being the bases in terminating the
employees’ services.
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Time and again, we have ruled that where there is no showing of a clear, valid and legal cause for termination of employment, the law
considers the case a matter of illegal dismissal. The burden is on the employer to prove that the termination of employment was for a
valid and legal cause. For an employee's dismissal to be valid, (a) the dismissal must be for a valid cause and (b) the employee must
be afforded due process.
Plantation Bay failed to indubitably prove that respondents were guilty of drug use in contravention of its drug-free workplace policy
amounting to serious misconduct, respondents are deemed to have been illegally dismissed.
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Fulache vs. ABS-CBN Broadcasting Corp.

G.R. NO. 183810. January 21, 2010
Facts:
Petitioners here are cameraman, editors, personal assistant, teleprompter operator-editing, VTR man/editor. They alleged that they
had been excluded from the coverage in the CBA as ABS-CBN considered them temporary and not regular employees, in violation of
the Labor Code. They claimed that they had already rendered more than a year of service in the company and therefore they should be
considered as regular employees entitled privileges and benefits enjoyed by regular employees. Respondent on the other hand
claimed that the production of programs per se is not necessary or desirable in its business because it could general profits by selling
airtime to block timers or through advertising. It further claimed that to cope with fluctuating business conditions, it contracts on a
case to case basis the services of persons who possess the necessary requirements. It alleged that petitioners’ services were
contracted on various dates as independent contractors and they were not entitled to regularization in these capacities.
Labor Arbiter Rendoque rendered a decision holding petitioners as regular employees of ABS-CBN and are entitled to the benefits and
privileges of regular employees. Respondent appealed the ruling to the NLRC contending that petitioners are not regular employees
but are independent contractors.
While the appeal was pending, respondent dismissed the petitioner drivers for their refusal to sign up contracts of employment with
service contractor Able Services. Respondent alleged that before there was a decision rendered in the regularization case, it had
already decided to course through legitimate service contractors all driving, messengerial, janitorial, utility, make up, wardrobe and
security services to improve operations and to make economically viable. Petitioner drivers were not singled out for dismissal, as
drivers, they were dismissed because they belong to a job category that had already been contracted out. Labor Arbiter upheld the
validity of ABS-CBS’s contracting out. The petitioner had been dismissed due to redundancy and authorized cause under the law. He
awarded them separation pay.
Again, ABS-CBN appealed to the NLRC which rendered a joint decision on the regularization and illegal dismissal case. It ruled that
there was employer-employee relationship as the company exercised control over the petitioners in the performance of their work;
the petitioners were regular employees because they were engaged to perform activities usually necessary or desirable in trade or
business. It, however, reversed the ruling in the illegal dismissal case. It found that the petitioners were illegally dismissed and
awarded them backwages and separation pay in lieu of reinstatement. Both parties filed their respective motion for reconsideration.
The NLRC resolved the motions. On the regularization issue, the NLRC ruled that petitioners were regular employees and are entitled
to benefits and privileges of regular employees. On the illegal dismissal case, the petitioners, while recognized as regular employee,
were declared dismissed due to redundancy.
The petitioners went to the Court of Appeals through a petition for certiorari. CA ruled that the petitioners were not illegally
dismissed as their separation from service was due to redundancy; they had not presented any evidence that respondent abused it
prerogative in contracting out the services of drivers. The petitioners moved for reconsideration but was denied. Hence, the present
petition.
Issue: Whether or not the petitioners were illegally dismissed.
Ruling:
The petitioners were illegally dismissed.
It forgot that by claiming redundancy as authorized cause for dismissal, it impliedly admitted that the petitioners were regular
employees whose services, by law, can only be terminated for the just and authorized causes defined under the Labor Code. It
similarly forgot that an exercise of management prerogative can be valid only if it is undertaken in good faith and with no intent to
defeat or circumvent the rights of its employees under the laws or under valid agreements.
Lastly, it forgot that there was a standing labor arbiter’s decision that, while not yet final because of its own pending appeal, cannot
simply be disregarded. By implementing the dismissal action at the time the labor arbiter’s ruling was under review, the company
unilaterally negated the effects of the labor arbiter’s ruling while at the same time appealling the same ruling to the NLRC. This
unilateral move is a direct affront to the NLRC’s authority and an abuse of the appeal process.
All these go to show that ABS-CBN acted with patent bad faith. A close parallel we can draw to characterize this bad faith is the
prohibition against forum-shopping under the Rules of Court. In forum-shopping, the Rules characterize as bad faith the act of filing
similar and repetitive actions for the same cause with the intent of somehow finding a favorable ruling in one of the actions filed.
ABS-CBN’s actions in the two cases, as described above, are of the same character, since its obvious intent was to defeat and render
useless, in a roundabout way and other than through the appeal it had taken, the labor arbiter’s decision in the regularization case.
Forum-shopping is penalized by the dismissal of the actions involved. The penalty against ABS-CBN for its bad faith in the present
case should be no less.
While notice has been made to the employees whose positions were declared redundant, the element of good faith in abolishing the
positions of the complainants appear to be wanting. In fact, it remains undisputed that herein complainants were terminated when
they refused to sign an employment contract with Able Services which would make them appear as employees of the agency and not
of ABS-CBN. Such act by itself clearly demonstrates bad faith on the part of the respondent in carrying out the company’s redundancy
program x x x.
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The injustice committed on the petitioners/drivers requires rectification. Their dismissal was not only unjust and in bad faith as the
above discussions abundantly show. The bad faith in ABS-CBN’s move toward its illegitimate goal was not even hidden; it dismissed
the petitioners – already recognized as regular employees – for refusing to sign up with its service contractor. Thus, from every
perspective, the petitioners were illegally dismissed.
By law, illegally dismissed employees are entitled to reinstatement without loss of seniority rights and other privileges and to full
backwages, inclusive of allowances, and to other benefits or their monetary equivalent from the time their compensation was
withheld from them up to the time of their actual reinstatement. The four dismissed drivers deserve no less.
Ancheta vs. Destinay Financial Plans, Inc.

G.R. No. 179702. February 16, 2010
Facts:
On December 1, 2002, respondent Destiny Financial Plans, Inc., a pre-need insurance company, hired petitioner as Head of its
Marketing Group, with a compensation package of Ninety Thousand Pesos (P90,000.00) a month. On February 2, 2004, a Marketing
Committee meeting was called by respondent Arsenio Bartolome (Bartolome) at the conference room of respondent company.
Present at the meeting were petitioner, respondent Bartolome, various leaders of the marketing team, and the operations director of
the company. During the meeting, respondent Bartolome made several announcements. However, to the surprise of petitioner,
respondent Bartolome announced that petitioner was to resign from the respondent company. On February 11, 2004, petitioner
received a letter from respondent company, asking him to explain within forty-eight (48) hours why his services should not be
terminated for loss of confidence in his ability to perform the functions of Marketing Director of the company. On February 13, 2004,
petitioner submitted his letter of explanation to respondent company. On February 17, 2004, the board of directors of respondent
company terminated petitioner’s services on the ground of loss of confidence. Thus, on March 16, 2004, petitioner filed before the
Labor Arbiter a complaint for illegal dismissal, with prayer for reinstatement, payment of full backwages, payment of 13th month pay,
moral and exemplary damages, and attorney’s fees, against respondent. On April 28, 2005, the Labor Arbiter rendered a Decision in
favor of petitioner Ancheta. National Labor Relations Commission (NLRC) reversed the decision of the Labor Arbiter. Aggrieved,
petitioner filed a petition for certiorari under Rule 65 of the Rules of Court before the CA. On April 19, 2007, the CA rendered a
Decision, affirming with modification the decision of the NLRC.
Issue: Whether petitioner’s employment was validly terminated because of loss of confidence.
Ruling:
Two requisites must concur in order that there be a valid dismissal from employment, namely: (1) the dismissal must be for any of the
causes expressed in Article 282 of the Labor Code; and (2) the employee must be given an opportunity to be heard and to defend
himself. Under Article 282(c) of the Labor Code, an employer can terminate the employment of the employee concerned for "fraud or
willful breach by an employee of the trust reposed in him by his employer or duly authorized representative." The doctrine of loss of
confidence requires the concurrence of the following: (1) loss of confidence should not be simulated; (2) it should not be used as a
subterfuge for causes which are improper, illegal, or unjustified; (3) it may not be arbitrarily asserted in the face of overwhelming
evidence to the contrary; (4) it must be genuine, not a mere afterthought to justify an earlier action taken in bad faith; and (5) the
employee involved holds a position of trust and confidence. Loss of confidence, as a just cause for termination of employment, is
premised on the fact that the employee concerned holds a position of responsibility, trust and confidence. He must be invested with
confidence on delicate matters, such as the custody, handling, care, and protection of the employer's property and/or funds. 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. Petitioner was a managerial employee of respondent company, holding a highly
sensitive position. Being the Head of the Marketing Group of respondent company, he was in charge, among others, of the over-all
production and sales performance of the company. Thus, as aptly pointed out by the CA, his performance was practically the lifeblood
of the corporation, because its earnings depended on the sales of the marketing group, which he used to head. The position held by
petitioner required the highest degree of trust and confidence of his employer in the former’s exercise of managerial discretion
insofar as the conduct of the latter’s business was concerned. Petitioner’s inability to perform the functions of his office to the
satisfaction of his employer and the former’s poor judgment as marketing head caused the company huge financial losses. If these
were not timely addressed and corrected, the company could have collapsed, to the detriment of its policy holders, stockholders,
employees, and the public in general. The power to dismiss an employee is a recognized prerogative inherent in the employer’s right
to freely manage and regulate his business. The law, in protecting the rights of the laborers, authorizes neither oppression nor self-
destruction of the employer. The worker's right to security of tenure is not an absolute right, for the law provides that he may be
dismissed for cause. In this case, as admitted by petitioner, he was hired because of his expertise in the pre-need industry. His
competence and satisfactory performance as head of the marketing group assumed primordial importance for his continued
employment in the company. His dismal performance was causing the company financial losses; thus, it was not wise for the company
to continue his services. To be sure, an employer cannot be compelled to continue with the employment of workers when continued
employment will prove inimical to the employer’s interest. The SC agrees to CA that private respondents did not strictly comply with
the “two notice” requirement in dismissing petitioner Ancheta. While private respondents sent a show cause letter to petitioner
Ancheta, the same letter precipitately implemented termination procedures, i.e., demanded the return of the Executive elevator key
which allows petitioner Ancheta access to the office premises and the surrender of the company car assigned to him, even as
petitioner Ancheta had yet to answer and air his side. Such betrays the fact that the said show cause letter was but a formality and
petitioner Ancheta’s dismissal is a foregone conclusion. It is thus apparent that private respondents did not comply with the
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procedural requirements of due process in dismissing petitioner Ancheta. Respondents’ failure to observe due process in the
termination of employment of petitioner for a just cause does not invalidate the dismissal but makes respondent company liable for
non-compliance with the procedural requirements of due process. The violation of petitioner’s right to statutory due process
warrants the payment of nominal damages, the amount of which is addressed to the sound discretion of the court, taking into account
the relevant circumstances. Petition Denied.
Javellana, Jr. vs. Belen

G.R. Nos. 181913 & 182158. March 5, 2010
Facts:
Belen was hired by Javellana as company driver and assigned him the tasks of picking up and delivering live hogs, feeds, and lime
stones used for cleaning the pigpens. On August 19, 1999 Javellana gave him instructions to (a) pick up lime stones in Tayabas,
Quezon; (b) deliver live hogs at Barrio Quiling, Talisay, Batangas; (c) have the delivery truck repaired; and (d) pick up a boar at Joliza
Farms in Norzagaray, Bulacan. Petitioner Belen further alleged that his long and arduous day finally ended at 4:30 a.m. of the
following day, August 20, 1999. But after just three hours of sleep, respondent Javellana summoned him to the office. When he arrived
at 8:20 a.m., Javellana had left. After being told that the latter would not be back until 4:00 p.m., Belen decided to go home and get
some more sleep. Petitioner Belen was promptly at the office at 4:00 p.m. but respondent Javellana suddenly blurted out that he was
firing Belen from work. Deeply worried that he might not soon get another job, Belen asked for a separation pay. When Javellana
offered him only P5,000.00, he did not accept it. Javellana claimed, on the other hand, that he hired petitioner Belen in 1995, not as a
company driver, but as family driver. Belen did not do work for his farm on a regular basis, but picked up feeds or delivered livestock
only on rare occasions when the farm driver and vehicle were unavailable.
Regarding petitioner Belen's dismissal from work, respondent Javellana insisted that he did it for a reason. Belen intentionally failed
to report for work on August 20, 1999 and this warranted his dismissal.
Issue: Does the amount that the Labor Arbiter awarded petitioner Belen represent all that he will get when the decision in his case
becomes final or does it represent only the amount that he was entitled to at the time the Labor Arbiter rendered his decision, leaving
room for increase up to the date the decision in the case becomes final?
Ruling:
Article 279 of the Labor Code, as amended by Section 34 of Republic Act 6715 instructs:
Art. 279. Security of Tenure. - In cases of regular employment, the employer shall not terminate the services of an employee except for
a just cause or when authorized by this Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement
without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or
their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual
reinstatement.
Clearly, the law intends the award of backwages and similar benefits to accumulate past the date of the Labor Arbiter's decision until
the dismissed employee is actually reinstated. But if, as in this case, reinstatement is no longer possible, this Court has consistently
ruled that backwages shall be computed from the time of illegal dismissal until the date the decision becomes final
As it happens, the parties filed separate petitions before this Court. The petition in G.R. 181913, filed by respondent Javellana,
questioned the CA's finding of illegality of dismissal while the petition in G.R. 182158, filed by petitioner Belen, challenged the
amounts of money claims awarded to him. The Court denied the first with finality in its resolution of September 22, 2008; the second
is the subject of the present case. Consequently, Belen should be entitled to backwages from August 20, 1999, when he was dismissed,
to September 22, 2008, when the judgment for unjust dismissal in G.R. 181913 became final. Separation pay, on the other hand, is
equivalent to one month pay for every year of service, a fraction of six months to be considered as one whole year. Here that would
begin from January 31, 1994 when petitioner Belen began his service. Technically the computation of his separation pay would end on
the day he was dismissed on August 20, 1999 when he supposedly ceased to render service and his wages ended. But, since Belen was
entitled to collect backwages until the judgment for illegal dismissal in his favor became final, here on September 22, 2008, the
computation of his separation pay should also end on that date. Further, since the monetary awards remained unpaid even after it
became final on September 22, 2008 because of Issue raised respecting the correct computation of such awards, it is but fair that
respondent Javellana be required to pay 12% interest per annum on those awards from September 22, 2008 until they are paid. The
12% interest is proper because the Court treats monetary claims in labor cases the equivalent of a forbearance of credit. It matters not
that the amounts of the claims were still in question on September 22, 2008. What is decisive is that the issue of illegal dismissal from
which the order to pay monetary awards to petitioner Belen stemmed had been long terminated.
WPP Marketing Communications, Inc. vs. Galera

G.R. No. 169207, March 25, 2010
Facts:
Petitioner is Jocelyn Galera, an American citizen who was recruited from the US by private respondent John Steedman, Chairman-WPP
Worldwide and Chief Executive Officer of Mindshare, Co., a corporation based in Hong Kong, China, to work in the Philippines for
private respondent WPP Marketing Communications, Inc. (WPP). On December 14, 2000, GALERA alleged she was verbally notified by
private STEEDMAN that her services had been terminated from private respondent WPP. A termination letter followed the next day.
On 3 January 2001, Galera filed a complaint for illegal dismissal, holiday pay, service incentive leave pay, 13th month pay, incentive
plan, actual and moral damages, and attorney's fees against WPP and/or John Steedman (Steedman), Mark Webster (Webster) and
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Nominada Lansang (Lansang). The Labor Arbiter's Ruling for illegal dismissal and damages in favor of GALERA. The First Division of
the NLRC reversed the ruling of Arbiter Madriaga. Yet it was reversed again by CA.
Issues:
1. Whether Galera is an Employee or a Corporate Officer.
2. Whether WPP illegally dismissed Galera.
Ruling:
Employee. Galera, on the belief that she is an employee, filed her complaint before the Labor Arbiter. On the other hand, WPP,
Steedman, Webster and Lansang contend that Galera is a corporate officer; hence, any controversy regarding her dismissal is under
the jurisdiction of the Regional Trial Court. We agree with Galera. Corporate officers are given such character either by the
Corporation Code or by the corporation's by-laws. Galera's appointment as a corporate officer (Vice-President with the operational
title of Managing Director of Mindshare) during a special meeting of WPP's Board of Directors is an appointment to a non-existent
corporate office. At the time of Galera's appointment, WPP already had one Vice-President in the person of Webster and all five
directorship positions provided in the by-laws are already occupied. Another indicator that she was a regular employee and not a
corporate officer is Section 14 of the contract, which clearly states that she is a permanent employee — not a Vice-President or a
member of the Board of Directors. Another convincing indication that she was only a regular employee and not a corporate officer is
the disciplinary procedure, which states that her right of redress is through Mindshare's Chief Executive Officer for the Asia-Pacific.
This implies that she was not under the disciplinary control of private respondent WPP's Board of Directors (BOD), which should have
been the case if in fact she was a corporate officer because only the Board of Directors could appoint and terminate such a corporate
officer.
WPP's dismissal of Galera lacked both substantive and procedural due process. Apart from Steedman's letter dated 15 December
2000 to Galera, WPP failed to prove any just or authorized cause for Galera's dismissal. Steedman's letter to Galera reads: The
operations are currently in a shamble. There is lack of leadership and confidence in your abilities from within, our agency partners
and some clients. Most of the staff I spoke with felt they got more guidance and direction from Minda than yourself. In your role as
Managing Director, that is just not acceptable. I believe your priorities are mismanaged. The recent situation where you felt an
internal strategy meeting was more important than a new business pitch is a good example. You failed to lead and advise on the two
new business pitches. In both cases, those involved sort (sic) Minda's input. As I discussed with you back in July, my directive was for
you to lead and review all business pitches. It is obvious [that] confusion existed internally right up until the day of the pitch. The
quality output is still not to an acceptable standard, which was also part of my directive that you needed to focus on back in July. I do
not believe you understand the basic skills and industry knowledge required to run a media special operation.
WPP, Steedman, Webster, and Lansang, however, failed to substantiate the allegations in Steedman's letter. Galera, on the other hand,
presented documentary evidence 22 in the form of congratulatory letters, including one from Steedman, which contents are
diametrically opposed to the 15 December 2000 letter. The law further requires that the employer must furnish the worker sought to
be dismissed with two written notices before termination of employment can be legally effected: (1) notice which apprises the
employee of the particular acts or omissions for which his dismissal is sought; and (2) the subsequent notice which informs the
employee of the employer's decision to dismiss him. Failure to comply with the requirements taints the dismissal with illegality. 23
WPP's acts clearly show that Galera's dismissal did not comply with the two-notice rule.
Nacague vs. Sulpicio Lines, Inc.

G.R. No. 172589. August 8, 2010
Facts:
Jeffrey Nacague (Nacague) was “hepe de viaje” or the representative of Sulpicio Lines,
Inc. (Sulpicio) on board one its vessels (the ship). A housekeeper on the ship reported to Sulpicio that Nacague and the chief mate
made a threat on his life after he found drug paraphernalia on board the ship. Sulpicio sent Nacague a notice of investigation
informing him of the charges against him – use of illegal drugs and threatening a co-employee. When the ship docked in the port of
Manila, crew members, including Nacague, were subjected to a random drug test at the S.M. Lazo Medical Clinic (S.M. Lazo Clinic).
Nacague tested positive for methamphetamine hydrochloride or shabu and was subsequently subjected to a formal investigation.
Nacague denied using illegal drugs and on the fifth day following the random drug test, underwent a voluntary drug test at the Chong
Hua Hospital in Cebu City, which yielded a negative result. Nacague submitted this result to Sulpicio, but Sulpicio later terminated his
services. Nacague filed a complaint for illegal suspension, illegal dismissal and reinstatement with backwages. The Labor Arbiter
declared that Nacague was illegally dismissed and awarded him separation pay in lieu of reinstatement due to his strained relations
with Sulpicio. The Labor Arbiter gave more weight to the drug test result from Chong Hua Hospital because it was accredited by the
Dangerous Drugs Board, unlike S.M. Lazo Clinic. On Sulpicio’s appeal, the National Labor Relations Commission (NLRC) reversed the
Labor Arbiter’s decision, holding that there was a presumption that S.M. Lazo Clinic was an accredited drug testing center and it was
incumbent on Nacague to show otherwise. Nacague filed a petition for certiorari with the Court of Appeals which sustained the
termination of his employment. Nacague brought the case to the Supreme Court for review.
Issue: Whether or not there was just cause to terminate Nacague’s employment.
Ruling:
Sulpicio failed to clearly show that Nacague was guilty of using illegal drugs. The lack of accreditation of S.M. Lazo Clinic made its drug
test results doubtful.
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Section 36 of Republic Act No. 9165 (Comprehensive Dangerous Drugs Act of 2002) provides that drug tests shall be performed only
by any government forensic laboratories or any of the drug testing laboratories accredited and monitored by the Department of
Health, to safeguard the quality of test results. The same provision also requires that drug testing should consist of both the screening
test and the confirmatory test. In this case, Sulpicio failed to prove that S.M. Lazo Clinic was an accredited drug testing center. Sulpicio
did not even deny Nacague’s allegation that S.M. Lazo Clinic was not accredited. Also, only a screening test was conducted to
determine if Nacague was guilty of using illegal drugs. Sulpicio Lines did not confirm the positive result of the screening test with a
confirmatory test. Sulpicio Lines failed to clearly show that it had a valid and legal cause for terminating Nacague’s employment.
When the alleged valid cause for the termination of employment is not clearly proven, as in this case, the law considers the matter a
case of illegal dismissal.
As the Labor Arbiter found, Nacague’s reinstatement was no longer feasible due to the strained relations between Nacague and
Sulpicio and he should instead be granted separation pay. The Labor Arbiter’s decision was reinstated.
St. Mary’s Academy of Dipolog City vs. Palacio

G.R. NO. 164913, September 8, 2010
DECS Memorandum No. 10 provides that all incumbent teachers have until September 19, 2000 to pass the Licensure Examination for
Teachers (LET), otherwise they cannot continue teaching in public or private schools unless they obtain a temporary permit to teach
as para-teachers. The complainants in this case were dismissed from the school on March 31, 2000 after they failed to pass the LET.
The Supreme Court held that their dismissal was illegal and premature. The law has provided a specific timeframe within which the
teachers could comply with the requirement of passing the LET hence, the school cannot deny them this privilege, which the law has
accorded to them, without violating their right to security of tenure.
To reiterate, this Court will not hesitate to defend respondents’ right to security of tenure. The premature dismissal from the service
of respondents Palacio, Calibod, Laquio, Santander and Montederamos is unwarranted. However, we take exception to the case of
respondent Saile who, as alleged by petitioner, was not qualified to take the LET as she only had three out of the minimum 10
required educational units to be admitted to take the LET pursuant to Section 15 of RA 7836, which fact respondent Saile did not
refute. Not being qualified to take the examination to become a duly licensed professional teacher, petitioner cannot be compelled to
retain her services as she cannot possibly obtain the needed prerequisite to allow her to continue practicing the teaching profession.
Thus, we find her termination just and legal.
Manila Mining Corp. Employees Assoc.-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 Zuñ iga, 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.
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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.
Robinsons Galleria/Robinsons Supermarket Corporation vs. Ranchez

G.R. No. 177937, January 19, 2011
Facts:
Respondent was a probationary employee of petitioner Robinsons Galleria/Robinsons Supermarket Corporation (petitioner
Supermarket) for a period of five (5) months, or from October 15, 1997 until March 14, 1998. She underwent six (6) weeks of training
as a cashier before she was hired as such on October 15, 1997.
Two weeks after she was hired, or on October 30, 1997, respondent reported to her supervisor the loss of cash amounting to Twenty
Thousand Two Hundred Ninety-Nine Pesos (P20,299.00) which she had placed inside the company locker. Petitioner Jess Manuel
(petitioner Manuel), the Operations Manager of petitioner Supermarket, ordered that respondent be strip-searched by the company
guards. However, the search on her and her personal belongings yielded nothing.
Respondent acknowledged her responsibility and requested that she be allowed to settle and pay the lost amount. However,
petitioner Manuel did not heed her request and instead reported the matter to the police. An information for Qualified Theft was filed
with the Quezon City Regional Trial Court. Respondent was constrained to spend two weeks in jail for failure to immediately post bail.
On November 25, 1997, respondent filed a complaint for illegal dismissal and damages.
On March 12, 1998, petitioners sent to respondent by mail a notice of termination and/or notice of expiration of probationary
employment dated March 9, 1998. In dismissing the complaint for illegal dismissal, the Labor Arbiter ratiocinated that at the time
respondent filed the complaint for illegal dismissal, she was not yet dismissed by petitioners. When she was strip- searched by the
security personnel of petitioner Supermarket, the guards were merely conducting an investigation. The subsequent referral of the loss
to the police authorities might be considered routine. Respondent's non-reporting for work after her release from detention could be
taken against her in the investigation that petitioner supermarket would conduct. In reversing the decision of the Labor Arbiter, the
NLRC ruled that respondent was denied due process by petitioners. Strip-searching respondent and sending her to jail for two weeks
certainly amounted to constructive dismissal because continued employment had been rendered impossible, unreasonable, and
unlikely.
Issue: The sole issue for resolution is whether respondent was illegally terminated from employment by petitioners.
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Ruling:
Yes. There is probationary employment when the employee upon his engagement is made to undergo a trial period during which the
employer determines his fitness to qualify for regular employment based on reasonable standards made known to him at the time of
engagement.
A probationary employee, like a regular employee, enjoys security of tenure. However, in cases of probationary employment, aside
from just or authorized causes of termination, an additional ground is provided under Article 281 of the Labor Code,i.e., the
probationary employee may also be terminated for failure to qualify as a regular employee in accordance with reasonable standards
made known by the employer to the employee at the time of the engagement. Thus, the services of an employee who has been
engaged on probationary basis may be terminated for any of the following: (1) a just or (2) an authorized cause; and (3) when he
fails to qualify as a regular employee in accordance with reasonable standards prescribed by the employer.
Article 277(b) of the Labor Code mandates that subject to the constitutional right of workers to security of tenure and their right to be
protected against dismissal, except for just and authorized cause and without prejudice to the requirement of notice under Article 283
of the same Code, the employer shall furnish the worker, whose employment is sought to be terminated, a written notice containing a
statement of the causes of termination, and shall afford the latter ample opportunity to be heard and to defend himself with the
assistance of a representative if he so desires, in accordance with company rules and regulations pursuant to the guidelines set by the
Department of Labor and Employment.
In the instant case, based on the facts on record, petitioners failed to accord respondent substantive and procedural due process. The
haphazard manner in the investigation of the missing cash, which was left to the determination of the police authorities and the
Prosecutor's Office, left respondent with no choice but to cry foul. Administrative investigation was not conducted by petitioner
Supermarket. On the same day that the missing money was reported by respondent to her immediate superior, the company already
pre-judged her guilt without proper investigation, and instantly reported her to the police as the suspected thief, which resulted in her
languishing in jail for two weeks.
As correctly pointed out by the NLRC, the due process requirements under the Labor Code are mandatory and may not be supplanted
by police investigation or court proceedings. The criminal aspect of the case is considered independent of the administrative aspect.
Thus, employers should not rely solely on the findings of the Prosecutor's Office. They are mandated to conduct their own separate
investigation, and to accord the employee every opportunity to defend himself. Furthermore, respondent was not represented by
counsel when she was strip-searched inside the company premises or during the police investigation, and in the preliminary
investigation before the Prosecutor's Office.
Respondent was constructively dismissed by petitioner Supermarket effective October 30, 1997. It was unreasonable for petitioners
to charge her with abandonment for not reporting for work upon her release in jail. It would be the height of callousness to expect her
to return to work after suffering in jail for two weeks. Work had been rendered unreasonable, unlikely, and definitely impossible,
considering the treatment that was accorded respondent by petitioners.
Morales vs. Harbour Centre Port Terminal

G.R. No. 174208, January 25, 2012
Facts:
Petitioner Morales was a Division Manager of the Accounting Department of respondent Harbour Centre Port Terminal, Inc. (HCPTI).
Subsequent to HCPTI's transfer to its new offices, Morales received an inter-office memorandum reassigning him to Operations Cost
Accounting. Morales wrote Singson, HCPTI’s Administration Manager, protesting that his reassignment was a clear demotion since the
position to which he was transferred was not even included in HCPTI's plantilla. In response to Morales' grievance that he had been
effectively placed on floating status, Singson issued a inter-office memorandum to the effect that "transfer of employees is a
management prerogative." For the whole of the ensuing month Morales was absent from work and/or tardy. As a consequence,
Singson issued to Morales the following inter-office memoranda: First Warning, Second Warning and a Notice to Report for Work and
Final Warning.
In the meantime, Morales filed a complaint against HCPTI for constructive dismissal. He alleged that subsequent to its transfer to its
new offices, HCPTI had suspended all the privileges enjoyed by its Managers, Division Chiefs and Section Heads.
HCPTI argued that Morales abandoned his employment and was not constructively dismissed.
Ruling:
Constructive dismissal; change in position. Constructive dismissal exists where there is cessation of work because “continued
employment is rendered impossible, unreasonable or unlikely, as an offer involving a demotion in rank or a diminution in pay” and
other benefits. Aptly called a dismissal in disguise of 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.In cases of a transfer of an
employee, the rule is settled that the employer is charged with the burden of proving that its conduct and action are for valid and
legitimate grounds such as genuine business necessity and that the transfer is not unreasonable, inconvenient or prejudicial to the
employee. If the employer cannot overcome this burden of proof, the employee’s transfer shall be tantamount to unlawful
constructive dismissal.
Dismissal; abandonment. As a just and valid ground for dismissal, at any rate, abandonment requires the deliberate, unjustified
refusal of the employee to resume his employment, without any intention of returning. Since an employee like Morales who takes
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steps to protest his dismissal cannot logically be said to have abandoned his work, it is a settled doctrine that the filing of a complaint
for illegal dismissal is inconsistent with abandonment of employment.
Mirant (Philippines) Corporation vs. Sario

G.R. No. 197598. November 21, 2012
Facts:
Respondent Sario worked for the company as procurement officer from March 1998 to October 2005.
The company issued the 2002 MMD Policies and Procedures Manual (2002 Procurement Manual) for the guidance of its employees
and officers in soliciting bid quotations and proposals from vendors, suppliers and contractors. Subsequently, this manual was
replaced by the 2004 Procurement Policies of the Company which was disseminated and which became effective on Aug. 31, 2004,
seminars were conducted and a proficiency examination was administered and Respondent took the proficiency examination on Sept.
28, 2004.
On September 8, 2005, Sario received a Show Cause Notice from the company, advising him that based on an internal audit, he was
found to have committed the following violations: 1.Non-compliance with the Minimum Bid/Quotation Requirements; 2.Non-
compliance with the Single Tender Justification Requirement; 3.No Evidence of Independent Approval of the PRF; 4.No Evidence of
Authorized Recommendation or Approval of the PO; 5.PO not Awarded to the lowest Bidder; and 6.No TAS Attached.
Sario was given ten (10) days, or until September 18, 2005, to explain why no disciplinary action should be taken against him for the
violations. He was also notified that an investigation would be conducted on the matter. He was placed on preventive suspension
pending the investigation. He submitted his written explanation on September 17, 2005.
At the administrative hearing on October 6, 2005, Sario argued that he could not be faulted for not complying with the 2004
Procurement Manual because it was never properly disseminated (rolled out) and neither did he take the proficiency examination on
the manual. He admitted, however, that he failed to comply with the procurement procedures laid out in the manual due to his desire
to meet the quota imposed by his supervisors.
On October 25, 2005, Sliman sent Sario a letter informing him of the termination of his employment for his failure to comply with the
standard operating procedures/instructions; for his serious misconduct or willful disobedience of the lawful orders of the company in
connection with his work; and for his gross and habitual neglect of his duties. The company found Sario liable for his failure to comply
with the 2002 and 2004 Procurement Manuals, especially his unabated practice of sending Requests for Quotation (RFQs) to suppliers
who have a history of not responding to requests or of not sending quotes. The practice, the company lamented, resulted in the
issuance of purchase orders to the lone bidders.
Issue: WON respondent was illegal dismissed?
Ruling:
Under the law, the burden of proving that the termination of a worker's employment was for a valid or authorized cause rests on the
employer. In this case, the company was able to prove that Sario's dismissal was for a valid cause. Through his repeated violations of
the company's 2002 and 2004 Procurement Manuals, Sario committed a serious misconduct or willful disobedience of the lawful
directives or orders of his employer, constituting a just cause for termination of employment.
As the records show, Sario failed to faithfully discharge his duties as procurement officer. These duties placed him at the early but
critical stage of the company's procurement process. The very first one in the list of his duties at once suggests the heavy
responsibility he had to bear and the sensitiveness of his functions, considering that he had to "[p]erform the entire purchasing
process of a Station's set of materials, parts, equipment, and/or project[.]" Flowing from this catch-all statement, Sario's activities
consisted of (1) receiving purchase requisition form assignments; (2) identifying the vendors/suppliers to be invited, setting bid
periods and deadlines for bid submission, including the RFQ process — coordinating critical issues with end-users and preparing the
RFQ package, sending RFQs to vendors and initiating RFQ confirmation status, and resolving commercial issues with vendors; (3)
receiving quotes/bids, reviewing tenders and performing tender analysis summary when necessary; (4) securing and evaluating
justification for single tender transactions, and coordinating price, payment and delivery terms with vendors; (5) preparing purchase
orders and checking of approval of purchase orders in accordance with the limits of authority; and (6) coordinating vendor
performance evaluation, resolving disputes between end-users and vendors, and recommending appropriate sanctions for infractions
committed by the vendors. ScaCEH
Over a span of almost one-and-a-half years, from January 2004 to May 2005 (not two years as the company claims), Sario committed
27 violations of the 2002 and 2004 Procurement Manuals in critical areas of the procurement process, in particular, non-compliance
with the minimum bid/quotation requirements, non-compliance with the single tender justification requirement, failure to provide
proof of approval of the purchase requisition form, failure to provide proof of authorized recommendation of the purchase order,
failure to award purchase order to the lowest bidder, and no tender analysis summary.
Given the critical and sensitive role Sario played in the company's procurement program, we appreciate why the company has
employed all legal means to terminate his services. Sario's continued employment has become inimical to its business interests which
rely critically on the effectiveness and integrity of its procurement procedure. We can, therefore, also understand why it had to issue
the 2002 and 2004 Procurement Manuals — to ensure that the procedure is not compromised. To be sure, the company has the
prerogative to issue the 2002 and 2004 Procurement Manuals.
As the NLRC aptly noted, "the issuance of the 2002 and 2004 Procurement Manuals was a reasonable and valid exercise of
management prerogative . . . to curb the rampant practice of some unscrupulous employees to favor some suppliers over the others in
the award of Purchase Orders[.]" "Any employee may be dismissed for violation of a reasonable company rule or regulation for the
conduct of the latter's business[.]"
Sario has to account for his own actions. The circumstance that his recommendations were approved by his superiors does not erase
the fact that he repeatedly violated the 2002 and 2004 Procurement Manuals. He was well aware of his duties and their parameters,
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based on the 2002 and 2004 Procurement Manuals. He committed the violations for one-and-a-half years. These repeated violations
can only indicate a willful disobedience to reasonable company rules and regulations.
Based on the facts, the law and jurisprudence, Sario deserves to be dismissed for willful disobedience. In Gold City Integrated Port
Services, Inc. v. NLRC, the Court stressed that willful disobedience of an employee contemplates the concurrence of at least two
requisites: the employee's assailed conduct must have been willful or intentional, the willfulness being characterized by a "wrongful
and perverse attitude"; and the order violated must have been reasonable, lawful and made known to the employee, and must pertain
to the duties which he had been engaged to discharge. We find the two requisites present in this case.
Sario's repeated violations of the company's 2002 and 2004 Procurement Manuals — lawful orders in themselves as they provide the
dos and, necessarily, thedon'ts of a procurement officer — constitute willful disobedience. He committed the repeated violations
because he knew or was confident that he would not get caught since his actions were being approved, as he claims, by his superiors,
evidencing wrongful or perverse intent.
Sario has become unfit to remain in employment. "The law, in protecting the rights of the laborer, authorizes neither oppression nor
self-destruction of the employer."
Mansion Printing vs. Bitara

G.R. No. 168120, January 25, 2012
Facts:
Petitioner Mansion Printing Center is engaged in the printing of quality self-adhesive labels and the like. Respondent Bitara was the
company's sole driver tasked to pick-up raw materials, collect account receivables and deliver the products within the delivery
schedules. Petitioner noted his habitual tardiness and absenteeism. Petitioner issued several memoranda to respondent requiring the
latter to submit written explanations: first, as to why no administrative sanction should be imposed on him for his habitual tardiness;
and then several months later, after Bitara’s apology and a failed undertaking to adhere to the attendance policies, why his services
should not be terminated. The last memoranda was personally handed to him, but the latter, after reading the directive, refused to
acknowledge receipt thereof. He did not submit any explanation and, thereafter, never reported for work. As a consequence, Davis
Cheng, General Manager, personally served another Memorandum (Notice of Termination) upon him informing him that the company
found him grossly negligent of his duties, for which reason, his services were terminated. Respondent met with the management
requesting for reconsideration of his termination. However, after hearing his position, the management decided to implement the last
Memorandum. Respondent filed a complaint for illegal dismissal.
Ruling:
Employee dismissal; gross negligence; habitual neglect. Gross negligence has been defined as the “want of care in the performance of
one’s duties” and habitual neglect has been defined as “repeated failure to perform one’s duties for a period of time, depending upon
the circumstances.” These are not overly technical terms, which, in the first place, are expressly sanctioned by the Labor Code of the
Philippines, to wit: ART. 282. Termination by employer. – An employer may terminate an employment for any of the following causes:
[xxx](b) Gross and habitual neglect by the employee of his duties; [xxx] Diosdado Bitara was dismissed from service due to habitual
tardiness and absenteeism, and for having continued disregarding attendance policies despite his undertaking to report on time. His
weekly time record for the first quarter of the year 2000 revealed that he came late 19 times out of the 47 times he reported for work.
He also incurred 19 absences out of the 66 working days during the quarter. His absences without prior notice and approval from
March 11-16, 2000 were considered to be the most serious infraction of all because of its adverse effect on business operations. The
Supreme Court held that even in the absence of a written company rule defining gross and habitual neglect of duties, Bitara’s
omissions qualify as such warranting his dismissal from the service.
Dismissal; procedural due process. Procedural due process entails compliance with the two-notice rule in dismissing an employee, to
wit: (1) the employer must inform the employee of the specific acts or omissions for which his dismissal is sought; and (2) after the
employee has been given the opportunity to be heard, the employer must inform him of the decision to terminate his employment.
In Bughaw v. Treasure Island Industrial Corporation, this Court, in verifying the veracity of the allegation that respondent refused to
receive the Notice of Termination, essentially looked for the following: (1) affidavit of service stating the reason for failure to serve the
notice upon the recipient; and (2) a notation to that effect, which shall be written on the notice itself. We are convinced that the
notices have been validly served.
Manila Electric Company vs. Beltran

G.R. No. 173774. January 30, 2012
Facts:
Petitioner, the respondent’s employer, dismissed the latter on the ground of breach of trust and confidence for allegedly having
withheld and misappropriated for her personal purpose or benefit an electric bill payment of a Meralco customer.
Respondent filed for illegal dismissal against petitioner and argued that “she had no intention to withhold company funds. Besides, it
was not her customary duty to collect and remit payments from customers. She claimed good faith, believing that her acceptance of
Chang's payment is considered goodwill in favor of both MERALCO and its customer. If at all, her only violation was a simple delay in
remitting the payment, which caused no considerable harm to the company. Further, her nine years of unblemished service to the
company should be taken into account such that the penalty of dismissal is not a commensurate penalty for the unintentional act
committed.”
MERALCO, on the other hand, maintained that under company policy, Beltran had the duty to remit payment for electric bills by any
customer on the day the same was received. It opined that if indeed the money was kept intact inside the drawer and was not put to
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personal use, Beltran could have easily turned over the same when Garcia instructed her to do so on January 7, 1997. However,
Beltran failed to remit the money on said date and even on the following day, January 8, when she reported for work. Worse, in the
two succeeding days, she went on leave. Thus, there was a clear sign of misappropriation of company funds, considered a serious
misconduct and punishable by dismissal from the service. Further, Beltran's reason for her failure to perform such obligation on
account of family problems deserves scant consideration. MERALCO insisted that Beltran's act renders her unworthy of the trust and
confidence demanded of her position.
LA ruled for respondent stating that the penalty of dismissal as not commensurate to the degree of infraction committed as there was
no adequate proof of misappropriation on the part of Beltran and that it was unintentional and same cannot serve as sufficient basis
to conclude that there was misappropriation of company funds. While the Labor Arbiter commiserated with Beltran's circumstances
and took into account her long and untainted service, he nonetheless imposed disciplinary action in the form of forfeiture of salary for
her neglect in remitting the funds at once.
NLRC reversed and found that Beltran withheld company funds by failing to remit it for almost four months. It disregarded Beltran's
assertion of family problems as the same cannot be used as an excuse for committing a serious misconduct in violation of the trust
reposed on her as a Senior Branch Clerk. The NLRC was convinced that Beltran used the money for her personal needs since her act of
taking a leave of absence right after her confrontation with Garcia suggested that she needed time to produce it. The NLRC thus ruled
that MERALCO validly dismissed Beltran from the service in the exercise of its inherent right to discipline its employees. It likewise
denied Beltran’s MR.
CA affirmed LA.
Issue: WON CA SERIOUSLY ERRED IN ORDERING THE REINSTATEMENT OF [BELTRAN] DESPITE THE UNDISPUTED FINDING THAT
SHE IS GUILTY OF WITHHOLDING COMPANY FUNDS.
Held:
Court finds for respondent, affirms CA.
For loss of trust and confidence to be a valid ground for dismissal, it must be based on a willful breach of trust and founded on clearly
established facts. A breach is willful if it is done intentionally, knowingly and purposely, without justifiable excuse, as distinguished
from an act done carelessly, thoughtlessly, heedlessly or inadvertently. In addition, loss of trust and confidence must rest on
substantial grounds and not on the employer's arbitrariness, whims, caprices or suspicion.
In the case at bench, Beltran attributed her delay in turning over Chang's payment to her difficult family situation as she and her
husband were having marital problems and her child was suffering from an illness. Admittedly, she was reminded of Chang's payment
by her supervisor on January 7, 1997 but denied having been ordered to remit the money on that day. She then reasoned that her
continued delay was caused by an inevitable need to take a leave of absence for her to attend to the needs of her child who was
suffering from asthma.
It should be emphasized at this point that the burden of proving the legality of an employee's dismissal lies with the employer. 26
"Unsubstantiated suspicions, accusations, and conclusions of employers do not provide legal justification for dismissing employees."
27 "[M]ere conjectures cannot work to deprive employees of their means of livelihood." 28 To begin with, MERALCO cannot claim or
conclude that Beltran misappropriated the money based on mere suspicion. The NLRC thus erred in concluding that Beltran made use
of the money from the mere fact that she took a leave of absence after having been reminded of the unremitted funds. And even if
Beltran delayed handing over the funds to the company, MERALCO still has the burden of proof to show clearly that such act of
negligence is sufficient to justify termination from employment. Moreover, we find that Beltran's delay does not clearly and
convincingly establish a willful breach on her part, that is, which is done "intentionally, knowingly and purposely, without any
justifiable excuse." True, the reasons Beltran proffered for her delay in remitting the cash payment are mere allegations without any
concrete proof. Nonetheless, we emphasize that as the employer, the burden still lies on MERALCO to provide clear and convincing
facts upon which the alleged loss of confidence is to be made to rest.
Undoubtedly, Beltran was remiss in her duties for her failure to immediately turn over Chang's payment to the company. Such
negligence, however, is not sufficient to warrant separation from employment. To justify removal from service, the negligence should
be gross and habitual. 29 "Gross negligence . . . is the want of even slight care, acting or omitting to act in a situation where there is
duty to act, not inadvertently but willfully and intentionally, with a conscious indifference to consequences insofar as other persons
may be affected." Habitual neglect, on the other hand, connotes repeated failure to perform one's duties for a period of time,
depending upon the circumstances. 31 No concrete evidence was presented by MERALCO to show that Beltran's delay in remitting the
funds was done intentionally. Neither was it shown that same is willful, unlawful and felonious contrary to MERALCO's finding as
stated in the letter of termination it sent to Beltran. 32 Surely, Beltran's single and isolated act of negligence cannot justify her
dismissal from service.
Moreover, Beltran's simple negligence did not result in any loss. From the time she received the payment on September 28, 1996 until
January 7, 1997 when she was apprised by her supervisor about Chang's payment, no harm or damage to the company or to its
customers attributable to Beltran's negligence was alleged by MERALCO. Also, from the time she was apprised of the non-remittance
by her superior on January 7, 1997, until the turn-over of the amount on January 13, 1997, no such harm or damage was ever claimed
by MERALCO.
Under the circumstances, MERALCO's sanction of dismissal will not be commensurate to Beltran's inadvertence not only because
there was no clear showing of bad faith and malice but also in consideration of her untainted record of long and dedicated service to
MERALCO. 33 In the similar case of Philippine Long Distance Telephone Company v. Berbano, Jr., 34we held that:
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The magnitude of the infraction committed by an employee must be weighed and equated with the penalty prescribed and must be
commensurate thereto, in view of the gravity of the penalty of dismissal or termination from the service. The employer should bear in
mind that in termination cases, what is at stake is not simply the employee's job or position but [her] very livelihood.
Where a penalty less punitive would suffice, whatever missteps may be committed by an employee ought not to be visited with a
consequence so severe such as dismissal from employment. 35 Hence, we find no reversible error or any grave abuse of discretion on
the part of the CA in ordering Beltran's reinstatement without backwages. The forfeiture of her salary is an equitable punishment for
the simple negligence committed.
Bank Of Lubao, Inc. vs. Manabat

G.R. No. 188722. February 1, 2012
Facts:
Respondent which was a market collector and subsequently assigned as an encoder of the Bank of Lubao's Sta. Cruz Extension Office,
was terminated from his employment by reason of serious misconduct tantamount to willful breach of trust and was likewise charged
with criminal complaints for Qualified Theft with a certain Lingad. Respondent's primary duty is to encode the clients' deposits on the
bank's computer after the same are received by Lingad. Petitioner after investigation had findings of discrepancies during the audit
that showed a misappropriation of funds in the amount of P 3,000,000.00, hence the dismissal from service.
Respondent filed a Complaint 3 for illegal dismissal with the Regional Arbitration Branch of the National Labor Relations Commission
(NLRC) in San Fernando City, Pampanga. In the said complaint, the respondent, to bolster his claim that there was no valid ground for
his dismissal, averred that the charge against him for qualified theft was dismissed for lack of sufficient basis to conclude that he
conspired with Lingad. The respondent sought an award for separation pay, full backwages, 13th month pay for 2004 and moral and
exemplary damages.
For its part, the petitioner insists that the dismissal of the respondent is justified, asserting the February 14, 2006 Audit Report which
confirmed the participation of the respondent in the alleged misappropriations. Likewise, the petitioner asserted that the dismissal of
the qualified theft charge against the respondent is immaterial to the validity of the ground for the latter's dismissal.
LA sustained respondent's claim of illegal dismissal thus ordering the petitioner to reinstate the respondent to his former position
and awarding the latter backwages in the amount of P111,960.00 and 13th month pay in the amount of P6,220.00. The LA opined that
the petitioner failed to adduce substantial evidence that there was a valid ground for the respondent's dismissal.
NLRC affirmed decision of LA: “it was sufficiently established that only Lingad was the one responsible for the said misappropriations.
Further, the NLRC asserted that the February 14, 2006 and April 30, 2007 audit reports presented by the petitioner could not be given
evidentiary weight as the same were executed after the respondent had already been dismissed.” NLRC denied MR of petitioner.
CA denied petitioner’s Certiorari, CA agreed with the LA and the NLRC that the petitioner failed to establish by substantial evidence
that there was indeed a valid ground for the respondent's dismissal. Nevertheless, the CA held that the petitioner should pay the
respondent separation pay since the latter did not pray for reinstatement before the LA and that the same would be in the best
interest of the parties considering the animosity and antagonism that exist between them.
Issues:
WON the CA erred in ordering the petitioner to pay the respondent separation pay in lieu of reinstatement;
WON the respondent is entitled to payment of backwages.
Ruling:
Court finds for respondent, upheld unanimous decisions of LA, NLRC and CA.
- Doctrine of Strained Relations. Under the law and prevailing jurisprudence, an illegally dismissed employee is entitled to
reinstatement as a matter of right. However, if reinstatement would only exacerbate the tension and strained relations between the
parties, or where the relationship between the employer and the employee has been unduly strained by reason of their irreconcilable
differences, particularly where the illegally dismissed employee held a managerial or key position in the company, it would be more
prudent to order payment of separation pay instead of reinstatement. 17
Under the doctrine of strained relations, the payment of separation pay is considered an acceptable alternative to reinstatement when
the latter option is no longer desirable or viable. On one hand, such payment liberates the employee from what could be a highly
oppressive work environment. On the other hand, it releases the employer from the grossly unpalatable obligation of maintaining in
its employ a worker it could no longer trust. 18
In such cases, it should be proved that the employee concerned occupies a position where he enjoys the trust and confidence of his
employer; and that it is likely that if reinstated, an atmosphere of antipathy and antagonism may be generated as to adversely affect
the efficiency and productivity of the employee concerned.
Here, we agree with the CA that the relations between the parties had been already strained thereby justifying the grant of separation
pay in lieu of reinstatement in favor of the respondent.
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First, it cannot be gainsaid that the petitioner's reinstatement to his former position would only serve to intensify the atmosphere of
antipathy and antagonism between the parties. Undoubtedly, the petitioner's filing of various criminal complaints against the
respondent for qualified theft and the subsequent filing by the latter of the complaint for illegal dismissal against the latter, taken
together with the pendency of the instant case for more than six years, had caused strained relations between the parties.
Second, considering that the respondent's former position as bank encoder involves the handling of accounts of the depositors of the
Bank of Lubao, it would not be equitable on the part of the petitioner to be ordered to maintain the former in its employ since it may
only inspire vindictiveness on the part of the respondent.
Third, the refusal of the respondent to be re-admitted to work is in itself indicative of the existence of strained relations between him
and the petitioner. In the case of Lagniton, Sr. v. National Labor Relations Commission, 20 the Court held that the refusal of the
dismissed employee to be re-admitted is constitutive of strained relations:
It appears that relations between the petitioner and the complainants have been so strained that the complainants are no longer
willing to be reinstated. As such reinstatement would only exacerbate the animosities that have developed between the parties, the
public respondents were correct in ordering instead the grant of separation pay to the dismissed employees in the interest of
industrial peace. 21
Time and again, this Court has recognized that strained relations between the employer and employee is an exception to the rule
requiring actual reinstatement for illegally dismissed employees for the practical reason that the already existing antagonism will
only fester and deteriorate, and will only worsen with possible adverse effects on the parties, if we shall compel reinstatement; thus,
the use of a viable substitute that protects the interests of both parties while ensuring that the law is respected.
- Backwages. The arguments raised by the petitioner with regard to the issue of backwages, essentially, attacks the factual
findings of the CA, the NLRC and the LA. As stated earlier, subject to well-defined exceptions, factual questions may not be raised in a
petition for review on certiorari under Rule 45 as this Court is not a trier of facts. The petitioner failed to assert any circumstance
which would impel this Court to disregard the findings of fact of the lower tribunals on the propriety of the award of backwages in
favor of the respondent.
However, the backwages that should be awarded to the respondent should be modified. Employees who are illegally dismissed are
entitled to full backwages, inclusive of allowances and other benefits or their monetary equivalent, computed from the time their
actual compensation was withheld from them up to the time of their actual reinstatement. But if reinstatement is no longer possible,
the backwages shall be computed from the time of their illegal termination up to the finality of the decision. 23
Thus, when there is an order of reinstatement, the computation of backwages shall be reckoned from the time of illegal dismissal up
to the time that the employee is actually reinstated to his former position.
Pursuant to the order of reinstatement rendered by the LA, the petitioner sent the respondent a letter requiring him to report back to
work on May 4, 2007. Notwithstanding the said letter, the respondent opted not to report for work. Thus, it is but fair that the
backwages that should be awarded to the respondent be computed from the time that the respondent was illegally dismissed until the
time when he was required to report for work, i.e., from September 1, 2005 until May 4, 2007. It is only during the said period that the
respondent is deemed to be entitled to the payment of backwages.
The fact that the CA, in its April 4, 2009 decision, ordered the payment of separation pay in lieu of the respondent's reinstatement
would not entitle the latter to backwages. It bears stressing that decisions of the CA, unlike that of the LA, are not immediately
executory. Accordingly, the petitioner should only pay the respondent backwages from September 1, 2005, the date when the
respondent was illegally dismissed, until May 4, 2007, the date when the petitioner required the former to report to work.
Canadian Opportunities Unlimited, Inc. vs. Dalangin, Jr.

G.R. No. 172223. February 6, 2012.
Facts:
Respondent was hired as Immigration and Legal Manager of petitioner company. He was placed on probation for six months. He was
to report directly to the Chief Operations Officer, Annie Llamanzares Abad. His tasks involved principally the review of the clients'
applications for immigration to Canada to ensure that they are in accordance with Canadian and Philippine laws.
The company terminated Dalangin's employment, declaring him "unfit" and "unqualified" to continue as Immigration and Legal
Manager on the grounds of:
a) Obstinacy and utter disregard of company policies. Propensity to take prolonged and extended lunch breaks, shows no
interest in familiarizing oneself with the policies and objectives.
b) Lack of concern for the company's interest despite having just been employed in the company. (Declined to attend company
sponsored activities, seminars intended to familiarize company employees with Management objectives and enhancement of
company interest and objectives.)
c) Showed lack of enthusiasm toward work.
d) Showed lack of interest in fostering relationship with his co-employees.
Respondent filed a complaint for illegal dismissal with prayer for reinstatement and backwages, as well as damages (moral and
exemplary) and attorney's fees, against petitioner. He argues that the seminar he was required to attend bears no connection with his
duties and functions and that it is beyond his work hours as stipulated in his employment contract. Aside from that he posits that he
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should not be treated similarly with other employees (required to attend such seminars) as they are differently situated in terms of
positions and duties.
Through their position paper, 10 the company and its principal officers alleged that at the time of Dalangin's engagement, he was
advised that he was under probation for six months and his employment could be terminated should he fail to meet the standards to
qualify him as a regular employee. He was informed that he would be evaluated on the basis of the results of his work; on his attitude
towards the company, his work and his co-employees, as spelled out in his job description. The company argued that since Dalangin
failed to qualify for the position of Immigration and Legal Manager, the company decided to terminate his services, after duly
notifying him of the company's decision and the reason for his separation.
LA declared Dalangin's dismissal illegal, and awarded him backwages of P75,000.00, moral damages of P50,000.00 and exemplary
damages of P50,000.00, plus 10% attorney's fees. The labor arbiter found that the charges against Dalangin, which led to his
dismissal, were not established by clear and substantial proof.
NLRC rendered a decision on March 26, 2004 14 granting the appeal, thereby reversing the labor arbiter's ruling. It found Dalangin's
dismissal to be a valid exercise of the company's management prerogative because Dalangin failed to meet the standards for regular
employment. NLRC denied MR.
CA found for respondent agreeing with LA that he was illegally dismissed. CA found that the company failed to support, with
substantial evidence, its claim that Dalangin failed to meet the standards to qualify as a regular employee. CA pointed out that the
company did not allow Dalangin to prove that he possessed the qualifications to meet the reasonable standards for his regular
employment; instead, it dismissed Dalangin peremptorily from the service. It opined that it was quite improbable that the company
could fully determine Dalangin's performance barely one month into his employment. CA denied MR.
Issue: WON respondent as a probationary employee was validly dismissed.
Ruling:
Court finds for petitionerfinding substantial evidence indicating that the company was justified in terminating Dalangin's
employment, however brief it had been.
3. One month enough to determine respondent’s unfitness, probationary term or period denotes its purpose but not its length.
Dalangin admitted in compulsory arbitration that the proximate cause for his dismissal was his refusal to attend the company's
"Values Formation Seminar" scheduled for October 27, 2001, a Saturday. He refused to attend the seminar after he learned that it had
no relation to his duties, as he claimed, and that he had to leave at 2:00 p.m. because he wanted to be with his family in the province.
When Abad insisted that he attend the seminar to encourage his co-employees to attend, he stood pat on not attending, arguing that
marked differences exist between their positions and duties, and insinuating that he did not want to join the other employees. He also
questioned the scheduled 2:00 p.m. seminars on Saturdays as they were not supposed to be doing a company activity beyond 2:00
p.m. He considers 2:00 p.m. as the close of working hours on Saturdays; thus, holding them beyond 2:00 p.m. would be in violation of
the law.
The "Values Formation Seminar" incident is an eye-opener on the kind of person and employee Dalangin was. His refusal to attend the
seminar brings into focus and validates what was wrong with him, as Abad narrated in her affidavit 36 and as reflected in the
termination of employment memorandum. 37 It highlights his lack of interest in familiarizing himself with the company's objectives
and policies. Significantly, the seminar involved acquainting and updating the employees with the company's policies and objectives.
Had he attended the seminar, Dalangin could have broadened his awareness of the company's policies, in addition to Abad's briefing
him about the company's policies on punctuality and attendance, and the procedures to be followed in handling the clients'
applications. No wonder the company charged him with obstinacy.
The incident also reveals Dalangin's lack of interest in establishing good working relationship with his co-employees, especially the
rank and file; he did not want to join them because of his view that the seminar was not relevant to his position and duties. It also
betrays an arrogant and condescending attitude on his part towards his co-employees, and a lack of support for the company
objective that company managers be examples to the rank and file employees.
Additionally, very early in his employment, Dalangin exhibited negative working habits, particularly with respect to the one hour
lunch break policy of the company and the observance of the company's working hours. Thus, Abad stated that Dalangin would take
prolonged lunch breaks or would go out of the office — without leave of the company — only to call the personnel manager later to
inform the latter that he would be unable to return as he had to attend to personal matters. Without expressly countering or denying
Abad's statement, Dalangin dismissed the charge for the company's failure to produce his daily time record. 38
The same thing is true with Dalangin's handling of Tecson's application for immigration to Canada, especially his failure to find ways
to appeal the denial of Tecson's application, as Abad stated in her affidavit. Again, without expressly denying Abad's statement or
explaining exactly what he did with Tecson's application, Dalangin brushes aside Abad's insinuation that he was not doing his job well,
with the ready argument that the company did not even bother to present Tecson's testimony.
In the face of Abad's direct statements, as well as those of his co-employees, it is puzzling that Dalangin chose to be silent about the
charges, other than saying that the company could not cite any policy he violated. All along, he had been complaining that he was not
able to explain his side, yet from the labor arbiter's level, all the way to this Court, he offered no satisfactory explanation of the
charges. In this light, coupled with Dalangin's adamant refusal to attend the company's "Values Formation Seminar" and a similar
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program scheduled earlier, we find credence in the company's submission that Dalangin was unfit to continue as its Immigration and
Legal Manager. As we stressed earlier, we are convinced that the company had seen enough from Dalangin's actuations, behavior and
deportment during a four-week period to realize that Dalangin would be a liability rather than an asset to its operations.
We, therefore, disagree with the CA that the company could not have fully determined Dalangin's performance barely one month into
his employment. As we said in International Catholic Migration Commission, the probationary term or period denotes its purpose but
not its length. To our mind, four weeks was enough for the company to assess Dalangin's fitness for the job and he was found wanting.
In separating Dalangin from the service before the situation got worse, we find the company not liable for illegal dismissal.
4. Procedural Due Process. The notice served on him did not give him a reasonable time, from the effective date of his
separation, as required by the rules. He was dismissed on the very day the notice was given to him, or, on October 27, 2001. Although
we cannot invalidate his dismissal in light of the valid cause for his separation, the company's non-compliance with the notice
requirement entitles Dalangin to indemnity, in the form of nominal damages in an amount subject to our discretion. 40 Under the
circumstances, we consider appropriate an award of nominal damages of P10,000.00 to Dalangin.
Manila Electric Company vs. Gala

G.R. Nos. 191288 & 191304. February 29, 2012
Facts:
Respondent was employed as a probationary lineman of petitioner company, barely 4 months on the job he was dismissed for alleged
complicity in pilferages of Meralco's electrical supplies, particularly, for the incident which took place on May 25, 2006. On that day,
Gala and other Meralco workers were instructed to replace a worn-out electrical pole at the Pacheco Subdivision in Valenzuela City.
While the Meralco crew was at work, one Noberto "Bing" Llanes, a non-Meralco employee, arrived. He appeared to be known to the
Meralco foremen as they were seen conversing with him. Llanes boarded the trucks, without being stopped, and took out what were
later found as electrical supplies. Aside from Gala, the foremen and the other linemen who were at the worksite when the pilferage
happened were later charged with misconduct and dishonesty for their involvement in the incident. Unknown to them the whole
incident was being videoed by Meralco surveillance task force.
Meralco called for an investigation of the incident and asked Gala to explain. Gala denied involvement in the pilferage, contending that
even if his superiors might have committed a wrongdoing, he had no participation in what they did. He claimed that: (1) he was at
some distance away from the trucks when the pilferage happened; (2) he did not have an inkling that an illegal activity was taking
place since his supervisors were conversing with Llanes, giving him the impression that they knew him; (3) he did not call the
attention of his superiors because he was not in a position to do so as he was a mere lineman; and (4) he was just following
instructions in connection with his work and had no control in the disposition of company supplies and materials. He maintained that
his mere presence at the scene of the incident was not sufficient to hold him liable as a conspirator.
Despite Gala's explanation, Meralco proceeded with the investigation and eventually terminated his employment on July 27, 2006. 4
Gala responded by filing an illegal dismissal complaint against Meralco.
LA dismissed the complaint for lack of merit. She held that Gala's participation in the pilferage of Meralco's property rendered him
unqualified to become a regular employee.
NLRC reversed the labor arbiter's ruling. It found that Gala had been illegally dismissed, since there was "no concrete showing of
complicity with the alleged misconduct/dishonesty[.]" 8 The NLRC, however, ruled out Gala's reinstatement, stating that his tenure
lasted only up to the end of his probationary period. It awarded him backwages and attorney's fees.
Both parties moved for partial reconsideration; Gala, on the ground that he should have been reinstated with full backwages, damages
and interests; and Meralco, on the ground that the NLRC erred in finding that Gala had been illegally dismissed. The NLRC denied the
motions.
CA denied Meralco's petition for lack of merit and partially granted Gala's petition. It concurred with the NLRC that Gala had been
illegally dismissed, a ruling that was supported by the evidence. It opined that nothing in the records show Gala's knowledge of or
complicity in the pilferage. It ordered Gala's reinstatement with full backwages and other benefits. The CA also denied Meralco's
motion for reconsideration.
Issue: WON respondent was illegaly dismissed
Ruling:
Court finds for petitioner, contrary to conclusions of NLRC and CA.
Respondent failed to meet standards and qualification of company. Gala misses the point. He forgets that as a probationary
employee, his overall job performance and his behavior were being monitored and measured in accordance with the standards (i.e.,
the terms and conditions) laid down in his probationary employment agreement. 22 Under paragraph 8 of the agreement, he was
subject to strict compliance with, and non-violation of the Company Code on Employee Discipline, Safety Code, rules and regulations
and existing policies. Par. 10 required him to observe at all times the highest degree of transparency, selflessness and integrity in the
performance of his duties and responsibilities, free from any form of conflict or contradicting with his own personal interest. TDAHCS
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The evidence on record established Gala's presence in the worksite where the pilferage of company property happened. It also
established that it was not only on May 25, 2006 that Llanes, the pilferer, had been seen during a Meralco operation. He had been
previously noticed by Meralco employees, including Gala (based on his admission), 23 in past operations. If Gala had seen Llanes in
earlier projects or operations of the company, it is incredulous for him to say that he did not know why Llanes was there or what
Zuñ iga and Llanes were talking about. To our mind, the Meralco crew (the foremen and the linemen) allowed or could have even
asked Llanes to be there during their operations for one and only purpose — to serve as their conduit for pilfered company supplies
to be sold to ready buyers outside Meralco worksites.
The familiarity of the Meralco crew with Llanes, a non-Meralco employee who had been present in Meralco field operations, does not
contradict at all but rather support the Meralco submission that there had been "reported pilferage" or "rampant theft," by the crew,
of company property even before May 25, 2006.
The established fact that Llanes, a non-Meralco employee, was often seen during company operations, conversing with the foremen,
for reason or reasons connected with the ongoing company operations, gives rise to the question: what was he doing there?
Apparently, he had been visiting Meralco worksites, at least in the Valenzuela Sector, not simply to socialize, but to do something else.
As testified to by witnesses, he was picking up unused supplies and materials that were not returned to the company. From these
factual premises, it is not hard to conclude that this activity was for the mutual pecuniary benefit of himself and the crew who
tolerated the practice. For one working at the scene who had seen or who had shown familiarity with Llanes (a non-Meralco
employee), not to have known the reason for his presence is to disregard the obvious, or at least the very suspicious.
We consider, too, and we find credible the company submission that the Meralco crew who worked at the Pacheco Subdivision in
Valenzuela City on May 25, 2006 had not been returning unused supplies and materials, to the prejudice of the company. From all
these, the allegedly hearsay evidence that is not competent in judicial proceedings (as noted above), takes on special meaning and
relevance.
On the whole, the totality of the circumstances obtaining in the case convinces us that Gala could not but have knowledge of the
pilferage of company electrical supplies on May 25, 2006; he was complicit in its commission, if not by direct participation, certainly,
by his inaction while it was being perpetrated and by not reporting the incident to company authorities. Thus, we find substantial
evidence to support the conclusion that Gala does not deserve to remain in Meralco's employ as a regular employee. He violated his
probationary employment agreement, especially the requirement for him "to observe at all times the highest degree of transparency,
selflessness and integrity in the performance of their duties and responsibilities[.]" 27 He failed to qualify as a regular employee.
Complaint dismissed for lack of merit.
Aro vs. NLRC

G.R. No. 174792. March 7, 2012
Facts:
Several employees of private respondent Benthel Development Corporation, including the petitioners, filed a Complaint for illegal
dismissal with various money claims and prayer for damages against the respondent.
LA found for the private respondents, ruled illegal dismissal and ordered to pay their separation pay.
NLRC affirmed decision of the LA but with the modification that private respondent pay backwages computed from the respective
dates of dismissal until finality of the decision. Private respondent, unsatisfied with the modification made by the NLRC, filed a motion
for reconsideration with the contention that, since it has been found by the Labor Arbiter and affirmed in the assailed decision that
the employees were project employees, the computation of backwages should be limited to the date of the completion of the project
and not to the finality of the decision. The NLRC, however, denied the motion ruling that private respondent failed to establish the
date of the completion of the project.
CA denied petition for certiorari and MR.
Private Respondent appealed to NLRC contending that the computation for backwages must be only until the completion of the
project and not until the finality of the decision. Public respondent, in its Decision dated June 25, 2004, affirmed the Order of Labor
Arbiter Bantug, but reduced the total amount to P4,073,858.00, inclusive of attorney's fees. Thereafter private respondent filed
another MR which was denied by public respondent, hence, private respondent filed a petition for certiorari with the CA, alleging that
public respondent committed grave abuse of discretion in promulgating its assailed decision and denying its motion for
reconsideration. The CA granted the petition, therefore, annulling and setting aside the decision and resolution of the NLRC as to the
award for backwages and remanded the case to the same public respondent for the proper computation of the backwages due to each
of the petitioners herein. Hence the present petition.
Issues:
WON employees were project employees.
WON the computation of their backwages was to be reckoned from the time of their illegal dismissal up to the time of the finality of
judgment.
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Held:
Court finds for private respondent, denied petitioners petition for review and affirming decision of CA dated March 7, 2006 and
Resolution dated July 27, 2006 in toto.
1. Termination of project employees and their backwages. According to the CA, petitioners are project employees as found by
Labor Arbiter Ernesto Carreon in his Decision dated May 28, 1998, because they were hired for the construction of the Cordova Reef
Village Resort in Cordova, Cebu, which was later on affirmed by the NLRC in its January 12, 1999 decision. The only discrepancy is the
Order of the NLRC that petitioners are entitled to backwages up to the finality of its decision, when as project employees, private
respondents are only entitled to payment of backwages until the date of the completion of the project. In a later resolution on private
respondent's motion for reconsideration of its January 12, 1999 decision, the NLRC changed its findings by ruling that petitioners
herein were regular employees and, therefore, entitled to full backwages, until finality of the decision, citing that petitioners' repeated
rehiring over a long span of time made them regular employees.
this Court agrees with the findings of the CA that petitioners were project employees. It is not disputed that petitioners were hired for
the construction of the Cordova Reef Village Resort in Cordova, Cebu. By the nature of the contract alone, it is clear that petitioners'
employment was to carry out a specific project. Hence, the CA did not commit grave abuse of discretion when it affirmed the findings
of the Labor Arbiter. The CA correctly ruled:
A review of the facts and the evidence in this case readily shows that a finding had been made by Labor Arbiter Ernesto Carreon, in his
decision dated May 28, 1998, that complainants, including private respondents, are project employees. They were hired for the
construction of the Cordova Reef Village Resort in Cordova, Cebu. We note that no appeal had been made by the complainants,
including herein private respondents, from the said finding. Thus, that private respondents are project employees has already been
effectively established.
Likewise, a review of the public respondent's January 12, 1999 decision shows that it affirmed the labor arbiter's finding of the private
respondents' being project employees.
We therefore cannot fathom how the public respondent could have ordered backwages up to the finality of its decision when, as
project employees, private respondents are only entitled to payment of the same until the date of the completion of the project. It is
settled that, without a valid cause, the employment of project employees cannot be terminated prior to expiration. Otherwise, they
shall be entitled to reinstatement with full backwages. However, if the project or work is completed during the pendency of the
ensuing suit for illegal dismissal, the employees shall be entitled only to full backwages from the date of the termination of their
employment until the actual completion of the work.
While it may be true that in the proceedings below the date of completion of the project for which the private respondents were hired
had not been clearly established, it constitutes grave abuse of discretion on the part of the public respondent for not determining for
itself the date of said completion instead of merely ordering payment of backwages until finality of its decision.
xxx xxx xxx
The decision of the labor arbiter, as affirmed by the public respondent in its January 12, 1999 decision, clearly established that private
respondents were project employees. Because there was no showing then that the project for which their services were engaged had
already been completed, the public respondent likewise found that private respondents were illegally dismissed and thus entitled to
backwages.
However, in utter disregard of the law and prevailing jurisprudence, the public respondents capriciously and arbitrarily ordered that
the said backwages be computed until the finality of its decision instead of only until the date of the project completion. In grave abuse
of its discretion, the public respondent refused to consider the evidence presented before it as to the date of completion of the
Cordova Reef Village Resort project. The records show that affidavits have been executed by the petitioner's manager, corporate
architect and project engineer as to the fact of the completion of the project in October 1996. As these evidences [sic] were already a
matter of record, the public respondent should not have closed its eyes and should have endeavored to render a correct and just
judgment. CHcTIA
xxx xxx xxx
Furthermore, as earlier noted, private respondents did not appeal from the Labor Arbiter's findings that they were indubitably project
employees. However, they were entitled to the payment of separation pay only for the reason that the date of the completion of the
project for which they were hired had not been clearly established. Thus, in affirming the labor arbiter's decision, the public
respondent in effect sustained the finding that private respondents are project employees. The statement, therefore, contained in the
resolution of the petitioner's motion for reconsideration of its January 12, 1999 decision that repeated rehiring makes the worker a
regular employee, is at best an obiter, especially considering that such conclusion had not been shown to apply to the circumstances
then obtaining with the private respondents' employment with the petitioner. 17
Therefore, being project employees, petitioners are only entitled to full backwages, computed from the date of the termination of their
employment until the actual completion of the work. Illegally dismissed workers are entitled to the payment of their salaries
corresponding to the unexpired portion of their employment where the employment is for a definite period. 18 In this case, as found
by the CA, the Cordova Reef Village Resort project had been completed in October 1996 and private respondent herein had signified
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its willingness, by way of concession to petitioners, to set the date of completion of the project as March 18, 1997; hence, the latter
date should be considered as the date of completion of the project for purposes of computing the full backwages of petitioners.
Ymbong VS ABS-CBN Broadcasting Corp.

G.R. NO. 184885; March 7, 2012
Facts:
Petitioner Ernesto G. Ymbong started working for ABS-CBN Broadcasting Corporation (ABS-CBN) in 1993 at its regional station in
Cebu as a television talent, co-anchoring Hoy Gising and TV Patrol Cebu. His stint in ABS-CBN later extended to radio when ABS-CBN
Cebu launched its AM station DYAB in 1995 where he worked as drama and voice talent, spinner, scriptwriter and public affairs
program anchor.
Like Ymbong, Leandro Patalinghug also worked for ABS-CBN Cebu. Starting 1995, he worked as talent, director and scriptwriter for
various radio programs aired over DYAB.
On January 1, 1996, the ABS-CBN Head Office in Manila issued Policy No. HR-ER-016 or the "Policy on Employees Seeking Public
Office." The pertinent portions read:
1.Any employee who intends to run for any public office position, must file his/her letter of resignation, at least thirty (30) days prior
to the official filing of the certificate of candidacy either for national or local election.
xxx xxx xxx
3.Further, any employee who intends to join a political group/party or even with no political affiliation but who intends to openly and
aggressively campaign for a candidate or group of candidates (e.g., publicly speaking/endorsing candidate, recruiting campaign
workers, etc.) must file a request for leave of absence subject to management's approval. For this particular reason, the employee
should file the leave request at least thirty (30) days prior to the start of the planned leave period.
Because of the impending May 1998 elections and based on his immediate recollection of the policy at that time, Dante Luzon,
Assistant Station Manager of DYAB issued the following memorandum:
TO:ALL CONCERNED
FROM:DANTE LUZON
DATE:MARCH 25, 1998
SUBJECT:AS STATED
Please be informed that per company policy, any employee/talent who wants to run for any position in the coming election will have
to file a leave of absence the moment he/she files his/her certificate of candidacy.
The services rendered by the concerned employee/talent to this company will then be temporarily suspended for the entire
campaign/election period.
After the issuance of the March 25, 1998 Memorandum, Ymbong got in touch with Luzon. Luzon claims that Ymbong approached him
and told him that he would leave radio for a couple of months because he will campaign for the administration ticket. It was only after
the elections that they found out that Ymbong actually ran for public office himself at the eleventh hour. Ymbong, on the other hand,
claims that in accordance with the March 25, 1998 Memorandum, he informed Luzon through a letter that he would take a few
months leave of absence from March 8, 1998 to May 18, 1998 since he was running for councilor of Lapu-Lapu City.
As regards Patalinghug, Patalinghug approached Luzon and advised him that he will run as councilor for Naga, Cebu. According to
Luzon, he clarified to Patalinghug that he will be considered resigned and not just on leave once he files a certificate of candidacy
Later, Ymbong and Patalinghug both tried to come back to ABS-CBN Cebu. According to Luzon, he informed them that they cannot
work there anymore because of company policy. As a result, they filed as illegal dismissal suit against ABS-CBN.
Issues:
(1) whether Policy No. HR-ER-016 is valid;
(2) whether the March 25, 1998 Memorandum issued by Luzon superseded Policy No. HR-ER-016; and
(3) whether Ymbong, by seeking an elective post, is deemed to have resigned and not dismissed by ABS-CBN.
Rulings:
(1) Policy No. HR-ER-016 is valid.
We have consistently held that so long as a company's management prerogatives 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, this Court will uphold them. In the instant case, ABS-CBN validly justified the implementation of Policy No. HR-ER-
016. It is well within its rights to ensure that it maintains its objectivity and credibility and freeing itself from any appearance of
impartiality so that the confidence of the viewing and listening public in it will not be in any way eroded. Even as the law is solicitous
of the welfare of the employees, it must also protect the right of an employer to exercise what are clearly management prerogatives.
The free will of management to conduct its own business affairs to achieve its purpose cannot be denied.
(2) Policy No. HR-ER-016 was not superseded by the March 25, 1998 Memorandum
The CA correctly ruled that though Luzon, as Assistant Station Manager for Radio of ABS-CBN, has policy-making powers in relation to
his principal task of administering the network's radio station in the Cebu region, the exercise of such power should be in accord with
the general rules and regulations imposed by the ABS-CBN Head Office to its employees. Clearly, the March 25, 1998 Memorandum
issued by Luzon which only requires employees to go on leave if they intend to run for any elective position is in absolute
contradiction with Policy No. HR-ER-016 issued by the ABS-CBN Head Office in Manila which requires the resignation, not only the
filing of a leave of absence, of any employee who intends to run for public office. Having been issued beyond the scope of his authority,
the March 25, 1998 Memorandum is therefore void and did not supersede Policy No. HR-ER-016.
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(3) Ymbong is deemed resigned when he ran for councilor.

As Policy No. HR-ER-016 is the subsisting company policy and not Luzon's March 25, 1998 Memorandum, Ymbong is deemed resigned
when he ran for councilor.
Ymbong's overt act of running for councilor of Lapu-Lapu City is tantamount to resignation on his part. He was separated from ABS-
CBN not because he was dismissed but because he resigned. Since there was no termination to speak of, the requirement of due
process in dismissal cases cannot be applied to Ymbong. Thus, ABS-CBN is not duty-bound to ask him to explain why he did not tender
his resignation before he ran for public office as mandated by the subject company policy.
In addition, we do not subscribe to Ymbong's claim that he was not in a position to know which of the two issuances was correct.
Ymbong most likely than not, is fully aware that the subsisting policy is Policy No. HR-ER-016 and not the March 25, 1998
Memorandum and it was for this reason that, as stated by Luzon in his Sworn Statement, he only told the latter that he will only
campaign for the administration ticket and not actually run for an elective post.
Blue Sky Trading Company vs. Blas

G.R. No. 190559, March 7, 2012
Facts:
Petitioner Blue Sky Trading Company, Inc. (Blue Sky) is a duly registered domestic corporation engaged in the importation and sale of
medical supplies and equipment. The respondents Arlene P. Blas (Arlene) and Joseph D. Silvano (Joseph) were regular employees of
Blue Sky and they respectively held the positions of stock clerk and warehouse helper before they were dismissed from service on
February 5, 2005.
An incident occurred where six pairs of intensifying screens were missing. On February 3, 2005, Jean B. De La Paz (Jean), Human
Resource Department Head issued notices to explain/preventive suspension to Arlene, Joseph, delivery personnel Jayde Tano-an
(Jayde) and maintenance personnel/driver Wilfredo Fasonilao (Wilfredo). The notices informed them that they were being accused of
gross dishonesty in connection with their alleged participation in and conspiracy with other employees in committing theft against
company property, specifically relative to the loss of the six intensifying screens.
On February 5, 2005, Jean issued to Arlene, Joseph, Jayde and Wilfredo notices of dismissal for cause stating therein that evidence that
they had conspired with each other to commit theft against company property was too glaring to ignore. Blue Sky had lost its trust
and confidence on them and as an act of self-preservation, their termination from service was in order.
On February 8, 2005, Arlene, Joseph, Helario, Jayde and Wilfredo filed with the National Labor Relations Commission (NLRC) a
complaint for illegal dismissal and suspension, underpayment of overtime pay, and non-payment of emergency cost of living
allowance (ECOLA), with prayers for reinstatement and payment of full backwages.
Meanwhile, an entrapment operation was conducted by the police during which Jayde and Helario were caught allegedly attempting
to sell to an operative an ultrasound probe worth around P400,000.00 belonging to Blue Sky. Though eventually, Jayde and Helario
executed affidavits of desistance stating that their dismissal was for cause.
The Labor Arbiter denied the claims of the respondents of illegal suspension and dismissal since they failed in their duties to exercise
utmost protection, care, or custody of respondent's property. Hence, their dismissal from the service is warranted.
The first decision of the NLRC ruled that respondents were not holding positions of trust and must therefore be reinstated and be paid
their backwages. Their second decision on the other hand reversed the previous one which in turn reinstated the Labor Arbiter’s
dismissal of the complaint saying that respondents were holding positions of trust and that the loss of the company’s property are
substantially proven. The CA on the other hand found merit on their claims, though found respondents to have positions of trust and
confidence, petitioner in this case failed to sufficiently establish the charge against respondents which was the basis for its loss of
trust and confidence that warranted their dismissal.
Issue: Whether or not respondents Blas and Silvano committed a breach of trust
Ruling:
The rule is long and well settled that, in illegal dismissal cases like the one at bench, the burden of proof is upon the employer to show
that the employee's termination from service is for a just and valid cause. The employer's case succeeds or fails on the strength of its
evidence and not on the weakness of that adduced by the employee, in keeping with the principle that the scales of justice should be
tilted in favor of the latter in case of doubt in the evidence presented by them. Often described as more than a mere scintilla, the
quantum of proof is substantial evidence which is understood as such relevant evidence as a reasonable mind might accept as
adequate to support a conclusion, even if other equally reasonable minds might conceivably opine otherwise. Failure of the employer
to discharge the foregoing onus would mean that the dismissal is not justified and therefore illegal.
We find no error in the CA's findings that the petitioners had not adequately proven by substantial evidence that Arlene and Joseph
indeed participated or cooperated in the commission of theft relative to the six missing intensifying screens so as to justify the latter's
termination from employment on the ground of loss of trust and confidence.
We note that the parties disagree as to what tasks were actually and regularly performed by Arlene and Joseph. They are at odds as to
the issue of whether or not Arlene and Joseph had custody of the missing screens. We observe though that neither of the parties
presented any documentary evidence, such as employment contracts, to establish their claims relative to the actual nature of Arlene
and Joseph's daily tasks.
The petitioners also argue that if Arlene and Joseph had not been grossly negligent in the performance of their duties, Blue Sky would
not have incurred the loss. We observe though that in the notices sent to Arlene and Joseph, first charging them with theft, and later,
informing them of their dismissal from service, gross negligence was not stated therein as a ground. Hence, Arlene and Joseph could
not have defended themselves against the charge of gross negligence. They cannot be dismissed on that ground lest due process be
violated.
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Other Matters: (For Discussion Purposes)

• Impropriety of the Preventive Suspension
- The purpose of the suspension is to prevent an employee from causing harm or injury to his colleagues and to the employer.
The maximum period of suspension is 30 days, beyond which the employee should either be reinstated or be paid wages and benefits
due to him.
- While we do not agree with Blue Sky's subsequent decision to terminate them from service, we find no impropriety in its act
of imposing preventive suspension upon the respondents since the period did not exceed the maximum imposed by law and there
was a valid purpose for the same.
• In lieu of reinstatement, separation pay
- If reinstatement proves impracticable, and hardly in the best interest of the parties, perhaps due to the lapse of time since
the employee's dismissal, or if the employee decides not to be reinstated, the latter should be awarded separation pay in lieu of
reinstatement.
- In the case at bar, Arlene and Joseph were dismissed from service on February 5, 2005. We find that the lapse of more than
seven years already renders their reinstatement impracticable. Further, from the stubborn stances of the parties, to wit, the
petitioners' insistence that dismissal was valid on one hand, and the respondents' express prayer for the payment of separation pay
on the other, we find that reinstatement would no longer be in the best interest of the contending parties.
• Liability of Corporate Officers
- As a general rule, a corporate officer 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. In illegal dismissal cases, corporate
officers may only be held solidarily liable with the corporation if the termination was done with malice or bad faith. We find that the
aforementioned circumstance did not obtain in the case of Jose (vice-president) and Linda (secretary) relative to Arlene and Joseph's
dismissal from service.
International Management Services vs. Logarta

G.R. No. 163657, April 18, 2012
Facts:
Recruitment agency, International Management Services (IMS), owned and operated by Marilyn C. Pascual, deployed respondent Roel
P. Logarta to work for Petrocon Arabia Limited (Petrocon) in Alkhobar, Kingdom of Saudi Arabia, in connection with general
engineering services of Petrocon for the Saudi Arabian Oil Company (Saudi Aramco). Respondent was employed for a period of two
(2) years, commencing on October 2, 1997, with a monthly salary of eight hundred US Dollars (US$800.00).
On April 29, 1998, Saudi Aramco notified Petrocon that due to changes in the general engineering services work forecast for 1998, the
man-hours that were formerly allotted to Petrocon is going to be reduced by 40% which constrained Petrocon to reduce its personnel.
Thus, on June 1, 1998, Petrocon gave respondent a written notice informing the latter that due to the lack of project works related to
his expertise, he is given a 30-day notice of termination, and that his last day of work with Petrocon will be on July 1, 1998. Petrocon
also informed respondent that all due benefits in accordance with the terms and conditions of his employment contract will be paid to
respondent, including his ticket back to the Philippines.
Before his departure from Saudi Arabia, respondent received his final paycheck from Petrocon amounting SR7,488.57.
Upon his return, respondent filed a complaint with the Regional Arbitration Branch VII, National Labor Relations Commission (NLRC),
Cebu City, against petitioner as the recruitment agency which employed him for employment abroad. In filing the complaint,
respondent sought to recover his unearned salaries covering the unexpired portion of his employment contract with Petrocon on the
ground that he was illegally dismissed.
The Labor Arbiter rendered judgment in favor of the respondent and ordered petitioner to pay the peso equivalent of US$5,600.00
based on the rate at the time of actual payment, as payment of his wages for the unexpired portion of his contract of employment. The
NLRC on appeal affirmed the Labor Arbiter’s decision but reduced the award to only US$4,800.00 or its peso equivalent at the time of
payment. The CA likewise dismissed the petition and affirmed the NLRC decision.
Issue: Whether or not respondents dismissal through retrenchment illegal.
Ruling:
No
Retrenchment is the reduction of work personnel usually due to poor financial returns, aimed to cut down costs for operation
particularly on salaries and wages. It is one of the economic grounds to dismiss employees and is resorted by an employer primarily
to avoid or minimize business losses. ISTHED
Retrenchment programs are purely business decisions within the purview of a valid and reasonable exercise of management
prerogative. It is one way of downsizing an employer's workforce and is often resorted to by the employer during periods of business
recession, industrial depression, or seasonal fluctuations, and during lulls in production occasioned by lack of orders, shortage of
materials, conversion of the plant for a new production program, or introduction of new methods or more efficient machinery or
automation. It is a valid management prerogative, provided it is done in good faith and the employer faithfully complies with the
substantive and procedural requirements laid down by law and jurisprudence.
Philippine Law recognizes retrenchment as a valid cause for the dismissal of a migrant or overseas Filipino worker under Article 283
of the Labor Code.
Thus, retrenchment is a valid exercise of management prerogative subject to the strict requirements set by jurisprudence, to wit:
DHSCT
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(1)That the retrenchment is reasonably necessary and likely to prevent business losses which, if already incurred, are not merely de
minimis, but substantial, serious, actual and real, or if only expected, are reasonably imminent as perceived objectively and in good
(2)That the employer served written notice both to the employees and to the Department of Labor and Employment at least one
month prior to the intended date of retrenchment;
(3)That the employer pays the retrenched employees separation pay equivalent to one month pay or at least 1/2 month pay for every
year of service, whichever is higher;
(4)That the employer exercises its prerogative to retrench employees in good faith for the advancement of its interest and not to
defeat or circumvent the employees' right to security of tenure; and
(5)That the employer used fair and reasonable criteria in ascertaining who would be dismissed and who would be retained among the
employees, such as status,…efficiency, seniority, physical fitness, age, and financial hardship for certain workers. 28
Applying the above-stated requisites for a valid retrenchment in the case at bar, it is apparent that the first, fourth and fifth
requirements were complied with by respondent's employer. However, the second and third requisites were absent when Petrocon
terminated the services of respondent.
As aptly found by the NLRC and justly sustained by the CA, Petrocon exercised its prerogative to retrench its employees in good faith
and the considerable reduction of work allotments of Petrocon by Saudi Aramco was sufficient basis for Petrocon to reduce the
number of its personnel.
As for the notice requirement, however, contrary to petitioner's contention, proper notice to the DOLE within 30 days prior to the
intended date of retrenchment is necessary and must be complied with despite the fact that respondent is an overseas Filipino
worker. In the present case, although respondent was duly notified of his termination by Petrocon 30 days before its effectivity, no
allegation or proof was advanced by petitioner to establish that Petrocon ever sent a notice to the DOLE 30 days before the
respondent was terminated. Thus, this requirement of the law was not complied with.
In the case at bar, despite the fact that respondent was employed by Petrocon as an OFW in Saudi Arabia, still both he and his
employer are subject to the provisions of the Labor Code when applicable. The basic policy in this jurisdiction is that all Filipino
workers, whether employed locally or overseas, enjoy the protective mantle of Philippine labor and social legislations.
Also, respondent is entitled to the payment of his separation pay. However, this Court disagrees with the conclusion of the Labor
Arbiter, the NLRC and the CA, that respondent should be paid his separation pay in accordance with the provision of Section 10 of R.A.
No. 8042. A plain reading of the said provision clearly reveals that it applies only to an illegally dismissed overseas contract worker or
a worker dismissed from overseas employment without just, valid or authorized cause.
In the case at bar, notwithstanding the fact that respondent's termination from his employment was procedurally infirm, having not
complied with the notice requirement, nevertheless the same remains to be for a just, valid and authorized cause, i.e., retrenchment as
a valid exercise of management prerogative. To stress, despite the employer's failure to comply with the one-month notice to the
DOLE prior to respondent's termination, it is only a procedural infirmity which does not render the retrenchment illegal. In Agabon v.
NLRC, this Court ruled that when the dismissal is for a just cause, the absence of proper notice should not nullify the dismissal or
render it illegal or ineffectual. Instead, the employer should indemnify the employee for violation of his statutory rights.
Consequently, it is Article 283 of the Labor Code and not Section 10 of R.A. No. 8042 that is controlling. Thus, respondent is entitled to
payment of separation pay equivalent to one (1) month pay, or at least one-half (1/2) month pay for every year of service, whichever
is higher. Considering that respondent was employed by Petrocon for a period of eight (8) months, he is entitled to receive one (1)
month pay as separation pay. In addition, pursuant to current jurisprudence, for failure to fully comply with the statutory due process
of sufficient notice, respondent is entitled to nominal damages in the amount P50,000.00.
Jiao vs. NLRC

G.R. No. 182331, April 18, 2012
Facts:
The petitioners were regular employees of the Philippine Banking Corporation (Philbank), each with at least ten years of service in
the company. Pursuant to its Memorandum dated August 28, 1970, Philbank established a Gratuity Pay Plan (Old Plan) for its
employees. The Old Plan provided:
1. Any employee who has reached the compulsory retirement age of 60 years, or who wishes to retire or resign prior to the
attainment of such age or who is separated from service by reason of death, sickness or other causes beyond his/her control shall for
himself or thru his/her heirs file with the personnel office an application for the payment of benefits under the plan
On March 8, 1991, Philbank implemented a new Gratuity Pay Plan (New Gratuity Plan). In particular, the New Gratuity Plan stated
thus:
x x x An Employee who is involuntarily separated from the service by reason of death, sickness or physical disability, or for any
authorized cause under the law such as redundancy, or other causes not due to his own fault, misconduct or voluntary resignation,
shall be entitled to either one hundred percent (100%) of his accrued gratuity benefit or the actual benefit due him under the Plan,
whichever is greater. [7]
In February 2000, Philbank merged with Global Business Bank, Inc. (Globalbank), with the former as the surviving corporation and
the latter as the absorbed corporation, but the bank operated under the name Global Business Bank, Inc. As a result of the merger,
complainants’ respective positions became redundant. A Special Separation Program (SSP) was implemented and the petitioners
were granted a separation package equivalent to one and a half month’s pay (or 150% of one month’s salary) for every year of service
based on their current salary. Before the petitioners could avail of this program, they were required to sign two documents, namely,
an Acceptance Letter and a Release, Waiver, Quitclaim (quitclaim).
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As their positions were included in the redundancy declaration, the petitioners availed of the SSP, signed acceptance letters and
executed quitclaims in Globalbank’s favor in consideration of their receipt of separation pay equivalent to 150% of their monthly
salaries for every year of service.
Subsequently, the petitioners filed separate complaints for non-payment of separation pay with prayer for damages and attorney’s
fees before the National Labor Relations Commission (NLRC)
The petitioners asserted that, under the Old Plan, they were entitled to an additional 50% of their gratuity pay on top of 150% of one
month’s salary for every year of service they had already received. They insisted that 100% of the 150% rightfully belongs to them as
their separation pay. Thus, the remaining 50% was only half of the gratuity pay that they are entitled to under the Old Plan.
The petitioners further argued that the quitclaims they signed should not bar them from claiming their full entitlement under the law.
They also claimed that they were defrauded into signing the same without full knowledge of its legal implications.
Issues: WON there was proper payment of separation pay.
Ruling:
The petitioners’ receipt of separation pay equivalent to their one and a half months salary for every year of service as provided in the
SSP and the New Gratuity Plan more than sufficiently complies with the Labor Code, which only requires the payment of separation
pay at the rate of one month salary for every year of service.
Globalbank’s right to replace the Old Plan and the New Gratuity Plan is within legal bounds as the terms thereof are in accordance
with the provisions of the Labor Code and complies with the minimum requirements thereof. Contrary to the petitioners’ claim, they
had no vested right over the benefits under the Old Plan considering that none of the events contemplated thereunder occurred prior
to the repeal thereof by the adoption of the New Gratuity Plan. Such right accrues only upon their separation from service for causes
contemplated under the Old Plan and the petitioners can only avail the benefits under the plan that is effective at the time of their
dismissal. In this case, when the merger and the redundancy program were implemented, what was in effect were the New Gratuity
Plan and the SSP; the petitioners cannot, thus, insist on the provisions of the Old Plan which is no longer existent.
The SSP did not revoke or supersede the New Gratuity Plan.
The SSP was not intended to supersede the New Gratuity Plan. On the contrary, the SSP was issued to make the benefits under the
New Gratuity Plan available to employees whose positions had become redundant because of the merger between Philbank and
Globalbank, subject to compliance with certain requirements such as age and length of service, and to improve such benefits by
increasing or rounding it up to an amount equivalent to the affected employees’ one and a half monthly salary for every year of
service. In other words, the benefits to which the redundated employees are entitled to, including the petitioners, are the benefits
under the New Gratuity Plan, albeit increased by the SSP.
Considering that the New Gratuity Plan still stands and has not been revoked by the SSP, does this mean that the petitioners can claim
the benefits thereunder in addition to or on top of what is required under the Article 283 of the Labor Code?
For as long as the minimum requirements of the Labor Code are met, it is within the management prerogatives of employers to come
up with separation packages that will be given in lieu of what is provided under the Labor Code.
Article 283 of the Labor Code provides only the required minimum amount of separation pay, which employees dismissed for any of
the authorized causes are entitled to receive. Employers, therefore, have the right to create plans, providing for separation pay in an
amount over and above what is imposed by Article 283. There is nothing therein that prohibits employers and employees from
contracting on the terms of employment, or from entering into agreements on employee benefits, so long as they do not violate the
Labor Code or any other law, and are not contrary to morals, good customs, public order, or public policy.
In the absence of proof that any of the vices of consent are present, the petitioners’ acceptance letters and quitclaims are valid; thus,
barring them from claiming additional separation pay.
The Court, in other cases, has upheld quitclaims if found to comply with the following requisites: (1) the employee executes a deed of
quitclaim voluntarily; (2) there is no fraud or deceit on the part of any of the parties; (3) the consideration of the quitclaim is credible
and reasonable; and (4) the contract is not contrary to law, public order, public policy, morals or good customs or prejudicial to a
third person with a right recognized by law.
We hold that Metrobank cannot be held liable for the petitioners’ claims.
WHEREFORE, the foregoing premises considered, the petition is DENIED
Realda vs. New Age Graphics Inc.

G.R. No. 192190, April 25, 2012
Facts
Petitioner Realda was dismissed by Respondent New Age Graphics Inc. for unjustified refusal to render overtime work, unexplained
failure to observe prescribed work standards, habitual tardiness and chronic absenteeism despite warning and non-compliance with
the directive for him to explain his numerous unauthorized absences. The Court of Appeals recognized the existence of just causes for
petitioner’s dismissal, however, the appellate court found that the respondent failed to observe the procedural requirements of due
process and, as a consequence, awarded the petitioner P5,000.00 as Nominal Damages.
Issues
WoN the dismissal based on the grounds cited constituted just causes; and
WoN the amount awarded as Nominal Damages of P5,000.00 was valid
Ruling
First, the petitioner’s arbitrary defiance to Graphics, Inc.’s order for him to render overtime work constitutes willful disobedience.
Taking this in conjunction with his inclination to absent himself and to report late for work despite being previously penalized, the CA
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correctly ruled that the petitioner is indeed utterly defiant of the lawful orders and the reasonable work standards prescribed by his
employer.
Second, the petitioner’s failure to observe Graphics, Inc.’s work standards constitutes inefficiency that is a valid cause for dismissal.
Failure to observe prescribed standards of work, or to fulfill reasonable work assignments due to inefficiency may constitute just
cause for dismissal. Such inefficiency is understood to mean failure to attain work goals or work quotas, either by failing to complete
the same within the alloted reasonable period, or by producing unsatisfactory results. As the operator of Graphics, Inc.’s printer, he is
mandated to check whether the colors that would be printed are in accordance with the client’s specifications and for him to do so, he
must consult the General Manager and the color guide used by Graphics, Inc. before making a full run. Unfortunately, he failed to
observe this simple procedure and proceeded to print without making sure that the colors were at par with the client’s demands. This
resulted to delays in the delivery of output, client dissatisfaction, and additional costs on Graphics, Inc.’s part.
While a penalty in the form of suspension had already been imposed on the petitioner for his habitual tardiness and repeated
absenteeism, the principle of “totality of infractions” sanctions the act of Graphics, Inc. of considering such previous infractions in
decreeing dismissal as the proper penalty for his tardiness and unauthorized absences incurred afterwards, in addition to his refusal
to render overtime work and conform to the prescribed work standards.
This Court cannot likewise agree to the petitioner’s attempt to brush aside his refusal to render overtime work as inconsequential
when Graphics, Inc.’s order for him to do so is justified by Graphics, Inc.’s contractual commitments to its clients. Such an order is
legal under Article 89 of the Labor Code and the petitioner’s unexplained refusal to obey is insubordination that merits dismissal from
service.
Nonetheless, while the CA finding that the petitioner is entitled to nominal damages as his right to procedural due process was not
respected despite the presence of just causes for his dismissal is affirmed, this Court finds the CA to have erred in fixing the amount
that the Company is liable to pay. The CA should have taken cognizance of the numerous cases decided by this Court where the
amount of nominal damages was fixed at P30,000.00 if the dismissal was for a just cause.
Mirant vs Caro;
GR NO. 181490, April 23, 2014
Facts:
Respondent was hired by Mirant Pagbilao on January 3, 1994 as its Logistics Officer. In 2002, when Southern Company was sold to
Mirant, respondent was already a Supervisor of the Logistics and Purchasing Department of petitioner. At the time of the severance of
his employment, respondent was the Procurement Supervisor of Mirant Pagbilao assigned at petitioner corporation’s corporate office.
As Procurement Supervisor, his main task was to serve as the link between the Materials Management Department of petitioner
corporation and its staff, and the suppliers and service contractors in order to ensure that procurement is carried out in conformity
with set policies, procedures and practices. In addition, respondent was put incharge of ensuring the timely, economical, safe and
expeditious delivery of materials at the right quality and quantity to petitioner corporation’s plant. Respondent was also responsible
for guiding and overseeing the welfare and training needs of the staff of the Materials Management Department. Due to the nature of
respondent’s functions, petitioner corporation considers his position as confidential. On November 3, 2004, petitioner corporation
conducted a random drug test where respondent was randomly chosen among its employees who would be tested for illegal drug use.
Through an Intracompany Correspondence, 12 these employees were informed that they were selected for random drug testing to be
conducted on the same day that they received the correspondence. Respondent was duly notified that he was scheduled to be tested
after lunch on that day. His receipt of the notice was evidenced by his signature on the correspondence.
There was phone call from his wife. She said there was a bombing incident near her workplace in Tel Aviv. So he acted on and told the
secretary of his department that respondent that he will give preferential attention to the emergency phone call that he just received.
He also told Torres that he would be back at the office as soon as he has resolved his predicament.
On that same day, at around 6:15 p.m., respondent returned to petitioner corporation’s office. When he was finally able to charge his
cellphone at the office, he received a text message from Tina Cecilia (Cecilia), a member of the Drug Watch Committee that conducted
the drug test, informing him to participate in the said drug test. He immediately called up Cecilia to explain the reasons for his failure
to submit himself to the random drug test that day. He also proposed that he would submit to a drug test the following day at his own
expense. Respondent never heard from Cecilia again.
On November 8, 2004, respondent received a Show Cause Notice 15 from petitioner corporation through Jaime Dulot (Dulot), his
immediate supervisor, requiring him to explain in writing why he should not be charged with "unjustified refusal to submit to random
drug testing." Respondent submitted his written explanation 16 on November 11, 2004. Petitioner corporation further required
respondent on December 14, 2004 to submit additional pieces of supporting documents.
He was found guilty by the petitioner’s corporation Investigating panel of “unjustified refusal of to submit random drug testing. and
recommended a penalty of four working weeks suspension without pay, instead of termination, due to the presence of mitigating
circumstances. petitioner corporation’s Asst. Vice President for Material Management Department, George K. Lamela, Jr. (Lamela),
recommended19 that respondent be terminated from employment instead of merely being suspended.
Issue:
WON respondent was validly terminated for his failure to take the mandatory drug test
Held:
No, We agree with the disposition of the appellate court that there was illegal dismissal in the case at bar. While the adoption and
enforcement by petitioner corporation of its Anti-Drugs Policy is recognized as a valid exercise of its management prerogative as an
employer, such exercise is not absolute and unbridled. Managerial prerogatives are subject to limitations provided by law, collective
bargaining agreements, and the general principles of fair play and justice.
Petitioner corporation’s subject Anti-Drugs Policy fell short of being fair and reasonable:
First. The policy was not clear on what constitutes "unjustified refusal" when the subject drug policy prescribed that an employee’s
"unjustified refusal" to submit to a random drug test shall be punishable by the penalty of termination for the first offense. To be sure,
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the term "unjustified refusal" could not possibly cover all forms of "refusal" as the employee’s resistance. The fact that petitioner
corporation’s own personnel had to dissect the intended meaning of "unjustified refusal" is further proof that it is not clear on what
context the term "unjustified refusal" applies to.
Second. The penalty of termination imposed by petitioner corporation upon respondent fell short of being reasonable. Company
policies and regulations are generally valid and binding between the employer and the employee unless shown to be grossly
oppressive or contrary to law 50 – as in the case at bar. Recognizing the ambiguity in the subject policy, the CA was more inclined to
adopt the recommendation of petitioner corporation’s own Investigating Panel over that of Sliman and the NLRC. Thus, We find that
the recommended four (4) working weeks’ suspension without pay as the reasonable penalty to be imposed on [respondent] for his
disobedience but not the illegal termination of work.
Kakampi & Its Members, Panuelos, et al. vs. Kingspoint Express and Logistic
G.R. No. 194813 April 25, 2012
Facts:
Victor Pañ uelos (Pañ uelos), Bobby Dacara (Dacara), Alson Dizon (Dizon), Saldy Dimabayao (Dimabayao), Fernando Lupangco, Jr.
(Lupangco), Sandy Pazi (Pazi), Camilo Tabarangao, Jr. (Tabarangao), Eduardo Hizole (Hizole) and Reginald Carillo (Carillo) were the
former drivers of Kingspoint Express and Logistic (Kingspoint Express), a sole proprietorship registered in the name of Mary Ann Co
(Co) and engaged in the business of transport of goods. On January 16, 2006, Kingspoint Express issued separate notices to individual
petitioners uniformly stating that they have been charged with dishonesty, serious misconduct, loss of confidence, and acts inimical to
the company, by filing with the NLRC false, malicious, and fabricated cases against the company. In addition, Kingspoint stated that
the petitioners’ refusal to undergo drug testing is unwarranted and against company policy. The petitioners were given 48 hrs (2
days) to submit their answers and explanation to the charges.
The individual petitioners failed to submit their written explanation within the stated period. Subsequently, Kingspoint Express
issued to them separate yet uniformly worded notices informing them of their dismissal. The charges were allegedly based on these
acts:
- FABRICATION OF BASELESS MONEY CLAIMS against the company;
- MISLEADING FELLOW CO-WORKERS to sign the MALICIOUS COMPLAINT FOR MONEY CLAIMS against the company;
- REFUSAL TO UNDERGO THE COMPANY’S GENERAL DRUG TEST
- EXTORTING MONEY FROM CO-WORKERS TO FUND ACTIVITIES THAT THEY WERE NEVER FULLY INFORMED OF.
A complaint for illegal dismissal was subsequently filed by petitioners, alleging that the charges against them were fabricated and that
their dismissal was prompted by Kingspoint Express’ aversion to their union activities.
The Labor Arbiter found Dacara, Lupangco, Pazi, Tabarangao, Hizole and Carillo illegally dismissed. On the other hand, the complaint
was dismissed insofar as Panuelos, Dizon and Dimabayao are concerned as they were deemed not to have filed their position papers.
While the allegation of anti-unionism as the primordial motivation for the dismissal is considered unfounded, the respondents failed
to prove that the dismissal was for a just cause.
On appeal, the NLRC affirmed the Labor Arbiter’s Decision. In addition, the NLRC ruled that the respondents failed to comply with the
procedural requirements of due process considering that the uniformly worded first notice sent by Kingspoint to the petitioners, did
not apprise them of the particular acts or omission for which their dismissal were sought. Respondents moved for reconsideration
and the NLRC reversed itself and declared the individual petitioners legally dismissed.
Subsequently, the petitioners filed a petition for certiorari with the CA. The CA reversed and set aside the NLRC Decision. Respondents
promptly filed a motion for reconsideration. Similar to the NLRC, the CA reversed itself and retracted its earlier finding that the
individual petitioners were illegally dismissed. The CA concluded that the 2 notices issued by Kingspoint Express complied with the
requirements of the law.
Issue: Whether or not the individual petitioners’ dismissal is valid.
Ruling:
Yes, the petitioners were legally dismissed.
It is fundamental that in order to validly dismiss an employee, the employer is required to observe both substantive and procedural
due process – the termination of employment must be based on a just or authorized cause and the dismissal must be effected after
due notice and hearing. The Court agreed with the CA that the petitioners’ refusal to submit themselves to drug test is a just cause for
their dismissal. An employer may terminate an employment on the ground of serious misconduct or willful disobedience by the
employee of the lawful orders of his employer or representative in connection with his work. Willful disobedience requires the
concurrence of two elements: (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. Both elements are present in this case.
At no point did the dismissed employees deny Kingspoint Express’ claim that they refused to comply with the directive for them to
submit to a drug test or, at the very least, explain their refusal. Thus, this gives rise to the impression that their non-compliance is
deliberate. The utter lack of reason or justification for their insubordination indicates that it was prompted by mere obstinacy, hence,
willful and warranting of dismissal. Drivers are indispensable to Kingspoint Express’ primary business of rendering door-to-door
delivery services. It is common knowledge that the use of dangerous drugs has adverse effects on driving abilities that may render the
dismissed employees incapable of performing their duties to Kingspoint Express and acting against its interests, in addition to the
threat they pose to the public.
Nonetheless, while Kingspoint Express had reason to sever their employment relations, the Court found its supposed observance of
the requirements of procedural due process pretentious. While Kingspoint Express required the dismissed employees to explain their
refusal to submit to a drug test, the 2 days afforded to them to do so cannot qualify as “reasonable opportunity”, which the Court
construed in King of Kings Transport, Inc. v. Mamac as a period of at least 5 calendar days from receipt of the notice. Thus, even if
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Kingspoint Express’ defective attempt to comply with procedural due process does not negate the existence of a just cause for their
dismissal, it was held that Kingspoint Express is still liable to indemnify the dismissed employees.
Waterfront Cebu City Hotel vs. Jimenez

G.R. No. 174214, June 13, 2012
Facts:
Respondents Ma. Melanie P. Jimenez, Jacqueline C. Baguio, Lovella V. Carillo, and Maila G. Roble were hired for Club Waterfront (the
Club), a division under petitioner Waterfront Cebu City Hotel (the Hotel) which catered to foreign high stakes gamblers, for different
positions and dates as indicated below:
NAME POSITION DATE HIRED MONTHLY SALARY

Ma. Melanie Jimenez P. Guest Service Asst Sept. 4, 1996 15,148.67
Jacqueline Cosep Baguio Treasury Supervisor June 1, 1996 16,082.22
Lovella V. Carillo Guest Services Asst May 26, 1998 15,652.00
Maila G. Roble Pit Supervisor Sept. 1, 1996 16,452.00
On 12 May 2003, respondents received identical letters of termination from petitioner's Director of Human Resources informing them
of the temporary suspension of business of the Club. A total of 45 employees were notified of the imminent closure. On the following
day, petitioner served the notice of suspension of business with the Department of Labor and Employment (DOLE).
The dismissed employees were offered separation pay equivalent to half-month pay for every year of service. The Club's closure took
effect on 15 June 2003.On 26 June 2003, respondents filed a complaint before the Labor Arbiter for illegal dismissal, illegal
suspension, and non-payment of salaries and other monetary benefits. They likewise prayed for damages and attorney's fees.
Respondents refused to believe that the Club was suffering from losses because they knew exactly the number of arrivals as well as
junket clients of the Club. They presented documents to show the arrival of foreign guests at the Club and that ,they are employees of
petitioner assigned to the Club, hence they should have been allowed to work in other departments of the hotel.
Petitioner anchors its arguments mainly on the thesis that retrenchment to prevent losses was undertaken to justify the dismissal of
respondents. Petitioner likened the closure of the Club, which it deemed as a division/department, to retrenchment. Acting on the
same premise that the Club is a division of petitioner, respondents demanded that they should be transferred to another department
of petitioner, instead of being dismissed from employment. Respondents also claim that petitioner failed to prove losses to support
retrenchment.
Issue: Whether or not retrenchment of the respondents was valid
Ruling:
Retrenchment is subject to faithful compliance with the substantative and procedural requirements laid down by law and
jurisprudence. For a valid retrenchment, the following elements must be present:
(1)That retrenchment is reasonably necessary and likely to prevent business losses which, if already incurred, are not merely de
minimis, but substantial, serious, actual and real, or if only expected, are reasonably imminent as perceived objectively and in good
(2)That the employer served written notice both to the employees and to the Department of Labor and Employment at least one
month prior to the intended date of retrenchment;
(3)That the employer pays the retrenched employees separation pay equivalent to one (1) month pay or at least 1/2 month pay for
every year of service, whichever is higher;
(4)That the employer exercises its prerogative to retrench employees in good faith for the advancement of its interest and not to
defeat or circumvent the employees' right to security of tenure; and
(5)That the employer used fair and reasonable criteria in ascertaining who would be dismissed and who would be retained among the
employees, such as status, efficiency, seniority, physical fitness, age, and financial hardship for certain workers.
All these elements were successfully proven by petitioner. First, the huge losses suffered by the Club for the past two years had forced
petitioner to close it down to avert further losses which would eventually affect the operations of petitioner. Second, all 45 employees
working under the Club were served with notice of termination. The corresponding notice was likewise served to the DOLE one
month prior to retrenchment. Third, the employees were offered separation pay, most of whom have accepted and opted not to join
in this complaint. Fourth, cessation of or withdrawal from business operations was bona fide in character and not impelled by a
motive to defeat or circumvent the tenurial rights of employees.
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Ramirez vs. Mar Fishing Co., Inc.

G.R. No. 168208, June 13, 2012
Facts:
On 28 June 2001, respondent Mar Fishing Co., Inc. (Mar Fishing), engaged in the business of fishing and canning of tuna, sold its
principal assets to co-respondent Miramar Fishing Co., Inc. (Miramar) through public bidding. The proceeds of the sale were paid to
the Trade and Investment Corporation of the Philippines (TIDCORP) to cover Mar Fishing's outstanding obligation in the amount of
P897,560,041.26. In view of that transfer, Mar Fishing issued a Memorandum dated 23 October 2001 informing all its workers that
the company would cease to operate by the end of the month. On 29 October 2001 or merely two days prior to the month's end, it
notified the Department of Labor and Employment (DOLE) of the closure of its business operations.
Thereafter, Mar Fishing's labor union, Mar Fishing Workers Union — NFL — and Miramar entered into a Memorandum of Agreement.
The Agreement provided that the acquiring company, Miramar, shall absorb Mar Fishing's regular rank and file employees whose
performance was satisfactory, without loss of seniority rights and privileges previously enjoyed.
Unfortunately, petitioners, who worked as rank and file employees, were not hired or given separation pay by Miramar. Thus,
petitioners filed Complaints for illegal dismissal with money claims before the Arbitration Branch of the National Labor Relations
Commission (NLRC).
In its 30 July 2002 Decision, the Labor Arbiter (LA) found that Mar Fishing had necessarily closed its operations, considering that
Miramar had already bought the tuna canning plant. By reason of the closure, petitioners were legally dismissed for authorized cause.
In addition, even if Mar Fishing reneged on notifying the DOLE within 30 days prior to its closure, that failure did not make the
dismissals void. Consequently, the LA ordered Mar Fishing to give separation pay to its workers.
Aggrieved, petitioners pursued the action before the NLRC, which modified the LA's Decision. Noting that Mar Fishing notified the
DOLE only two days before the business closed, the labor court considered petitioners' dismissal as ineffectual. Hence, it awarded,
apart from separation pay, full back wages to petitioners from the time they were terminated on 31 October 2001 until the date when
the LA upheld the validity of their dismissal on 30 July 2002.
Additionally, the NLRC pierced the veil of corporate fiction and ruled that Mar Fishing and Miramar were one and the same entity,
since their officers were the same. Hence, both companies were ordered to solidarily pay the monetary claims. On reconsideration,
the NLRC modified its ruling by imposing liability only on Mar Fishing. The labor court held that petitioners had no cause of action
against Miramar, since labor contracts cannot be enforced against the transferee of an enterprise in the absence of a stipulation in the
contract that the transferee assumes the obligation of the transferor.
Issue: Whether or not Mar Fishing and Miramar should be held solidarily liable to petitioners
Ruling:
For a dismissal based on the closure of business to be valid, three (3) requirements must be established. Firstly, the cessation of or
withdrawal from business operations must be bona fide in character. Secondly, there must be payment to the employees of
termination pay amounting to at least one-half (1/2) month pay for each year of service, or one (1) month pay, whichever is higher.
Thirdly, the company must serve a written notice on the employees and on the DOLE at least one (1) month before the intended
termination.
In their Petition for Review on Certiorari, petitioners did not dispute the conclusion of the LA and the NLRC that Mar Fishing had an
authorized cause to dismiss its workers. Neither did petitioners challenge the computation of their separation pay.
Rather, they questioned the holding that only Mar Fishing was liable for their monetary claims.
Basing their conclusion on the Memorandum of Agreement and Supplemental Agreement between Miramar and Mar Fishing's labor
union, as well as the General Information Sheets and Company Profiles of the two companies, petitioners assert that Miramar simply
took over the operations of Mar Fishing. In addition, they assert that these companies are one and the same entity, given the
commonality of their directors and the similarity of their business venture in tuna canning plant operations.
At the fore, the question of whether one corporation is merely an alter ego of another is purely one of fact generally beyond the
jurisdiction of this Court. In any case, given only these bare reiterations, this Court sustains the ruling of the LA as affirmed by the
NLRC that Miramar and Mar Fishing are separate and distinct entities, based on the marked differences in their stock ownership.
Also, the fact that Mar Fishing's officers remained as such in Miramar does not by itself warrant a conclusion that the two companies
are one and the same. As this Court held in Sesbreñ o v. Court of Appeals, the mere showing that the corporations had a common
director sitting in all the boards without more does not authorize disregarding their separate juridical personalities. Neither can the
veil of corporate fiction between the two companies be pierced by the rest of petitioners' submissions, namely, the alleged take-over
by Miramar of Mar Fishing's operations and the evident similarity of their businesses. At this point, it bears emphasizing that since
piercing the veil of corporate fiction is frowned upon, those who seek to pierce the veil must clearly establish that the separate and
distinct personalities of the corporations are set up to justify a wrong, protect a fraud, or perpetrate a deception. This, unfortunately,
petitioners have failed to do. In Indophil Textile Mill Workers Union vs. Calica, we ruled thus:
In the case at bar, petitioner seeks to pierce the veil of corporate entity of Acrylic, alleging that the creation of the corporation is a
devi[c]e to evade the application of the CBA between petitioner Union and private respondent company. While we do not discount the
possibility of the similarities of the businesses of private respondent and Acrylic, neither are we inclined to apply the doctrine invoked
by petitioner in granting the relief sought. The fact that the businesses of private respondent and Acrylic are related, that some of the
employees of the private respondent are the same persons manning and providing for auxiliary services to the units of Acrylic, and
that the physical plants, offices and facilities are situated in the same compound, it is our considered opinion that these facts are not
sufficient to justify the piercing of the corporate veil of Acrylic. (Emphasis supplied.)
Having been found by the trial courts to be a separate entity, Mar Fishing — and not Miramar — is required to compensate
petitioners. Indeed, the back wages and retirement pay earned from the former employer cannot be filed against the new owners or
operators of an enterprise.
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Prudential Guarantee & Assurance Employee Labor Union vs. NLRC

G.R. No. 185335, June 13, 2012
Facts:
On November 11, 2005, PGAI's Human Resource Manager, Atty. Joaquin R. Rillo (Atty. Rillo), invited Union President, Mike Apostol
(Apostol) to his office. Atty. Rillo informed Apostol that PGAI was going to conduct an on-the-spot security check in the Information
and Technology (IT) Department. Atty. Rillo also requested that Union representatives witness the inspection to which Apostol
agreed. TDAHCS
The inspection team proceeded to the IT Department, and the EDP head, through PGAI network administrator Angelo Gutierrez
(Gutierrez), initiated the spot check of IT Department computers, beginning with the one assigned to Vallota. After exploring the
contents of all the folders and subfolders in the "My Documents" folder, Gutierrez apparently did not find anything unusual with
Vallota's computer and said "Wala naman, saan dito?" Retizos insisted, "Nandyan yan," and took over the inspection until she found a
folder named "MAA." She then exclaimed, "Heto oh! Ano to? Bakit may MAA dito?" Retizos asked Vallota, "Are you working for MAA?"
Vallota replied, "Hindi po, MAA mutual life po yan na makikita po sa internet." Gutierrez saved a copy of the contents of the MAA
folder in a floppy disk.
Sensing that Vallota was being singled out, Apostol insisted that all the computers in the IT Department, including that of Retizos, be
also subjected to a spot security check. Later, at Retizos' office, and in the presence of Atty. Rillo, Vallota was informed that Retizos
and Atty. Rillo would print the files found in his computer under the folder "MAA." Vallota did not object. After the files were printed,
Vallota and the Union Secretary were asked to sign each page of the printout. Vallota, however, was not given a copy of the printed
file.
On November 14, 2005, Vallota received a memorandum directing him to explain within 72 hours why highly confidential files were
stored in his computer.
Meanwhile, the Union sent a letter 11 to PGAI President Philip K. Rico (Rico) requesting that a grievance committee be convened and
that the contents of the computers of other IT personnel be similarly produced. The request for the convening of a grievance
committee was ignored. On December 21, 2005, Vallota was given a notice of termination of his employment effective January 10,
2006 on the ground of loss of trust and confidence. The decision (AC-05-02) was embodied in a memorandum dated December 21,
2005.
Thus, the petitioners filed a complaint for illegal dismissal with claims for full backwages, moral and exemplary damages, and
attorney's fees. The case was docketed as NLRC-NCR Case No. 00-01-00387-06.
On March 31, 2006, Labor Arbiter Aliman D. Mangandog (LA) rendered a decision in favor of the petitioners.
NLRC granted the respondents' motion for reconsideration and reversed and set aside the decision of the LA.
Issue: Whether Vallota was validly dismissed on the ground of loss of trust and confidence; and (2) whether the requirements of
procedural due process for termination were observed.
Ruling:
The Court's discussion in Mabeza v. National Labor Relations Commission is instructive: ISAcHD
Loss of confidence as a just cause for dismissal was never intended to provide employers with a blank check for terminating their
employees. Such a vague, all-encompassing pretext as loss of confidence, if unqualifiedly given the seal of approval by this Court, could
readily reduce to barren form the words of the constitutional guarantee of security of tenure. Having this in mind, loss of confidence
should ideally apply only to cases involving employees occupying positions of trust and confidence or to those situations where the
employee is routinely charged with the care and custody of the employer's money or property. To the first class belong managerial
employees, i.e., those vested with the powers or prerogatives to lay down management policies and/or to hire, transfer, suspend, lay-
off, recall, discharge, assign or discipline employees or effectively recommend such managerial actions; and to the second class belong
cashiers, auditors, property custodians, etc., or those who, in the normal and routine exercise of their functions, regularly handle
significant amounts of money or property. Evidently, an ordinary chambermaid who has to sign out for linen and other hotel property
from the property custodian each day and who has to account for each and every towel or bedsheet utilized by the hotel's guests at
the end of her shift would not fall under any of these two classes of employees for which loss of confidence, if ably supported by
evidence, would normally apply. Illustrating this distinction, this Court, in Marina Port Services, Inc. vs. NLRC, has stated that:
To be sure, every employee must enjoy some degree of trust and confidence from the employer as that is one reason why he was
employed in the first place. One certainly does not employ a person he distrusts. Indeed, even the lowly janitor must enjoy that trust
and confidence in some measure if only because he is the one who opens the office in the morning and closes it at night and in this
sense is entrusted with the care or protection of the employer's property. The keys he holds are the symbol of that trust and
confidence.
By the same token, the security guard must also be considered as enjoying the trust and confidence of his employer, whose property
he is safeguarding. Like the janitor, he has access to this property. He too, is charged with its care and protection.
Notably, however, and like the janitor again, he is entrusted only with the physical task of protecting that property. The employer's
trust and confidence in him is limited to that ministerial function. He is not entrusted, in the Labor Arbiter's words, 'with the duties of
safekeeping and safeguarding company policies, management instructions, and company secrets such as operation devices.' He is not
privy to these confidential matters, which are shared only in the higher echelons of management. It is the persons on such levels who,
because they discharge these sensitive duties, may be considered holding positions of trust and confidence. The security guard does
not belong in such category.
More importantly, we have repeatedly held that loss of confidence should not be simulated in order to justify what would otherwise
be, under the provisions of law, an illegal dismissal. "It should not be used as a subterfuge for causes which are illegal, improper and
unjustified. It must be genuine, not a mere afterthought to justify an earlier action taken in bad faith."
In Bristol Myers Squibb (Phils.), Inc. v. Baban, the Court discussed the requisites for a valid dismissal on the ground of loss of trust
and confidence:
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It is clear that Article 282(c) of the Labor Code allows an employer to terminate the services of an employee for loss of trust and
confidence. The right of employers to dismiss employees by reason of loss of trust and confidence is well established in jurisprudence.
The first requisite for dismissal on the ground of loss of trust and confidence is that the employee concerned must be one holding a
position of trust and confidence. Verily, We must first determine if respondent holds such a position.
There are two (2) classes of positions of trust. The first class consists of managerial employees. They are defined as those vested with
the powers or prerogatives to lay down management policies and to hire, transfer, suspend, lay-off, recall, discharge, assign or
discipline employees or effectively recommend such managerial actions. The second class consists of cashiers, auditors, property
custodians, etc. They are defined as those who in the normal and routine exercise of their functions, regularly handle significant
amounts of money or property.
xxx xxx xxx
The second requisite is that there must be an act that would justify the loss of trust and confidence. Loss of trust and confidence to be
a valid cause for dismissal must be based on a willful breach of trust and founded on clearly established facts. The basis for the
dismissal must be clearly and convincingly established but proof beyond reasonable doubt is not necessary.
Thus, the first question to be addressed is whether Vallota held a position of trust and confidence.
Based on the standards set by previous jurisprudence, Vallota's position as Junior Programmer is analogous to the second class of
positions of trust and confidence. Though he did not physically handle money or property, he became privy to confidential data or
information by the nature of his functions. At a time when the most sensitive of information is found not printed on paper but stored
on hard drives and servers, an employee who handles or has access to data in electronic form naturally becomes the unwilling
recipient of confidential information. HEDSIc
Having addressed the nature of his position, the next question is whether the act complained of justified the loss of trust and
confidence of Vallota's employer so as to constitute a valid cause for dismissal. It must, thus, be determined whether the alleged basis
for dismissal was based on clearly established facts.
To be a valid ground for dismissal, loss of trust and confidence must be based on a willful breach of trust and founded on clearly
established facts. A breach is willful if it is done intentionally, knowingly and purposely, without justifiable excuse, as distinguished
from an act done carelessly, thoughtlessly, heedlessly or inadvertently. It must rest on substantial grounds and not on the employer's
arbitrariness, whims, caprices or suspicion; otherwise, the employee would remain eternally at the mercy of the employer. Further, in
order to constitute a just cause for dismissal, the act complained of must be work-related and show that the employee concerned is
unfit to continue working for the employer. Such ground for dismissal has never been intended to afford an occasion for abuse
because of its subjective nature.
It must also be remembered that in illegal dismissal cases like the one at bench, the burden of proof is upon the employer to show that
the employee's termination from service is for a just and valid cause. The employer's case succeeds or fails on the strength of its
evidence and not the weakness of that adduced by the employee, in keeping with the principle that the scales of justice should be
tilted in favor of the latter in case of doubt in the evidence presented by them. Often described as more than a mere scintilla, the
quantum of proof is substantial evidence which is understood as such relevant evidence as a reasonable mind might accept as
adequate to support a conclusion, even if other equally reasonable minds might conceivably opine otherwise. Failure of the employer
to discharge the foregoing onus would mean that the dismissal is not justified and, therefore, illegal. TADCSE
In this case, there was no other evidence presented to prove fraud in the manner of securing or obtaining the files found in Vallota's
computer. In fact, aside from the presence of these files in Vallota's hard drive, there was no other evidence to prove any gross
misconduct on his part. There was no proof either that the presence of such files was part of an attempt to defraud his employer or to
use the files for a purpose other than that for which they were intended. If anything, the presence of the files reveals some degree of
carelessness or neglect in his failure to delete them, but it is an extremely farfetched conclusion bordering on paranoia to state that it
is part of a larger conspiracy involving corporate espionage.
2. In this case, the two-notice requirement was complied with. By the petitioners' own admission, PGAI issued to Vallota a written
Notice of Charges & Preventive Suspension (Ref. No. AC-05-02) dated November 14, 2005. After an exchange of memoranda, PGAI
then informed Vallota of his dismissal in its decision dated December 21, 2005.
Given, however, that the petitioners expressly requested a conference or a convening of a grievance committee, following the Court's
ruling in the Perez case, which was later cited in the recent case of Lopez v. Alturas Group of Companies, such formal hearing became
mandatory. After PGAI failed to affirmatively respond to such request, it follows that the hearing requirement was not complied with
and, therefore, Vallota was denied his right to procedural due process.
In light of the above discussion, Vallota is entitled to reinstatement and backwages, reckoned from the date he was illegally dismissed
until the finality of this decision in accordance with jurisprudence.
Paulino vs. NLRC

G.R. No. 176184, June 13, 2012
Facts:
On 16 January 1995, petitioner, who was then employed by private respondent Philippine Long Distance Telephone Company, Inc.
(PLDT) as Cable Splicer III, surrendered his service vehicle to PLDT's motor pool for body repairs. For this reason, he unloaded the
company-issued plant materials contained in the vehicle and stored them at his residence for safekeeping.
For 1 month and 11 days, PLDT's properties were in the custody of petitioner. Thus, on 27 February 1995, members of the Philippine
National Police (PNP), armed with a search warrant, searched his house.
At that time, based on the investigation by the PNP, petitioner did not present any documents or requisition slips that would justify
his possession of the materials. Consequently, PLDT caused the filing of an Information for qualified theft against him.
The next day, PLDT issued an invitation to V. Pesayco, the manager of petitioner, requesting him to make petitioner available to clarify
certain matters. Petitioner attended this meeting along with his lawyer, but PLDT's investigators merely talked with the counsel.
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PLDT then received a security report stating that petitioner had engaged in the illicit disposal of its plant materials, which were
recovered during the search conducted at his residence. jur2005
On 3 April 1995, PLDT issued an Inter-Office Memo requiring petitioner to explain why he should not be terminated from
employment for serious misconduct (theft of company property). The Memo also gave him the option to ask for a formal hearing of
his case. In reply, he requested that the proceedings be held in abeyance until the criminal case against him had been concluded.
Then, on 26 May 1995, Pesayco informed petitioner in writing that since his reply did not provide any clarification whatsoever that
would have warranted an evaluation of his case, the company was terminating his services effective on the said date.
Three years later, after the criminal case for qualified theft had been terminated for failure of the prosecution to prove his guilt
beyond reasonable doubt, petitioner filed a Complaint for Illegal Dismissal which the Labor Arbiter (LA) dismissed for utter lack of
merit.
Both the NLRC and the CA upheld the dismissal of petitioner.
Issue: Petitioner raises the sole issue of whether or not the CA gravely erred in upholding his dismissal as valid based on just cause.
Ruling:
The Labor Code recognizes that an employer, for just cause, may validly terminate the services of an employee for serious misconduct
or willful disobedience of the lawful orders of the employer or representative in connection with the employee's work. Fraud or
willful breach by the employee of the trust reposed by the employer in the former, or simply loss of confidence, also justifies an
employee's dismissal from employment.
The LA, the NLRC and the CA all acknowledged that, notwithstanding petitioner's acquittal in the criminal case for qualified theft,
respondent PLDT had adequately established the basis for the company's loss of confidence as a just cause to terminate petitioner.
This Court finds that approach to be correct, since proof beyond reasonable doubt of an employee's misconduct is not required in
dismissing an employee. Rather, as opposed to the "proof beyond reasonable doubt" standard of evidence required in criminal cases,
labor suits require only substantial evidence to prove the validity of the dismissal.
Willful breach of trust or loss of confidence requires that the employee (1) occupied a position of trust or (2) was routinely charged
with the care of the employer's property. As correctly appreciated by the CA, petitioner was charged with the care and custody of
PLDT's property.
To warrant dismissal based on loss of confidence, there must be some basis for the loss of trust or the employer must have reasonable
grounds to believe that the employee is responsible for misconduct that renders the latter unworthy of the trust and confidence
demanded by his or her position. Here, petitioner disputes the sufficiency of PLDT's basis for loss of trust and confidence. He alleges
that he did not steal the plant materials, considering that he had lawful possession.
However, assuming that he lawfully possessed the materials, PLDT still had ample reason or basis to already distrust petitioner. For
more than a month, he did not even inform PLDT of the whereabouts of the plant materials. Instead, he stocked these materials at his
residence even if they were needed in the daily operations of the company. In keeping with the honesty and integrity demanded by his
position, he should have turned over these materials to the plant's warehouse.
The fact that petitioner did not present any documents or requisition slips at the time that the PNP took the plant materials logically
excites suspicion. In addition, PLDT received a security report stating that petitioner had engaged in the illicit disposal of its plant
materials, which were recovered during the search conducted at his residence.
Thus, PLDT reasonably suspected petitioner of stealing the company's property. At that juncture, the employer may already dismiss
the employee since it had reasonable grounds to believe or to entertain the moral conviction that the latter was responsible for the
misconduct, and the nature of his participation therein rendered him absolutely unworthy of the trust and confidence demanded by
his position.
Given these circumstances, it would have been unfair for PLDT to keep petitioner in its employ. Petitioner displayed actions that made
him untrustworthy. Thus, as a measure of self-protection, PLDT validly terminated his services for serious misconduct and loss of
confidence.
Manila Electric Co. vs. Dejan

G.r. No. 194106, June 18, 2012
Facts:
Respondent Herminigildo Dejan commenced employment with the Manila Electric Company (Meralco) on July 7, 1992. He was then
Meralco's branch representative in its San Pedro, Laguna branch, with a monthly salary of P30,500.00. His work consisted of
accepting payments of the required fees from applicants for electric service installation and issuing the corresponding meter
sockets/bases after payment of a deposit, preceded by an inspection of the premises to be energized by a Meralco field personnel.
In the mid-afternoon of March 18, 2005, the security guard on duty at the branch, Warlito Silverio, noticed a certain Estanislao
Gozarin a.k.a. Mang Islao, a private electrician, take out from the branch premises 20 pieces of meter sockets which were then loaded
into a parked Meralco contracted jeep belonging to one Cesar Reyes. Reyes brought the meter sockets to his house. The meter sockets
were thereafter allegedly picked up by Gil Duenas, a Meralco field representative. Dejan was asked to explain the incident. aCITEH
In his letter-explanation, dated March 23, 2005, to a certain Emilia SJ Reaso, Dejan admitted that he released the meter sockets in
question because the deposit fees had already been paid. The payor, a certain Antonio A. Depante a.k.a. Bruce, also an electrician,
asked for the release of the items. Allegedly, he had several contracts for service installation with the branch. Dejan indicated the list
of contracts covering the released meter sockets. Sometime in September, October and November 2005, Meralco asked Gozarin,
Dejan, and Reyes to give their sworn statements on the incident.
On February 10, 2006, Dejan received a letter from Marcelino Rosario, head of Meralco's Investigation-Paralegal Services, charging
him with the unauthorized taking of 20 meter sockets, in violation of Section 7, paragraphs 4 and 11 of the Company Code of
Employee Discipline, in relation to Article 282 of the Labor Code. On February 17, 2006, Meralco conducted a formal investigation
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where Dejan admitted issuing the meter sockets without the authorization of the applicants for electric connection. He alleged that he
released the items even without authorization as it had been the accepted practice in the office, provided the deposit fee had been
paid. He claimed that he talked with Depante, through the cell phone of Duenas, about it, after Duenas himself requested him (Dejan)
to release the meter sockets to Gozarin. When Dejan released the meter sockets, Duenas instructed Gozarin to take them out of the
Meralco premises and load them in Reyes' jeep.
Also testifying at the investigation, Depante corroborated Dejan's account of the incident. He alleged that he made the request for the
release of the meter sockets due to his inability to pick up the items himself as he was busy with another project at the time. He and
Duenas retrieved the meter sockets from Reyes' house the next day.
Unconvinced with Dejan's explanation, Meralco served Dejan a letter on April 6, 2006, 9 terminating his employment effective the
following day, with forfeiture of all rights and privileges. On April 20, 2006, Dejan filed his complaint with the National Labor
Relations Commission (NLRC).
Issue: the validity of dejan’s termination.
Ruling:
We found for petitioner.
Dejan is liable as charged. More specifically, he is liable for violation of Section 7, paragraphs 4 and 11 of the Company Code of
Employee Discipline, constituting serious misconduct, fraud and willful breach of trust of the employer, just causes for termination of
employment under the law. The facts and the evidence on record clearly bear this out and we wonder how the CA could have missed
the seriousness or gravity of Dejan's transgressions.
There is no dispute about the release of the meter sockets. Also, the persons involved were clearly identified — Dejan; Gozarin or
Mang Islao, a private electrician who received the meter sockets; Reyes, the owner of the jeep where the meter sockets were loaded
by Gozarin; Duenas, a Meralco field representative; and Depante, another private electrician who purportedly owned the meter
sockets.
There is also no question that Dejan released the meter sockets to Gozarin without the written authority or SPA from the customer or
customers who applied for electric connection (as a matter of company policy). Dejan released the meter sockets to Gozarin on the
mere say-so of Depante, as he claimed, through a call to Duenas' cell phone, and justified his act to be in accord with accepted
company practice.
Dejan tried to minimize the gravity of his offense by denying that the meter sockets were lost and that he issued them without
authority since they were all contracted, as shown by the SINs he submitted in evidence.
Dejan's tale fails to convince us. While the meter sockets might not have been lost, their issuance or release was highly irregular,
perpetrated to defraud the company. As we see it, the release of the meter sockets served as a key element in a private contracting
activity for electric service connection of Dejan and Duenas. AEaSTC
On the day of the release of the meter sockets, March 18, 2005, a Friday, Duenas was in the branch office, interceding for private
electrician Depante. Gozarin, Depante's emissary, was there also, waiting for the release. Dejan had then already put the 20 meter
sockets in boxes when he received a call from Depante on Duenas' cell phone requesting for the release of the meter sockets to
Gozarin, saying that he could not pick them up as he was attending to another project.
After Depante's call, Dejan released the meter sockets to Gozarin who had them loaded in Reyes' jeep; Reyes, in turn, brought them to
his house. On the Sunday of that week, March 20, 2005, the meter sockets were picked up. Reyes testified that Duenas picked them
up; Duenas, on the other hand, stated that it was Depante who retrieved the meter sockets.
While there was no unanimity as to who picked up the meter sockets, it appears that it was Duenas who was the most active or the
most interested in having the meter sockets released. Gozarin, who had known Duenas for quite some time, testified that it was
Duenas who told him to get the meter sockets from Dejan and load them in Reyes' jeep.
Questioned as to whether Dejan asked him for a written authorization, Gozarin answered no. Reyes, like Gozarin, had also known
Duenas for some time; in fact, since 1993. Also, it was Duenas who asked him to load the meter sockets in his jeep.
Given Duenas' involvement in the release of the meter sockets on March 18, 2005, there is reason to believe that it was more through
his intervention than Depante's representation that the meter sockets were released. There is reason to believe, too, that it was
Duenas who picked the meter sockets from Reyes' house and that Depante made a call to Dejan to accommodate the latter and
Duenas, whom he likewise knew very well, in taking the meter sockets out of the branch premises for reason or reasons only known
to them. Depante is a private contractor for electric services and it would work to his favor if he cooperated with the two Meralco
employees.
It was bad enough that Dejan failed to ask for a written authorization for the release of the meter sockets as required by company
policy. His apparent motive behind the move — to mislead the company, in concert with Duenas, as to the real recipient of the meter
sockets — made it worse. It could only result in a loss to Meralco as it was not the customer, who applied for electric service, or his
authorized representative who received the meter sockets. As the circumstances strongly indicate, it was Duenas who retrieved the
meter sockets. It was obviously an act intended to defraud the company. It lends credence to Meralco's submission that Duenas was
engaged in private contracting for electric connection, together with Dejan. TSDHCc
The above impression is bolstered by Dejan's false claim that the meter sockets were all accounted for because they were issued for
Depante's service applications. As the company discovered, however, the SINs Dejan submitted in evidence covered applications
which had already been inspected, approved and provided (installed) with meters even before March 18, 2005, the date when the 20
meter sockets were released. Meralco argued before the NLRC 27 that if Depante's service applications had already been installed
with meters, it could only be that the meter sockets Dejan issued were intended for purposes which the company had not approved or
authorized. It added that there was clear indication of Dejan's intent to gain from and to defraud the company. Meralco reiterated the
same argument before the CA.
The CA brushed aside the argument, relying on Dejan's explanation that Depante's "practice of leaving the deposit with him whenever
customers abounded often resulted in the accumulation of contracts for the meter base."
We disagree with this finding. Dejan stated in his Sinumpaang Salaysay given on October 21, 2005:
T:Bakit ikaw ang kinausap ni Bruce na mag-issue ng 20 meter sockets?
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S:Kasi po ako po ang gumawa ng mga kontrata niya.

T:Kung gayon ay kaya mo ito ibinigay ay bayad na lahat ng mga deposito nito?
S:Opo.
Further, in the Malayang Salaysay given by Dejan and Depante on February 17, 2006, Dejan said:
T:Anong masasabi mo Ginoong Dejan hinggil sa paratang sa iyo?
S:Hindi po totoo na sinasabi nila na nawala po ang meter base at hindi rin po totoo na ito ay aking inisyu ng walang pahintulot dahil
ang lahat nito ay kontrata. Akin po[ng] isinusumite ang ilan sa mga kontratang ukol sa mga SIN na siyang dahilan kaya ko ini-issue ang
mga ito.
Based on the above depositions, we cannot accept the CA's insinuation that Dejan mixed up the SINs he submitted in evidence (to
cover for the released 20 meter sockets) with the SINs pertaining to other service applications which Depante contracted. There could
not have been room for confusion as far as Dejan is concerned. He was the one preparing Depante's contracts, as he himself admitted.
He knew or should have known the contracts' status (whether they had already been acted upon or not). It would be gross negligence
on his part if it were otherwise.
Under the circumstances, we believe that Dejan submitted the SINs in question to make it appear that the released meter sockets
pertained to outstanding service applications contracted by Depante; in other words, to give a semblance of regularity in the
transaction and to avoid liability for their unauthorized release. He released the meter sockets with intent to defraud the company.
We cannot blame Meralco for losing its trust and confidence in Dejan. He is no ordinary employee. As branch representative, "he was
principally charged with the function and responsibility to accept payment of fees required for the installation of electric service and
facilitate issuance of meter sockets." The duties of his position require him to always act with the highest degree of honesty, integrity
and sincerity, as the company puts it. In light of his fraudulent act, Meralco, an enterprise imbued with public interest, cannot be
compelled to continue Dejan's employment, as it would be inimical to its interest. Needless to say, "[t]he law, in protecting the rights
of the laborer, authorizes neither oppression nor self-destruction of the employer." For sure, Dejan was validly dismissed for serious
misconduct, and loss of trust and confidence.
The procedural question
Dejan posits that the petition is improper because it raises only questions of facts. We do not see this as a legal problem. As we
stressed earlier, the CA grossly misapprehended the facts and the evidence on record. The case falls within the exceptions to the rule
on the conclusiveness of the CA findings, thereby opening the CA rulings to the Court's discretionary review authority
Apo Cement Corporation vs. Baptisma

G.R. No. 176671, June 20, 2012
Facts:
On June 16, 1998, respondent Zaldy E. Baptisma was employed by petitioner Apo Cement Corporation, a duly registered corporation
maintaining and operating a cement manufacturing plant in Tinaan, Naga, Cebu. 4
Sometime in September 2003, petitioner received information from one of its employees, Armando Moralda (Moralda), that some of
its personnel, including respondent who was then the manager of petitioner's Power Plant Department, were receiving commissions
or "kickbacks" from suppliers. 5 To ascertain the veracity of the information given by Moralda, the top management of petitioner
conducted an investigation during which Jerome Lobitañ a (Lobitañ a), one of petitioner's accredited suppliers, doing business under
the name and style "Precision Process," came forward to corroborate the statement of Moralda. 6
On October 10, 2003, Moralda and Lobitañ a executed separate affidavits 7 to substantiate their claims. Pertinent portions of the
affidavits read:
Lobitañ a's Affidavit:

xxx xxx xxx
8.1.There were times when Mr. Tinoco himself talked directly to the end-user [to] negotiate for the amount or percentage of the
kickback that they would get from me. There was one time when Mr. Tinoco informed me that he has negotiated with Mr. Zaldy
Baptisma, the Power Plant Manager, and committed to give him a ten percent (10%) "commission" or kickback for all transactions
which would be awarded to me. Upon the award of the contract amounting to approximately Two Hundred Thousand Pesos
(P200,000.00) and the remittance by Apo of the payment, I met with Mr. Baptisma outside the Apo plant and personally handed to
him his ten percent (10%) "commission"/kickback in cash.
Having been implicated in the irregularities, respondent, on November 3, 2003, received a Show Cause Letter with Notice of
Preventive Suspension. Respondent submitted his written explanation 12 denying the accusations hurled against him.
To further afford respondent ample opportunity to defend himself, petitioner conducted a series of administrative investigation
hearings during which respondent was able to face his accusers.
For his part, respondent presented his co-employees Bobby Banzon (Banzon), Reno Cedeñ o (Cedeñ o) and Chrstopher Navarro. 16
Banzon testified that sometime in December 2002, he, along with respondent and other Apo employees, went to Papa's Grill; that on
said occasion, he saw Lobitañ a with some companions at another table; and that Lobitañ a did not approach them but only gave food
and bottles of beer through a waiter. 17 Cedeñ o, on the other hand, denied meeting Lobitañ a at Papa's Grill. 18
On March 22, 2004, respondent received the Notice of Termination 19 dated March 19, 2004 informing him of his dismissal from
employment effective immediately on the ground of loss of trust and confidence.
The Labor Arbiter favored the respondent. Commissioner reversed the decision. However, CA reinstated the Decision of the Labor
Arbiter. It ruled that petitioner failed to prove the existence of a just cause to warrant the termination of respondent as the alleged
loss of trust and confidence was not based on established facts.
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Issue: Whether there was just cause for the dismissal of respondent.
Ruling:
To validly dismiss an employee on the ground of loss of trust and confidence under Article 282 (c) of the Labor Code of the
Philippines, the following guidelines must be observed: "1) loss of confidence should not be simulated; 2) it should not be used as
subterfuge for causes which are improper, illegal or unjustified; 3) it may not be arbitrarily asserted in the face of overwhelming
evidence to the contrary; and 4) it must be genuine, not a mere afterthought to justify earlier action taken in bad faith." More
important, it "must be based on a willful breach of trust and founded on clearly established facts."
In this case, we agree with the NLRC that the termination of respondent on the ground of loss of trust and confidence was justified.
Unlike the Labor Arbiter and the CA, we find the testimony of Lobitañ a credible and truthful.
All told, we find that the testimony of Lobitañ a constitutes substantial evidence to prove that respondent, as the then Power Plant
Manager, accepted commissions and/or "kickbacks" from suppliers, which is a clear violation of Section 2.04 of petitioner's Company
Rules and Regulations. Jurisprudence consistently holds that for managerial employees "the mere existence of a basis for believing
that such employee has breached the trust of his employer would suffice for his dismissal." As we then see it, respondent's
termination was for a just and valid cause.
Cosmos Bottling vs. Fermin

G.R. No. 193676, June 20, 2012
Facts:
-Wilson B. Fermin (Fermin) was a forklift operator at Cosmos Bottling Corporation (COSMOS), where he started his employment on
27 August 1976. 4 On 16 December 2002, he was accused of stealing the cellphone of his fellow employee, Luis Braga (Braga). 5
Fermin was then given a Show Cause Memorandum, requiring him to explain why the cellphone was found inside his locker. In
compliance therewith, he submitted an affidavit the following day, explaining that he only hid the phone as a practical joke and had
every intention of returning it to Braga. Braga executed a handwritten narration of events.
After conducting an investigation, COSMOS found Fermin guilty of stealing Braga's phone in violation of company rules and
regulations. Consequently, on 2 October 2003, the company terminated Fermin from employment after 27 years of service.
Meanwhile, Fermin filed a Complaint for Illegal Dismissal, which the Labor Arbiter (LA) dismissed for lack of merit on the ground that
the act of taking a fellow employee's cellphone amounted to gross misconduct. Further, the LA likewise took into consideration
Fermin's other infractions, namely: (a) committing acts of disrespect to a superior officer, and (b) sleeping on duty and abandonment
of duty. This was affirmed by the Commission.Court of Appeals reversed the rulings of the LA and the NLRC and awarded him his full
retirement benefits. Although the CA accorded with finality the factual findings of the lower tribunals as regards Fermin's commission
of theft, it nevertheless held that the penalty of dismissal from service was improper on the ground that the said violation did not
amount to serious misconduct or willful disobedience.
Issue: Whether or not the imposition of the penalty of dismissal was appropriate.
Ruling:
Affirmative. Theft committed against a co-employee is considered as a case analogous to serious misconduct, for which the penalty of
dismissal from service may be meted out to the erring employee, viz.:
Article 282.Termination by Employer. — An employer may terminate an employment for any of the following causes:
(a)Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or his representatives in
connection with his work.
Misconduct involves "the transgression of some established and definite rule of action, forbidden act, a dereliction of duty, willful in
character, and implies wrongful intent and not mere error in judgment."
In this case, the LA has already made a factual finding, which was affirmed by both the NLRC and the CA, that Fermin had committed
theft when he took Braga's cellphone. Thus, this act is deemed analogous to serious misconduct, rendering Fermin's dismissal from
service just and valid.
Further, the CA was correct in ruling that previous infractions may be cited as justification for dismissing an employee only if they are
related to the subsequent offense. However, it must be noted that such a discussion was unnecessary since the theft, taken in isolation
from Fermin's other violations, was in itself a valid cause for the termination of his employment.
Finally, it must be emphasized that the award of financial compensation or assistance to an employee validly dismissed from service
has no basis in law. Therefore, considering that Fermin's act of taking the cellphone of his co-employee is a case analogous to serious
misconduct, this Court is constrained to reverse the CA's ruling as regards the payment of his full retirement benefits. In the same
breath, neither can this Court grant his prayer for backwages.
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Reyes-Ravel vs. Philippine Luen Thai Holdings

G.R. No. 174893, July 11, 2012
Facts:
In February 2000, PLTHC hired petitioner as Corporate Human Resources (CHR) Director for Manufacturing for its
subsidiary/affiliate company, L&T. In the employment contract, 5 petitioner was tasked to perform functions in relation to
administration, recruitment, benefits, audit/compliance, policy development/structure, project plan, and such other works as may be
assigned by her immediate superior, Frank Sauceda (Sauceda), PLTHC's Corporate Director for Human Resources.
On September 6, 2001, petitioner received a Prerequisite Notice from Sauceda and the Corporate Legal Counsel of PLTHC, Ma. Lorelie
T. Edles with reference to her failure to perform in accordance with management directives in various instances, which collectively
have resulted in loss of confidence because on numerous occasions. Also, in the presence of colleagues and subordinates, she made
statements that serve to undermine the Company's efforts at pursuing the HR2 Program of which the other colleagues complained
about her.
She explained that her alleged failure to perform management directives could be attributed to the lack of effective communication
with her superiors due to malfunctioning email system. This caused her to miss certain directives coming from her superiors and
likewise, for her superiors to overlook the reports she was submitting. She denied uttering negative comments about the HR2
Program and instead claimed to have intimated her support for it.
Petitioner was dismissed from the service for loss of confidence on her ability to promote the interests of the company. This led
petitioner to file a Complaint for illegal dismissal, payment of separation pay, 13th month pay, moral and exemplary damages,
attorney's fees, and other unpaid company benefits against respondents and its officers.
Issue: Whether or not there was a valid dismissal.
Ruling:
There exists a valid ground for petitioner's termination for employment.
Jurisprudence provides that an employer has a distinct prerogative and wider latitude of discretion in dismissing a managerial
personnel who performs functions which by their nature require the employer's full trust and confidence. As distinguished from a
rank and file personnel, mere existence of a basis for believing that a managerial employee has breached the trust of the employer
justifies dismissal. Loss of confidence as a ground for dismissal does not require proof beyond reasonable doubt as the law requires
only that there be at least some basis to justify it.
Petitioner was L&T's CHR Director for Manufacturing. As such, she was directly responsible for managing her own departmental staff.
It is therefore without question that the CHR Director for Manufacturing is a managerial position saddled with great responsibility.
Because of this, petitioner must enjoy the full trust and confidence of her superiors. Not only that, she ought to know that she is
"bound by more exacting work ethics" and should live up to this high standard of responsibility.
records show that petitioner indeed unreasonably failed to effectively communicate with her immediate superior. There was an
apparent neglect in her obligation to maintain constant communication with Sauceda in order to ensure that her work is up to par.
Second, the affidavits of petitioner's co-workers revealed her negative attitude and unprofessional behavior towards them and the
company. The third and most important is petitioner's display of inefficiency and ineptitude in her job.
An employer has the right to regulate, according to its discretion and best judgment, all aspects of employment, including work
assignment, working methods, processes to be followed, working regulations, transfer of employees, work supervision, lay-off of
workers and the discipline, dismissal and recall of workers soo long as they are exercised in good faith.
Omar Verdadero vs. Barney Autolines Group of Companies Transport, Inc.

G.R. No. 195428, August 29, 2012
Facts:
Jomar Verdadero is a bus conductor of Barney Autolines. In January 2008, he had an altercation with Gerardo Gimenez, a Disciplinary
Officer employed by Barney Autolines. The altercation resulted from a misunderstanding when Verdadero failed to give Gimenez’s
wife a free ride (under Barney Autolines’s guidelines, employees and their wives are given free rides in Barney buses). Later, Gimenez
filed an administrative complaint against Verdadero. Barney and Rosela Chito, owners of Barney Autolines, presided over the case.
The administrative case however was fruitless and thereafter Verdadero failed to report to work as he allegedly feared Gimenez and
his friends – Gimenez has a higher rank than Verdadero. Verdadero would only report to Barney Autolines premises if Gimenez is not
around and would only sign the logbook. He also failed to meet with the Chitos. Despite this, the Chitos advised Verdadero to report to
work and also to submit a letter of apology to Gimenez (as requested by Gimenez). But instead of complying, Verdadero filed a case
for illegal dismissal against Barney Autolines as he claimed that he was constructively dismissed when he was not given any more
work assignments and when he was berated by Gimenez during their altercation. Verdadero is praying that due to his strained
relations with the owners, he should be awarded separation pay and backwages.
Issue: Whether or not Verdadero was illegally dismissed (constructively dismissed) and as such entitled to separation pay and
backwages.
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Ruling:
No. As a rule, reinstatement and backwages are reliefs available to an illegally dismissed employee. Reinstatement restores the
employee who was unjustly dismissed to the position from which he was removed, that is, to his status quo ante dismissal, while the
grant of backwages allows the same employee to recover from the employer that which he had lost by way of wages as a result of his
dismissal. If reinstatement is not possible due to strained relations, separation pay as well as backwages are in order. HOWEVER, in
this case, there is no constructive or illegal dismissal. Verdadero brought this to himself. He was being ordered to return to work but
he refused to do so based on his unfounded fear of Gimenez. How can the Chitos assign him any work when he refused to appear
before them? Further, the alleged act of Gimenez berating him cannot be imputed as an act of illegal dismissal on the part of the
Chitos. Gimenez and Verdadero are both employees of the Chitos. Unlawful acts committed by a co-employee will not bring the matter
within the ambit of constructive dismissal. Gimenez may be of higher rank than Verdadero but his functions as a disciplinary officer
do not involve the power or authority to dismiss or even suspend an employee. Such power is exclusively lodged in the Barney
Autolines management. Without such illegal dismissal, there can be no strained relations to speak of, hence there can be no award of
separation pay or backwages in favor of Verdadero. In fact, the Chitos intimated that they are willing take back Verdadero as their
employee without any demotion should he report for work.
Naranjo vs. Biomedica Health Care, Inc.

G.R. No. 193789, September 19, 2012
Facts:
Respondent Biomedica Health Care, Inc. (Biomedica) was, during the material period, engaged in the distribution of medical
equipment. Petitioners were former employees of Biomedica who November 7, 2006, with two (2) other employees, were all absent
for various personal reasons. Notably, these are the same employees who filed a letter to the National Director, National Capital
Region-Department of Labor and Employment (DOLE) against Biomedica for lack of salary increases, failure to remit Social Security
System and Pag-IBIG contributions, and violation of the minimum wage law, among other grievances. Later that day, petitioners
reported for work after receiving text messages for them to proceed to Biomedica. They were, however, refused entry and told to start
looking for another workplace. The next day, petitioners allegedly came in for work but were not allowed to enter the premises. Motol
purportedly informed petitioners, using foul language, to just find other employment.
Biomedica issued a notice of preventive suspension and notices to explain within 24 hours to petitioners. In the Notices, Biomedica
accused the petitioners of having conducted an illegal strike and were accordingly directed to explain why they should not be held
guilty of and dismissed for violating the company policy against illegal strikes. Thereafter, Biomedica served Notices of Termination
on petitioners.
Issue: WON there was a valid dismissal.
Ruling:
Petitioners were not afforded procedural due process.
It bears pointing out that in the dismissal of an employee, the law requires that due process be observed. Such due process
requirement is two-fold, procedural and substantive, that is, "the termination of employment must be based on a just or authorized
cause of dismissal and the dismissal must be effected after due notice and hearing." In the instant case, petitioners were not afforded
both procedural and substantive due process.
Art. 277 (b) of the Labor Code contains the procedural due process requirements in the dismissal of an employee:
Art. 277.Miscellaneous Provisions. — . . .
(b)Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a just
and authorized cause without prejudice to the requirement of notice under Article 283 of this Code, the employer shall furnish the
worker whose employment is sought to be terminated a written notice containing a statement of the causes for termination and shall
afford the latter ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires in
accordance with company rules and regulations promulgated pursuant to guidelines set by the Department of Labor and
Employment….
Thus, the Court elaborated in King of Kings Transport, Inc. v. Mamac that a mere general description of the charges against an
employee by the employer is insufficient to comply with the above provisions of the law:
. . . Moreover, in order to enable the employees to intelligently prepare their explanation and defenses, the notice should contain a
detailed narration of the facts and circumstances that will serve as basis for the charge against the employees. A general description of
the charge will not suffice. Lastly, the notice should specifically mention which company rules, if any, are violated and/or which
among the grounds under Art. 282 is being charged against the employees.
Clearly, petitioners were charged with conducting an illegal strike, not a mass leave, without specifying the exact acts that the
company considers as constituting an illegal strike or violative of company policies. Such allegation falls short of the requirement in
King of Kings Transport, Inc. of "a detailed narration of the facts and circumstances that will serve as basis for the charge against the
employees." A bare mention of an "illegal strike" will not suffice.
Further, it failed to quote the provisions in the company rules in the notice so petitioners can be adequately informed of the nature of
the charges against them and intelligently file their explanation and defenses to said accusations. It is incumbent upon respondent
company to show that petitioners were duly informed of said company policies at the time of their employment and were given copies
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of these policies. No such proof was presented by respondents. Worse, respondent Biomedica did not even quote or reproduce the
company policies referred to in the notice while on trial. Moreover, the period of 24 hours allotted to petitioners to answer the notice
was severely insufficient and in violation of the implementing rules of the Labor Code.
In addition, Biomedica did not set the charges against petitioners for hearing or conference in accordance with Sec. 2, Book V, Rule
XIII of the Implementing Rules and Regulations of the Labor Code and in line with ruling in King of Kings Transport, Inc., where the
Court explained:
(2)After serving the first notice, the employers should schedule and conduct a hearing or conference wherein the employees will be
given the opportunity to: (1) explain and clarify their defenses to the charge against them; (2) present evidence in support of their
defenses; and (3) rebut the evidence presented against them by the management.
While petitioners did not submit any written explanation to the charges, it is incumbent for Biomedica to set the matter for hearing or
conference to hear the defenses and receive evidence of the employees.
Lastly, Biomedica again deviated from the dictated contents of a written notice of termination as laid down in Sec. 2, Book V, Rule XIII
of the Implementing Rules that it should embody the facts and circumstances to support the grounds justifying the termination. As
amplified in King of Kings Transport, Inc.:
(3)After determining that termination of employment is justified, the employers shall serve the employees a written notice of
Petitioners were denied substantive due process.
Serious misconduct, as a justifying ground for the dismissal of an employee, has been explained in Aliviado v. Procter & Gamble, Phils.,
Inc.:
Misconduct has been defined as improper or wrong conduct; the transgression of some established and definite rule of action, a
forbidden act, a dereliction of duty, unlawful in character implying wrongful intent and not mere error of judgment. The misconduct
to be serious must be of such grave and aggravated character and not merely trivial and unimportant. To be a just cause for dismissal,
such misconduct (a) must be serious; (b) must relate to the performance of the employee's duties; and (c) must show that the
employee has become unfit to continue working for the employer. AacCIT
Clearly, to justify the dismissal of an employee on the ground of serious misconduct, the employer must first establish that the
employee is guilty of improper conduct, that the employee violated an existing and valid company rule or regulation, or that the
employee is guilty of a wrongdoing. In the instant case, Biomedica failed to even establish that petitioners indeed violated company
rules, failing to even present a copy of the rules and to prove that petitioners were made aware of such regulations. In fact, from the
records of the case, Biomedica has failed to prove that petitioners are guilty of a wrongdoing that is punishable with termination from
employment. In the instant case, Biomedica failed to overcome such burden. As will be shown, petitioners' absence on November 7,
2006 cannot be considered a mass leave, much less a strike and, thus, cannot justify their dismissal from employment.
But setting aside from the nonce the facts established above, the most pivotal argument against the dismissal of petitioners is that the
penalty of dismissal from employment cannot be imposed even if we assume that petitioners went on an illegal strike. It has not been
shown that petitioners are officers of the Union. The convergence of these facts coupled with the filing by petitioners of their
complaint with the DOLE shows a relationship governed by antipathy and antagonism as to justify the award of separation pay in lieu
of reinstatement. Thus, in addition to backwages, owing to the strained relations between the parties, separation pay in lieu of
reinstatement would be proper. And in line with prevailing jurisprudence, petitioners are entitled to nominal damages in the amount
of PhP30,000 each for Biomedica's violation of procedural due process.
The New Philippine Skylanders, Inc. vs. Dakila

G.R. No. 199547, September 24, 2012
Facts:
Respondent Dakila was employed by petitioner corporation as early as 1987 and terminated for cause in April 1997 when the
corporation was sold. In May 1997, he was rehired as consultant by the petitioners under a Contract for Consultancy Services dated
April 30, 1997.
Thereafter, in a letter dated April 19, 2007, respondent Dakila informed petitioners of his compulsory retirement effective May 2,
2007 and sought for the payment of his retirement benefits pursuant to the Collective Bargaining Agreement. His request, however,
was not acted upon. Instead, he was terminated from service effective May 1, 2007.
Consequently, respondent Dakila filed a complaint for constructive illegal dismissal, non-payment of retirement benefits, under/non-
payment of wages and other benefits of a regular employee, and damages against petitioners.
On the other hand, petitioners, in their position paper, 8 asserted that respondent Dakila was a consultant and not their regular
employee. The latter was not included in petitioners' payroll and paid a fixed amount under the consultancy contract. He was not
required to observe regular working hours and was free to adopt means and methods to accomplish his task except as to the results of
the work required of him. Hence, no employer-employee relationship existed between them.
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The Labor Arbiter declared respondent Dakila to be a regular employee on the basis of the unrebutted documentary evidence
showing that he was under the petitioners' direct control and supervision and performed tasks that were either incidental or usually
desirable and necessary in the trade or business of petitioner corporation for a period of ten years.
Issue: WON there was a valid dismissal.
Ruling:
The issue of illegal dismissal is premised on the existence of an employer-employee relationship between the parties herein.Records
reveal that both the LA and the NLRC, as affirmed by the CA, have found substantial evidence to show that respondent Dakila was a
regular employee who was dismissed without cause.
Following Article 279 of the Labor Code, an employee who is unjustly dismissed from work is entitled to reinstatement without loss of
seniority rights and other privileges and to his full backwages computed from the time he was illegally dismissed. However,
considering that respondent Dakila was terminated on May 1, 2007, or one (1) day prior to his compulsory retirement on May 2,
2007, his reinstatement is no longer feasible. Accordingly, the NLRC correctly held him entitled to the payment of his retirement
benefits pursuant to the CBA. On the other hand, his backwages should be computed only for days prior to his compulsory retirement
which in this case is only a day.
Morales Vs. Metropolitan Bank and Trust Company

G.R. No. 182475, November 21, 2012
Facts:
Petitioner Lenn Morales was hired by Solidbank as Teller for its Rizal Avenue Branch in Tacloban City. With said bank's merger with
respondent Metropolitan Bank & Trust Company (Metrobank) the latter, as surviving entity, absorbed Morales and assigned him to
its Customer Service Relations-Reserve Pool (CSR-RP) which was composed of employees who, with no permanent places of
assignment, acted as relievers whenever temporary vacancies arise in other branches. Morales was subsequently promoted to the
position of Customer Service Representative. It was while occupying the latter position that Morales was informed by Federico
Mariano, the Senior Manager of Metrobank's Tacloban City Main Branch, that he was covered by the bank's Special Separation
Program (SSP) and that, in accordance therewith, his employment was going to be terminated on the ground of redundancy. 5
Assured that his termination was through no fault of his own but mainly due to business exigencies and developments in the banking
industry, Morales was notified that he shall be paid the following: (a) a redundancy premium/separation pay, on top of his
entitlements under the bank's retirement plan; (b) proportionate 13th month pay; (c) cash conversion of his outstanding vacation and
sick leave credits; and, if applicable, (d) the return of his Provident Fund contributions; and, (e) cash surrender value of his Insurance.
Morales filed against Metrobank a complaint for illegal dismissal, separation pay, backwages, moral and exemplary damages as well
as attorney's fees. In its position paper, Metrobank averred that it had adopted the SSP since 1995 as a way of addressing worsening
economic conditions and stiff competition with strategies designed to make its operations efficient but cost-effective. Morales was
duly informed of the management's decision more than one month ahead of his actual severance from service, Metrobank claimed to
have served the Department of Labor and Employment (DOLE) the required Establishment Termination Report on 29 August 2003.
Issue: WON Morales was validly dismissed on the ground of reduncy.
Ruling:
One of the authorized causes for the dismissal of an employee, redundancy exists when the service capability of the workforce is in
excess of what is reasonably needed to meet the demands of the business enterprise. 21 A position is redundant when it is
superfluous, and superfluity of a position or positions could be the result of a number of factors, such as the overhiring of workers, a
decrease in the volume of business or the dropping of a particular line or service previously manufactured or undertaken by the
enterprise. 22 Time and again, it has been ruled that an employer has no legal obligation to keep more employees than are necessary
for the operation of its business. 23 For the implementation of a redundancy program to be valid, however, the employer must comply
with the following requisites: (1) written notice served on both the employees and the DOLE at least one month prior to the intended
date of termination of employment; (2) payment of separation pay equivalent to at least one month pay for every year of service; (3)
good faith in abolishing the redundant positions; and (4) fair and reasonable criteria in ascertaining what positions are to be declared
redundant and accordingly abolished. 24
Our perusal of the record shows that Metrobank has more than amply proven compliance with the above-enumerated requisites for
the validity of his termination from service on the ground of redundancy. Under the SSP which Metrobank adopted in 1995,
employees who voluntarily gave up their employment were paid the amount of separation pay they were entitled under the law and a
premium equivalent to 50%-75% of their salaries. It appears that employees "whose work evaluation showed consistent poor
performance and/or those who had not been promoted for five years" were also considered primary candidates for optional
separation from service. 25 In order to meet the challenges of the business and to make its operations efficient and cost effective,
however, it was shown that Metrobank further conducted a bank-wide operational review and study.
In implementing a redundancy program, it has been ruled that the employer is required to adopt a fair and reasonable criteria, taking
into consideration such factors as (a) preferred status; (b) efficiency; and (c) seniority, 27 among others. Consistent with this
principle, Metrobank established that, as a direct result of the adoption of the HRP, it was determined that the volume of transactions
in Visayas Region III required the further reduction of its eight-man reserve pool by two employees. 28As these employees had no
permanent place of assignment and merely acted as relievers whenever temporary vacancies arise in other branches, they were the
most logical candidates for inclusion in the SSP. Already lacking preferred status in Metrobank's hierarchy of positions, Morales was
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included in the SSP because of his poor work performance which reportedly caused complaints from the branches where he was
temporarily assigned as reliever.
Given Morales' previous record of not reporting for work for one whole week without prior leave of absence while assigned as
reliever in its Borongan, Samar Branch,33 we find that Metrobank cannot be faulted for including him in the list of employees covered
by the SSP. The rule is settled that "the determination that the employee's services are no longer necessary or sustainable and,
therefore, properly terminable for being redundant is an exercise of business judgment of the employer." 34 "While it is true that
management may not, under the guise of invoking its prerogative, ease out employees and defeat their constitutional right to security
of tenure," 35 the wisdom and soundness of such characterization or decision is not subject to discretionary review unless a violation
of law or arbitrary or malicious action is shown.
Kakampi & Its Members Panuelos et al. vs. Kingspoint Express And Logistics
G.R. No. 194813, April 25, 2012
Facts:
Victor Pañ uelos (Pañ uelos), Bobby Dacara (Dacara), Alson Dizon (Dizon), Saldy Dimabayao (Dimabayao), Fernando Lupangco, Jr.
(Lupangco), Sandy Pazi (Pazi), Camilo Tabarangao, Jr. (Tabarangao), Eduardo Hizole (Hizole) and Reginald Carillo (Carillo) were the
former drivers of Kingspoint Express and Logistic (Kingspoint Express), a sole proprietorship registered in the name of Mary Ann Co
(Co) and engaged in the business of transport of goods. On January 16, 2006, Kingspoint Express issued separate notices to individual
petitioners uniformly stating that they have been charged with dishonesty, serious misconduct, loss of confidence, and acts inimical to
the company, by filing with the NLRC false, malicious, and fabricated cases against the company. In addition, Kingspoint stated that
the petitioners’ refusal to undergo drug testing is unwarranted and against company policy. The petitioners were given 48 hrs (2
days) to submit their answers and explanation to the charges.
The individual petitioners failed to submit their written explanation within the stated period. Subsequently, Kingspoint Express
issued to them separate yet uniformly worded notices informing them of their dismissal. The charges were allegedly based on these
acts:
- FABRICATION OF BASELESS MONEY CLAIMS against the company;

- MISLEADING FELLOW CO-WORKERS to sign the MALICIOUS COMPLAINT FOR MONEY CLAIMS against the company;
- REFUSAL TO UNDERGO THE COMPANY’S GENERAL DRUG TEST
- EXTORTING MONEY FROM CO-WORKERS TO FUND ACTIVITIES THAT THEY WERE NEVER FULLY INFORMED OF.
A complaint for illegal dismissal was subsequently filed by petitioners, alleging that the charges against them were fabricated and that
their dismissal was prompted by Kingspoint Express’ aversion to their union activities.
The Labor Arbiter found Dacara, Lupangco, Pazi, Tabarangao, Hizole and Carillo illegally dismissed. On the other hand, the complaint
was dismissed insofar as Panuelos, Dizon and Dimabayao are concerned as they were deemed not to have filed their position papers.
While the allegation of anti-unionism as the primordial motivation for the dismissal is considered unfounded, the respondents failed
to prove that the dismissal was for a just cause.
On appeal, the NLRC affirmed the Labor Arbiter’s Decision. In addition, the NLRC ruled that the respondents failed to comply with the
procedural requirements of due process considering that the uniformly worded first notice sent by Kingspoint to the petitioners, did
not apprise them of the particular acts or omission for which their dismissal were sought. Respondents moved for reconsideration
and the NLRC reversed itself and declared the individual petitioners legally dismissed.
Subsequently, the petitioners filed a petition for certiorari with the CA. The CA reversed and set aside the NLRC Decision. Respondents
promptly filed a motion for reconsideration. Similar to the NLRC, the CA reversed itself and retracted its earlier finding that the
individual petitioners were illegally dismissed. The CA concluded that the 2 notices issued by Kingspoint Express complied with the
requirements of the law.
Issue: Whether or not the individual petitioners’ dismissal is valid.
Ruling:
Yes, the petitioners were legally dismissed.
It is fundamental that in order to validly dismiss an employee, the employer is required to observe both substantive and procedural
due process – the termination of employment must be based on a just or authorized cause and the dismissal must be effected after
due notice and hearing. The Court agreed with the CA that the petitioners’ refusal to submit themselves to drug test is a just cause for
their dismissal. An employer may terminate an employment on the ground of serious misconduct or willful disobedience by the
employee of the lawful orders of his employer or representative in connection with his work. Willful disobedience requires the
concurrence of two elements: (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. Both elements are present in this case.
At no point did the dismissed employees deny Kingspoint Express’ claim that they refused to comply with the directive for them to
submit to a drug test or, at the very least, explain their refusal. Thus, this gives rise to the impression that their non-compliance is
deliberate. The utter lack of reason or justification for their insubordination indicates that it was prompted by mere obstinacy, hence,
willful and warranting of dismissal. Drivers are indispensable to Kingspoint Express’ primary business of rendering door-to-door
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delivery services. It is common knowledge that the use of dangerous drugs has adverse effects on driving abilities that may render the
dismissed employees incapable of performing their duties to Kingspoint Express and acting against its interests, in addition to the
threat they pose to the public.
Nonetheless, while Kingspoint Express had reason to sever their employment relations, the Court found its supposed observance of
the requirements of procedural due process pretentious. While Kingspoint Express required the dismissed employees to explain their
refusal to submit to a drug test, the 2 days afforded to them to do so cannot qualify as “reasonable opportunity”, which the Court
construed in King of Kings Transport, Inc. v. Mamac as a period of at least 5 calendar days from receipt of the notice. Thus, even if
Kingspoint Express’ defective attempt to comply with procedural due process does not negate the existence of a just cause for their
dismissal, it was held that Kingspoint Express is still liable to indemnify the dismissed employees.
Sampaguita Auto Transport Corp. vs. NLRC

G.r. No. 197384, January 30, 2013
Facts:
On May 14, 2006, Sagad was hired by the company hired him as a regular bus driver until his dismissal on November 5, 2006 for
allegedly conniving with conductor Vitola in issuing tickets outside their assigned route
However, the company claimed that it employed Sagad as a probationary bus driver (evidenced by a probationary employment
contract) from May 14, 2006 to October 14, 2006; he was duly informed of his corresponding duties and responsibilities. He was
further informed that during the probationary period, his attendance, performance and work attitude shall be evaluated to determine
whether he would qualify for regular employment. For this purpose and as a matter of company policy, an evaluator was deployed on
a company bus (in the guise of a passenger) to observe the driver's work performance and attitude.
On September 21, 2006, an evaluator boarded Sagad's bus. The evaluator described Sagad's manner of driving as "reckless driver,
nakikipaggitgitan, nakikipaghabulan, nagsasakay sa gitna ng kalsada, sumusubsob ang pasahero[.]" Sagad disputed the evaluator's
observations. In an explanation, he claimed that he could not have been driving as reported because his wife (who was pregnant) and
one of his children were with him on the bus. He admitted though that at one time, he chased an "Everlasting" bus to serve warning on
its driver not to block his bus when he was overtaking. He also admitted that once in a while, he sped up to make up for lost time in
making trips.
The company further alleged that on October 13, 2006, it conducted a thorough evaluation of Sagad's performance. It requested
conductors who had worked with Sagad to comment on his work. Conductors A. Hemoroz and Israel Lucero revealed that Sagad
proposed that they cheat on the company by way of an unreported early bus trip. Dispatcher E. Castillo likewise submitted a negative
report and even recommended the termination of Sagad's employment. The company also cited Sagad's involvement in a hit-and-run
accident on September 9, 2006 along Commonwealth Avenue in Quezon City while on a trip (bus with Plate No. NYK-216 and Body
No. 3094). Allegedly, Sagad did not report the accident to the company.
On October 15, 2006, upon conclusion of the evaluation, the company terminated Sagad's employment for his failure to qualify as a
regular employee.
Issues:
I. WON the employee was dismissed as a regular employee, and not as a probationary.
II. WON the employee was dismissed for just cause.
III. WON the employer failed to observe procedural due process. Hence, the employee is entitled to nominal damages.
Ruling:
I. The employee was dismissed as a regular employee, and not as a probationary.
The employer was not able to clearly establish that the employee was a probationary. The employee denied having signed any
probationary contract. Moreover, the employer had retained the employee beyond the supposed probationary period of employment.
The payslips presented by the employee evidences such extension.
In labor law, it is an elementary rule that "an employee who is allowed to work after a probationary period shall be considered a
regular employee."
II. The employee was dismissed for just cause.
The employee was evidently dismissed for just cause.

First, it was established that the employer called the employee's attention to his "negative actuations as a bus driver". These were
reported by a company evaluator who boarded the employee's bus. The evaluator reported that the employee was "driving recklessly,
racing and jostling for position on the road, thereby jarring the passengers on their seats, and picking up passengers on the middle of
the road."
By way of reply, the employee claimed that he could not have been driving recklessly as his wife and one of his children were with him
on the bus at the time of evaluation. However, he admitted to two things: (a) that, on one occasion, he chased on "Everlasting" bus in
order "to warn the driver not to block him", and (b) that, once in a while, "he sped up to compensate for lost time in his trips".
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"Sagad's explanation reveals more than what is stated. During his brief employment with the company, he exhibited the tendency to
speed up when he finds the need for it, very obviously in violation of traffic rules, regulations and company policy. Instead of negating
the evaluator's observations, his admissions make them credible."
Second, the two conductors who had worked with the employee commented that the employee "proposed to them that they cheat on
the company by making early trips (but not to be reported) bus trips". The two conductors had no ax to grind against the employee.
Furthermore, the evaluator's evaluation report rated the employee's work performance as poor on account of: "(1) the low revenue of
Sagad's bus; (2) his inability to make all his scheduled trips; and (3) his habit of bringing his wife with him on trips". He likewise heard
of talks of the employee's orders to the conductors "to earn money in a questionable way".
As the two conductors have no ax to grind with the employee, their testimony is credible. In addition, their testimony validates the
evaluator's observation that he heard talks of the employee's orders to the conductors "for them to cheat on the company".
"x x x The scheme, contrary to Sagad's explanation, can only be committed with the corporation, or even at the behest of the driver, as
the proposed scheme is for the bus to make unscheduled, but unreported, early trips.
Third, the employee's involvement in a hit-and-run incident while driving his assigned bus was clearly established. The following
were the substantial evidence presented: (1) the Traffic Accident Investigation Report; (2) Sworn Statement of the driver of the Elf
truck, which was hit; (3) Sworn Statement of the driver of the White Honda City (owned by Purefoods Hormel Co.), the first party to
the vehicular accident; and, (4) Demand Letter by the insurance company demanding reimbursement it paid to Purefoods.
In view of the above-mentioned grounds, the "irregularities or infractions committed by Sagad in connection with his work as a bus
driver constitutes a serious misconduct under Article 282 of the Labor Code.
"The irregularities or infractions committed by Sagad in connection with his work as a bus driver constitutes serious misconduct or,
at the very least, conduct analogous to serious misconduct, under the above-cited Article 282 of the Labor Code. To be sure his
tendency to speed up during his trips, his reckless driving, his picking up passengers in the middle of the road, his racing with other
buses and his jostling for vantage positions do not speak well of him as a bus driver. While he denies being informed when he was
hired, of the duties and responsibilities of a driver contained in a document submitted in evidence by the company - the requirement
"3. to obey traffic rules and regulations as well as the company policies. 4. to ensure the safety of the riding public as well as the other
vehicles and motorist (sic)" is so fundamental and so universal that any bus driver is expected to satisfy the requirement whether or
not he has been so informed." (Citations omitted.)
While the employee tried to minimize the adverse effect of the evaluator's report by claiming that he had already been penalized by a
5-day suspension, the same is of no moment. "He was penalized for one reckless driving incident, but it does not erase all other
infractions he committed."
III. The employer failed to observe procedural due process. Hence, the employee is entitled to nominal damages.
While the employee was dismissed based on a just cause, the employer failed to comply with the two-notice rule.That is to say, the
employer failed to serve: (1) the initial notice - stating the particular acts on which the employee is being dismissed on 05 November
2006, and (2) the termination notice.
Following Agabon v. NLRC, the violation of the employee's right to procedural due process entitles him to nominal damages in the
amount of Php30,000.00.
Philippine Holdings Inc. vs. Episcope

G.R. No. 192826, February 27, 2013
Facts:
Petitioner Philippine Plaza Holdings, Inc. (PPHI) is the owner and operator of the Westin Philippine Plaza Hotel (Hotel). Respondent
Ma. Flora M. Episcope (Episcope) was employed by PPHI since July 24, 1984 until she was terminated on November 4, 2004 for
dishonesty, willful disobedience and serious misconduct amounting to loss of trust and confidence.
In order to check the performance of the employees and the services in the different outlets of the Hotel, PPHI regularly employed the
services of independent auditors and/or professional shoppers. For this purpose, Sycip, Gorres and Velayo auditors dined at the
Hotel's Café Plaza on August 28, 2004. After dining, the auditors were billed the total amount of P2,306.65, representing the cost of
the food and drinks they had ordered under Check No. 565938. 4 Based on the audit report 5 submitted to PPHI, Episcope was one of
those who attended to the auditors and was the one who handed the check and received the payment of P2,400.00. She thereafter
returned Check No. 565938, which was stamp marked "paid," together with the change.
Upon verification of the foregoing check receipt with the sales report of Café Plaza, it was discovered that the Hotel's copy of the
receipt bore a discount of P906.45 6 on account of the use of a Starwood Privilege Discount Card registered in the name of Peter A.
Pamintuan, while the receipt issued by Episcope to the auditors reflected the undiscounted amount of P2,306.65 considering that
none of the auditors had such discount card. In view of the foregoing, the amount actually remitted to the Hotel was only P1,400.20
thus, leaving a shortage of P906.45.
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On September 30, 2004, the Hotel issued a Show-Cause Memo 7 directing Episcope to explain in writing why no disciplinary action
should be taken against her for the questionable and invalid discount application on the settlement check issued to the auditors on
August 28, 2004.
Finding Episcope to have failed to sufficiently explain the questionable discount application on the settlement bill of the auditors, her
employment was terminated for committing acts of dishonesty, which was classified as a Class D offense under the Hotel's Code of
Discipline, as well as for willful disobedience, serious misconduct and loss of trust and confidence. 12
Aggrieved, Episcope filed a complaint 13 for illegal dismissal with prayer for payment of damages and attorney's fees against PPHI
before the NLRC docketed as NLRC-NCR Case No. 00-12-13621-04.
Issue: WON there was illegal dismissal.
Ruling:
Article 293 (formerly Article 279) of the Labor Code 25 provides that the employer shall not terminate the services of an employee
except only for a just or authorized cause. If an employer terminates the employment without a just or authorized cause, then the
employee is considered to have been illegally dismissed and is thus, entitled to reinstatement or in certain instances, separation pay in
lieu thereof, as well as the payment of backwages.
Among the just causes for termination is the employer's loss of trust and confidence in its employee. Article 296 (c) (formerly Article
282 [c]) of the Labor Code provides that an employer may terminate the services of an employee for fraud or willful breach of the
trust reposed in him. But in order for the said cause to be properly invoked, certain requirements must be complied with namely, (1)
the employee concerned must be holding a position of trust and confidence and (2) there must be an act that would justify the loss of
trust and confidence.
It is noteworthy to mention that there are two classes of positions of trust: on the one hand, there are managerial employees whose
primary duty consists of the management of the establishment in which they are employed or of a department or a subdivision
thereof, and to other officers or members of the managerial staff; on the other hand, there are fiduciary rank-and-file employees, such
as cashiers, auditors, property custodians, or those who, in the normal exercise of their functions, regularly handle significant
amounts of money or property. These employees, though rank-and-file, are routinely charged with the care and custody of the
employer's money or property, and are thus classified as occupying positions of trust and confidence. 27 Episcope belongs to this
latter class and therefore, occupies a position of trust and confidence.
As may be readily gleaned from the records, Episcope was employed by PPHI as a service attendant in its Café Plaza. In this regard,
she was tasked to attend to dining guests, handle their bills and receive their payments for transmittal to the cashier. It is also
apparent that whenever discount cards are presented, she maintained the responsibility to take them to the cashier for the
application of discounts. Being therefore involved in the handling of company funds, Episcope is undeniably considered an employee
occupying a position of trust and confidence and as such, was expected to act with utmost honesty and fidelity.
Anent the second requisite, records likewise reveal that Episcope committed an act which justified her employer's (PPHI's) loss of
trust and confidence in her.
Primarily, it is apt to point out that proof beyond reasonable doubt is not required in dismissing an employee on the ground of loss of
trust and confidence; it is sufficient that there lies some basis to believe that the employee concerned is responsible for the
misconduct and that the nature of the employee's participation therein rendered him absolutely unworthy of trust and confidence
demanded by his position.
Perforce, having substantially established the actual breach of duty committed by Episcope and the due observance of due process, no
grave abuse of discretion can be imputed against the NLRC in sustaining the finding of the LA that her dismissal was proper under the
circumstances.
Finally, with respect to Episcope's other monetary claims, namely, service incentive leave credits and 13th month pay, the Court finds
no error on the part of the LA when it denied the foregoing claims considering that Episcope failed to proffer any legitimate basis to
substantiate her entitlement to the same
The Orchard Golf And Country Club vs. Francisco

G.R. No. 178125, March 13, 2013
Facts:
On March 17, 1997, respondent was employed as Club Accountant, to head the Club's General Accounting Division and the four
divisions under it.
On May 18, 2000, Famy directed Francisco to draft a letter to SGV & Co. (SGV), the Club's external auditor, inquiring about the
accounting treatment that should be accorded property that will be sold or donated to the Club. Francisco failed to prepare the letter,
even after Famy's repeated verbal and written reminders, the last of which was made on June 22, 2000.
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Francisco went to the Club's General Manager, Tomas B. Clemente III (Clemente), and personally explained to the latter that due to the
alleged heavy volume of work that needed her attention, she was unable to draft the letter. Because Francisco did not submit the
required written explanation, Famy issued a June 29, 2000 memorandum suspending Francisco without pay for a period of 15 days.
On July 3, 2000 Francisco wrote to the Club's General and Administrative Manager, Ma. Irma Corazon A. Nuevo (Nuevo), questioning
Famy's act of charging, investigating, and suspending her without coursing the same through the Club's Personnel Department. Nuevo
exonerated Famy and justified Famy’s actions as falling within his power and authority as department head.
On July 20, 2000, or a day after Francisco's period of suspension expired, Famy issued separate memoranda to Francisco and
Clemente informing them of Francisco's transfer, without diminution in salary and benefits, to the Club's Cost Accounting Section.
Issue: WON the transfer of respondent form the position of club accountant to cost accountant was tantamount to a demotion
Ruling:
Yes, there was constructive dismissal when Francisco was transferred to the cost accounting section as there was not valid basis that
it amounted to a demotion in rank
When Francisco was placed on forced leave and transferred to the Cost Accounting Section, not once was Francisco given the
opportunity to contest these company actions taken against her. It has also not escaped our attention that just when one penalty has
been served by Francisco, another would instantaneously take its place. And all these happened even while the supposed case against
her, the alleged charge of "betrayal of company trust", was still pending and remained unresolved.
As for her October 12, 2000 permanent transfer, the same is null and void for lack of just cause. Also, the transfer is a penalty imposed
on a charge that has not yet been resolved. Definitely, to punish one for an offense that has not been proved is truly unfair; this is
deprivation without due process. Finally, the Court sees no necessity for Francisco's transfer; on the contrary, such transfer is
outweighed by the need to secure her office and documents from Famy's possible intervention on account of the complaint she filed
against him.
Torres vs. Rural Bank of San Juan Inc. et al.

G.R. No. 184520, March 13, 2013
Facts:
PETITIONER Rolando Torres was temporarily assigned as the manager of the N. Domingo branch of respondent Rural Bank of San
Juan Inc. (RBSJI), in view of the resignation of Jacinto Figuroa.
Three days after his assignment, Figuroa requested and the petitioner signed a standard employment clearance pertaining to the
former’s accountabilities with RBSJI.
Petitioner was dismissed from the service by RBSJI on the ground of loss of trust and confidence, for issuing without authority and
audit a clearance to Figuroa, who turned out to be still liable for unpaid cash advances and for an P11-million fraudulent transaction
that exposed the bank to a lawsuit.
Issue: WON the dismissal was justified.
Ruling:
No.
As correctly argued by the petitioner, the onus of submitting a copy of the clearance allegedly exonerating Figuroa from all his
accountabilities fell on the respondents. It was the single and absolute evidence of the petitioner’s act that purportedly kindled the
respondents’ loss of trust.
Without it, the respondents’ allegation of loss of trust and confidence has no leg to stand on and must thus be rejected. Moreover, one
can reasonably expect that a copy of the clearance, an essential personnel document, is with the respondents. Their failure to present
it and the lack of explanation for such failure or the document’s unavailability props up the presumption that its contents are
unfavorable to the respondents’ assertions.
At any rate, the absence of the clearance upon which the contradicting claims of the parties could ideally be resolved should work
against the respondents. With only sworn pleadings as proof of their opposite claims on the true contents of the clearance, the Court is
bound to apply the principle that the scales of justice should be tilted in favor of labor in case of doubt in the evidence presented.
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The Orchard Golf & Country Club vs. Francisco

G.R. No. 178125, March 15, 2013
Facts:
On March 17, 1997, respondent was employed as Club Accountant, to head the Club's General Accounting Division and the four
divisions under it.
On May 18, 2000, Famy directed Francisco to draft a letter to SGV & Co. (SGV), the Club's external auditor, inquiring about the
accounting treatment that should be accorded property that will be sold or donated to the Club. Francisco failed to prepare the letter,
even after Famy's repeated verbal and written reminders, the last of which was made on June 22, 2000.
Francisco went to the Club's General Manager, Tomas B. Clemente III (Clemente), and personally explained to the latter that due to the
alleged heavy volume of work that needed her attention, she was unable to draft the letter. Because Francisco did not submit the
required written explanation, Famy issued a June 29, 2000 memorandum suspending Francisco without pay for a period of 15 days.
On July 3, 2000 Francisco wrote to the Club's General and Administrative Manager, Ma. Irma Corazon A. Nuevo (Nuevo), questioning
Famy's act of charging, investigating, and suspending her without coursing the same through the Club's Personnel Department. Nuevo
exonerated Famy and justified Famy’s actions as falling within his power and authority as department head.
On July 20, 2000, or a day after Francisco's period of suspension expired, Famy issued separate memoranda to Francisco and
Clemente informing them of Francisco's transfer, without diminution in salary and benefits, to the Club's Cost Accounting Section.
Issue: WON the transfer of respondent form the position of club accountant to cost accountant was tantamount to a demotion
Ruling:
Yes, there was constructive dismissal when Francisco was transferred to the cost accounting section as there was not valid basis that
it amounted to a demotion in rank
When Francisco was placed on forced leave and transferred to the Cost Accounting Section, not once was Francisco given the
opportunity to contest these company actions taken against her. It has also not escaped our attention that just when one penalty has
been served by Francisco, another would instantaneously take its place. And all these happened even while the supposed case against
her, the alleged charge of "betrayal of company trust", was still pending and remained unresolved.
As for her October 12, 2000 permanent transfer, the same is null and void for lack of just cause. Also, the transfer is a penalty imposed
on a charge that has not yet been resolved. Definitely, to punish one for an offense that has not been proved is truly unfair; this is
deprivation without due process. Finally, the Court sees no necessity for Francisco's transfer; on the contrary, such transfer is
outweighed by the need to secure her office and documents from Famy's possible intervention on account of the complaint she filed
against him.
Banares vs. Tabaco Womens Transport Service Cooperative

G.R. No. 197353, April 1, 2013
Facts:
PETITIONER Alexander B. Bañ ares worked for some time as general manager of respondent Tabaco Women’s Transport Service
Cooperative (TAWTRASCO). He filed a complaint for illegal dismissal and payment of monetary claims against TAWTRASCO. Among
others, the Labor Arbiter ordered TAWTRASCO to immediately reinstate petitioner to his former position.
In compliance with the decision, TAWTRASCO directed the petitioner to report at the company’s Virac, Catanduanes terminal.
Petitioner asked for a lodging allowance, which he used to enjoy in his previous assignment but was told to just stay at the Virac office.
He, however, found the Virac office very dilapidated and empty of an office table, chairs, filing cabinet and other office supplies. He
asked for expenses for renovation, which respondents turned deaf ears to. Hence, he stopped reporting to work and filed a complaint
for non-payment of salaries.
Issue: WON the complaint will prosper.
Ruling:
Yes.
Under Article 223 of the Labor Code, an employee entitled to reinstatement “shall either be admitted back to work under the same
terms and conditions prevailing prior to his dismissal or separation x x x.” An illegally dismissed employee is entitled to reinstatement
without loss of seniority rights and to other established employment privileges, and to his full back wages. The boarding house
privilege, being an established perk accorded to petitioner, ought to have been granted him if a real and authentic reinstatement to his
former position as general manager is to be posited.
It cannot be stressed enough that TAWTRASCO withheld petitioner’s salaries for and after his purported refusal to report for work at
the Virac terminal. The reality, however, is that TAWTRASCO directed petitioner to work under terms and conditions prejudicial to
him, the most hurtful cut being that he was required to work without a decent office, partly performing a checker’s job. This
embarrassing work arrangement is what doubtless triggered the refusal to work, which under the premises appears justified.
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Generally, employees have a demandable right over benefits voluntarily granted to them by their employers. And if the grant or
benefit is founded on an express policy or has, for a considerable period, been given regularly and deliberately, then the grant ripens
into a vested right that the employer cannot unilaterally diminish, discontinue or eliminate. So it must be here with respect, at the
minimum, to the lodging accommodation which TAWTRASCO, as found by the National Labor Relations Commission, appears to have
regularly extended for free for some time to petitioner.
Reyes, et al., vs. RP Guardians security Agency Inc.

G.R. No. 193756, April 10, 2013
Facts:
PETITIONERS were hired by the respondent, RP Guardians Security Agency, Inc., as security guards. Their last assignments were in
the different branches of Banco Filipino Savings and Mortgage Bank. In September 2006, the respondent’s security contract with
Banco Filipino was terminated. Petitioners were individually informed of the termination.
In a complaint for constructive dismissal, the labor arbiter (LA), the National Labor Relations Commission (NLRC) and the Court of
Appeals (CA) found that petitioners were constructively dismissed.
The CA, however, reduced the computation of the LA and NLRC of the separation pay from one month to one-half month per year of
service.
Issue: WON the CA err in determining the separation pay.
Ruling:
Yes.
There is no doubt that petitioners were constructively dismissed. The LA, the NLRC and the CA were one in their conclusion that
respondent was guilty of illegal dismissal when it placed petitioners on floating status beyond the reasonable six-month period after
the termination of their service contract with Banco de Oro.
Temporary displacement or temporary off-detail of security guard is, generally, allowed in a situation where a security agency’s client
decided not to renew their service contract with the agency and no post is available for the relieved security guard. Such situation
does not normally result in a constructive dismissal.
Nonetheless, when the floating status lasts for more than six (6) months, the employee may be considered to have been constructively
dismissed.
xxx
The normal consequences of respondents’ illegal dismissal, then, are reinstatement without loss of seniority rights, and payment of
back wages computed from the time compensation was withheld up to the date of actual reinstatement. Where reinstatement is no
longer viable as an option, separation pay equivalent to one month salary for every year of service should be awarded as an
alternative. The payment of separation pay is in addition to payment of back wages.
xxx
In this case, respondent would have been liable for reinstatement and payment of back wages. Reinstatement, however, was no longer
feasible because, as found by the LA, respondent had already ceased operation of its business. Thus, back wages and separation pay, in
the amount of one month for every year of service, should be paid in lieu of reinstatement.
Celdran vs. Forza Integrated Services et al.

G.R. No. 189460, June 5, 2013, Res.
Facts:
Petitioner Leo Mario C. Celdran was hired by private respondent City Service as Vice-President for the Visayas Regional Office in Cebu
City. Private respondents City Service Corporation and Peerless Integrated Services, Incorporated are affiliate companies of
respondent FORZA Integrated Corporation. According to petitioner, his compensation package included a car plan wherein they
would assume the remaining balance of his car plan, with 50% by the company and the other 50% by Celdran himself; but, to private
respondents, it was a car lease arrangement. Celdran consistently refused to sign the said lease contract as it was contrary to what he
allegedly agreed with private respondent Valentin B. Prieto, Jr. during his employment interview way back in May 2005.
On November 10, 2005, Celdran was accused of dishonesty, for charging a personal lunch to the company, and was demanded to
resign by the Chief Operating Officer Santiago. Celdran received a termination notice signed by private respondent Santiago which led
the former to file a complaint for illegal dismissal on November 22, 2005, before the Regional Arbitration Branch of the National
Labor Relations Commission. However, the said case was settled as he was reinstated to his position on December 27, 2005.
However, upon his return, Celdran was told to occupy the last open cubicle at the ground floor ands given a new copy of the motor
vehicle lease contract for his signature which he refused to sign. He was relieved as Mancom Chairman for no reason at all. He was
subjected to check and inspection by the security guard and his transportation and cellular phone allowances were subjected to new
guidelines. Private respondent City Service Corporation gave Celdran the option to buy the Honda CRV at its residual value until
February 9, 2006, otherwise, the former would recover the vehicle from the latter.
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On February 14, 2006, Celdran filed a complaint with the Regional Arbitration Branch of the NLRC charging private respondents with
violation of the terms of the car plan. On March 2, 2006, Celdran was placed under preventive suspension for 30 days due to his
belligerent attitude and required to explain why he should not be terminated. He was not asked to return to work after his suspension
for which reason he amended his complaint on April 11, 2006, to include charges of illegal suspension, constructive dismissal and
unpaid money claims.
In a letter dated April 11, 2006, private respondent City Service Corporation informed all its employees, including Celdran, that by
virtue of a board resolution dated March 17, 2006, the company decided to replace the Visayas Regional Office with a small Liaison
Office. Consequently, Celdran made a second amendment of his complaint on April 18, 2006 to include charges of illegal lay-
off/downsizing.
Issues:
1. Whether or not there was constructive dismissal.
2. Whether or not the petitioner was illegally dismissed.
3. Whether or not individual respondents may not be held solidarily liable with respondent corporations.
Ruling:
There was no constructive dismissal in the case at bar.
According to petitioner, he had been experiencing a kind of treatment that rendered "employment impossible and unreasonable" as
early as in the last quarter of 2005. However, he never resigned. In fact, when he filed a complaint in March 2006 regarding his car
plan benefit, he did not make any allegation concerning his inability to continue working for respondents due to an alleged ill working
environment. We thus find that he was still willing and able to continue his employment despite any alleged ill treatment. For there to
be constructive dismissal, the employer must be shown to have committed an act of clear discrimination, insensibility, or disdain,
which had become so unbearable on the part of the employee that it foreclosed any choice other than for the latter to forego
continued employment.
Petitioner was not illegally dismissed when respondent company implemented a downsizing program for their Visayas regional
office.
Pursuant to Article 283 of the Labor Code, an employer may reduce the number of its employees based on economic grounds in order
to protect and preserve the employer's viability and ensure its survival. Consequently, employers are given the management
prerogative to implement a retrenchment program for the purpose of preventing losses or cessation of business operations due to
business recession, industrial depression, seasonal fluctuations, lack of work, or considerable reduction in the volume of their
business.
Respondents were able to prove that their retrenchment program was justified and not implemented in bad faith. As found by the ELA
and the NLRC, respondents had been experiencing a downtrend in their Visayas operations since three years before they decided to
downsize. In fact, City Service was suffering from continuous defeats in numerous biddings it had participated in. Furthermore, they
showed that they had complied with the requirement of written notice to the employees and to the DOLE at least one month prior to
the intended date of downsizing or retrenchment.
Individual respondents may not be held personally liable.
As a general rule, corporate directors, trustees, or officers are not personally liable for their official acts, unless they have exceeded
the scope of their authority. Indeed, personal liability may attach when directors, trustees, or officers assent to a patently unlawful act
of the corporation, or when they act in bad faith, resulting in damages to the corporation, its stockholders, or other persons. However,
there was no substantial evidence on record proving bad faith in the termination of petitioner's employment due to retrenchment.
Surigao Del Norte Electric Cooperative Inc. vs. Gonzaga

G.R. No. 187722, June 10, 2013
Facts:
Respondent Gonzaga was a lineman of the petitioner Surigao Del Norte Electric Cooperative, Inc. (SURNECO). However, on February
15, 2000, he was assigned as Temporary Teller at SURNECO's sub-office in Gigaquit, Surigao Del Norte. On June 26, 2001, petitioner
Danny Escalante, General Manager of SURNECO, issued Memorandum 34-01, with Collection Report and two (2)sets of summaries of
collections and remittances, seeking an explanation from Gonzaga regarding his remittance shortages in the total amount of
P314,252.23, covering the period from February 2000 to May 2001. Gonzaga denied any unremitted amount on his part and states
that the report cannot accurately establish any remittance shortage on his part since it was not supported by any bills or official
receipts. SURNECO formed an Investigation Committee to investigate Gonzaga's alleged remittance shortages, in which he
participated. Pending investigation, Gonzaga was placed under preventive suspension from July 31 to August 29, 2001.
On August 9, 2001, the Committee tendered its report, finding Gonzaga guilty of (a) gross and habitual neglect of duty under Section
5.2.15 of the Code of Ethics and Discipline for Rural Electric Cooperative (REC) Employees; (b) misappropriation of REC funds under
Section 7.2.1 of the Code of Ethics; and (c) failure to remit collections/monies under Section 7.2.2 of the Code of Ethics. Thereafter, a
notice of termination was served on Gonzaga on September 13, 2001. Gonzaga sought reconsideration before SURNECO's Board of
Directors but the latter denied the same after he presented his case. On October 25, 2001, Final Notice of Termination was served on
Gonzaga. Consequently, he was dismissed from the service on November 26, 2001.
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Gonzaga filed a complaint with the NLRC Regional Arbitration for illegal dismissal with payment of backwages including damages and
attorney's fees, claiming that he was denied due process and dismissed without just cause. He alleged that he was nonetheless denied
due process since the actual grounds for his dismissal were not indicated in the memorandum. He also claimed that petitioners'
evidence failed to show any missing collection.
In defense, petitioners maintained that Gonzaga's dismissal was attended with due process and founded on a just and valid cause.
Petitioners further argued that Gonzaga was given enough opportunity to defend himself during the investigation. Likewise, he was
properly informed of the accusation against him since the charge of cash shortage has a direct and logical relation to the findings of
gross and habitual neglect of duties and responsibilities, misappropriation of REC funds and failure to remit collections/monies. In
this regard, there was no conflict between the charge stated in Memorandum 34-01 and the grounds cited in the Final Notice of
Termination.
In reply, Gonzaga added that the cooperative's proper procedure for the conduct of investigation, as outlined in Section 16.5 of the
Code of Ethics was not followed; hence, he was denied due process.
Issues:
1. Whether or not there was a valid cause of termination.
2. Whether or not there was statutory compliance of termination procedure.
3. Whether or not there was a breach in the company’s procedure in investigating employees.
Ruling:
There was a valid cause of termination.
The petitioner’s evidence– which consists of the Collection Report, the Summaries, and the September 15, 2003 Audit Report with
attached Cash Flow Summary – adequately supports the conclusion that Gonzaga misappropriated the funds of the cooperative. The
data indicated therein show gaping discrepancies between Gonzaga's collections and remittances, of which he was accountable for. In
this accord, the burden of evidence shifted to Gonzaga to prove that the reflected shortage was not attributable to him. However,
despite being allowed to peruse the bills and receipts on record together with the assistance of an accountant and a counsel during
the investigation proceedings, Gonzaga could not reconcile the amounts of his collections and remittances and, instead, merely
interposed bare and general denials.
Considering the totality of circumstances in this case, the evidence presented by the petitioners, as opposed to the bare denial of
Gonzaga, is sufficient to constitute substantial evidence to prove that he committed serious misconduct and gross and habitual neglect
of duty to warrant his dismissal from employment. Such are just causes for termination which are explicitly enumerated under Article
296 of the Labor Code. At any rate, Gonzaga had admitted that he failed to remit his collections daily in violation of SURNECO's
company policy, rendering such fact conclusive and binding upon him. Therefore, for his equal violation of Section 7.2.2 of the Code of
Ethics (failure to remit collections/monies), his dismissal is justified altogether.
There was statutory compliance in the termination procedure of Gonzaga.

The statutory procedure for terminating an employee is found in Section 2 (III), Rule XXIII, Book V of the Omnibus Rules
Implementing the Labor Code (Omnibus Rules) consists of (a) a first written notice stating the intended grounds for termination; (b) a
hearing or conference where the employee is given the opportunity to explain his side; and (c) a second written notice informing the
employee of his termination and the grounds therefor. Records disclose that petitioners were able to prove that they sufficiently
complied with these procedural requirements.
First, petitioners have furnished Gonzaga a written first notice specifying the grounds on which his termination was sought, in
particular, Memorandum 34-01. While the actual grounds of Gonzaga's dismissal were not explicitly stated in Memorandum 34-01,
these infractions are, however, implicit in the charge of cash shortage. Due to the direct and logical relation between these grounds,
any defense to the charge of cash shortage equally constitutes an adequate defense to the charges of gross and habitual neglect of
duties and responsibilities, misappropriation of REC funds and failure to remit collections/monies. Therefore, based on these
considerations, the Court finds that the first notice requirement had been properly met
Second, petitioners have conducted an informal inquiry in order to allow Gonzaga to explain his side. SURNECO formed an
investigation committee to investigate Gonzaga's alleged remittance shortages. Gonzaga never denied his participation during the said
proceedings. Perforce, the second requirement had been equally complied with.
Third, second written notice was sent to Gonzaga informing him of the company's decision to relieve him from employment, as well
as the grounds. A notice of termination was served on Gonzaga on September 13, 2001, stating the aforesaid grounds. Thereafter,
Gonzaga tried to appeal his dismissal before SURNECO's Board of Directors which was, however, denied after again being given an
adequate opportunity to present his case. On October 25, 2001, a Final Notice of Termination was served on Gonzaga.
SURNECO failed to adhere to their established policy in investing employees.

At this juncture, it must be pointed out that while petitioners have complied with the procedure laid down in the Omnibus Rules, they,
however, failed to show that the established company policy in investigating employees was adhered to. In this regard, SURNECO's
breach of its company procedure necessitates the payment of nominal damages.
Jurisprudence dictates that it is not enough that the employee is given an "ample opportunity to be heard" if company rules or
practices require a formal hearing or conference. The rationale behind this mandatory characterization is premised on the fact that
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company rules and regulations which regulate the procedure and requirements for termination, are generally binding on the
employer.
Records reveal that while Gonzaga was given an ample opportunity to be heard within the purview of the foregoing principles,
SURNECO, however, failed to show that it followed its own rules which mandate that the employee who is sought to be terminated be
afforded a formal hearing or conference. SURNECO remains bound by – and hence, must faithfully observe – its company policy
embodied in Section 16.5 of its own Code of Ethics. Accordingly, since only an informal inquiry was conducted in investigating
Gonzaga's alleged cash shortages, SURNECO failed to comply with its own company policy, violating the proper termination procedure
altogether.
In this relation, case law states that an employer who terminates an employee for a valid cause but does so through invalid procedure
is liable to pay the latter nominal damages. Hence, although the dismissal stands, the Court deems it appropriate to award Gonzaga
nominal damages in the amount of P30,000.00.
Univac Developments Inc. vs. Soriano

G.R. No. 182072, June 19, 2013
Facts:
William M. Soriano was hired on August 23, 2004 by Univac Development, Inc. on probationary basis as legal assistant of the company
with a monthly salary of P15,000.00. He claimed that on February 15, 2005, or eight (8) days prior to the completion of his six
months probationary period, Castro allegedly informed him that he was being terminated from employment due to the company's
cost-cutting measures. He allegedly asked for a thirty-day notice but his termination was ordered to be effective immediately. Thus,
he was left with no choice but to leave the company.
Petitioner, on the other hand, denied the allegation of respondent and claimed instead that prior to his employment, respondent was
informed of the standards required for regularization and also supposedly informed him of his duties and obligations. Petitioner
recalled that on January 5, 2005, a company meeting was held where respondent allegedly expressed his intention to leave the
company because he wanted to review for the bar examinations. It was also in that meeting where he was informed of his
unsatisfactory performance in the company. Thus, when respondent did not report for work on February 16, 2005, petitioner
assumed that he pushed through with his plan to leave the company. In other words, petitioner claimed that respondent was not
illegally dismissed from employment; rather, he in fact abandoned his job by his failure to report for work.
The CA gave more credence to respondent's claim that he was illegally dismissed rather than petitioner's theory of abandonment.
Contrary to the LA and NLRC conclusions, the appellate court held that petitioner failed to apprise respondent of the standards
required for regularization, coupled with the fact that it failed to make an evaluation of his performance, making his dismissal illegal.
Petitioner's employment of another person to replace respondent on the day of the alleged abandonment was taken by the appellate
court against petitioner as it negates the claim of abandonment. In sum, the CA considered respondent's dismissal from employment
illegal because he was not informed of the standards required for regularization; petitioner failed to show proof that respondent's
performance was poor and unsatisfactory constituting a just cause for termination; and that the evidence presented negates
petitioner's claim that respondent abandoned his job. As a consequence of the illegal dismissal, the CA awarded respondent
backwages, separation pay in lieu of reinstatement and attorney's fees. Hence, the petition.
Issue: Whether or not the respondent was illegally dismissed from employment by the petitioner.
Ruling:
The respondent was illegally dismissed from employment.
It is undisputed that respondent was hired as a probationary employee. As such, he did not enjoy a permanent status. Nevertheless, he
is accorded the constitutional protection of security of tenure which means that he can only be dismissed from employment for a just
cause or when he fails to qualify as a regular employee in accordance with reasonable standards made known to him by the employer
at the time of his engagement.
In this case, petitioner failed to present adequate evidence to substantiate its claim that respondent was apprised of said standards.
Equally important is the requirement that in order to invoke "failure to meet the probationary standards" as a justification for
dismissal, the employer must show how these standards have been applied to the subject employee. In this case, aside from its bare
allegation, it was not shown that a performance evaluation was conducted to prove that his performance was indeed unsatisfactory.
The power of the employer to terminate a probationary employee is subject to three limitations, namely: (1) it must be exercised in
accordance with the specific requirements of the contract; (2) the dissatisfaction on the part of the employer must be real and in good
faith, not feigned so as to circumvent the contract or the law; and (3) there must be no unlawful discrimination in the dismissal. In this
case, not only did petitioner fail to show that respondent was apprised of the standards for regularization but it was likewise not
shown how these standards had been applied in his case.
Pursuant to well-settled doctrine, petitioner's failure to specify the reasonable standards by which respondent's alleged poor
performance was evaluated as well as to prove that such standards were made known to him at the start of his employment, makes
respondent a regular employee. In other words, because of this omission on the part of petitioner, respondent is deemed to have been
hired from day one as a regular employee.
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The respondent's termination from employment is without just and valid ground. Neither was due process observed, making his
termination illegal. He is, therefore, entitled to the twin relief of reinstatement and backwages granted under the Labor Code.
However, considering the strained relations between petitioner and respondent, separation pay should be awarded in lieu of
reinstatement. Backwages shall be computed from the time of illegal dismissal until the date the decision becomes final. Separation
pay, on the other hand, is equivalent to at least one month pay, or one month pay for every year of service, whichever is higher (with a
fraction of at least six months being considered as one whole year), computed from the time of employment or engagement up to the
finality of the decision.
Having been forced to litigate in order to seek redress of his grievances, respondent is entitled to the payment of attorney's fees
equivalent to 10% of his monetary award. Pursuant to prevailing jurisprudence, legal interest shall be imposed on the monetary
awards herein granted at the rate of 6% per annum from date of termination until full payment.
Unilever Phils vs. Rivera

G.R. No. 201701, June 3, 2013
Facts:
ON OCT. 19, 2007, respondent Maria Ruby M. Rivera filed a complaint for illegal dismissal and other monetary claims against
petitioner Unilever Philippines, Inc. (Unilever).
When the case reached the National Labor Relations Commission (NLRC), Unilever was ordered to pay respondent P30,000 as
nominal damages, retirement benefits and separation pay. Upon a motion for reconsideration filed by Unilever, the NLRC, in a
resolution of March 31, 2009, modified its ruling by deleting the award of separation pay and reducing the nominal damages from
P30,000 to P20,000 but affirmed the award of retirement benefits.
Unilever elevated the case to the Court of Appeals (CA), Cagayan de Oro City, via a petition for certiorari under Rule 65 of the Rules of
Court. Respondent Rivera did not appeal the decision of the NLRC. The CA deleted the award for retirement benefit but awarded
separation pay as a measure of social justice.
Issue: WON CA was correct in awarding separation pay.
Ruling:
Yes.
In this case, Rivera was dismissed from work because she intentionally circumvented a strict company policy, manipulated another
entity to carry out her instructions without the company’s knowledge and approval, and directed the diversion of funds, which she
even admitted doing under the guise of shortening the laborious process of securing funds for promotional activities from the head
office. These transgressions were serious offenses that warranted her dismissal from employment and proved that her termination
from work was for a just cause. Hence, she is not entitled to separation pay.
More importantly, Rivera did not appeal the March 31, 2009 ruling of the NLRC disallowing the award of separation pay to her. It was
Unilever who elevated the case to the CA. It is axiomatic that a party who does not appeal, or file a petition for certiorari, is not
entitled to any affirmative relief.
Due process prevents the grant of additional awards to parties who did not appeal. An appellee who is not an appellant may assign
errors in his brief where his purpose is to maintain the judgment, but he cannot seek modification or reversal of the judgment or claim
affirmative relief unless he has also appealed. It was, therefore, erroneous for the CA to grant an affirmative relief to Rivera who did
not ask for it.
Samar-med Distribution vs. NLRC, et al.

G.R. No. 162385, July 15, 2013
Facts:
RESPONDENT Josafat Gutang filed a complaint for money claims against petitioner Samar-Med Distribution, a sole proprietorship
registered in the name of Danilo V. Roleda. He claimed that Samar-Med had difficulty paying his compensation during his
employment, resulting in his not being paid salaries since November 1995, allowances since June 1994 and commissions from sales,
and 13th month pay in 1996. He also alleged that Samar-Med made illegal deductions in June 1994 and February 1995. Consequently,
he had been compelled to look for other sources of income beginning on March 26, 1996 in order to survive.
Roleda contended that since Gutang’s complaint before the labor arbiter did not include illegal dismissal as his cause of action, this
means that the instant case does not involve the issue of illegal dismissal.
Issue: WON ther was illegal dismissal.
Ruling:
No.
The petitioner’s contention that the validity of Gutang’s dismissal should not be determined because it had not been included in his
complaint before the National Labor Relations Commission (NLRC) is bereft of merit.
The complaint of Gutang was a mere checklist of possible causes of action that he might have against Roleda. Such manner of
preparing the complaint was obviously designed to facilitate the filing of complaints by employees and laborers who are thereby
enabled to expediently set forth their grievances in a general manner.
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But the non-inclusion in the complaint of the issue of dismissal did not necessarily mean that the validity of the dismissal could not be
an issue. The rules of the NLRC require the submission of verified position papers by the parties should they fail to agree upon an
amicable settlement, and bar the inclusion of any cause of action not mentioned in the complaint or position paper from the time of
their submission by the parties.
With Gutang’s position paper having alleged not only the bases for his money claims, but also that he had been “compelled to look for
other sources of income in order to survive” and that his employment had not been formally terminated, thereby entitling him to “full
backwages aside from his other claims for unpaid monies,” the consideration and ruling on the propriety of Gutang’s dismissal by the
Labor Arbiter and the NLRC were proper.
Naranjo et al, vs. Biomedica Health Care Inc.

G.R. No. 193789, Sept. 19, 2012
Facts:
On November 7, 2006, petitioners––with two (2) other employees were all absent for various personal reasons. Notably, these are the
same employees who filed a letter-complaint dated October 31, 2006 against Biomedica for lack of salary increases, failure to remit
Social Security System and Pag-IBIG contributions, and violation of the minimum wage law, among other grievances.
Later that day, petitioners were allegedly to told to start looking for another workplace and were not allowed to enter the premises.
Biomedica issued a notice of preventive suspension and notices to explain within 24 hours to petitioners, with accusation that
petitioners conducted an illegal strike and were accordingly directed to explain why they should not be held guilty of and dismissed
for violating the company policy.
Petitioners, without submitting their written explanations, filed a Complaint with the NLRC for constructive dismissal.
Thereafter, Biomedica served Notices of Termination on petitioners.

Issue: WON the petitioners were illegally dismissed.
Ruling:
This petition is meritorious. In the instant case, petitioners were not afforded both procedural and substantive due process.
Notice of Charge, Reasonable Opportunity
Rule XIII, Book V, Sec. 2 I (a) of the Implementing Rules and Regulations of the Labor Code states:
xxx
I. For termination of employment based on just causes as defined in Article 282 of the Code:
(a) 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.
In King of Kings Transport, Inc. v. Mamac that a mere general description of the charges against an employee by the employer is
insufficient to comply with the above provisions of the law:
x x x Moreover, in order to enable the employees to intelligently prepare their explanation and defenses, the notice should contain a
detailed narration of the facts and circumstances that will serve as basis for the charge against the employees. A general description of
the charge will not suffice. Lastly, the notice should specifically mention which company rules, if any, are violated and/or which among
the grounds under Art. 282 is being charged against the employees.
Clearly, petitioners were charged with conducting an illegal strike, not a mass leave, without specifying the exact acts that the
company considers as constituting an illegal strike or violative of company policies.
Moreover, the period of 24 hours allotted to petitioners to answer the notice was severely insufficient and in violation of the
implementing rules of the Labor Code. King of Kings Transport, Inc. elucidates in this wise:
(Reasonable Opportunity) should be construed as a period of at least five (5) calendar days from receipt of the notice to give the
employees an opportunity to study the accusation against them, consult a union official or lawyer, gather data and evidence, and
decide on the defenses they will raise against the complaint.
Hearing
In addition, Biomedica did not set the charges against petitioners for hearing or conference in accordance with Sec. 2, Book V, Rule
XIII of the Implementing Rules and Regulations of the Labor Code and in line with ruling in King of Kings Transport, Inc., where the
Court explained:
(2) After serving the first notice, the employers should schedule and conduct a hearing or conference wherein the employees will be
given the opportunity to: (1) explain and clarify their defenses to the charge against them; (2) present evidence in support of their
defenses; and (3) rebut the evidence presented against them by the management.
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While petitioners did not submit any written explanation to the charges, it is incumbent for Biomedica to set the matter for hearing or
conference to hear the defenses and receive evidence of the employees. More importantly, Biomedica is duty-bound to exert efforts,
during said hearing or conference, to hammer out a settlement of its differences with petitioners. These prescriptions Biomedica
failed to satisfy.
Notice of Termination
Lastly, Biomedica again deviated from the dictated contents of a written notice of termination as laid down in Sec. 2, Book V, Rule XIII
of the Implementing Rules that it:
(3) After determining that termination of employment is justified, the employers shall serve the employees a written notice of
The Notice of Termination issued by Biomedica miserably failed to satisfy the requisite contents of a valid notice of termination, as it
simply mentioned the failure of petitioners to submit their respective written explanations without discussing the facts and
circumstances to support the alleged violations
Petitioners were denied substantive due process

Serious misconduct, as a justifying ground for the dismissal of an employee, has been explained in Aliviado v. Procter & Gamble, Phils.,
Inc.:
Misconduct has been defined as improper or wrong conduct; the transgression of some established and definite rule of action, a forbidden
act, a dereliction of duty, unlawful in character implying wrongful intent and not mere error of judgment.
The misconduct to be serious must be of such grave and aggravated character and not merely trivial and unimportant. To be a just
cause for dismissal, such misconduct (a) must be serious; (b) must relate to the performance of the employee’s duties; and (c) must
show that the employee has become unfit to continue working for the employer.
Petitoners failed to show that there was a mass leave or illegal strike, with the Court concluding that there were only individual
availment of their leaves by petitioners. And they cannot be held guilty of any wrongdoing, much less anything to justify their
dismissal from employment. On this ground alone, the petition must be granted.
Given the illegality of their dismissal, petitioners are entitled to reinstatement and backwages.
Manila Jockey Club Inc. vs. Trajano

G.R. No. 160982, June 26, 2013
Facts:
MJCI had employed Trajano as a selling teller of betting tickets. On one occasion, two regular bettors gave their respective bets. One of
the bettors however requested her to cancel his bet. As she had authority to do so, she complied. It happened however that she had
mistakenly cancelled the other bettors ticket.
Later that day, Trajano and told her to submit a written explanation about the ticket cancellation incident which she submitted the
next day. She then resumed her work as a selling teller, until she notified that she was being placed under preventive suspension.
When she reported back 30 days laters, she was no longer admitted. She later learned about her termination through a memo posted
in a selling station of MJCI.
MJCI maintained that Trajano’s dismissal was justified because the unauthorized cancellation of the ticket had constituted a serious
violation of company policy amounting to dishonesty; that her action had also constituted a just cause for terminating her
employment under Article 282 of the Labor Code, particularly paragraph (a) on serious misconduct or willful disobedience and
paragraph (b) on gross and habitual neglect of duty.
MJCI also posits that Trajano held a position of trust and confidence; that the unauthorized cancellation of the ticket was a serious
misconduct on her part considering that had the bet of P2,000.00 won the daily double race, the dividend to be paid could have been
such a big amount that she would be unable to pay on her own; that the repercussions of her act to MJCI would have been disastrous
had the bet won.
Issue: Whether or not there was just cause when Petitioner (MJCI) dismissed Respondent Aimee O. Trajano from the service; And
Whether or not Petitioner MJCI complied with the due process requirement.
Ruling:
The appeal lacks merit.
Loss of Trust and Confidence

Loss of the employer’s trust and confidence is a just cause under Article 282 (c), a provision that ideally applies only to cases involving
an employee occupying a position of trust and confidence, or to a situation where the employee has been routinely charged with the
care and custody of the employer’s money or property. But the loss of trust and confidence, to be a valid ground for dismissal, must
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be based on a willful breach of trust and confidence founded on clearly established facts. "A breach is willful," according to AMA
Computer College, Inc. v. Garay, "if it is done intentionally, knowingly and purposely, without justifiable excuse, as distinguished from
an act done carelessly, thoughtlessly, heedlessly or inadvertently. It must rest on substantial grounds and not on the employer ’s
arbitrariness, whims, caprices or suspicion; otherwise, the employee would eternally remain at the mercy of the employer."An
ordinary breach is not enough.
Moreover, the loss of trust and confidence must be related to the employee’s performance of duties. As held in Gonzales v. National
Labor Relations Commission:
xxx. 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.
As a selling teller, Trajano held a position of trust and confidence. The nature of her employment required her to handle and keep in
custody the tickets issued and the bets made in her assigned selling station. The bets were funds belonging to her employer. MJCI
however, did not establish that the unauthorised cancellation of the ticket was intentional, knowing and purposeful on her part in
order for her to have breached the trust and confidence reposed in her by MJCI, instead of being only out of an honest mistake.
Speculative and Unrealized Prejudice

The contention of MJCI that the unauthorized cancellation of the ticket could have greatly prejudiced MJCI for causing damage to both
its income and reputation is unwarranted.
MJCI’s prejudice remained speculative and unrealized. To dismiss an employee based on speculation as to the damage the employer
could have suffered would be an injustice. The injustice in the case of Trajano would be greater if the supposed just cause for her
dismissal was not even sufficiently established.
The loss of trust and confidence as a ground for the dismissal of an employee must also be shown to be genuine: ”x x x loss of
confidence should not be simulated in order to justify what would otherwise be, under the provisions of law, an illegal dismissal. It
should not be used as a subterfuge for causes which are illegal, improper and unjustified. It must be genuine, not a mere afterthought
to justify an earlier action taken in bad faith."
Insufficient Notice
As for the last procedural requirement of giving the second notice, the posting of the notice of termination at MJCI ’s selling stations
did not satisfy it, and the fact that Trajano was eventually notified of her dismissal did not cure the infirmity.
There is no question that an illegally dismissed employee is entitled to her reinstatement without loss of seniority rights and other
privileges, and to full backwages, inclusive of allowances and other benefits or their monetary equivalent.
Fianza vs. NLRC et al.

G.R. No. 163061, June 26, 2013
Facts:
PETITIONER Alfonso L. Fianza was employed as officer for social acceptance of respondent Binga Hydroelectric Plant, Inc. In February
1999, he did not receive his salary of P15,000 for the first 15 days of the month. He was advised not to report for work until his status
was officially clarified by the Manila office.
Petitioner made several inquiries concerning his status and was told by a supervisor to report for work. However, he was told that the
new management committee had to concur in his reappointment before he could be reinstated in the payroll. It also wanted an
opportunity to determine whether his services would still be necessary. Meanwhile, the chief of the rehabilitation department of the
company recommended his return.
As the management committee did not act on his inquiries for several months, on May 24, 1999, petitioner filed a complaint for illegal
dismissal against respondent. Respondent invoked the defense that petitioner abandoned his job.
Issue: Whether or not petitioner abandoned his job.
Ruling:
No.
It is clear that respondent company failed to prove the necessary elements of abandonment. Additionally, the National Labor
Relations Commission (NLRC) and the Court of Appeals (CA) failed to take into account the strict requirements set by jurisprudence
when they determined the existence of abandonment on the basis of mere allegations that were contradicted by the evidence shown.
The very act of filing the complaint for illegal dismissal should have negated any intention on petitioner’s part to sever his
employment. In fact, it should already have been sufficient evidence to declare that there was no abandonment of work. Moreover,
petitioner went back to the company several times to inquire about the status of his employment. The fact that his inquiries were not
answered does not prejudice this position.
Throughout the entire ordeal, petitioner was vigilant in protecting himself from any claim that he had abandoned his work.
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The following circumstances evinced his intent to return to work: his continuous inquiry with respondent about the status of his
work; his willingness to return to work at any time, subject to the approval of respondent, and his visits to the plant to apply for work;
and his filing of an illegal dismissal case.
Considering all these facts, established by the labor arbiter and confirmed by the NLRC and the CA, the Supreme Court concluded that
both appellate bodies were remiss in declaring the existence of abandonment.
Pasos vs. Phil National Construction Corp.

G.R. No. 192394, July 3, 2013
Facts:
Pasos started working for PNCC, under a Project Employment Contract which was to last three month. His employment was however
extended two years, and thereafter severally rehired under similar contracts. Despite the termination of his last contract, he was
instructed to report back as he will be employed again.
Pasos underwent medical examination for purposes of reemployment. He was advised to take a 14-day sick leave, and on a
subsequent check-up, was advised to take a 60-day sick leave. It was at this circumstance that petitioner was told he was not entitled
to sick leave as he was not a regular employee. And when petitioner was finally given a clean bill of health and reported to work, he
was no longer admitted and told his contract ended on October 19, 2000.
This prompted petitioner to file a complaint for illegal dismissal against PNCC. He argued that he is deemed a regular employee of
PNCC due to his prolonged employment as a project employee as well as the failure on the part of PNCC to report his termination
every time a project is completed.
PNCC countered that petitioner was hired as a project employee in several projects with specific dates of engagement and termination
and had full knowledge and consent that his appointment was only for the duration of each project.
Issue: WON petitioner is a regular employee with right to security of tenure.
Ruling:
This Court is convinced however that although petitioner started as a project employee, he eventually became a regular employee of
PNCC.
Under Article 280 of the Labor Code, as amended, a project employee is one whose "employment has been fixed for a specific project
or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where
the work or services to be performed is seasonal in nature and the employment is for the duration of the season." Thus, the principal
test used to determine whether employees are project employees is whether or not the employees were assigned to carry out a
specific project or undertaking, the duration or scope of which was specified at the time the employees were engaged for that project.
In the case at bar, petitioner worked continuously for more than two years after the supposed three-month duration of his project
employment for the NAIA II Project.
The failure of an employer to file termination reports after every project completion proves that an employee is not a project
employee.
Records clearly show that PNCC did not report the termination of petitioner’s supposed project employment to the DOLE. Department
Order No. 19, or the "Guidelines Governing the Employment of Workers in the Construction Industry," requires employers to submit a
report of an employee’s termination to the nearest public employment office every time an employee’s employment is terminated due
to a completion of a project.
A regular employee dismissed for a cause other than the just or authorized causes provided by law is illegally dismissed.
Petitioner’s regular employment was terminated by PNCC due to contract expiration or project completion, which are both not among
the just or authorized causes provided in the Labor Code, as amended, for dismissing a regular employee.
Thus, petitioner was illegally dismissed.
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Universal Robina Corp. vs. Castillo

G.R. No. 189686, July 10, 2013
Facts:
Respondent Wilfredo Z. Castillo (Castillo) was hired by petitioner Universal Robina Corporation (URC) as a truck salesman on 23
March 1983 with a monthly salary of P4,000.00. He rose from the ranks and became a Regional Sales Manager, until his dismissal on
12 January 2006.
As Regional Sales Manager, respondent was responsible for planning, monitoring, leading and controlling all activities affecting
smooth sales operation. His area of responsibility covered some parts of Laguna, including Liana’s Supermart (Liana) in San Pablo
City, Laguna. On 19 August 2005, URC’s Credit and Collection Department (CCD) Analyst in Silangan, Laguna Branch noted an outright
deduction in the amount of P72,000.00 tagged as Gift Certificate (GC) per Original Receipt No. 625462 dated 18 August 2005. The
CCD Analyst found the issuance of GCs as unusual. This finding prompted URC’s Corporate Internal Audit (CIA) to conduct a routine
audit of the unresolved accounts of Liana’s account receivables.
On 14 November 2005, respondent was asked to explain in writing why the company should not institute the appropriate disciplinary
action against him for possible violation of Offenses Subject to Disciplinary Action 2.04. On 17 November 2005, respondent submitted
his explanation. Respondent repeatedly denied that he signed two (2) blank Charge invoices intended for GCs. He also admitted that
only two (2) cut-cases should have been charged and he assumed liability for the undue payment of one (1) cut-case display.
Clarification inquiries were likewise held on 8 December 2005. On 9 January 2006, respondent was served a written notice of
termination.
MR. CASTILLO WAS DISMISSED AS REGIONAL SALES MANAGER OF ROBINA SALES CORPORATION FOR JUST CAUSE, SPECIFICALLY,
LOSS OF TRUST AND CONFIDENCE UNDER ART. 282. The principal charge against petitioner Castillo was hinged upon “unauthorized
arrangements” which he allegedly entered into. Petitioner Castillo’s unauthorized dealing with respect to the changes in the Account
Development Agreement is exactly the offending cause of the host of infractions he committed, i.e., his neglect in signing the blank
charge invoices and his improper receipt of gift certificates for his personal gain. These acts taken together constitute a breach of the
trust and confidence reposed on petitioner Castillo by private respondent URC. Indeed, petitioner Castillo’s acts of receiving the gift
certificates and signing the blank invoices are closely intertwined and inextricably connected with each other. In other words,
petitioner Castillo’s acquisition of the gift certificates could not have been facilitated without him signing the blank invoices. Such
signing was a ruse to cover up his receipt of the gift certificates. Oddly enough, petitioner Castillo readily admitted to signing receipt
on Charge Invoices Nos. 2189 and 2190 covering the gift certificates in the amounts of P60,000.00 and P12,000.00, respectively, but
made the qualification that the same were in blank when he signed on them. Such claim was obviously to create the impression that
he was really not aware of any gift certificates and that whatever misstep he committed was merely brought about by his good faith.
Issue: Whether or not a validly dismissed employee is entitled to separation pay.
Ruling:
NO.
THE AWARD OF SEPARATION PAY IS AUTHORIZED IN THE SITUATIONS DEALT WITH IN ARTICLE 283 AND 284 OF THE LABOR
CODE, BUT NOT IN TERMINATIONS OF EMPLOYMENT BASED ON INSTANCES ENUMERATED IN ARTICLE 282.
“x x x [L]abor adjudicatory officials and the CA must demur theaward of separation pay based on social justice when an employee’s
dismissal is based on serious misconduct or willful disobedience; gross and habitual neglect of duty; fraud or willful breach of trust; or
commission of a crime against the person of the employer or his immediate family— grounds under Art. 282 of the Labor Code that
sanction dismissals of employees. They must be most judicious and circumspect in awarding separation pay or financial assistance as
the constitutional policy to provide full protection to labor is not meant to be an instrument to oppress the employers. The
commitment of the Court to the cause of labor should not embarrass us from sustaining the employers when they are right, as here. In
fine, we should be more cautious in awarding financial assistance to the undeserving and those who are unworthy of the liberality of
the law.”
Martinez vs. Central Pangasinan Electric Cooperative

G.R. No. 192306, July 15, 2013
Facts:
In 1991, CENPELCO employed Martinez on a contractual basis and in 1993, was subsequently regularized as a billing clerk at the
former's main office in San Carlos City, Pangasinan. On January 7, 2002, CENPELCO gave Martinez the position of teller at Area VI in
Malasiqui, Pangasinan.
On April 26, 2002, CENPELCO’s Internal Audit Department (IAD) conducted a cash count audit concluded that there was an error in
the breakdown of collection turned over by Martinez for April 23, 2002. On June 30 2002, the Company’s Grievance Committee, which
was commissioned to investigate the charges imputed to Martinez, submitted its report recommending Martinez’s termination from
employment as well as the filing of the appropriate case in court.
It was found that a closer scrutiny of the audit report reveals that on April 25, 2002, Martinez indeed had a shortage in the amount of
P44,846.77, which he himself admitted in his letter-explanation dated May 15, 2002. Further, Martinez was not able to account for
such shortage and instead, tried to offset the same with his April 23, 2002 overage in the amount of P45,682.58.
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On November 26, 2002, Martinez was dismissed from service, prompting him to file a complaint for illegal dismissal with money
claims for 13th month pay, service incentive leave pay and allowances, as well as moral and exemplary damages.
The Labor Arbiter (LA) opined that there is no ascribable offense against Martinez which may constitute the charges of
misappropriation and loss of confidence against him and ruled Martinez’s dismissal illegal. The NLRC reversed the LA’s ruling,
declaring Martinez’s dismissal valid but nevertheless, upheld the award for 13 th month pay and cash equivalent of leave credits.
Martinez moved for reconsideration but was denied.
The CA affirmed the NLRC’s ruling. The CA held that the anomalies charged against Martinez are duly substantiated as such finding is
supported by an audit. It echoed the NLRC’s finding that Martinez cannot offset his April 25, 2002 shortage with his April 23, 2002
overage because the latter is dubious and that the practice of offsetting shortages with overages is highly improper. Aggrieved,
Martinez moved for reconsideration but was denied.
Issue: Whether Martinez’s dismissal on the ground of loss of trust and confidence is valid.
Ruling:
The petition is DENIED.
To validly dismiss an employee on the ground of loss of trust and confidence under Article 296(c) (formerly Article 282[c]) of the
Labor Code,26 the following guidelines must be observed:
(1) the employee concerned must be holding a position of trust and confidence; and
(2) there must be an act that would justify the loss of trust and confidence. 27
Anent the first requisite, it is noteworthy to mention that there are two classes of positions of trust, namely:
(1) managerial employees whose primary duty consists of the management of the establishment in which they are employed or of a
department or a subdivision thereof, and to other officers or members of the managerial staff; and
(2) fiduciary rank-and-file employees such as cashiers, auditors, property custodians, or those who, in the normal exercise of their
functions, regularly handle significant amounts of money or property.
Being an employee tasked to collect payments and remit the same to CENPELCO, Martinez belongs to the latter class and thus,
occupies a position of trust and confidence.
Anent the second requisite, Martinez not only admitted the same but even tried to exculpate himself from liability by attempting to
offset said shortage with his alleged overage on April 23, 2002 in the amount of P45,682.58. The Court agrees with the CA that this
practice should never be countenanced because it would allow the employees to patch up inaccuracies or even their own
wrongdoings and thus, the true revenues or losses of the company will never be conectly identified. Verily, this irregular practice
would be detrimental to the interests of the employer whose bread and butter depends solely on realized profits. 30 Perforce,
Martinez's failure to properly account for his shortage of such a significant amount is enough reason for CENPELCO to lose trust and
confidence in him.
Properly adduced evidence which substantially supports the conclusion that on April 25, 2002, Martinez had a shortage in the amount
of P44,846.77. As Martinez was accountable for the discrepancies in his collections vis-a-vis his remittances, the burden of evidence
shifted to him to prove that the reflected shortage was not attributable to any form of negligence or infraction on his part. However,
records disclose that instead of properly explaining the reason for such shortage, Martinez merely admitted its existence. Worse, he
even tried to offset such shortage with his purported April 23, 2002 overage. In fine, CENPELCO had every right to dismiss Martinez
on the ground of loss of trust and confidence for the latter's inability to account for the shortages imputed to him.
Zuellig Pharma Corp vs. Sibal et al.

G.R. No. 173587, July 15, 2013
Facts:
Petitioner , Zuellig Corporation, is a domestic Corporation engaged in the manufacture and distribution of pharmaceutical products. It
also distributes pharmaceutical products manufactured by other companies like Syntex Pharmaceuticals (Syntex). Respondents (36 in
all), on the other hand, were the employees of Zuellig at its Syntex Division. In 1995 Roche Philippines purchased Syntex and took
over Zuellig the distribution of Syntex Products. Consequently, Zuellig closed its Syntex Division and terminated the services of
respondents due to redundancy. They were properly notified of their termination and were paid separation pay according to their
CBA and which individually signed Release and Quitclaim in full settlement of all claims arising from their employment with Zuellig.
Controversy arose when respondents filed in the NLRC separate complaints for payment of retirement gratuity and monetary
equivalent of their unused sick leave .
Issues:
WON the respondents can recover both their separation pay and retirement pay.
WON the respondents can claim their award of monetary equivalent of respondent’s unused sick leave.
WON the Release and Quitclaim executed between the parties is valid .
Ruling:
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1.) No, The CBA does not allow recovery of both separation pay and retirement gratuity. the CBA contains specific provisions
which effectively bar the availment of retirement benefits once the employees have chosen separation pay or vice versa.
Section 2 of Article XIV explicitly states that any payment of retirement gratuity shall be chargeable against separation pay.
Clearly, respondents cannot have both retirement gratuity and separation pay, as selecting one will preclude recovery of the
other. If the employees choose to retire, whatever amount they will receive as retirement gratuity will be charged against
the separation pay they would have received had their separation from employment been for a cause which would entitle
them to severance pay. These causes are enumerated in Section 3, Article XIV of the CBA (i.e., retrenchment, closure of
business, merger, redundancy, or installation of labor-saving device). However, if the cause of the termination of their
employment was any of the causes enumerated in said Section 3, they could no longer claim retirement gratuity as the fund
from which the same would be taken had already been used in paying their separation pay. Put differently, employees who
were separated from the company cannot have both retirement gratuity and separation pay as there is only one fund from
which said benefits would be taken. Consequently, respondents are entitled only to one.
2.) No, Respondents are not entitled to the monetary equivalent of their unused sick leave credits. The CA’s ruling in effect put
something into the CBA that is not written in it, contrary to the old and familiar Latin maxim of expressio unius est exclusio
alterius. In this case, Article VIII of the CBA covers only (1) an employee who is 60 years old and due for compulsory
retirement; (2) an employee who retires prior to attaining the compulsory retirement age but has served at least 25 years;
and, (3) an employee who retires before attaining compulsory retirement age due to illness or disability. Necessarily, the
enumeration cannot be extended to include those who will be leaving the company due to redundancy, death, merger,
installation of labor cost-saving device, retrenchment, or closure of business as mistakenly ruled by the CA. As the law
between the parties, the CBA must be strictly complied with. It is a familiar and fundamental doctrine in labor law that the
CBA is the law between the parties and they are obliged to comply with its provisions.
3.) Yes, It is true that quitclaims executed by employees are often frowned upon as contrary to public policy. However, in this
case, there is no showing that Zuellig coerced or forced respondents to sign the Release and Quitclaim. In fact, there is no
allegation that Zuellig employed fraud or deceit in making respondents sign the Release and Quitclaim.
Zuellig Freight & Cargo System vs. NLRC,

G.R. No. 157900, July 22, 2013
Facts:
San Miguel brought a complaint for unfair labor practice, illegal dismissal, non-payment of salaries and moral damages against
petitioner. He alleged that he had been a checker/customs representative of Zeta since December 16, 1985; that in January 1994, he
and other employees of Zeta were informed that Zeta would cease operations, and that all affected employees, including him, would
be separated. By letter dated February 28, 1994, Zeta informed him of his termination effective March 31, 1994; that he reluctantly
accepted his separation pay subject to the standing offer to be hired to his former position by petitioner; and that on April 15, 1994,
he was summarily terminated, without any valid cause and due process.. San Miguel contended that the amendments of the articles of
incorporation of Zeta were for the purpose of changing the corporate name, broadening the primary functions, and increasing the
capital stock; and that such amendment could not mean that Zeta had been thereby dissolved.
Issue: WON the cessation of business by Zeta was valid to be regarded as a valid ground for termination of employment of San Miguel.
Ruling:
No, Verily, the amendments of the articles of incorporation of Zeta to change the corporate name to Zuellig Freight and Cargo Systems,
Inc. did not produce the dissolution of the former as a corporation. The changing of the name of a corporation is no more the creation
of a corporation than the changing of the name of a natural person is begetting of a natural person. The act, in both cases, would seem
to be what the language which we use to designate it imports – a change of name, and not a change of being. In short, Zeta and
petitioner remained one and the same corporation. The change of name did not give petitioner the license to terminate employees of
Zeta like San Miguel without just or authorized cause. 18Petitioner, despite its new name, was the mere continuation of Zeta’s
corporate being, and still held the obligation to honor all of Zeta’s obligations, one of which was to respect San Miguel’s security of
tenure. The dismissal of San Miguel from employment on the pretext that petitioner, being a different corporation, had no obligation
to accept him as its employee, was illegal and ineffectual.
Abbott Laboratrories Phils et al., Vs. Alcaraz

G.R. No. 192571, July 23, 2013 En banc
Facts:
Alcaraz applied for and was accepted as Medical and Regulatory Affairs Manager of Abbott Laboratories, Philippines. In her
employment contract, she was placed on probation for a period of six (6) months beginning February 15 to August 14, 2005. During
her pre-employment orientation, she was briefed of her duties and responsibilities for the said position. During her employment, she
was considered as ‘too strict’ by some of the staff as she would reprimand the latter for their unprofessional behavior. Months later,
she was informed that she failed to meet the regularization standards for the position of Regulatory Affairs Manager. Hence, she filed
a complaint for illegal dismissal and damages against Abbott and its officers contending that she was unjustly terminated from her
employment. She claimed that she should have already been considered as a regular and not a probationary employee for Abbott’s
failure to appraise her of the reasonable standards for her regularization upon her engagement as required under Art. 295 of the
Labor Code. Abbott countered saying that Alcaraz was validly terminated given her failure to satisfy the prescribed standards which
were made known to him at the time of her engagement.
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Issue: Whether or not Alcaraz was validly terminated.
Ruling:
YES. A probationary employee, like a regular employee, enjoys security of tenure. However, in cases of probationary employment,
aside from just or authorized causes of termination, an additional ground is provided under Article 295 of the Labor Code, i.e., the
probationary employee may also be terminated for failure to qualify as a regular employee in accordance with the reasonable
standards made known by the employer to the employee at the time of the engagement. Thus, the services of an employee who has
been engaged on probationary basis may be terminated for any of the following: (a) a just or (b) an authorized cause; and (c) when he
Corollary thereto, Section 6 (d), Rule I, Book VI of the Implementing Rules of the Labor Code provides that if the employer fails to
inform the probationary employee of the reasonable standards upon which the regularization would be based on at the time of the
engagement, then the said employee shall be deemed a regular employee. In other words, the employer is made to comply with two
(2) requirements when dealing with a probationary employee: first, the employer must communicate the regularization standards to
the probationary employee; and second, the employer must make such communication at the time of the probationary employee's
engagement. If the employer fails to comply with either, the employee is deemed as a regular and not a probationary employee.
The records reveal that Abbott had indeed complied with the above-stated requirements. This conclusion is largely impelled by the
fact that Abbott clearly conveyed to Alcaraz her duties and responsibilities as Regulatory Affairs Manager prior to, during the time of
her engagement, and the incipient stages of her employment. Circumstances show that Alcaraz was well-aware that her regularization
would depend on her ability and capacity to fulfill the requirements of her position as Regulatory Affairs Manager and that her failure
to perform such would give Abbott a valid cause to terminate her probationary employment.
Manila Polo Club Employees Union vs. Manila Polo Club

G.R. No. 172846, July 24, 2013
Facts:
The Board of Directors of Manila Polo Club Inc. unanimously resolved to completely terminate the entire operation of its Food and
Beverage (F & B) outlets due to yearly losses and award its operations to a qualified restaurant operator or caterer. A retrenchment
program was then implemented against the 117 employees who are directly and indirectly involved with the operations of the F & B
outlets with payment of their separation pay. Unaware yet of the termination notice sent to them, the affected employees were
surprised when they were prevented from entering the Club premises as they report for work. They later learned that the F & B
operations had already been awarded to Makati Skyline, Inc. Aggrieved, the union representing the employees filed a Notice of Strike
before the National Conciliation and Mediation Board (NCMB) for illegal dismissal, violation/non-implementation of the Collective
Bargaining Agreement (CBA), union busting, and other unfair labor practices (ULP).
Issue: Whether or not the retrenchment of the 117 union members was legal.
Ruling:
YES. This case involves a closure of business undertaking, not retrenchment. Retrenchment is the reduction of personnel for the
purpose of cutting down on costs of operations in terms of salaries and wages resorted to by an employer because of losses in
operation of a business occasioned by lack of work and considerable reduction in the volume of business. On the other hand, closure
of a business or undertaking due to business losses is the reversal of fortune of the employer whereby there is a complete cessation of
business operations to prevent further financial drain upon an employer who cannot pay anymore his employees since business has
already stopped.
Hereunder are the guidelines for a valid termination of employees as a result of closure of business:
1.Closure or cessation of operations of establishment or undertaking may either be partial or total.
2.Closure or cessation of operations of establishment or undertaking may or may not be due to serious business losses or financial
reverses. However, in both instances, proof must be shown that: (1) it was done in good faith to advance the employer's interest and
not for the purpose of defeating or circumventing the rights of employees under the law or a valid agreement; and (2) a written notice
on the affected employees and the DOLE is served at least one month before the intended date of termination of employment. EHCcIT
3.The employer can lawfully close shop even if not due to serious business losses or financial reverses but separation pay, which is
equivalent to at least one month pay as provided for by Article 283 of the Labor Code, as amended, must be given to all the affected
employees.
4.If the closure or cessation of operations of establishment or undertaking is due to serious business losses or financial reverses, the
employer must prove such allegation in order to avoid the payment of separation pay. Otherwise, the affected employees are entitled
to separation pay.
5.The burden of proving compliance with all the above-stated falls upon the employer.
In this case, the closure of the F & B Department was due to legitimate business considerations, a resolution which the Court has no
business interfering with. The characterization of the employee's service as no longer necessary or sustainable, and therefore,
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properly terminable, is an exercise of business judgment on the part of the employer; the determination of the continuing necessity of
a particular officer or position in a business corporation is a management prerogative, and the courts will not interfere with the
exercise of such so long as no abuse of discretion or arbitrary or malicious action on the part of the employer is shown. Just as no law
forces anyone to go into business, no law can compel anybody to continue the same.
Canedo vs. Kampilan Security & Detective Agency Inc. et al

G.R. No. 179326, July 31, 2013
Facts:
Luciano Canedo was assigned by Kampilan Security and Detective Agency as security guard of the National Power Corporation (NPC)
at Toledo City. However, for not wearing a uniform while on duty as per report of Allan Alfafara of the NPC. Canedo was suspended for
a month. NPC thereafter informed Kampilan that it was no longer interested in Canedo’s service and thus requested for his
replacement. In the meantime, Canedo requested from Arquiza of Kampilan to issue a certification in connection with his intended
retirement to which the latter acceded. Days later, Canedo filed before the labor arbiter a complaint for illegal dismissal, illegal
suspension and non-payment of monetary benefits against Kampilan. He claimed that his suspension was without a valid ground and
effected without due process, hence, illegal. Kampilan countered that Canedo was not dismissed from service but he was just pulled
put from NPC in view of NPC’s request for his replacement.
Issue: Whether or not Canedo was dismissed from service.
Ruling:
NO. In illegal dismissal cases, "while the employer bears the burden to prove that the termination was for a valid or authorized cause,
the employee must first establish by substantial evidence the fact of dismissal from service." The burden of proving the allegations
rests upon the party alleging and the proof must be clear, positive and convincing. Thus, in this case, it is incumbent upon petitioner to
prove his claim of dismissal. While it is true that he was not allowed to report for work after the period of his suspension expired, the
same was due to NPC's request for his replacement as NPC was no longer interested in his services. And as correctly argued by
Kampilan, Canedo from that point onward is not considered dismissed but merely on a floating status. "Such a 'floating status' is
lawful and not unusual for security guards employed in security agencies as their assignments primarily depend on the contracts
entered into by the agency with third parties."
A floating status can ripen into constructive dismissal only when it goes beyond the six-month maximum period allowed by law. In
this case, Canedo filed the Complaint for illegal dismissal even before the lapse of the six-month period. Hence, his claim of illegal
dismissal lacks basis. It was in fact Canedo who intended to terminate his relationship with Kampilan through his planned retirement.
This circumstance negates his claim that he was terminated. Clearly, there is no dismissal to speak of this case.
Ang vs. San Joaquin Jr et al.

G.R. No. 185549, Aug. 7, 2013
Facts:
Respondents San Joaquin, Jr. and Fernandez were regular employees of Virose which Ang is the proprietor of the business. San
Joaquin was hired in 1974 as helper, while Fernandez was employed in 1982 as driver. Respondents attended the court hearing
relative to the 41 criminal cases filed by former Virose employee Abrera against Ang for the latter’s non-remittance of Social Security
System (SSS) Contributions. During that hearing, respondents testified against Ang; it was the second time for San Joaquin to testify,
while it was Fernandez’s first Previously, respondents joined Abrera in questioning Ang’s procedure in remitting their SSS
contributions. After the said hearing Ang began to treat respondents with hostility and antagonism. On August 28, 1999, a salesclerk
who was Instructed to find a helper by Ang’s wife to transfer monoblock chairs to her restaurant asked San Joaquin to help, but the
latter refused, saying that he was not an employee of the restaurant but a glass installer of Virose. A heated argument ensued between
San Joaquin on the one hand and Rosa, her son Jonathan, and the salesclerk on the other. San Joaquin left the store, shouting
invectives. San Joaquin returned to the store, only to find out that Ang had torn his DTR to pieces that day while the DTR of
Fernandez was torn to pieces by Ang immediately after the August 24, 1999 hearing in which the respondents testified. On
the same day, Fernandez reported for work and received a memorandum of even date issued by Ang informing him that he was
placed on a one-week suspension for insubordination. The memorandum did not specify the act of insubordination. Respondents filed
against Ang Complaints for illegal constructive dismissal with claims for backwages and separation pay. Fernandez confronted Ang,
demanding that the latter sign certain documents which the former had with him. Ang refused, and Fernandez – who was then
intoxicated – left uttering unsavory remarks and threatening to sue Ang. San Joaquin received a memorandum from Ang placing the
former under preventive suspension and ordering him to explain in writing, within three days, why no disciplinary action should be
imposed against him for his refusal to obey instructions to transfer the monobloc chairs. Fernandez received another memorandum
from Ang, ordering him to report for work after being absent for a week. Ang issued a memorandum terminating San Joaquin’s
employment.
Issue: WON there was constructive dismissal
Held:
Respondents were illegally dismissed.
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“Constructive dismissal exists where there is cessation of 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 into account 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 the absence 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. In addition, such tearing of respondents’ time cards
confirms petitioner’s vindictive nature and oppressive conduct, as well as his reckless disregard for respondents’ rights.
For a termination of employment on the ground of abandonment to be valid, the employer “must prove, by substantial
evidence, the concurrence of [the employee’s] failure to report for work for no valid reason and his categorical intention to
discontinue employment.” In the present case, it appears that there is no intention to abandon employment; respondents’ repeated
absence were caused by Ang’s oppressive treatment and indifference which respondents simply grew tired of and wanted a break
from. Indeed, an employee cannot be expected to work efficiently in an atmosphere where the employer’s hostility pervades;
certainly, it is too stressful and depressing – the threat of immediate termination from work, if not aggression, is a heavy burden
carried on the employee’s shoulder. Respondents may have stayed away from work to cool off, but not necessarily to abandon their
employment. The fact remains that respondents returned to work, but then their time cards had been torn to pieces.
Sanoh Fulton Phils Inc. et al., vs. Bernardo et al.

G.R. No. 187214, Aug. 14, 2013
Facts:
Sanoh is a domestic corporation engaged in the manufacture of automotive parts and wire condensers for home appliances. Its Wire
Condenser Department employed 61 employees including respondents. In view of job order cancellations relating to the manufacture
of wire condensers by Matsushita, Sanyo and National Panasonic, Sanoh decided to phase out the Wire Condenser Department. On 22
December 2003, the Human Resources Manager of Sanoh informed the 17 employees, 16 of whom belonged to the Wire Condenser
Department, of retrenchment effective 22 January 2004. All 17 employees are union members. A grievance conference was held
where the affected employees were informed of the following grounds for retrenchment:1) Lack of local market.2) Competition from
imported products.3) Phasing out of Wire Condenser Department. Two succeeding conciliation conferences were likewise held but
the parties failed to reach an amicable settlement. The complainants alleged that there was no valid cause for retrenchment and in
effecting retrenchment, there was a violation of the "first in-last out" and "last in-first out" (LIFO) policy embodied in the Collective
Bargaining Agreement. Sanoh, on the other hand, asserted that retrenchment was a valid exercise of management prerogative. Sanoh
averred that some employees who were hired much later were either assigned to other departments or were bound by the terms of
their job training agreement to stay with the company for 3 years.
Issue: WON there was valid retrenchment
Held:
There was no valid retrenchment. Nor was there closure of business
For retrenchment, the three (3) basic requirements are: (a) proof that the retrenchment is necessary to prevent losses or impending
losses; (b) service of written notices to the employees and to the Department of Labor and Employment at least one (1) month prior
to the intended date of retrenchment; and (c) payment of separation pay equivalent to one (1) month pay, or at least one-half (1/2)
month pay for every year of service, whichever is higher. In addition, jurisprudence has set the standards for losses which may justify
retrenchment, thus:(1) the losses incurred are substantial and not de minimis; (2) the losses are actual or reasonably imminent; (3)
the retrenchment is reasonably necessary and is likely to be effective in preventing the expected losses; and (4) the alleged losses, if
already incurred, or the expected imminent losses sought to be forestalled, are proven by sufficient and convincing evidence. Upon the
other hand, in termination, the law authorizes termination of employment due to business closure, regardless of the underlying
reasons and motivations therefore, be it financial losses or not. However, to put a stamp to its validity, the closure/cessation of
business must be bona fide, i.e., its purpose is to advance the interest of the employer and not to defeat or circumvent the rights of
employees under the law or a valid agreement. In termination cases either by retrenchment or closure, the burden of proving
that the termination of services is for a valid or authorized cause rests upon the employer. Not every loss incurred or expected
to be incurred by an employer can justify retrenchment. The employer must prove, among others, that the losses are substantial and
that the retrenchment is reasonably necessary to avert such losses.
Sanoh asserts that cancelled orders of wire condensers led to the phasing out of the Wire Condenser Department which triggered
retrenchment. Sanoh presented the letters of cancellation given by Matsushita and Sanyo as evidence of cancelled orders. The
evidence presented by Sanoh barely established the connection between the cancelled orders and the projected business losses that
may be incurred by Sanoh. Sanoh failed to prove that these cancelled orders would severely impact on their production of wire
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condensers. We held in Lambert Pawnbrokers and Jewelry Corporation v. Binamira that the losses must be supported by sufficient
and convincing evidence and the normal method of discharging this is by the submission of financial statements duly audited by
independent external auditor. It was aptly observed by the appellate court that no financial statements or documents were presented
to substantiate Sanoh’s claim of loss of P7 million per month. Contrarily, respondents amply proved that the cancelled orders did not
seriously create a dent on Sanoh’s financial standing. Respondents further presented the production target and actual production of
the Wire Condenser Department for the year 2005, to prove that the department had realized income for that year.
As the Wire Condenser Department is still in operation and no business losses were proven by Sanoh, the dismissal of respondents was
unlawful. Respondents are entitled to reinstatement without loss of seniority rights and other privileges and to full backwages, computed
from the time the compensation was withheld up to the time of actual reinstatement. Present law says that if reinstatement is not
feasible, the payment of full backwages shall be made from the date of dismissal until finality of judgment. Reinstatement is no longer
practical in view of the length of time that had elapsed. As held in EDI Staff Builders International Inc. v. Magsino, apart from backwages,
respondents should be awarded separation pay.
Daabay vs.Coca-Cola Bottlers Phils

G.R. No. 199890, Aug. 19, 2013
Facts:
The case stems from a complaint for illegal dismissal, illegal suspension, unfair labor practice and monetary claims filed by Daabay
against respondent Coca-Cola Bottlers Phils., Inc. (Coca-Cola) and three officers of the company. The records indicate that the
employment of Daabay with Coca-Cola as Sales Logistics Checker was terminated by the company in June 2005, following receipt of
information from one Cesar Sorin (Sorin) that Daabay was part of a conspiracy that allowed the pilferage of company property. Coca-
Cola then served upon Daabay a Notice to Explain with Preventive Suspension. In compliance therewith, Daabay submitted an
explanation denying said allegations.
Formal Investigation was ensued. Eventually, Coca-Cola served upon Daabay a Notice of Termination that cited pilferage, serious
misconduct and loss of trust and confidence as grounds. At the time of his dismissal, Daabay had been a regular employee of Coca-Cola
for eight years.
Daabay then filed the subject labor complaint against Coca-Cola. The Executive Labor Arbiter ruled in favor of Daabay because the
alleged participation was not proven with substantial evidence. In lieu of reinstatement and considering the already strained relations
between the parties, ELA Magbanua ordered the payment of backwages and separation pay or retirement benefits.
Dissatisfied, Coca-cola appealed the decision to NLRC. NLRC reversed ELA decision and held that here is a “reasonable and well-
founded basis to dismiss” Daabay but awarded retirement benefits. The NLRC, in awarding retirement benefits, explained that there
was a need "to humanize the severe effects of dismissal" and "tilt the scales of justice in favor of labor as a measure of equity and
compassionate social justice."
Coca-cola appealed to CA regarding the award of retirement benefits. CA agreed that Daabay should not be entitled to it considering
he was dismissed for just cause.
Aggrieved, Daabay filed this petition to SC.
Issue: Whether or not Daabay is entitled to retirement benefits.
Ruling:
No. Daabay was declared by the NLRC to have been lawfully dismissed by Coca-Cola on the grounds of serious misconduct, breach of
trust and loss of confidence. SC pronouncement in Philippine Airlines, Inc. v. NLRC was applied in this case. SC held:
“…private respondent was not separated from petitioner's employ due to mandatory or optional retirement but, rather, by
termination of employment for a just cause…Even private respondent's assertion that, at the time of her lawful dismissal, she was
already qualified for retirement does not aid her case because the fact remains that private respondent was already terminated
for cause thereby rendering nugatory any entitlement to mandatory or optional retirement pay that she might have
previously possessed. “
Also, the Court has ruled, time and again, that financial assistance, or whatever name it is called, as a measure of social justice is
allowed only in instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his
moral character.||| Clearly, considering that Daabay was dismissed on the grounds of serious misconduct, breach of trust and loss of
confidence, the award based on equity was unwarranted.
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MZR Industries et al., vs. Colambot

G.R. No. 179001, Aug. 28, 2013
Facts:
On February 8, 2000, petitioner Marilou Quiroz, Owner and Vice-President for Finance and Marketing of MZR, hired respondent Majen
Colambot (Colambot) as messenger. Colambot’s duties and responsibilities included field, messengerial and other liaison work.
However, beginning 2002, Colambot’s work performance started to deteriorate. Petitioners issued several memoranda to Colambot
for habitual tardiness, negligence, and violations of office policies, including insubordinations, among others.
Petitioners claimed that despite written warnings for repeated tardiness and insubordination, Colambot failed to mend his ways.
Hence, in a Memorandum (October 25, 2004) issued by petitioner Lea Timbal, MZR’s Administrative Manager, Colambot was given a
notice of suspension for insubordination and negligence.
Again, in a Memorandum (November 25, 2004), Colambot was suspended from November 26, 2004 until December 6, 2004 for
insubordination. Petitioners claimed they waited for Colambot to report back for work on December 7, 2004, but they never heard
from him anymore.
Later, petitioners were surprised to find out that Colambot had filed a complaint for illegal dismissal, illegal suspension,
underpayment of salaries, holiday pay, service incentive pay, 13 th month pay and separation pay.
Petitioner insisted that while Colambot was suspended due to insubordination and negligence, they maintained that they never
terminated Colambot’s employment. Colambot, meanwhile, argued that contrary to petitioners’ claim that he abandoned his job, he
claimed that he did not report back to work after the expiration of his suspension on December 6, 2004, because Quiroz told him that
his employment was already terminated effective December 7, 2004.
Labor Arbiter declared petitioner guilty of illegal dismissal. LA held that there was no abandonment as there was no deliberate intent
on the part of Colambot to sever the employer-employee relationship and petitioner failed to notify Colambot to return to work. |
Aggrieved, petitioner appealed to NLRC. NLRC ruled in favor of Quiroz. But CA reversed.
Issues:
1. Whether or not petitioner Quiroz is guilty of Illegal Dismissal
2. Whether or not Colambot is guilty of abandonment
Ruling:
1. No.
There was no illegal dismissal, no dismissal having actually taken place. In illegal dismissal cases, the employer bears the burden of
proving that the termination was for a valid or authorized cause. However, before the employer must bear the burden of proving that
the dismissal was legal, the employee must first establish by substantial evidence the fact of his dismissal from service. If there is no
dismissal, then there can be no question as to the legality or illegality thereof. In the present case, however, the facts and the evidence
do not establish a prima facie case that the employee was dismissed from employment.
Other than Colambot's unsubstantiated allegation of having been verbally terminated from his work, there was no evidence presented
to show that he was indeed dismissed from work or was prevented from returning to his work. In the absence of any showing of an
overt or positive act proving that petitioners had dismissed respondent, the latter's claim of illegal dismissal cannot be sustained. The
Notice of Suspension shows that he is merely suspended from work. It was also apparent that there was a specific instruction for him
to return back to work on Dec. 7.
There were no wordings whatsoever implying actual or constructive dismissal. Thus, Colambot's general allegation of having been
orally dismissed from the service as against the clear wordings and intent of the notice of suspension which he signed, we are then
inclined to believe that there was no dismissal.
2. No.
To constitute abandonment of work, two elements must be present:
a. the employee must have failed to report for work or must have been absent without valid or justifiable reason; and
b. there must have been a clear intention on the part of the employee to sever the employer-employee relationship manifested by
some overt act.
Mere absence or failure to report for work, even after notice to return, is not tantamount to abandonment.
The burden of proof to show that there was unjustified refusal to go back to work rests on the employer. Abandonment is a matter of
intention and cannot lightly be presumed from certain equivocal acts. To constitute abandonment, there must be clear proof of
deliberate and unjustified intent to sever the employer-employee relationship.
In the instant case, other than Colambot's failure to report back to work after suspension, petitioners failed to present any evidence
which tend to show his intent to abandon his work. Petitioner failed to discharge the burden.
These circumstances, taken together, the lack of evidence of dismissal and the lack of intent on the part of the respondent to abandon
his work, the remedy is reinstatement but without backwages. However, considering that reinstatement is no longer applicable due to
the strained relationship between the parties and that Colambot already found another employment, each party must bear his or her
own loss.
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Integrated Micorelctronics Inc. vs. Pionella

G.R. No. 200222, Aug. 28, 2013
Facts:
Adonis Pionilla was hired by IMI as its production worker. On May 5, 2005, Pionilla received a notice from IMI requiring him to
explain the incident which occurred the day before where he was seen escorting a lady to board the company shuttle bus at the
Alabang Terminal. It was reported by the bus marshall that the lady was wearing a company identification card (ID) – which serves as
a free pass for shuttle bus passengers – even if she was just a job applicant at IMI. In this regard, Pionilla admitted that he lent his ID to
the lady who turned out to be his relative. He further intimated that he risked lending her his ID to save on their transportation
expenses. Nevertheless, he apologized for his actions.
During the Conscience Committee hearing, Pionilla admitted that at the time of the incident, he had two IDs in his name as he lost his
original ID in November 2004 but was able to secure a temporary ID later. Based on the foregoing, IMI found Pionilla guilty of
violating Article 6.12 of the Company Rules and Regulations (CRR) which prohibits the lending of one’s ID since the same is
considered a breach of its security rules and carries the penalty of dismissal. Subsequently, Pionilla received a letter informing him of
his dismissal from service.
Three days after, he filed a complaint for illegal dismissal with damages against IMI.
LA ruled in favor of Pionilla ordering reinstatement and payment of backwages. Dissatisfied, IMI elevated the matter to the National
Labor Relations Commission (NLRC).
NLRC reversed the LA’s ruling, finding Pionilla’s dismissal to be valid. It pointed out that Pionilla’s act of lending his temporary ID was
willful and intentional as he, in fact, admitted and apologized for the same. The NLRC further ruled that Pionilla’s attitude in violating
the CRR could be treated as perverse as bolstered by his failure to surrender his temporary ID despite locating the original one.
Dissatisfied, Pionilla filed a petition for certiorari before the CA.
CA ruled in favor of Pionilla. It found that while IMI’s regulations on company IDs were reasonable, the penalty of dismissal was too
harsh and not commensurate to the misdeed committed. It also stated that the while the right of the employer to discipline is beyond
question, it, nevertheless, remains subject to reasonable regulation. It further noted that Pionilla worked with IMI for a period of nine
years without any derogatory record and even observed that his performance rating had always been "outstanding."
Hence, the present motion for reconsideration.
Issue: Whether or not Pionilla is entitled to reinstatement and full backwages.
Ruling:
The motion for reconsideration is partly granted. Court ordered his reinstatement but without backwages.
As a general rule, an illegally dismissed employee is entitled to reinstatement (or separation pay, if reinstatement is not viable) and
payment of full backwages. In certain cases, however, the Court has carved out an exception to the foregoing rule and thereby ordered
the reinstatement of the employee without backwages on account of the following:
(a) the fact that dismissal of the employee would be too harsh of a penalty; and
(b) that the employer was in good faith in terminating the employee.
In this case, the Court observes that: (a) the penalty of dismissal was too harsh of a penalty to be imposed against Pionilla for his
infractions; and (b) IMI was in good faith when it dismissed Pionilla as his dereliction of its policy on ID usage was honestly perceived
to be a threat to the company's security.
The Court finds it proper to accord the same disposition and consequently directs the deletion of the award of back wages in favor of
Pionilla, notwithstanding the illegality of his dismissal.
Asia Brewery Inc. vs. Tunay na Pagkakaisa ng Manggagawa sa Asia

G.R. No. 171594-96, September 18, 2013
Facts:
Tunay Na Pagkakaisa ng mga Manggagawa sa Asia (TPMA) is a legitimate labor organization, certified as the sole and exclusive
bargaining agent of all regular rank and file employees of [petitioner corporation] Asia Brewery, Incorporated (ABI). The [petitioner
corporation], on the other hand, is a company engaged in the manufacture, sale and distribution of beer, shandy, glass and bottled
water products. It employs about 1,500 workers and has existing distributorship agreements with at least 13 companies.
Since their old collective bargaining agreement had already expired, the two are now negotiating for a new CBA which will apply for
the next 3 years. After about 18 sessions or negotiations, the parties were still unable to reconcile their differences on their respective
positions on most items, particularly on wages and other economic benefits. TPMA declared a deadlock and filed for a strike.
The Secretary of Labor, Patricia Sto. Tomas, assumed jurisdiction over the matter resolved the deadlock between the parties. She gave
an arbitral award on the Wage increase that will take effect for the next 3 years and on the Health care premiums.
Thereafter, on February 9, 2004, the parties executed and signed the Collective Bargaining Agreement with a term from August 1,
2003 to July 31, 2006.
However, TPMA questions the award rendered by the Secretary of Labor and imputing grave abuse of discretion upon the public
respondent because such awards were based on unaudited financial statements. The Court of Appeals vacated the decision of the
Secretary of Labor and and remanded it back to render the proper awards based on the correct approach on deciding the dispute.
Issue: Whether or not the CA erred when it remanded to the Secretary of Labor the issue on wage increase?
Ruling:
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The Secretary of Labor gravely abused her discretion when she relied on the unaudited financial statements of ABI in determining the
wage award because such evidence is self-serving and inadmissible. This may have resulted to a wage award that is based on an
inaccurate and biased picture of ABI’s capacity to pay – one of the more significant factors in making a wage award. Petitioner
corporation has offered no reason why it failed and/or refused to submit its audited financial statements for the past five years
relevant to this case. This only further casts doubt as to the veracity and accuracy of the unaudited financial statements it submitted to
the Secretary of Labor. Verily, we cannot countenance this procedure because this could unduly deprive labor of its right to a just
share in the fruits of production and provide employers with a means to understate their profitability in order to defeat the right of
labor to a just wage.
As can be seen when it gave the wage award, the Secretary of Labor failed to indicate the actual data upon which the wage award was
based. It even appears that she utilized the "middle ground approach which we precisely warned against in Meralco. Factors such as
the actual and projected net operating income, impact of the wage increase on net operating income, the company's previous CBAs,
and industry trends were not discussed in detail so that the precise bases of the wage award are not discernible on the face of the
Decision. The contending parties are effectively precluded from seeking a review of the wage award, even if proper under our ruling
in Meralco, because of the general but unsubstantiated statement in the Decision that the wage award was based on factors like the
bargaining history, trends of arbitrated and agreed awards, and industry trends. In fine, there is no way of determining if the
Secretary of Labor utilized the proper evidence, figures or data in arriving at the subject wage award as well as the reasonableness
thereof. This falls short of the requirement of administrative due process obligating the decision-maker to adjudicate the rights of the
parties in such a manner that they can know the various issues involved and the reasons for the decision rendered.
Based on the foregoing, we hold that the Secretary of Labor gravely abused her discretion in making the subject wage award. The
appellate court, thus, correctly remanded this case to the Secretary of Labor for the proper determination of the wage award which
should utilize, among others, the audited financial statements of petitioner corporation and state with sufficient clarity the facts and
law on which the wage award is based.
Hormillosa vs. Coca-Cola Bottlers Phils

GR No. 198699, October 9, 2013
Facts:
Hormillosa was employed as a route salesman by Coca-Cola Bottlers Phils., Inc. (CBPI). His duties included, among others, selling
CBPI's soft drink products, either on cash or on credit basis; receiving payments from proceeds of the sale or payments of past due or
current accounts; issuing sales invoices; and receiving empty bottles and cases of soft drinks (empties).
Sometime in the early part of 1999, the then CBPI District Sales Supervisor, Tiosayco, conducted a verification and audit of the
accounts handled by Hormillosa. He discovered transactions in violation of CCBPI Employee Code of Disciplinary Rules and
Regulations, specifically "Fictitious sales transactions; Falsification of company records/data/documents/invoices/reports; fictitious
issuances of TCS/COL (Temporary Credit Sales/Container on Loan); non-issuance or mis-issuance of invoices and receipts as well as
commercial documents to dealers; forgery; misuse, abuse or defalcation of funds from market development program." On March 8,
1999, Tiosayco issued a memorandum to Hormillosa informing him that he was being placed on grounded status and would be
subjected to an investigation.
The investigation showed a number of fictitious transactions that were denied by its clients such as the extended credits that were
extended to them through forged or tampered sales invoices.
Tiosayco directed Hormillosa to report to his office to submit an explanation on his alleged violations and warned him that his failure
to answer on said allegations is a waiver of his opportunity to be heard. Homillosa failed to report after a number of chances that were
given to him. Instead, Homillosa informed Tiosayco that he filed a case against CBPI for Unfair Labor Practice (ULP).
On March 22, 1999, Tiosayco submitted his findings and recommendations to the Regional Sales Manager, proposing the termination
of Hormillosa which CBPI gave credence to the report and approved his recommendation. Hormillosa was informed of his termination
on the ground of Falsification of Invoices, Misappropriation of Company funds, violation of company rules and loss of trust and
confidence.
On May 24, 1999, Hormillosa filed a complaint for ULP (harassment due to union activities and union busting), Illegal Dismissal, Illegal
Deduction, Illegal Grounding, Non-payment of Commission, Non-payment of 13th Month pay, Violation of CBA, Damages, and
Attorney's Fees against CBPI before the Sub-Regional Arbitration Branch No. VI(SRAB). Hormillosa averred in his position paper that
prior to his dismissal, he was a member of the Board of Directors of CBPI's employees union and he became its secretary on March 7,
1999. As secretary, he sent a copy of the new list of union officers to the management with a warning that if CBPI would not stop
harassing the members of the union, it would declare a strike.
Hormillosa denied the allegations on the anomalous transactions he was charged. He claimed however, that the verification and audit
were contrary to Section 2 (d), Article III of the Collective Bargaining Agreement (CBA) which provides: "The Company shall
coordinate with the Union authorized representative to witness the account verification that the company will conduct with respect to
questionable accounts issued to Company customers by route salesman or relief salesmen under investigation." He likewise alleged
that as part of the design to destroy the union, CBPI discriminated against the officers until they were pressured to resign.
Issues:
Whether or not Hormillosa was illegally dismissed?
Whether or not Hormillosa is entitled to separation pay?
Ruling:
Art. 282.Termination by employer. – An employee may terminate an employment for any of the following causes:
(c)Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative;
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There are substantial evidence to justify the dismissal of Hormillosa.

Hormosilla was considered an employee who regularly handled significant amounts of money and property in the normal and routine
exercise of his functions. He occupies a position of trust. There was a high degree of trust and confidence reposed on him and when
this confidence was breached, the employer was justified in taking the appropriate disciplinary action.
The Court finds that Hormillosa committed acts which warranted his dismissal from employment.
Hormillosa was given a chance to confront the witnesses against him and refute the evidence on record against him. Except for the
affidavits of Cecilia Palmes, Fely Paneiro and Shirley Jardeleza, the evidence against him remained in the records, particularly the
documents and invoices he submitted to CBPI. The falsified invoices remained unexplained by him.
Hormillosa's act of issuing sales invoices to Arnold Store could not have been performed without intent and knowledge on his part as
such act could not have been done without planning or merely through negligence. Hence, the breach was willful.
Regarding the issue of separation pay, "The only cases when separation pay shall be paid, although the employee was lawfully
dismissed, are when the cause of termination was not attributable to the employee's fault but due to: (1) the installation of labor
saving devices, (2) redundancy, (3) retrenchment, (4) cessation of employer's business, or (5) when the employee is suffering from a
disease and his continued employment is prohibited by law or is prejudicial to his health and to the health of his co-employees
(Articles 283 and 284, Labor Code.) Other than these cases, an employee who is dismissed for a just and lawful cause is not entitled to
separation pay even if the award were to be called by another name." From our discussion above, Hormillosa is not entitled to
separation pay.
Abbott Laboratories Phils. vs. Alcaraz

GR No. 192571, April 22, 2013, En banc; see also Resolution, dated April 22, 2014
Facts:
Alcaraz was hired as Regulatory Affairs Manager of petitioner Abbott Laboratories, which was an item under the company’s Hospira
Affiliate Local Surveillance Unit (ALSU) department. In Abbott’s offer sheet, it was stated that Alcaraz was to be employed on a
probationary basis. During her pre-employment orientation, she was briefed on her duties and responsibilities which include the
management, evaluation, and discipline of the staff of Hospira. Days later, she received an e-mail which contained an explanation of
the procedure for evaluating the performance of probationary employees and further indicated that Abbott had only one evaluation
system for all of its employees. She was also given copies of Abbott’s Code of Conduct and Probationary Performance Standards and
Evaluation (PPSE) and Performance Excellence Orientation Modules (Performance Modules).

On May 16, 2005, Alcaraz was called to a meeting with the general manager of Abbott where she was informed that she failed to meet
the regularization standards for the position of Regulatory Affairs Manager. Thereafter, she was requested Alcaraz to tender her
resignation, else they be forced to terminate her services. She was also told that, regardless of her choice, she should no longer report
for work and was asked to surrender her office identification cards.

On May 23, 2005, Abbott's officers personally handed to Alcaraz a letter stating that her services had been terminated effective May
19, 2005. The letter detailed the reasons for Alcaraz’s termination – particularly, that Alcaraz: (a) did not manage her time effectively;
(b) failed to gain the trust of her staff and to build an effective rapport with them; (c) failed to train her staff effectively; and (d) was
not able to obtain the knowledge and ability to make sound judgments on case processing and article review which were necessary
for the proper performance of her duties. Alcaraz also received another copy of the said termination letter via registered mail.

Alcaraz felt that she was unjustly terminated from her employment and thus, filed a complaint for illegal dismissal and damages
against Abbott and its officers. She claimed that she should have already been considered as a regular and not a probationary
employee given Abbott’s failure to inform her of the reasonable standards for her regularization upon her engagement as required
under Article 29525 of the Labor Code. In this relation, she contended that while her employment contract stated that she was to be
engaged on a probationary status, the same did not indicate the standards on which her regularization would be based.

The LA dismissed Alcaraz' petition for lack of merit while the NLRC reversed the same and was affirmed by the CA. Thus, the petition.
Issues:
a. WON Alcaraz was sufficiently informed of the reasonable standards to qualify her as a regular employee;
b. WON Alcaraz was validly terminated from her employment
Ruling:
a.) A probationary employee, like a regular employee, enjoys security of tenure. However, in cases of probationary employment, aside
from just or authorized causes of termination, an additional ground is provided under Article 295 of the Labor Code, i.e., the
probationary employee may also be terminated for failure to qualify as a regular employee in accordance with the reasonable
standards made known by the employer to the employee at the time of the engagement. Thus, the services of an employee who has
been engaged on probationary basis may be terminated for any of the following: (a) a just or (b) an authorized cause; and (c) when he
Corollary thereto, Section 6(d), Rule I, Book VI of the Implementing Rules of the Labor Code provides that if the employer fails to
inform the probationary employee of the reasonable standards upon which the regularization would be based on at the time of the
engagement, then the said employee shall be deemed a regular employee, viz.: (d) In all cases of probationary employment, the
employer shall make known to the employee the standards under which he will qualify as a regular employee at the time of his
engagement. Where no standards are made known to the employee at that time, he shall be deemed a regular employee.

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In other words, the employer is made to comply with two (2) requirements when dealing with a probationary employee: first , the
employer must communicate the regularization standards to the probationary employee; and second , the employer must make such
communication at the time of the probationary employee’s engagement. If the employer fails to comply with either, the employee is de
emed as a regular and not probationary employee.

An examination of the records reveals that Abbott had indeed complied with the above-stated requirements. This conclusion is largely
impelled by the fact that Abbott clearly conveyed to Alcaraz her duties and responsibilities as Regulatory Affairs Manager prior to,
during the time of her engagement, and the incipient stages of her employment, as evidenced by the offer sheet and employment
contract among others. SC ruled that Alcaraz was a probationary employee and that her consequent dismissal must stand.
b.) Section 2, Rule I, Book VI of the Implementing Rules of the Labor Code states that “[i]f the termination is brought about by the x x x
failure of an employee to meet the standards of the employer in case of probationary employment, it shall be sufficient that a written
notice is served the employee, within a reasonable time from the effective date of termination.”

Alcaraz's dismissal was effected through a letter dated May 19, 2005 which she received on May 23, 2005 and again on May 27, 2005.
Stated therein were the reasons for her termination, i.e., that after proper evaluation, Abbott determined that she failed to meet the
reasonable standards for her regularization considering her lack of time and people management and decision-making skills, which
are necessary in the performance of her functions as Regulatory Affairs Manager. Undeniably, this written notice sufficiently meets
the criteria set forth above, thereby legitimizing the cause and manner of Alcaraz’s dismissal as a probationary employee under the
parameters set by the Labor Code.
Gemina Jr vs. bankwise Inc. et al.

GR No. 175365, October 23, 2013
Facts:
Petitioner Gemina signed an employment contract with respondent Bankwise as Marketing Officer with the rank of Senior Manager,
with an annual salary of P750,000.00 b ased on a fifteen-month scheme or P50,000.00 per month and a service vehicle for his field
work. The same contract stipulated for a fund level commitment of P100,000,000.00 for the first six (6) months of employment.

During his first months in Bankwise, Gemina's performance was satisfactory. However, when the former got involved in a
controversy, he had difficulty in soliciting new depositors and after 5 months, he had the lowest performance among the members of
the fund management group. This prompted his supervisors to call his attention and warn him of his obligations under the contract of
employment and failure to comply with those constitute breach of his contractual obligations.

Despite the warning, Gemina went on leave for eleven (11) days. Thereafter, he incurred absences without leave and did not bother to
inform the bank regarding the reason therefor. Pascua and Galapate, petitioner's seniors tried to contact him to inquire about the
reason of his long absence and requested him to return the company vehicle but to no avail. Instead, petitioner filed a complaint for
illegal dismissal against Bankwise.

LA held that Gemina was illegally dismissed while the NLRC held that there was no constructive dismissal, rather Gemina abandoned
his employment. CA on the other hand denied the petition for certiorari filed by the petitioner.
Issues:
a. WON the fund level commitment is a condition for Gemina’s employment to warrant breach of his contractual obligations
b. WON Gemina was constructively dismissed
Ruling:
a. The fund level commitment is a condition for Gemina's employment. A fund level commitment was stipulated as a term or condition
on Gemina’s contract of employment. Though not per se a ground for dismissal, it is the standard by which Gemina’s performance will
be evaluated by Bankwise’s management. Thus, the contract states, "your performance relative to your ability to generate deposits
shall be monitored monthly and reviewed on your 6th month." The stated amount of funds sets the goal or target amount of funds
which Gemina should strive to generate within a specific number of months.

It must be clear, however, that the fund level commitment is not the sole basis of Gemina’s employment. In the same manner, the
failure to comply with this undertaking does not automatically lead to dismissal from employment. Gemina will still be subjected to
the management’s evaluation to determine his performance based on the amount of funds he was able to bring in to the coffers of
Bankwise. Even then, Gemina may not conveniently brush aside compliance with the fund level commitment, thinking that it does not
have any implication on employment. It bears stressing that while not an automatic ground for dismissal, the failure to generate the
funds translates to a poor performance rating which may ultimately jeopardize his continued employment. Depending on the results
of the periodic evaluation undertaken by the management, the failure to comply with the fund level commitment may eventually
justify his dismissal from employment. Thus, Gemina must put forth all his efforts in order to fulfill his fund level commitment.
b. There was no constructive dismissal. There is constructive dismissal when "there is cessation of work, because ‘continued
employment is rendered impossible, unreasonable or unlikely, as an offer involving a demotion in rank or a diminution in pay’ and
other benefits. Aptly called 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."
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Baguio Central University vs. Gallente,

GR No. 188267, December 2, 2013
Facts:
Respondent was hired by BCU as instructor in 1991 and was eventually promoted to dean of the University’s College of Arts, Sciences
and Public Administration. While still serving as dean, he organized GRC Review and Language Center under the name Genesis
Gallente and listed under the Articles of Incorporation that its purpose is to conduct review classes for PRC and CSC exams and also
provided the address of BCU as its primary address. BCU’s President, Dr. Fernandez called the respondent’s attention on the matter
and conducted grievance meetings but he resigned from the BCU and then filed before the LA a complaint for illegal (constructive)
dismissal. LA decided in favor of Gallente then it was reversed by the NLRC. CA then reinstated the ruling of the LA.
Issue: WON Gallente was validly dismissed with loss of trust and confidence as ground thereof.
Ruling:
SC finds for the petitioner. For an employee’s dismissal to be valid it must comply with two basic requirements; 1) just or authorized
cause, being the substantive aspect, and 2) the observance of due process, being the procedural aspect. Article 282 (c) of the Labor
Code provides that an employer may terminate an employment for fraud or willful breach by the employee of the trust reposed in him
by his employer or duly authorized representative provided that these two conditions are present: 1) the employee holds a position of
trust or a managerial employee and 2) the act constituting such shall be established.
Being the dean of two departments, Gallente was tasked to assist the school head on matters of policy affecting the entire institution
which would then grant him discretion and powers equivalent to a managerial employee and as such, the first requirement is
satisfied. For the second requirement, the Court found that Gallente engaged in a venture that would have directly conflicted with
BCU’s interest as he now placed himself in a position to perform substantially the same task of formulating and updating the programs
of learning for both institutions. Further, the fact that BCU suffered no damage because of the failure of GRC to fully operate is beside
the point as the heart of the loss-of-trust charge is the betrayal of the employee of the employer’s trust. Finally, Gallente invalidly
appropriated BCU’s property by listing its address as that of GRC without authority and worse, it created the notion for the public that
it is a BCU sponsored venture.
Sangwoo Phils Inc. et al., vs. Sangwoo Phils Inc Employees Union
GR No. 173154, December 9, 2013
Facts:
This is a consolidated petition where both parties seek to set aside or modify the CA ruling pertaining to their dispute. On July 25,
2003 while both parties are in the midst of negotiations for a CBA, SPI filed with the DOLE a letter-notice of temporary suspension of
operations due to lack of orders for one month beginning Sept 15. SPI then asked for extension until March 15, 2004 which prompted
the filing of a complaint on Oct 28, 2003 by SPEU with the RAB for unfair labor practice with illegal closure and dismissal. On Feb 12,
2004, SPI posted notices in the company premises of its cessation of business operations effective March 16 and furnished the DOLE
and SPEU a copy of said notice. SPI offered separation pay for its employees and 234 accepted the same and executed quitclaims while
the rest was given until March 25 but still refused. The LA found that SPI was experiencing economic losses and complied with the
notice requirement, thus cannot be held liable for separation pay. The NLRC upheld but modified the same to grant separation pay as
SPI already paid 234 employees. SPI offered to pay the employees 15,000 pesos each as a settlement but they refused to accept the
same. CA then upheld the ruling but stated that SPI is not liable for separation pay. Instead, SPI should pay the 15,000 settlement offer.
Issues:
1. WON the employees are entitled to separation pay;
2. WON SPI complied with the notice requirement of Article 297 of the Labor Code.
Ruling:
1. SPI is not liable for separation pay. Generally, closure of business as an authorized cause for termination of employment requires
the employer to give out separation pay to the employees except when the closure is due to serious business losses. The LA, NLRC and
CA all ruled that SPI was suffering from serious business losses which resulted in its permanent shutdown. To require an employer to
be generous when it is no longer in a position to do so would be oppressive, unjust and unfair to the employer. The 15,000 offer made
by SPI as settlement was a calculated move to avoid further litigation expenses but was not accepted by the employees, said offer did
not ripen into an enforceable obligation.
2. The notice posted by the employer in the company premises does not comply with the requirement, it being necessary that the one
month notice be served on each employee personally. The LA, NLRC and CA erred therefore in ruling that SPI complied with the notice
requirement. Employers with a valid cause for termination but conducts such with a procedural infirmity is liable for nominal
damages amounting to 50,000 for authorized cause and 30,000 for just causes. Jurisprudence however, exhorts that such damages
may be modified if the payment thereof is unjust, impossible or too burdensome. The Court awarded nominal damages for the
employees for 10,000 each.
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International School Manila et al., vs. International School Alliance of Educators et al.
GR No. 167286, February 5, 2014
Facts:
Evangeline Santos, herein respondent was a faculty of the International School Manila since 1978. In the year 1992 she applied for a
leave of absence. When she returned in 1993, only one teaching load for Spanish was available, thus she agreed to teach 4 Filipino
classes. As per evaluation during the year 1993, respondent’s evaluation stated that she needed improvement in key areas such as use
of effective questioning techniques and enforcement of academic and classroom behavior among others. The following school year,
Santos expressed that she will be teaching for the school year and that she did not prefer a change in the teaching assignments. For
said school year, she was again evaluated and her evaluation results mirrored those areas in which she needed improvement. The
situation was the same for school year 1995-1996.
In 1996, a Professional Growth Plan designed by Asst. Principal Peter Loy was signed by Santos wherein she undertook to focus and
improve on the specifically stated areas of her teaching that she need to improve on. Phase 1 was Planning. But even with the
Professional Growth Plan and the series of meetings and consultations conducted for the benefit of Santos, her over-all performance
did not improve. In fact, 8 months into the implementation of the Professional Growth Plan, she was still in Phase 1.
In April 10, 1997, the school then wrote a letter to Santos asking her to explain why she her services should not be terminated in view
of her performance way below the standards set by said school. Santos was given the chance to answer. A meeting was thereafter
conducted wherein Santos was allowed to bring counsel or representative. Santos was accompanied by Raquel Ching, President of the
International School Alliance of Educators. Positions of the parties were clarified in the meeting and was held, Santos was being
charged by the school with gross inefficiency or negligence in the performance of duties. An administrative investigation followed.
The committee who conducted the investigation recommended that the employment of Santos cannot be continued.
Adopting the recommendation by the investigating committee, Santos was informed in a letter of her termination effective June 7,
1997. Bases of which was the finding of the committee that despite three years of numerous consultations with her supervisors, no
appreciable improvement was seen in the performance of Santos.
Issues:
1. Whether or not Santos was illegally dismissed?
2. Whether or not Santos is entitled to reinstatement or separation pay with backwages?
Ruling:
1. Santos was not illegally dismissed.
To constitute a valid dismissal from employment, two requisites must concur: (1) the dismissal must be for any of the causes provided
in Article 282 of the Labor Code; and, (2) the employee must be given an opportunity to be heard and to defend himself.
 Dismissal Must be for any causes provided in Art. 282

In the collective bargaining agreement (CBA) between the School and ISAE for the years 1992-1995, Section 13 of Appendix A thereof
expressly states that "termination of employment shall be in accordance with the laws of the Philippines as presented in the LABOR
CODE.
ART. 282. Termination by employer. – An employer may terminate an employment for any of the following causes:
(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with
his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative;
(d) Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his
duly authorized representative; and
(e) Other causes analogous to the foregoing.
The Court had occasion to explain in Century Iron Works, Inc. v. Bañ as the concept of gross and habitual neglect of duties. Thus:
Gross negligence connotes want or absence of or failure to exercise slight care or diligence, or the entire absence of care. It evinces a
thoughtless disregard of consequences without exerting any effort to avoid them. Fraud and willful neglect of duties imply bad faith of
the employee in failing to perform his job, to the detriment of the employer and the latter’s business. Habitual neglect, on the other
hand, implies repeated failure to perform one’s duties for a period of time, depending upon the circumstances.
On gross inefficiency, we ruled in Lim v. National Labor Relations Commission that:
Gross inefficiency falls within the purview of "other causes analogous to the foregoing," and constitutes, therefore, just cause to
terminate an employee under Article 282 of the Labor Code. One is analogous to another if it is susceptible of comparison with the
latter either in general or in some specific detail; or has a close relationship with the latter. "Gross inefficiency" is closely related to
"gross neglect," for both involve specific acts of omission on the part of the employee resulting in damage to the employer or to his
business. In Buiser vs. Leogardo, this Court ruled that failure to observe prescribed standards of work, or to fulfill reasonable work
assignments due to inefficiency may constitute just cause for dismissal.
Viewed in light of the above doctrines, the Court is not convinced that the actuations of Santos complained of by the petitioners
constituted gross and habitual neglect of her duties.
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What can be gathered from a thorough review of the records of this case is that the inadequacies of Santos as a teacher did not stem
from a reckless disregard of the welfare of her students or of the issues raised by the School regarding her teaching. Far from being
tainted with bad faith, Santos’s failings appeared to have resulted from her lack of necessary skills, in-depth knowledge, and expertise
to teach the Filipino language at the standards required of her by the School.
Be that as it may, we find that the petitioners had sufficiently proved the charge of gross inefficiency, which warranted the
dismissal of Santos from the School.
The Court enunciated in Peñ a v. National Labor Relations Commission73 that "it is the prerogative of the school to set high standards
of efficiency for its teachers since quality education is a mandate of the Constitution. As long as the standards fixed are reasonable and
not arbitrary, courts are not at liberty to set them aside." Moreover, the prerogative of a school to provide standards for its teachers
and to determine whether these standards have been met is in accordance with academic freedom, which gives the educational
institution the right to choose who should teach.
The Court finds that, not only did the petitioners’ documentary evidence sufficiently prove Santos’s inefficient performance of duties,
but the same also remained unrebutted by respondents’ own evidence. On the contrary, Santos admits in her pleadings that her
performance as a teacher of Filipino had not been satisfactory but she prays for leniency on account of her prior good record as a
Spanish teacher at the School. Indeed, even the Labor Arbiter, the NLRC and the Court of Appeals agreed that Santos was not without
fault but the lower tribunals deemed that termination was too harsh a penalty.
Nonetheless, the Court finds that petitioners had satisfactorily discharged the burden of proving the existence of gross
inefficiency on the part of Santos, warranting her separation from the school.
 As regards the requirements of procedural due process:

Section 2(d) of Rule 1 of The Implementing Rules of Book VI states that:
For termination of employment based on just causes as defined in Article 282 of the Labor Code:
(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.
(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
In this case, the School complied with the above requirements. After a thorough evaluation of Santos’s performance, the School held a
series of conferences and meetings with Santos, in order to improve her performance. On March 29, 1996, the School required Santos
to undertake a Professional Growth Plan. Thereafter, when the intervention of the School failed to yield any considerable
improvement on Santos, McCauley wrote her a letter on April 10, 1997, which required her to explain in writing within forty-eight
(48) hours why her employment should not be terminated in view of her failure to meet the standards of the School on very specific
areas of concern. On April 16, 1997, Santos responded to McCauley’s letter, asking why she was being required to explain. On April 21,
1997, McCauley wrote Santos a letter informing her that an administrative investigation would be conducted on April 23, 1997 where
she would be given the opportunity to be heard. On April 23, 1997, an administrative investigation was conducted. Santos appeared
therein with the assistance of ISAE President Ching. In a letter dated May 29, 1997, the School informed Santos of its decision to
terminate her employment on the ground of her failure to meet the standards of the School, which as discussed was tantamount to
gross inefficiency.
2. In view of the finding that Santos was validly dismissed from employment, she would not ordinarily be entitled to
separation pay. An exception to this rule is when the court finds justification in applying the principle of social justice
according to the equities of the case.
We hold that henceforth separation pay shall be allowed as a measure of social justice only in those instances where the employee is
validly dismissed for causes other than serious misconduct or those reflecting on his moral character.
In the instant case, the Court finds equitable and proper the award of separation pay in favor of Santos in view of the length of her
service with the School prior to the events that led to the termination of her employment. To recall, Santos was first employed by the
School in 1978 as a Spanish language teacher. During this time, the records of this case are silent as to the fact of any infraction that
she committed and/or any other administrative case against her that was filed by the School. Thus, an award of separation pay
equivalent to one-half (1/2) month pay for every year of service is awarded in favor of Santos on grounds of equity and social justice.
Dreamland Hotel Resort vs. Johnson

GR No. 191455, March 12, 2014
Facts:
Dreamland is a corporation engaged in the hotel, restaurant, and allied business and is duly registered with the Securities and
Exchange Commission. Prentice is its current President and Chief Executive Officer. Respondent Stephen B. Johnson is an Australian
citizen who came to the Philippines as a businessman/investor.
Sometime on June 21, 2007, Prentice and Johnson entered into an Employment Agreement, which stipulates among others, that
Johnson shall serve as Operations Manager of Dreamland from August 1, 2007 and shall serve as such for a period of three (3) years.
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From the start of August 2007, as stipulated in the Employment Agreement, respondent Johnson already reported for work. It was
then that he found out to his dismay that the resort was far from finished. However, he was instructed to supervise construction and
speak with potential guests. He also undertook the overall preparation of the guestrooms and staff for the opening of the hotel, even
performing menial tasks (i.e. inspected for cracked tiles, ensured proper grout installation, proper lighting and air-conditioning unit
installation, measured windows for curtain width and showers for shower curtain rods, unloaded and installed mattresses, beddings,
furniture and appliances and even ironed and hung guest room curtains).
As Johnson remained unpaid since August 2007 and he has loaned all his money to petitioners, he asked for his salary after the resort
was opened in October 2007 but the same was not given to him by petitioners. Johnson became very alarmed with the situation as it
appears that there was no intention to pay him his salary, which he now depended on for his living as he has been left penniless. He
was also denied the benefits promised him as part of his compensation such as service vehicles, meals and insurance.
Thus, on November 3, 2007 respondent Johnson was forced to submit his resignation. In deference to the Employment Agreement
signed, [Johnson] stated that he was willing to continue work for the three month period stipulated therein.
However, in an SMS or text message sent by Prentice to [Johnson] on the same day at around 8:20 pm, he was informed that "… I
consider your resignation as immediate". Despite demand, petitioners refused to pay Johnson the salaries and benefits due him.
On January 31, 2008, Johnson filed a Complaint for illegal dismissal and non-payment of salaries, among others, against the
petitioners.
Issue: Whether or not Johnson was illegally dismissed?
Ruling:
Johnson was illegally dismissed.
As regards the NLRC findings that Johnson was constructively dismissed and did not abandon his work, the Court is in consonance
with this conclusion with the following basis:
Even the most reasonable employee would consider quitting his job after working for three months and receiving only an insignificant
fraction of his salaries. There was, therefore, not an abandonment of employment nor a resignation in the real sense, but a
constructive dismissal, which is defined as an involuntary resignation resorted to when continued employment is rendered
impossible, unreasonable or unlikely.
"There is constructive dismissal if an act of clear discrimination, insensibility, or disdain by an employer becomes so unbearable on
the part of the employee that it would foreclose any choice by him except to forego his continued employment. It exists where there is
cessation of 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 impossible, unreasonable or unlikely that any employee, such as Johnson would continue working for an employer who does not
pay him his salaries. Applying the Court’s pronouncement in Duldulao v. CA, the Court construes that the act of the petitioners in not
paying Johnson his salaries for three months has become unbearable on the latter’s part that he had no choice but to cede his
employment with them.
The Court quotes the pertinent sections of Johnson’s resignation letter which reflects the real reason why he was resigning as
operations manager of the hotel:
I hereby tender my resignation to you, Mr[.] Wes Prentice, Dreamland Resort, Subic, Zambales, Philippines.
Since joining Dreamland Resort & Hotel over three months ago I have put my heart and soul into the business. I have donated many hours
of my personal time. I have frequently worked seven days a week and twelve to thirteen hours a day. I am now literally penniless, due
totally to the fact that I have lent you and your resort/hotel well over $200,000AU (approx 8million pesos) and your non-payment of
wages to me from 1st August 2007 as per Employment Agreement.
The above preceding statement only goes to show that while it was Johnson who tendered his resignation, it was due to the
petitioners’ acts that he was constrained to resign. The petitioners cannot expect Johnson to tolerate working for them without any
compensation.
Since Johnson was constructively dismissed, he was illegally dismissed.

Relief Granted:
Thus, an illegally dismissed employee is entitled to two reliefs: backwages and reinstatement. The two reliefs provided are separate
and distinct. In instances where reinstatement is no longer feasible because of strained relations between the employee and the
employer, separation pay is granted. In effect, an illegally dismissed employee is entitled to either reinstatement, if viable, or
separation pay if reinstatement is no longer viable, and backwages.
its employ a worker it could no longer trust.
In the present case, the NLRC found that due to the strained relations between the parties, separation pay is to be awarded to Johnson
in lieu of his reinstatement.
Accordingly, the award of backwages should be computed from November 3, 2007 to August 1, 2010 - which is three years from
August 1, 2007. Furthermore, separation pay is computed from the commencement of employment up to the time of termination,
including the imputed service for which the employee is entitled to backwages. As one-month salary is awarded as separation pay for
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every year of service, including imputed service, Johnson should be paid separation pay equivalent to his three-month salary for the
three-year contract.
Castillo et al., vs. Prudentialife Plans Inc.

GR No. 196142, March 26, 2014
Facts:
Individual petitioners Castillo, Evangelista, Dolendo, and Sy were regular employees of respondent Prudentialife Plans, Inc. The
individual petitioners are members of PPEU-FFW. Under Section 4, Article X of the parties' Collective Bargaining Agreement,
Prudentialife employees were granted an optical benefit allowance of P2,500.00 to subsidize prescription eyeglasses for those who
have developed vision problems in the course of employment. Many Prudentialife employees — petitioners included — availed
thereof and Prudentialife was flooded with requests for reimbursement for eyeglasses the employees supposedly purchased from a
single outfit/supplier, Alavera Optical. Suspecting fraud, Prudentialife began an investigation into the matter, and on February 22,
2006, it sent individual written Notices to Explain to petitioners and other employees who availed of the benefit. In her written
explanation, Castillo claimed that she acted in good faith in availing of the optical benefit allowance; that she did not conspire with
Alavera Optical in the overpricing of her eyeglasses; that she was made to believe that her transaction with Alavera Optical —
whereby the latter would issue an official receipt for the eyeglasses even without actual payment thereof, which Castillo would then
claim from Prudentialife — was regular; that she was unaware that Alavera Optical was using a fictitious address and telephone
number; and that she had no intention to defraud Prudentialife. Other Prudentialife employees admitted that the eyeglasses they
obtained cost only so much, yet were overpriced for purposes of reimbursement.
Prudentialife through their investigation discovered that the employees who availed of the optical benefit allowance obtained their
eyeglasses from Alavera Optical, based on the employees' reimbursement requests/petty cash vouchers and that Alavera Optical
issued prescriptions, released the eyeglasses, and issued the official receipts therefor even though they have not been paid for.
Thus, Prudentialife concluded that petitioners and other employees knowingly availed of the optical benefit allowance to obtain a
refund of the maximum P2,500.00 benefit even though they did not have vision problems, or that their eyeglasses were worth less
than P2,500.00. On April 10, 2006, Prudentialife issued individual Notices of Termination to petitioners and other employees.
Petitioners filed a Complaint for illegal dismissal, money claims and damages (illegal dismissal case) against respondents, In their
Position Paper, petitioners mainly contended that they were illegally dismissed based on a charge of dishonesty that was not proved,
but was mainly founded on suspicion, conjecture and suppositions.
Issue:
(1) Whether or not an affidavit of the co-employee can serve as basis for proving an employee's guilt or wrongdoing.
(2) Whether or not there was a valid ground for their dismissal.
Ruling:
(1) Yes. The written statements of petitioners' co-employees admitting their participation in the scheme are admissible to establish
the plan or scheme to defraud Prudentialife; the latter had the right to rely on them for such purpose. The argument that the said
statements are hearsay because the authors thereof were not presented for cross-examination does not persuade; the rules of
evidence are not strictly observed in proceedings before the NLRC, which are summary in nature and decisions may be made on the
basis of position papers. Besides, these written declarations do not bear directly on petitioners' participation in the scheme; their guilt
has been established by evidence other than these statements.
Petitioners' reliance on Garcia v. Malayan Insurance Co., Inc. is misplaced. Far from declaring that the statement of a co-employee may
not be used to prove the guilt of an employee accused of theft of company property, the Court held therein that the affidavit of the co-
employee cannot serve as basis for the finding that said petitioner conspired in the theft because it was so lacking in crucial details.
The opposite is thus true: the affidavit or statement of a co-employee in a labor case may prove an employee's guilt or wrongdoing if it
recites crucial details of his involvement.
(2) Yes. By presenting the false receipt to their employer to obtain reimbursement for an expense which they did not in fact incur, this
constituted dishonesty. By availing of the benefit, the employee represents to Prudentialife that he has developed vision problems. If
this is not true, then he has committed an act of dishonesty as well. Given the circumstances then obtaining, the same principle holds
true with respect to eyeglasses whose lenses do not match the corresponding prescription.
For their dishonesty, the penalty of dismissal is justified pursuant to Section 2.6 (i) of the Prudentialife Personnel Manual which
prescribes the penalty of dismissal for acts of padding receipts for reimbursement or liquidation of advances or expenses. Dishonesty
is a serious offense, and "no employer will take to its bosom a dishonest employee." Dishonesty implies a "[d]ispposition to lie, cheat,
deceive, or defraud; untrustworthiness; lack of integrity; [l]ack of honesty, probity or integrity in principle; lack of fairness and
straightforwardness; disposition to defraud, deceive or betray." Acts of dishonesty have been held to be sufficient grounds for
dismissal as a measure of self-protection on the part of the employer.
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Unibersidad De Sta Isabel vs. Sambajon, Jr.

GR No. 196280 & 196286, April 2, 2014, citing 2010 Mercado vs. AMA Computer College
Facts:
Universidad de Sta. Isabel (petitioner) is a non-stock, non-profit religious educational institution in Naga City. Petitioner hired
Marvin-Julian L. Sambajon, Jr. (respondent) as a full-time college faculty member with the rank of Assistant Professor on probationary
status effective November 1, 2002 up to March 30, 2003.After the aforesaid contract expired, petitioner continued to give teaching
loads to respondent who remained a full-time faculty member of the Department of Religious Education for the two semesters of
school-year (SY) 2003-2004 (June 1, 2003 to March 31, 2004); and two semesters of SY 2004-2005 Sometime in June 2003, after
respondent completed his course in Master of Arts in Education, major in Guidance and Counseling, he submitted the corresponding
Special Order from the Commission on Higher Education (CHED), together with his credentials for the said master's degree, to the
Human Resources Department of petitioner for the purpose of salary adjustment/increase. Subsequently, respondent's salary was
increased, as reflected in his pay slips starting October 1-15, 2004. He was likewise re-ranked from Assistant Professor to Associate
Professor.
In a letter addressed to the President of petitioner, Sr. Ma. Asuncion G. Evidente, D.C., respondent vigorously argued that his salary
increase should be made effective as of June 2003 and demanded the payment of his salary differential. The school administration
replied by explaining its policy on re-ranking of faculty members:
xxx xxx xxx
Please be informed that teachers in the Universidad are not re-ranked during their probationary period. The Faculty Manual as
revised for school year 2002-2003 provides (page 38) "Re-ranking is done every two years, hence the personnel hold their present
rank for two years. Those undergoing probationary period and those on part-time basis of employment are not covered by this
provision."
However, respondent found the above explanation insufficient and not clear enough. In his letter dated January 12, 2005, he pointed
out the case of another faculty member — whom he did not name — also on probationary status whose salary was supposedly
adjusted by petitioner at the start of school year (June) after he/she had completed his/her master's degree in March. Respondent
thus pleaded for the release of his salary differential, or at the very least, that petitioner give him categorical answers to his questions.
Apparently, to resolve the issue, a dialogue was held between respondent and Sr. Evidente. Respondent claimed that Sr. Evidente told
him that the school administration had decided to shorten his probationary period to two years on the basis of his satisfactory
performance. This was categorically denied by Sr. Evidente though the latter admitted having informed respondent "that he was made
Associate Professor on account of his incessant requests for a salary increase which the Universidad de Santa Isabel eventually
accommodated . . . considering that [respondent] had obtained a Master's Degree in June 2003." She further informed respondent that
"his appointment as Associate Professor did not affect his status as a probationary employee" and that petitioner "was not and did not
exercise its prerogative to shorten his probationary period to only two years." Sr. Stella O. Real, D.C., who issued a Certificate of
Employment to respondent, likewise denied that she confirmed to respondent that petitioner has shortened his probationary
employment.
On February 26, 2005, respondent received his letter of termination which stated:
Xxxxxxxxxxxx
We regret to inform your good self that your full time probationary appointment will not be renewed when it expires at the end of this
coming March 31, 2005.
Xxxxxxxxxxxxxxx
On April 14, 2005, respondent filed a complaint for illegal dismissal against the petitioner.
In his Decision dated August 22, 2006, Labor Arbiter Jesus Orlando M. Quinones ruled that there was no just or authorized cause in
the termination of respondent's probationary employment. Consequently, petitioner was found liable for illegal dismissal.
Petitioner appealed to the NLRC. On August 1, 2008, the NLRC rendered its Decision affirming the Labor Arbiter and holding that
respondent had acquired a permanent status pursuant to Sections 91, 92 and 93 of the 1992 Manual of Regulations for Private
Schools, in relation to Article 281 of the Labor Code, as amended. Both parties filed separate appeals before the CA. The CA sustained
the conclusion of the NLRC that respondent had already acquired permanent status when he was allowed to continue teaching after
the expiration of his first appointment-contract on March 30, 2003. However, the CA found it necessary to modify the decision of the
NLRC to include the award of back wages to respondent.
Issue: Whether the Marvin Julian L. Sambajon, Jr. was illegally dismissed from the Universidad De Sta. Isabel.
Ruling:
Yes. The probationary employment of teachers in private schools is not governed purely by the Labor Code. The Labor Code is
supplemented with respect to the period of probation by special rules found in the Manual of Regulations for Private Schools. On the
matter of probationary period, Section 92 of the 1992 Manual of Regulations for Private Schools regulations states:
Section 92.Probationary Period. — Subject in all instances to compliance with the Department and school requirements, the
probationary period for academic personnel shall not be more than three (3) consecutive years of satisfactory service for those
in the elementary and secondary levels, six (6) consecutive regular semesters of satisfactory service for those in the tertiary
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level, and nine (9) consecutive trimesters of satisfactory service for those in the tertiary level where collegiate courses are offered on
a trimester basis. (Emphasis supplied.)
Thus, it is the Manual of Regulations for Private Schools, and not the Labor Code, that determines whether or not a faculty member in
an educational institution has attained regular or permanent status. Section 93 of the 1992 Manual of Regulations for Private Schools
provides that full-time teachers who have satisfactorily completed their probationary period shall be considered regular or
permanent.
Since it was explicitly provided in the above contract that unless renewed in writing respondent's appointment automatically expires
at the end of the stipulated period of employment, the CA erred in concluding that simply because the word "probationary" no longer
appears below the designation (Full-Time Faculty Member), respondent had already become a permanent employee. There can be no
dispute that the period of probation may be reduced if the employer, convinced of the fitness and efficiency of a probationary
employee, voluntarily extends a permanent appointment even before the three-year period ends. But absent any circumstances which
unmistakably show that an abbreviated probationary period has been agreed upon, the three-year probationary term governs.
Petitioner argues that respondent's probationary period expires after each semester he was contracted to teach and hence it was not
obligated to renew his services at the end of the fifth semester (March 2005) of his probationary employment. Plainly, petitioner
considered the subject appointment contracts as fixed-term contracts such that it can validly dismiss respondent at the end of each
semester for the reason that his contract had expired.
The Court finds no merit in petitioner's interpretation of the Manual of Regulations, supplemented by DOLE-DECS-CHED-TESDA
Order No. 01, series of 1996. In the case of Mercado v. AMA Computer College-Parañaque City, Inc. 39 the Court, recognized the right of
respondent school to determine for itself that it shall use fixed-term employment contracts as its medium for hiring its teachers.
Nevertheless, the Court held that the teachers' probationary status should not be disregarded simply because their contracts were
fixed-term. Thus:
The Conflict: Probationary Status

and Fixed-term Employment
That in a situation where the probationary status overlaps with a fixed-term contract not specifically used for the fixed term it offers ,
Article 281 should assume primacy and the fixed-period character of the contract must give way.
Illegal Dismissal
Notwithstanding the limited engagement of probationary employees, they are entitled to constitutional protection of security of
tenure during and before the end of the probationary period. The services of an employee who has been engaged on probationary
basis may be terminated for any of the following: (a) a just or (b) an authorized cause; and (c) when he fails to qualify as a regular
employee in accordance with reasonable standards prescribed by the employer.
Thus, while no vested right to a permanent appointment— he enjoys a limited tenure. During the said probationary period, he cannot
be terminated except (1) for just or authorized causes, or (2) if he fails to qualify in accordance with reasonable standards prescribed
by petitioner for the acquisition of permanent status of its teaching personnel.
In a letter dated February 26, 2005, petitioner terminated the services of respondent stating that his probationary employment as
teacher will no longer be renewed upon its expiry on March 31, 2005, respondent's fifth semester of teaching. No just or authorized
cause was given by petitioner. Prior to this, respondent had consistently achieved above average rating based on evaluation by
petitioner's officials and students. He had also been promoted to the rank of Associate Professor after finishing his master's degree
course on his third semester of teaching. Clearly, respondent's termination after five semesters of satisfactory service was illegal.
Bluer Than Blue Joint Ventures Co., vs. Esteban

GR No. 192582, April 7, 2014
Facts:
Respondent Glyza Esteban (Esteban) was employed in January 2004 as Sales Clerk, and assigned at Bluer Than Blue Joint Ventures
Company's (petitioner) EGG boutique in SM City Marilao, Bulacan, beginning the year 2006. Part of her primary tasks were attending
to all customer needs, ensuring efficient inventory, coordinating orders from clients, cashiering and reporting to the accounting
department. In November 2006, the petitioner received a report that several employees have access to its point-of-sale (POS) system
through a universal password given by Elmer Flores (Flores). Upon investigation, it was discovered that it was Esteban who gave
Flores the password. The petitioner sent a letter memorandum to Esteban on November 8, 2006, asking her to explain in writing why
she should not be disciplinary dealt with for tampering with the company's POS system through the use of an unauthorized password.
Esteban was also placed under preventive suspension for ten days.
In her explanation, Esteban admitted that she used the universal password three times on the same day in December 2005, after she
learned of it from two other employees who she saw browsing through the petitioner's sales inquiry. She inquired how the employees
were able to open the system and she was told that they used the "123456" password. On November 13, 2006, Esteban's preventive
suspension was lifted, but at the same time, a notice of termination was sent to her, finding her explanation unsatisfactory and
terminating her employment immediately on the ground of loss of trust and confidence.
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On December 6, 2006, Esteban filed a complaint for illegal dismissal, illegal suspension, holiday pay, rest day and separation pay. The
Labor Arbiter (LA) ruled in favor of Esteban and found that she was illegally dismissed. The NLRC reversed the decision of the LA and
dismissed the case for illegal dismissal. The CA granted Esteban's petition and reinstated the LA decision
The petitioner argues that it had just cause to terminate the employment of Esteban, that is, loss of trust and confidence. Esteban, the
petitioner believes, is a rank-and-file employee whose nature of work is reposed with trust and confidence. Her unauthorized access
to the POS system of the company and her dissemination of the unauthorized password, which Esteban admitted, is a breach of trust
and confidence, and justifies her dismissal.
Esteban, on the other hand, avers that the competency clause she signed with the petitioner merely states the following functions: (1)
attend to and assist the customer in all their needs; (2) conduct physical inventory; (3) clean and tidy up the merchandise and store;
and (4) coordinate with the stockroom for orders. As regards the cashiering function, it merely states "to follow." As such, her main
task is that of a sales clerk.
Issues:
(1) Whether or not she occupies a position of trust and confidence;
(2) Whether or not Esteban's acts constitute just cause to terminate her employment.
Ruling:
(1) Yes. Esteban was a sales clerk. Her duties, however, were more than that of a sales clerk. Aside from attending to customers and
tending to the shop, Esteban also assumed cashiering duties. As consistently ruled by the Court, it is not the job title but the actual
work that the employee performs that determines whether he or she occupies a position of trust and confidence. She had in her care
and custody the store's property and funds, she is considered as a rank-and-file employee occupying a position of trust and
confidence.
(2) No. Loss of trust and confidence is premised on the fact that the employee concerned holds a position of responsibility, trust and
confidence. The employee must be invested with confidence on delicate matters, such as the custody, handling, care and protection of
the employer's property and funds. "[W]ith 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."
In this case, the Court finds that the acts committed by Esteban do not amount to a wilful breach of trust. She admitted that she
accessed the POS system with the use of the unauthorized "123456" password. She did so, however, out of curiosity and without any
obvious intention of defrauding the petitioner. As professed by Esteban, "she was acting in good faith in verifying what her co-staff
told her about the opening of the computer by the use of the "123456" password. She even told her co-staff not to open again said
computer, and that was the first and last time she opened said computer."
The Court is not saying that Esteban is innocent of any breach of company policy. That she relayed the password to another employee
is likewise demonstrative of her mindless appreciation of her duties as a sales clerk in the petitioner's employ. But absent any
showing that her acts were done with "moral perverseness" that would justify the claimed loss of trust and confidence attendant to
her job, the Court must sustain the conclusion that Esteban was illegally dismissed.
Wenphil Corp., vs. Abing, et al.

GR No. 207983, April 7, 2014
Facts:
On December 8, 2000, LA Geobel A. Bartolabac ruled 8 that the respondents had been illegally dismissed by Wenphil. According to the
LA, the allegation of serious misconduct against the respondents had no factual and legal basis. 9 Consequently, LA Bartolabac ordered
Wenphil to immediately reinstate the respondents to their respective positions or to equivalent ones, whether actuall or in the
payroll. Also, the LA ordered Wenphil to pay the respondents their backwages from February 3, 2000 until the date of their actual
reinstatement.10
Because of the unfavorable LA decision, Wenphil appealed to the NLRC on April 16, 2001 11. In the meantime, the respondents moved
for the immediate execution of the LA’s December 8, 2000 decision. 12
On October 29, 2001, Wenphil and the respondents entered into a compromise agreement 13 before LA Bartolabac. They agreed to the
respondents’ payroll reinstatement while Wenphil’s appeal with the NLRC was ongoing. Wenphil also agreed to pay the accumulated
salaries of the respondents for the payroll period from April 5, 2001 until October 15, 2001. 14 As for the remaining payroll period
starting October 16, 2001, Wenphil committed itself to credit the respective salaries of the respondents to their ATM payroll accounts
until such time that the questioned decision of LA Bartolabac is either modified, amended or reversed by the Honorable National
Labor Relations Commission.15
On January 30, 2002, the NLRC issued a resolution 16 affirming LA Bartolabac’s decision with modifications. Instead of ordering the
respondents’ reinstatement, the NLRC directed Wenphil to pay the respondents their respective separation pay at the rate of one (1)
month salary for every year of service. Also, the NLRC found that while the respondents had been illegally dismissed, they had not
been illegally suspended. Thus, the period from February 3 to February 28, 2000 during which the respondents were on preventive
suspension – was excluded by the NLRC in the computation of the respondents’ backwages. 17
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Subsequently, Wenphil moved for the reconsideration 18 of the NLRC’s January 30, 2002 resolution, but the NLRC denied the motion in
another resolution dated September 24, 2002.19
Wenphil thereafter went up to the CA via a petition for certiorari to question the NLRC’s January 30, 2002 and September 24, 2002
resolutions.20 On August 27, 2003, the CA rendered its decision 21 reversing the NLRC’s finding that the respondents had been illegally
dismissed. According to the CA, there was enough evidence to show that the respondents had been guilty of serious misconduct; thus,
their dismissal was for a valid cause. 22The respondents moved for the reconsideration of the CA’s decision. 23 In a resolution24 dated
February 23, 2004, the CA denied the respondents’ motion.
Issue: WON there was illegal dismissal
Ruling:
We resolve to DENY the petition. An order of reinstatement is immediately executory even pending appeal. The employer has the
obligation to reinstate and pay the wages of the dismissed employee during the period of appeal until reversal by the higher court.
Under Article 223 of the Labor Code, "the decision of the Labor Arbiter reinstating a dismissed or separated employee, insofar as the
reinstatement aspect is concerned, shall immediately be executory, even pending appeal. The employee shall either be admitted back
to work under the same terms and conditions prevailing prior to his dismissal or separation, or at the option of the employer, merely
reinstated in the payroll. The posting of a bond by the employer shall not stay the execution for reinstatement."
The Court discussed reason behind this legal policy in Aris v. NLRC, 45 where it explained:
In authorizing execution pending appeal of the reinstatement aspect of a decision of the Labor Arbiter reinstating a dismissed or
separated employee, the law itself has laid down a compassionate policy which, once more, vivifies and enhances the provisions of the
1987 Constitution on labor and the working-man. These provisions are the quintessence of the aspirations of the workingman for
recognition of his role in the social and economic life of the nation, for the protection of his rights, and the promotion of his welfare…
These duties and responsibilities of the State are imposed not so much to express sympathy for the workingman as to forcefully and
meaningfully underscore labor as a primary social and economic force, which the Constitution also expressly affirms with equal
intensity. Labor is an indispensable partner for the nation's progress and stability. [emphasis ours]
Since the decision is immediately executory, it is the duty of the employer to comply with the order of reinstatement, which can be
done either actually or through payroll reinstatement. As provided under Article 223 of the Labor Code, this immediately executory
nature of an order of reinstatement is not affected by the existence of an ongoing appeal. The employer has the duty to reinstate the
employee in the interim period until a reversal is decreed by a higher court or tribunal.
In the case of payroll reinstatement, even if the employer’s appeal turns the tide in its favor, the reinstated employee has no duty to
return or reimburse the salary he received during the period that the lower court or tribunal’s governing decision was for the
employee’s illegal dismissal.
Otherwise, the situation would run counter to the immediately executory nature of an order of reinstatement. The case of Garcia v.
Philippine Airlines46 is enlightening on this point:
Even outside the theoretical trappings of the discussion and into the mundane realities of human experience, the "refund doctrine"
easily demonstrates how a favorable decision by the Labor Arbiter could harm, more than help, a dismissed employee. The employee,
to make both ends meet, would necessarily have to use up the salaries received during the pendency of the appeal, only to end up
having to refund the sum in case of a final unfavorable decision. It is mirage of a stop-gap leading the employee to a risky cliff of
insolvency.
Advisably, the sum is better left unspent. It becomes more logical and practical for the employee to refuse payroll reinstatement and
simply find work elsewhere in the interim, if any is available.1âwphi1 Notably, the option of payroll reinstatement belongs to the
employer, even if the employee is able and raring to return to work.
We see the situation discussed above to be present in the case before us as Wenphil observed the mandate of Article 223 to
immediately comply with the order of reinstatement by the LA. On October 29, 2001, while Wenphil’s appeal with the NLRC was
pending, it entered into a compromise agreement with the respondents. In this agreement, Wenphil committed to reinstate the
respondents in its payroll. However, the commitment came with a condition: Wenphil stipulated that its obligation to pay the wages
due to the respondents would cease if the decision of the LA would be "modified, amended or reversed" by the NLRC. 47
Thus, when the NLRC rendered its decision on the appeal affirming the LA’s finding that the respondents were illegally dismissed, but
modifying the award of reinstatement to payment of separation pay, Wenphil stopped paying the respondents’ wages.
The reinstatement salaries due to the respondents were, by their nature, payment of unworked backwages. These were salaries due
to the respondents because they had been prevented from working despite the LA and the NLRC findings that they had been illegally
dismissed.
We point out that reinstatement and backwages are two separate reliefs available to an illegally dismissed employee. The normal
consequences of a finding that an employee has been illegally dismissed are: first, that the employee becomes entitled to
reinstatement to his former position without loss of seniority rights; and second, the payment of backwages covers the period running
from his illegal dismissal up to his actual reinstatement. 48These two reliefs are not inconsistent with one another and the labor arbiter
can award both simultaneously.
Moreover, the relief of separation pay may be granted in lieu of reinstatement but it cannot be a substitute for the payment of
backwages. In instances where reinstatement is no longer feasible because of strained relations between the employee and the
employer, separation pay should be granted. In effect, an illegally dismissed employee should be entitled to either reinstatement – if
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viable, or separation pay if reinstatement is no longer be viable, plus backwages in either instance. 49 The rationale for such policy of
distinction was vividly explained in Santos v. NLRC under these terms: 50
Though the grant of reinstatement commonly carries with it an award of backwages, the inappropriateness or
non-availability of one does not carry with it the inappropriateness or non-availability of the other.
Apparently, when the NLRC changed the LA’s decision (specifically, the order to award separation pay in lieu of reinstatement),
Wenphil read this to mean to be the "modification" envisioned in the compromise agreement, Wenphil likewise effectively concluded
that separation pay and backwages are the same or are interchangeable reliefs. This conclusion can be deduced from Wenphil’s
insistence not to pay the respondent’s remaining backwages under its erroneous reasoning that this was the effect of the NLRC’s
order to Wenphil to pay separation pay in lieu of reinstatement.
We emphasize that the basis for the payment of backwages is different from that of the award of separation pay. Separation pay is
granted where reinstatement is no longer advisable because of strained relations between the employee and the employer.
Backwages represent compensation that should have been earned but were not collected because of the unjust dismissal. The basis
for computing separation pay is usually the length of the employee’s past service, while that for backwages is the actual period when
the employee was unlawfully prevented from working. 51
Had Wenphil really wanted to put a stop to the running of the period for the payment of the respondents’ backwages, then it should
have immediately complied with the NLRC’s order to award the employees their separation pay in lieu of reinstatement. This action
would have immediately severed the employer-employee relationship. However, the records are bereft of any evidence that Wenphil
actually paid the respondents’ separation pay. Thus, the employer-employee relationship between Wenphil and the respondents
never ceased and the employment status remained pending and uncertain until the CA actually rendered its decision that the
respondents had not been illegally dismissed. In the context of the parties’ agreement, it was only at this point that the payment of
backwages should have stopped.
A compromise agreement should not be contrary to law, morals, good customs and public policy.
While it is true that a compromise agreement is binding between the parties and becomes the law between them, 52 it is also a rule that
to be valid, a compromise agreement must not be contrary to law, morals, good customs and public policy. 53
The Court reaffirms the prevailing principle that even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is
reversal by the higher court. It settles the view that the Labor Arbiter's order of reinstatement is immediately executory and the
employer has to either re-admit them to work under the same terms and conditions prevailing prior to their dismissal, or to reinstate
them in the payroll, and that failing to exercise the options in the alternative, employer must pay the employee’s salaries.
This ruling embodies a principle and policy of the law that cannot be watered down by any lesser agreement except perhaps when
backwages are already earned entitlements that the employee chooses to surrender for a valuable consideration (and even then, the
consideration must at least be equitable). This legal policy emphasizes, too, the rule that separation pay cannot be a substitute for
backwages but only for reinstatement. The award of separation pay is not inconsistent with the payment of backwages. Thus, until a
higher court’s or tribunal’s reversal of the finding that an employee had been illegally dismissed, the employee would be entitled to
receive his reinstatement salary or backwages during the period of appeal until such reversal. This is in line with the Labor Code’s
policy that an order of reinstatement, which can either be actual or through the payroll, is immediately executory and is not affected
by the period of appeal.
Arabit et al., vs. Jardine Pacific Finance Inc.

GR No. 181719, April 21, 2014
Facts:
Petitioners were former regular employees of respondent Jardine Pacific Finance, Inc. (formerly MB Finance) (Jardine). The
petitioners were also officers and members of MB Finance Employees Association-FFW Chapter (the Union), a legitimate labor union
and the sole exclusive bargaining agent of the employees of Jardine. The table below shows the petitioners’ previously occupied
positions, as well as their total length of service with Jardine before their dismissal from employment.
Petitioner Position Number of Years of

Service
Eugene S. Arabit Field Collector 20 years
Edgardo C. Sadsad Field Collector 3 years
Lowell C. Funtanoz Field Collector 7 years
Gerardo F. Punzalan Field Collector 16 years
Freddie M. Mendoza Field Collector 20 years
Emilio B. Belen Senior Credit Investigator/Field 18 years

Collector- San Pablo Branch
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Violeta C. Diumano Senior Accounting 19 years

Clerk/Documentation Clerk-San Pablo Branch
On the claim of financial losses, Jardine decided to reorganize and implement a redundancy program among its employees. The
petitioners were among those affected by the redundancy program. Jardine thereafter hired contractual employees to undertake the
functions these employees used to perform.
The Union filed a notice of strike with the National Conciliation and Mediation Board (NCMB), questioning the termination of
employment of the petitioners who were also union officers. The Union alleged unfair labor practice on the part of Jardine, as well as
discrimination in the dismissal of its officers and members.
Negotiations ensued between the Union and Jardine under the auspices of the NCMB, and both parties eventually reached an amicable
settlement. In the settlement, the petitioners accepted their redundancy pay without prejudice to their right to question the legality of
their dismissal with the NLRC. Jardine paid the petitioners a separation package composed of their severance pay, plus their grossed
up transportation allowance. 7
On June 1, 1999, the petitioners and the Union filed a complaint against Jardine with the NLRC for illegal dismissal and unfair labor
practice.
Ruling:
In this context, the primary question we confront is: did the CA correctly rule that the NLRC committed grave abuse of discretion
when it found that Jardine validly terminated the petitioners’ employment because of redundancy?
Redundancy in contrast with retrenchment

Jardine, in its petition for certiorari with the CA, posited that the distinction between redundancy and retrenchment is not
material.48 It contended that employers resort to these causes of dismissal for purely economic considerations. 49 Jardine further
argued that the immateriality of the distinction between these two just causes for dismissal is shown by the fact that redundancy and
retrenchment are found and lumped together in just one single provision of the Labor Code (Article 283 thereof).
This Court has already ruled before that retrenchment and redundancy are two different concepts; they are not synonymous; thus,
they should not be used interchangeably. 50 The clear distinction between these two concepts was discussed in Andrada, et al., v.
NLRC,51 citing the case of Sebuguero v. NLRC,52 where this Court clarified:
Redundancy exists where the services of an employee are in excess of what is reasonably demanded by the actual requirements of the
enterprise. A position is redundant where it is superfluous, and superfluity of a position or positions may be the outcome of a number
of factors, such as over hiring of workers, decreased volume of business, or dropping of a particular product line or service activity
previously manufactured or undertaken by the enterprise.
Retrenchment, on the other hand, is used interchangeably with the term "lay-off." It is the termination of employment initiated by the
employer through no fault of the employee’s and without prejudice to the latter, resorted to by management during periods of
business recession, industrial depression, or seasonal fluctuations, or during lulls occasioned by lack of orders, shortage of materials,
conversion of the plant for a new production program or the introduction of new methods or more efficient machinery, or of
automation. Simply put, it is an act of the employer of dismissing employees because of losses in the operation of a business, lack of
work, and considerable reduction on the volume of his business, a right consistently recognized and affirmed by this Court.
These rulings appropriately clarify that redundancy does not need to be always triggered by a decline in the business. Primarily,
employers resort to redundancy when the functions of an employee have already become superfluous or in excess of what the
business requires. Thus, even if a business is doing well, an employer can still validly dismiss an employee from the service due to
redundancy if that employee’s position has already become in excess of what the employer’s enterprise requires.
From this perspective, it is illogical for Jardine to terminate the petitioners’ employment and replace them with contractual
employees. The replacement effectively belies Jardine’s claim that the petitioners’ positions were abolished due to superfluity.
Redundancy could have been justified if the functions of the petitioners were transferred to other existing employees of the company.
To dismiss the petitioners and hire new contractual employees as replacements necessarily give rise to the sound conclusion that the
petitioners’ services have not really become in excess of what Jardine’s business requires. To replace the petitioners who were all
regular employees with contractual ones would amount to a violation of their right to security of tenure.
Guidelines in implementing redundancy

We recognize that management has the prerogative to characterize an employee’s services as no longer necessary or sustainable, and
therefore properly terminable.54
In De Ocampo, this Court held that, in the absence of proof that the management abused its discretion or acted in a malicious or
arbitrary manner in replacing dismissed employees with contractual ones, judicial intervention should not be made in the company’s
exercise of its management prerogative.57
The employer’s exercise of its management prerogative, however, is not an unbridled right that cannot be subjected to this Court’s
scrutiny. The exercise of management prerogative is subject to the caveat that it should not performed in violation of any law and that
it is not tainted by any arbitrary or malicious motive on the part of the employer. 58
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This Court, in several cases, sufficiently explained that the employer must follow certain guidelines to dismiss employees due to
redundancy. These guidelines aim to ensure that the dismissal is not implemented arbitrarily and is not tainted with bad faith against
the dismissed employees.
In Golden Thread Knitting Industries, Inc. v. NLRC, 59 this Court laid down the principle that the employer must use fair and reasonable
criteria in the selection of employees who will be dismissed from employment due to redundancy. Such fair and reasonable criteria
may include the following, but are not limited to: (a) less preferred status (e.g. temporary employee); (b) efficiency; and (c) seniority.
The presence of these criteria used by the employer shows good faith on its part and is evidence that the implementation of
redundancy was painstakingly done by the employer in order to properly justify the termination from the service of its employees. 60
As the petitioners pointed out, the records are bereft of indications that Jardine employed clear criteria when it decided who among
its employees, who held similar positions as the petitioners, should be removed from their posts because of redundancy. Jardine never
bothered to explain how and why the petitioners were the ones dismissed. Jardine’s acts became more suspect given that the
petitioners were all union officers and some of them were panel members in the scheduled CBA negotiations between Jardine and the
Union.
For the implementation of a redundancy program to be valid, the employer must comply with the following requisites: (1) written
notice served on both the employees and the Department of Labor and Employment at least one month prior to the intended date of
retrenchment; (2) payment of separation pay equivalent to at least one month pay or at least one month pay for every year of service,
whichever is higher; (3) good faith in abolishing the redundant positions; and (4) fair and reasonable criteria in ascertaining what
positions are to be declared redundant and accordingly abolished. 62
Admittedly, Jardine complied with guidelines 1 and 2 of the guidelines in Asian Alcohol. Jardine informed the Department of Labor
and Employment of the petitioners’ separation from the service due to redundancy on April 30, 1999, one month before their
termination’s effectivity. Also, the petitioners were given their individual separation packages, composed of their severance pay, plus
their grossed up transportation allowance.
Guidelines 3 and 4 of Asian Alcohol, however, are different matters. These last two guidelines are interrelated to ensure good faith in
abolishing redundant positions; the employer must clearly show that it used fair and reasonable criteria in ascertaining what
positions are to be declared redundant.
Mirant (Philippines) Corp., et al., vs. Caro

GR No. 181490, April 23, 2014
Facts:
Respondent filed a complaint10 for illegal dismissal and money claims for 13th and 14th month pay, bonuses and other benefits, as
well as the payment of moral and exemplary damages and attorney’s fees. Respondent posits the following allegations in his Position
Paper:11
On January 3, 1994, respondent was hired by petitioner corporation as its Logistics Officer and was assigned at petitioner
corporation’s corporate office in Pasay City. At the time of the filing of the complaint, respondent was already a Supervisor at the
Logistics and Purchasing Department with a monthly salary of P39,815.00.
On November 3, 2004, petitioner corporation conducted a random drug test where respondent was randomly chosen among its
employees who would be tested for illegal drug use. Through an Intracompany Correspondence, 12 these employees were informed
that they were selected for random drug testing to be conducted on the same day that they received the correspondence. Respondent
was duly notified that he was scheduled to be tested after lunch on that day. His receipt of the notice was evidenced by his signature
on the correspondence.
Respondent avers that at around 11:30 a.m. of the same day, he received a phone call from his wife’s colleague who informed him that
a bombing incident occurred near his wife’s work station in Tel Aviv, Israel where his wife was then working as a caregiver.
Respondent attached to his Position Paper a Press Release 13 of the Department of Foreign Affairs (DFA) in Manila to prove the
occurrence of the bombing incident and a letter 14 from the colleague of his wife who allegedly gave him a phone call from Tel Aviv.
Respondent claims that after the said phone call, he proceeded to the Israeli Embassy to confirm the news on the alleged bombing
incident. Respondent further claims that before he left the office on the day of the random drug test, he first informed the secretary of
his Department, Irene Torres (Torres), at around 12:30 p.m. that he will give preferential attention to the emergency phone call that
he just received. He also told Torres that he would be back at the office as soon as he has resolved his predicament. Respondent
recounts that he tried to contact his wife by phone but he could not reach her. He then had to go to the Israeli Embassy to confirm the
bombing incident. However, he was told by Eveth Salvador (Salvador), a lobby attendant at the Israeli Embassy, that he could not be
allowed entry due to security reasons.
respondent on December 14, 2004 to submit additional pieces of supporting documents to prove that respondent was at the Israeli
Embassy in the afternoon of November 3, 2004 and that the said bombing incident actually occurred. Respondent requested for a
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hearing to explain that he could not submit proof that he was indeed present at the Israeli Embassy during the said day because he
was not allegedly allowed entry by the embassy due to security reasons. On January 3, 2005, respondent submitted the required
additional supporting documents.17
On January 13, 2005, petitioner corporation’s Investigating Panel issued an Investigating Report 18 finding respondent guilty of
"unjustified refusal to submit to random drug testing" and recommended a penalty of four working weeks suspension without pay,
instead of termination, due to the presence of mitigating circumstances. In the same Report, the Investigating Panel also
recommended that petitioner corporation should review its policy on random drug testing, especially of the ambiguities cast by the
term "unjustified refusal."
On January 19, 2005, petitioner corporation’s Asst. Vice President for Material Management Department, George K. Lamela, Jr.
(Lamela), recommended19 that respondent be terminated from employment instead of merely being suspended. Lamela argued that
even if respondent did not outrightly refuse to take the random drug test, he avoided the same. Lamela averred that "avoidance" was
synonymous with "refusal."
On February 14, 2005, respondent received a letter 20 from petitioner corporation’s Vice President for Operations, Tommy J. Sliman
(Sliman), terminating him on the same date. Respondent filed a Motion to Appeal 21 his termination on February 23, 2005. The motion
was denied by petitioner corporation on March 1, 2005.
It is the contention of respondent that he was illegally dismissed by petitioner corporation due to the latter’s non-compliance with the
twin requirements of notice and hearing. He asserts that while there was a notice charging him of "unjustified refusal to submit to
random drug testing," there was no notice of hearing and petitioner corporation’s investigation was not the equivalent of the
"hearing" required under the law which should have accorded respondent the opportunity to be heard.
Ruling:
It is beyond debate that petitioner corporation’s enforcement of its Anti-Drugs Policy is an exercise of its management prerogative. It
is also a conceded fact that respondent "failed" to take the random drug test as scheduled, and under the said company policy, such
failure metes the penalty of termination for the first offense. A plain, simple and literal application of the said policy to the omission of
respondent would have warranted his outright dismissal from employment – if the facts were that simple in the case at bar. Beyond
debate – the facts of this case are not – and this disables the Court from permitting a straight application of an otherwise prima facie
straightforward rule if the ends of substantial justice have to be served.
We agree with the disposition of the appellate court that there was illegal dismissal in the case at bar.
While the adoption and enforcement by petitioner corporation of its Anti-Drugs Policy is recognized as a valid exercise of its
management prerogative as an employer, such exercise is not absolute and unbridled. Managerial prerogatives are subject to
limitations provided by law, collective bargaining agreements, and the general principles of fair play and justice. 46 In the exercise of its
management prerogative, an employer must therefore ensure that the policies, rules and regulations on work-related activities of the
employees must always be fair and reasonable and the corresponding penalties, when prescribed, commensurate to the offense
involved and to the degree of the infraction.47 The Anti-Drugs Policy of Mirant fell short of these requirements.
Petitioner corporation’s subject Anti-Drugs Policy fell short of being fair and reasonable.
the term "unjustified refusal" could not possibly cover all forms of "refusal" as the employee’s resistance, to be punishable by
termination, must be "unjustified." To the mind of the Court, it is on this area where petitioner corporation had fallen short of making
it clear to its employees – as well as to management – as to what types of acts would fall under the purview of "unjustified refusal."
Even petitioner corporation’s own Investigating Panel recognized this ambiguity, viz.:
It is not a mere jurisprudential principle, but an enshrined provision of law, that all doubts shall be resolved in favor of labor. Thus, in
Article 4 of the Labor Code, as amended, "[a]ll doubts in the implementation and interpretation of the provisions of [the Labor] Code,
including its implementing rules and regulations, shall be resolved in favor of labor." In Article 1702 of the New Civil Code, a similar
provision states that "[i]n case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety and decent
living for the laborer." Applying these provisions of law to the circumstances in the case at bar, it is not fair for this Court to allow an
ambiguous policy to prejudice the rights of an employee against illegal dismissal. To hold otherwise and sustain the stance of
petitioner corporation would be to adopt an interpretation that goes against the very grain of labor protection in this jurisdiction. As
correctly stated by the Labor Arbiter, "when a conflicting interest of labor and capital are weighed on the scales of social justice, the
heavier influence of the latter must be counter-balanced by the sympathy and compassion the law must accord the underprivileged
worker."49
oppressive or contrary to law50 – as in the case at bar.
To be sure, the unreasonableness of the penalty of termination as imposed in this case is further highlighted by a fact admitted by
petitioner corporation itself: that for the ten-year period that respondent had been employed by petitioner corporation, he did not
have any record of a violation of its company policies.
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Libcap Marketing Corp v Baquial

G.R. No. 192011, June 30, 2014
FACTS:
The respondent was employed in the petitioner corporation as an accounting clerk. One of her functions was to deposit in the bank
account of the petitioner its daily sales and collections. During an audit conducted by the petitioner it was found out that the
respondent made a double reporting of a single deposit. This was later found out by the petitioner to be a fact and thus the amount
double posted was deducted from the respondent’s salary. The petitioner then sent notice to the respondent requiring her to appear
for investigation. The respondent, however, failed to do so despite of a second notice. Respondent was then placed on preventive
suspension and was later sent a notice for termination. Consequently, the respondent filed a complaint for illegal dismissal for lack of
non-compliance with the procedural due process requirement. The Labor Arbiter ruled that the lag of non-compliance did not
invalidate the termination but only gave rise to the petitioner’s liability to pay the respondent for nominal damages caused amounting
to P100,000.
ISSUES:
1. Whether there was non-compliance with the procedural due process requirement?
2. Whether the nominal damage awarded was absent of any justifiable compelling circumstance to depart from the standard
P30,000 established by jurisprudence?
HELD:
The following are the guiding principles in connection with the hearing requirement in dismissal cases:
(a) "ample opportunity to be heard" means any meaningful opportunity (verbal or written) given to the employee to answer the
charges against him and submit evidence in support of his defense, whether in a hearing, conference or some other fair, just and
reasonable way.
(b) a formal hearing or conference becomes mandatory only when requested by the employee in writing or substantial evidentiary
disputes exist or a company rule or practice requires it, or when similar circumstances justify it.
(c) the "ample opportunity to be heard" standard in the Labor Code prevails over the "hearing or conference" requirement in the
implementing rules and regulations.
1. There was already non-compliance when the petitioners already pre-judged the respondent’s case. The pre-judging could
be seen through the act, of the petitioner, of deducting the amount from the respondent’s salary. By pre-judging respondent’s case it
could not be expected that she would obtain a fair resolution of her case. In a democratic system, the infliction of punishment before
trial is fundamentally abhorred. What petitioners did was clearly illegal and improper.
2. We cannot subscribe to the CA’s ratiocination that since respondent rendered overtime work for four years without
receiving any overtime pay, she is entitled to P100,000.00 nominal damages. Nominal damages are awarded for the purpose of
vindicating or recognizing a right and not for indemnifying a loss. Hence, the CA should have limited the justification of the award of
nominal damages to petitioners’ violation of respondent’s right to due process in effecting her termination. It should not have
considered the claimed unpaid overtime pay.
Ampeloquio vs. Jaka Distribution Inc.

GR No. 196936, July 2, 2014
FACTS:
Petitioner Monchito R. Ampeloquio (Ampeloquio) is a reinstated employee of respondent Jaka Distribution, Inc. (JAKA), formerly RMI
Marketing Corporation (RMI).
Ampeloquio resumed work as merchandiser at JAKA and reported at JAKA’s outlets within Metro Manila, Shopwise Makati and
Alabang. He received a daily wage of P252.00, without meal and transportation allowance.
On 4 April 2005, Ampeloquio was transferred outside of Metro Manila, to Lucena City and subsequently to San Pablo City. At that
time, he was receiving the same daily wage of 252.00, without meal and transportation allowance. Ampeloquio was given a monthly
cost of living allowance (COLA) of P720.00.
Petitioner, then wrote a letter to manager requesting for salary adjustment and benefits retroactive to the date of his reinstatement.
Because of the discrepancy in wages, Ampeloquio filed anew before the NLRC, a complaint for underpayment of wages, COLA, non-
payment of meal and transportation allowances docketed as NLRC NCR Case No. 00-06-04702-06.
In its defense, respondents avers that it is engage in the business of distribution of consumer goods, that petitioner is their only
regular employee as merchandiser; that at the filling of this case petitioner is still working in a supermarket with a monthly salary of P
7,985; that their other merchandisers are outsourced from manpower agencies or are seasonal employees hired during peak season;
that the salary of petitioner was based on the minimum wage of P 250 and ECOLA of P 50 per day; that it is in the process of
computing wage distortion in the implementation of 2005 wage increase of P25; that their exemption in wage increase expired in the
implementation of wage increase expired at June 2006 prior to the filling of this compliant; that they did not act due to the pendency
of this case.
ISSUE:
The issue for our resolution is the scope viz-a-viz wages of reinstatement “without loss of seniority rights and other privileges.”
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RULING:
Seniority rights refer to the creditable years of service in the employment record of the illegally dismissed employee as if he or she
never ceased working for the employer. In other words, the employee’s years of service is deemed continuous and never interrupted.
Such is likewise the rationale for reinstatement’s twin relief of full backwages.
Attached to the recognition of seniority rights of a reinstated employee who had been illegally dismissed is the entitlement to wages
appurtenant thereto.
The case of Ampeloquio is outside the ordinary. His reinstatement was ordered when merchandisers like him were no longer
employed by JAKA.
He is not entitled to the same terms and conditions of employment as that which was offered to the other regular employees (not
merchandisers) subsequently hired by JAKA.
JAKA’s decision to grant or withhold certain benefits to other employees is part of its management prerogative as a function of an
employer’s constitutionally protected right to reasonable return on investments.
In all, the labor tribunals were right in using as guidepost the existing statutory minimum wages and COLA during the three (3) year
prescriptive period within which Ampeloquio can make his money claims.
The option of reinstatement to a substantially equivalent position does not apply herein as reinstatement to a substantially equivalent
position entails the same or similar job functions and not just same wages or salary. As applied to this case, Ampeloquio cannot be
reinstated to a messengerial position although such is a regular employment enjoying the same employment benefits and privileges.
His employment cannot likewise be converted into a contractual employment as such is actually a downgrade from his regular
employment enjoying security of tenure with JAKA.
The reduction of the salary differential award to Ampeloquio by the NLRC, and affirmed by the appellate court, was correct given the
exemption to Wage Order Nos. 10 & 11 granted to JAKA.
Given our holding herein, we likewise uphold the deletion by the NLRC and the appellate court of the award of moral and exemplary
damages absent a showing of bad faith on the part of JAKA in its corrected payment of wages to Ampeloquio.
LIM v HMR Phils Inc.

G.R. No. 201483, August 04, 2014
FACTS:
On February 2001, petitioner (Lim) filed a case for illegal dismissal and money claims against respondents (HMR Phil Inc.) and its
officers, Teresa G. Santos-Castro, Henry G. Bunag and Nelson S. Camiller. The LA dismissed the complaint for lack of merit. On April
2003, the NLRC reversed the LA Decision and declared Lim to have been illegally dismissed. Respondents were then ordered to pay
the Lim his full backwages “reckoned from his dismissal on February 3, 2001 up to the promulgation of this Decision.”
Lim and HMR Phil Inc. appealed to CA. The CA affirmed the NLRC Decision with modification. Consequently, HMR Phil Inc. appealed to
SC and was denied.
On September 2007, Lim moved for execution. On November 2007, the Computation and Research Unit (CRU) of the NLRC computed
the backwages from February 3, 2001, the date of the illegal dismissal, up to October 31, 2007, the date of actual reinstatement.
HMR opposed the computation arguing that the back wages should be computed until April 11, 2003 (the date of promulgation of the
NLRC decision), as stated in the dispositive portion of the NLRC decision, which provided that backwages shall be “reckoned from his
dismissal on February 3, 2001 up to the promulgation of this Decision.” Lim argued that the body of the NLRC decision explicitly
stated that he was entitled to full backwages from the time he was illegally dismissed until his actual reinstatement, which was also in
accord with Article 279 of the Labor Code and all prevailing jurisprudence.
The LA issued the order granting the motion for execution filed by Lim. Holding that the backwages should be reckoned until April 11,
2003 only in accordance with the NLRC decision and not up to his actual reinstatement. The NLRC sustained the computation of the
LA.
ISSUE:
WON backwages should be computed from the time the employee was illegal dismissed until his actual reinstatement.
HELD:
Yes. Under Article 279 of the Labor Code it is clear that an illegally dismissed employee is entitled to his full backwages computed
from the time his compensation was withheld up to the time of his actual reinstatement, to wit:
Art. 279. Security of tenure. In cases of regular employment, the employer shall not terminate the services of an employee except for a
just cause or when authorized by this Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement
without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or
their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual
reinstatement.
The April 2003 NLRC decision expressly recognizes that Lim is entitled to his full backwages until his actual reinstatement, as follows:
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“In fine, the act of complainant-appellant herein, do not constitute a serious misconduct as to justify his dismissal. As such, he is, thus,
entitled to reinstatement to his former position as Assistant Technical Manager, unless such position no longer exists, in which case,
he shall be given a substantially equivalent position without loss of seniority rights. He is, likewise, entitled to his full backwages from
the time he was illegally dismissed until his actual reinstatement.”
There is nothing in the NLRC decision that restricted the award of backwages. Nonetheless, the fallo of the said decision limited the
computation of the backwages up to its promulgation on April 11, 2003, in this wise:
“WHEREFORE, premises considered, judgment is hereby rendered declaring the appealed Decision REVERSED and SET ASIDE; that
the dismissal of herein complainant-appellant was illegal and the respondent-appellee Company is hereby ordered to reinstate
immediately the said employee to his former position without loss of seniority rights and other privileges. Furthermore, the
respondent-appellee Company is hereby ordered to pay the complainant-appellant his full backwages, reckoned from his dismissal on
February 3, 2001 up to the promulgation of this Decision.
All other claims are hereby DISMISSED for lack of merit.
The Computation and Research Unit (CRU) of this Commission is hereby directed to compute the backwages and the 10% annual
increase from 1998 to 2000.
SO ORDERED.”
A re-computation, or an original computation, if no previous computation was made, as in the present case, is a part of the law that is
read into the decision, namely, Article 279 of the Labor Code and established jurisprudence. Article 279 provides for the
consequences of illegal dismissal, one of which is the payment of full backwages until actual reinstatement, qualified only by
jurisprudence when separation pay in lieu of reinstatement is allowed, where the finality of the illegal dismissal decision instead
becomes the reckoning point.
The nature of an illegal dismissal case requires that backwages continue to add on until full satisfaction. The computation required to
reflect full satisfaction does not constitute an alteration or amendment of the final decision being implemented as the illegal dismissal
ruling stands. Thus, in this case, a computation of backwages until actual reinstatement is not a violation of the principle of
immutability of final judgments.
The respondents aver that the recoverable backwages cannot go beyond December 26, 2007, the date HMR offered to reinstate Lim,
who allegedly refused to be reinstated and abandoned his job.
HMR sent the petitioner a letter, dated December 22, 2007, directing him to report for work on December 26, 2007, with an offer of
separation pay in the amount of P150,000.00 in lieu of reinstatement which he could avail of not later than December 26, 2007. Lim
replied in a letter, dated December 24, 2007, requesting for a meeting in January 2008, considering that his counsel was out of the
country; that the NLRC was still in the process of computing the amount of the award which was necessary to consider the offer of
separation pay; and that a writ of execution had not yet been issued. HMR never responded to the petitioner’s request, and up to the
present, the latter has yet to be reinstated.
From the above, it is apparent that the petitioner cannot be deemed to have refused reinstatement or to have abandoned his job.
HMR’s offer of reinstatement appeared superficial and insincere considering that it never replied to the petitioner’s letter. It did not
make any further attempt to reinstate the petitioner either. The recoverable backwages, thus, continue to run, and must be reckoned
up until the petitioner’s actual reinstatement.
BENSON INDUSTRIES EMPLOYEES UNION-ALU-TUCP AND/OR Vilma Genon et al., vs BENSON INDUSTRIES,
INC.
GR No. 200746, August 6, 2014
FACTS:
The Respondent Benson Industries, Inc. is engaged in the manufacturing of green coils with the brand name Lion-Tiger Mosquito
Killer. On February 12, 2008, Benson informed its employees including the petitioner of their intended termination from employment,
to be effected on March 15, 2008 on the ground of closure and /or cessation of business operations. In consequence, the majority of
Benson’s employees resigned. Meanwhile, the petitioner through its Union, filed a notice of strike claiming that the company’s
supposed closure was merely a ploy to replace the union members with lower paid workers but it did not push through due to the
parties’ amicable settlement during the conciliation proceedings. This notwithstanding, petitioners proffered a claim for the payment
of additional separation pay at the rate of 4 days for every year of service and it invoked Section 1, Article VIII of the existing collective
bargaining agreement (CBA). The voluntary arbitrator ruled in favor of the petitioner using the provision in the CBA as the basis;
while the Court of Appeals reversed on the ground of Benson’s current financial status. Hence, this petition.
ISSUE:
Whether or not the employees are entitled to the additional separation benefits equivalent to 4 days of work for every year of service.
RULING:
Yes. The law provided that generally the employers’ are required to pay its employees separation benefits, except when the closure is
due to serious business losses or retrenchment is done to prevent losses. When the obligation to pay separation pay, however, is not
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sourced from law but from contract such as the collective bargaining agreement between the employer and its employees, an
examination of the latter’s provisions becomes necessary in order to determine the governing parameters for the said obligation. For
the same exemption to obtain in the contract the tenor of the parties’ agreement ought to be similar to the law’s tenor. When the
parties, however, agree to deviate therefrom, and unqualifiedly covenant the payment of separation benefits irrespective of the
employer’s financial position, then the obligatory force of the contract prevails and its terms should be carried out to its full effect.
Hence if the CBA are clear and there is no doubt as to the intention of the contracting parties, the literal meaning of its stipulations
shall prevail.
In this case, it was undisputed that the CBA was forged by the employer and the union and equally undisputed that Benson agreed to
and was thus obligated under the CBA to pay its employees who had been terminated without any fault attributable to them
separation benefits at the rate of 19 days for every year of service. Hence, the court disagreed with the CA’s ruling negating Benson’s
obligation to pay petitioner’s their full separation benefits under the said agreement and granted the petition.
Montinola vs. PAL,

G.R. No. 198656, Sept. 8, 2014
FACTS:
On January 29, 2008, Montinola and other flight crew members were subjected to custom searches in Honolulu, Hawaii, USA. Items
from the airline were recovered from the flight crew by customs officials.
PAL conducted an investigation. Montinola was among those implicated because she was mentioned in the customs official’s email to
PAL. On February 1, 2008, PAL’s Cabin Services Sub-Department required Montinola to comment on the incident. She gave a
handwritten explanation three days after, stating that she did not take anything from the aircraft. She also committed to give her full
cooperation should there be any further inquiries on the matter.
On February 22, 2008, PAL’s International Cabin Crew Division Manager, Jaime Roberto A. Narciso (Narciso), furnished Montinola the
emails from the Honolulu customs official followed by a notice of administrative charge on March 25, 2008. On April 12, 2008, there
was a clarificatory hearing conducted by a panel of PAL’s Administrative Personnel.
Montinola alleged that her counsel objected during the clarificatory hearing regarding PAL’s failure to specify her participation in the
alleged pilferage. Atty. Pascual, PAL’s Senior Labor Counsel, threatened Montinola that a request for clarification would result in a
waiver of the clarificatory hearing. This matter was not reflected in the transcript of the hearing. Despite her counsel’s objections,
Montinola allowed the clarificatory hearings to proceed because she “wanted to extend her full cooperation [in] the investigation[s].”
PAL, found Montinola guilty of 11 violations of the company’s Code of Discipline and Government Regulation. She was meted with
suspension for one (1) year without pay. Montinola asked for a reconsideration but this was denied.
Montinola brought the matter before the Labor Arbiter (LA).
ISSUE:
Whether Montinola’s illegal suspension entitled her to an award of moral and exemplary damages and attorney’s fees
HELD:
Montinola is entitled to moral and exemplary damages. She is also entitled to attorney’s fees.
Security of tenure of workers is not only statutorily protected, it is also a constitutionally guaranteed right. Thus, any deprivation of
this right must be attended by due process of law. This means that any disciplinary action which affects employment must pass due
process scrutiny in both its substantive and procedural aspects.
PAL complied with procedural due process as laid out in Article 277, paragraph (b) of the Labor Code. PAL issued a written notice of
administrative charge, conducted a clarificatory hearing, and rendered a written decision suspending Montinola. However, we
emphasize that the written notice of administrative charge did not serve the purpose required under due process. PAL did not deny
her allegation that there would be a waiver of the clarificatory hearing if she insisted on a specific notice of administrative charge.
With Montinola unable to clarify the contents of the notice of administrative charge, there were irregularities in the procedural due
process accorded to her.
Moreover, PAL denied Montinola substantial due process. Just cause has to be supported by substantial evidence. Substantial
evidence, or “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion,” is the quantum of
evidence required in administrative bodies such as the NLRC.
The employee is entitled to moral damages when the employer acted a) in bad faith or fraud; b) in a manner oppressive to labor; or c)
in a manner contrary to morals, good customs, or public policy.
PAL’s actions in implicating Montinola and penalizing her for no clear reason show bad faith. PAL’s denial of her request to clarify the
charges against her shows its intent to do a wrongful act for moral obliquity.
PAL apparently granted Montinola procedural due process by giving her a notice of administrative charge and conducting a hearing.
However, this was more apparent than real. There is denial of an opportunity to be heard if the employee is not clearly apprised of
the acts she committed that constituted the cause for disciplinary action. Nothing in PAL’s action supports the finding that Montinola
committed specific acts constituting violations of PAL’s Code of Discipline. This act of PAL is contrary to morals, good customs, and
public policy. Moral damages are, thus, appropriate.
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VI. SUSPENSION OF BUSINESS OPERATIONS

MINDANAO TERMINAL & BROKERAGE SERVICE, INC. VS. NAGKAHIUSANG MAMUMUO SA MINTERBRO-
SOUTHERN PHILS. FEDERATION OF LABOR
G.R. No. 174300; December 5, 2012
Facts:
It was alleged that the union members/employees were deprived of gainful employment on April 14, 1997 after the last vessel was
serviced prior to the repair of the pier or on August 1, 1997 when repair works on the pier were commenced.
Minterbro is a domestic corporation and is engaged in the business of providing arrastre and stevedoring services to its clientele at
Port Area, Sasa, Davao City. It has a Contract for Use of Pier with Del Monte Philippines, Inc. (Del Monte), which provides for the
exclusive use by Del Monte of the Minterbro pier. Thus, at the time relevant to this controversy, Del Monte was Minterbro's only
client.
The docking of vessels at the piers in Davao City, including that of Minterbro, is being carried out by the Davao Pilots' Association, Inc.
(DPAI). In a letter dated January 6, 1996, DPAI requested Minterbro to waive any claim of liability against it for any damage to the pier
or vessel. DPAI alleged that Minterbro's pier vibrates everytime a ship docks due to weak posts at the underwater portion.
In a letter dated January 15, 1997, Minterbro denied the request explaining that DPAI's observation had no basis as any damage to the
pier was actually caused by a vessel under the control of DPAI which bumped the pier on December 28, 1996. DPAI replied in a
letter dated January 23, 1997 informing Minterbro of its intention to refrain from docking vessels at Minterbro's pier for security and
safety reasons, until such time as Minterbro shall have caused the restoration of the original independent fenders of the said
pier. cHAaCE
Minterbro decided to rehabilitate the pier on August 1, 1997 and, on the same day, sent a letter to the Department of Labor and
Employment (DOLE) to inform DOLE of Minterbro's intention to temporarily suspend arrastre and stevedoring operations. Minterbro
alleged that, despite the condition of the pier, it was able to service 16 vessels from January 1997 to April 13, 1997 and it was ready
and awaiting vessels to dock at the pier from April 14, 1997 to July 31, 1997 during which Minterbro's office, motor pool, and field
personnel continued operations.
On November 4, 1997, respondent Nagkahiusang Mamumuo sa Minterbro-Southern Philippines Federation of Labor composed of
respondents Manuel Abellana, et al., employees of Minterbro working on a rotation basis and employed for arrastre and stevedoring
work depending on the actual requirements of the vessels serviced by Minterbro, filed a complaint for payment of separation pay
against Minterbro and De Castro in the Regional Arbitration Branch No. XI at Davao City of the National Labor Relations Commission
(NLRC).
At the initial hearing before the Labor Arbiter on December 10, 1997, Minterbro and De Castro informed the union and its members
that the rehabilitation of the pier had been completed and that they were just awaiting clearance to operate from the PPA. In a
manifestation dated December 12, 1997, the union and its members stated, among others, that "they . . . are not anymore amenable
to going back to work with [the] company, for the reason that the latter has not been operating for more than six (6) months,
even if it resumes operation at a later date and would just demand that they be given Retirement or Separation Pay, as the
case may be."
Issue: WON respondents are entitled to separation pay
Ruling:
Lay-off is essentially retrenchment and under Article 283 of the Labor Code a retrenched employee is entitled to separation pay
equivalent to one (1) month salary or one-half (1/2) month salary per year of service, whichever is higher.
The union members/employees were not given work starting April 14, 1997 and that more than six months have elapsed after the
union members were laid off when the next vessel was serviced at the Minterbro pier on December 22 to 28, 1997.
Petitioners' inaction on what they allege to be the unexplained abandonment by Del Monte of its obligations under the Contract for
the Use of Pier coupled with petitioners' belated action on the damaged condition of the pier caused the absence of available work for
the union members. As petitioners were responsible for the lack of work at the pier and, consequently, the layoff of the union
members, they are liable for the separation from employment of the union members on a ground similar to retrenchment.
When petitioners failed to make work available to the union members for a period of more than six months starting April 14, 1997 by
failing to call the attention of Del Monte on the latter's obligations under the Contract of Use of Pier and to undertake a timely
rehabilitation of the pier, they are deemed to have constructively dismissed the union members.
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LEOPARD SECURITY AND INVESTIGATION AGENCY VS. QUITOY

G.R. No. 186344; February 28, 2013
Facts:
Respondents were hired as security guards by Petitioner (LSIA). They were assigned by the petitioner to the different branches of
Union Bank in Cebu city. On April 1, 2005, Union Bank served notice to LSIA terminating the security service contract effective at the
end of business hours of April 30, 2005. However, the respondents were only informed of the termination of the contract with Union
Bank on April 29, 2005. The respondents went to union bank on April 30, 2005 for the turnover of their service firearms to Cortes,
Union Bank Chief security officer. Respondents filed a complaint for illegal dismissal against LSIA. CA sustained the award of
separation pay of NLRC to respondents on the ground that the parties' relationship had already been strained.
Issues:
WON there was illegal dismissal.
WON the award of separation pay was proper.
Ruling:
NO. Applying Article 286 of the Labor Code of the Philippines by analogy, this Court has repeatedly recognized that security guards
may be temporarily sidelined by their security agency as their assignments primarily depend on the contracts entered into by the
latter with third parties. Temporary "off-detail" or "floating status" is the period of time when security guards are in between
assignments or when they are made to wait after being relieved from a previous post until they are transferred to a new one. It takes
place when, as here, the security agency's clients decide not to renew their contracts with the agency, resulting in a situation where
the available posts under its existing contracts are less than the number of guards in its roster. For as long as such temporary
inactivity does not continue for a period exceeding six months, it has been ruled that placing an employee on temporary "off-detail" or
"floating status" is not equivalent to dismissal.
Considering that a security guard is only considered illegally dismissed from service when he is sidelined from duty for a period
exceeding six months, respondents were not illegally dismissed by LSIA. Under Article 279 of the Labor Code, an illegally
dismissed employee is entitled to the twin reliefs of full backwages and reinstatement without loss of seniority rights. Aside from the
instances provided under Articles 283 and 284 of the Labor Code, separation pay is, however, granted when reinstatement is no
longer feasible because of strained relations between the employer and the employee. In cases of illegal dismissal, the accepted
doctrine is that separation pay is available in lieu of reinstatement when the latter recourse is no longer practical or in the best
interest of the parties.
As a relief granted in lieu of reinstatement, however, it consequently goes without saying that an award of separation pay is
inconsistent with a finding that there was no illegal dismissal. Even in cases of illegal dismissal, the doctrine of strained relations is
not applied indiscriminately as to bar reinstatement, especially when the employee has not indicated an aversion to returning to
work or does not occupy a position of trust and confidence in or has no say in the operation of the employer's business. Although
litigation may also engender a certain degree of hostility, it has likewise been ruled that the understandable strain in the parties'
relations would not necessarily rule out reinstatement which would, otherwise, become the rule rather than the exception in illegal
dismissal cases.
Our perusal of the position paper they filed a quo shows that, despite erroneously believing themselves to have been illegally
dismissed, respondents had alleged no circumstance indicating the strained relations between them and LSIA and had even
alternatively prayed for reinstatement alongside the payment of separation pay. Since application of the doctrine of strained relations
presupposes a question of fact which must be demonstrated and adequately supported by evidence, the CA clearly erred in ruling
that the parties' relations had already soured and that an award of separation pay in favor of respondents is proper.
SKM ART CRAFT CORP. VS. BAUCA

G.R. No. 171282; November 27, 2013
Facts:
RESPONDENTS Efren Bauca and 22 others were employed by petitioner SKM Art Craft Corp. Last Oct. 18, 2000, a fire occurred in the
inspection and receiving, repair and packing area of petitioner’s premises in Intramuros, Manila. The fire investigation report stated
that the structure and the beach rubber building were destroyed. Also burned were four cargo containers and a trailer truck. The
estimated damage was P22 million.
Last May 8, 2000, petitioner informed respondents that it will suspend its operations for six months, effective May 9, 2000. Last May
16, 2000, only eight days after receiving notice of the suspension of petitioner’s operations, the 23 respondents (and other co-
workers) filed a complaint for illegal dismissal. They alleged that there was discrimination in choosing the workers to be laid off.
Issue: Was there valid suspension of operations?
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Ruling:
Yes.
We agree with the National Labor Relations Commission (NLRC) that petitioner’s suspension of operations is valid because the fire
caused substantial losses to petitioner and damaged its factory. On this point, we disagree with the Court of Appeals (CA) that
petitioner failed to prove that its suspension of operations is bona fide. The list of materials burned was not the only evidence
submitted by petitioner.
It was corroborated by pictures and the fire investigation report, and they constitute substantial evidence of petitioner’s losses.
Under Article 286 of the Labor Code, the bona fide suspension of the operations of a business or undertaking for a period not
exceeding six months shall not terminate employment.
Article 286 provides, “When employment not deemed terminated. The bona fide suspension of the operations of a business or
undertaking for a period not exceeding six (6) months, or the fulfillment by the employee of a military or civic duty shall not terminate
employment. In all such cases, the employer shall reinstate the employee to his former position without loss of seniority rights if he
indicates his desire to resume his work not later than one month from the resumption of operations of his employer or from his relief
from the military or civic duty.”
The NLRC correctly noted that the complaint for illegal dismissal filed by respondents was premature since it was filed only eight days
after petitioner announced that it will suspend its operations for six months. In Nippon Housing Phil., Inc. v. Leynes, G.R. No. 177816,
August 3, 2011, 655 SCRA 77, 88, we said that a complaint for illegal dismissal filed prior to the lapse of said six months is generally
considered as prematurely filed.
NAVOTAS SHIPYARD CORP. VS. MONTALLANA

G.R No. 190053; March 24, 2014
Facts:
The case arose when respondents Montellana, et al filed a complaint for illegal (constructive) dismissal, with money claims
against petitioners, Navotas Shipyard Corporation and its President/General Manager, Jesus Villafolor.
According to respondents, on Ocober 20, 2003, the company’s employees were called to a meeting where Villaflor told them
that he intends to close the business and that he will just pay them separation pay since he cannot pay them their salary since he still
had many debts to pay. Since then, they were not allowed to report for work but Villaflor’s promise to give them separation pay never
materialized despite persistent demands.
The petitioners argue that the company is suffering financial reverses due to the seasonal lack of fish caught and uncollected
receivables. It was thus constrained to temporarily cease operations but they projected that the company could resume operations
before the end of six months. The company had reported the temporary shutdown to the DOLE-NCR and filed an Establishment
Termination Report.
Under Compulsory Arbitration the respondents’ complaint was dismissed for lack of merit, but they were awarded 13 th
month pay and service incentive leave pay for 2003. The LA considered the temporary shutdown as a suspension of the employment
relationship between the parties. The respondents appealed the ruling and argued before the NLRC that since they were not given
work assignments for more than six months, they should have been considered constructively dismissed and granted backwages as
well as separation pay. The NLRC dismissed the appeal for lack of merit.
When the case was brought before the Court of Appeals, the CA held that the company’s shutdown was not temporary, but
permanent. It set aside the challenged NLRC decision and granted the respondents' claims for service incentive leave pay, 13th month
pay, separation pay and backwages. Thus Petitioner now brings the case up to the Supreme Court.
Issues:
1. Whether or not the respondents were illegally dismissed
2. Whether or not they are entitled to backwages, separation pay, incentive leave pay and 13 th month pay.
Ruling:
The Court found the petition to be partially meritorious.
1. On illegal dismissal
Under the circumstances, we cannot say that the company's employees were illegally dismissed; rather, they lost their
employment because the company ceased operations after failing to recover from their financial reverses.
The respondents' verbal account of what happened during the meeting, particularly the company's imminent closure, to our
mind, confirmed the company's dire situation. The temporary shutdown, it appears, was a last ditch effort on the part of Villaflor to
make the company's operations viable but, as it turned out, the effort proved futile. The shutdown became permanent as the CA itself
acknowledged. The CA misappreciated the facts when it opined that the respondents were illegally dismissed because they were not
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reinstated by the petitioners after the lapse of the company's temporary shutdown. It lost sight of the fact that the company did not
resume operations anymore, a situation the CA itself recognized. The respondents, therefore, had no more jobs to go back to; hence,
their non-reinstatement.
In these lights, the CA was not only incorrect from the point of law; it likewise disregarded, or at the very least, grossly
misappreciated the evidence on record — that the petitioner was in distress and had temporarily suspended its operations, and
duly reflected these circumstances to the DOLE. From this perspective, there was no grave abuse of discretion to justify the CA's
reversal of the NLRC's findings and conclusions.
2. On backwages/nominal damages
Since there was no illegal dismissal, the respondents are not entitled to backwages. The term "backwages"
presupposes illegal termination of employment. It is restitution of earnings unduly withheld from the employee because of illegal
termination. Hence, where there is no illegal termination, there is no basis for claim or award of backwages.
The lack of basis for backwages notwithstanding, we note that the respondents claimed that they were not given individual
written notices of the company's temporary shutdown or of its closure.. Pursuant to existing jurisprudence, if the dismissal is by
virtue of a just or authorized cause, but without due process, the dismissed workers are entitled to an indemnity in the form
of nominal damages
In the present case, the evidence on hand substantially shows that the company closed down due to serious business
reverses, an authorized cause for termination of employment. The failure to notify the respondents in writing of the closure of the
company will not invalidate the termination of their employment, but the company has to pay them nominal damages for the violation
of their right to procedural due process. This amount is addressed to the sound discretion of the court, taking into account the
relevant circumstances, as the Court explained in Agabon v. NLRC.
In Jaka Food Processing Corp. v. Pacot, the Court made a distinction between "just" and "authorized" cause in relation to the
award of nominal damages. Thus, the Court said: "if the dismissal is based on a just cause under Article 282 but the employer failed to
comply with the notice requirement, the sanction to be imposed upon him should be tempered because the dismissal process was, in effect,
initiated by an act imputable to the employee; and (2) if the dismissal is based on an authorized cause under Article 283 but the employer
failed to comply with the notice requirement, the sanction should be stiffer because the dismissal process was initiated by the employer's
exercise of his management prerogative." The Court awarded P50,000.00 nominal damages in Jaka.
Although the respondents were not individually served written notice of the termination of their employment, the company,
nonetheless, filed an Establishment Termination Report which included the names of the respondents. The filing of the report
indicates that the company made the bona fide effort to comply with the notice requirement under the law and the rules. Given the
circumstances surrounding the company's closure and guided by the ruling in Industrial Timber, we find it reasonable to
award the respondents P10,000.00 in nominal damages.
3. On the award of separation pay,service incentive leave pay and13th month pay
Considering that the company's closure was due to serious financial reverses, it is not legally bound to give the
separated employees separation pay. In Reahs Corporation v. NLRC, the Court explained that "[t]he grant of separation pay, as an
incidence of termination of employment under Article 283, is a statutory obligation on the part of the employer and a demandable
right on the part of the employee, except only where the closure or cessation of operations was due to serious business losses or
financial reverses and there is sufficient proof of this fact or condition."
We note, however, that in his meeting with the employees, including the respondents, on October 20, 2003, Villaflor told
them that he would be giving them separation pay as a consequence of the company's closure. He should now honor his undertaking
to the respondents and grant them separation pay. Except for the petitioners' claim that "they gave the separation pays of their
employees," they failed to present proof of actual payment. In this light, Villaflor's grant of separation pay to the respondents has still
to be fulfilled.
Finally, the petitioners did not appeal the LA's award of service incentive leave pay and 13th month pay for the year 2003 to
the respondents. Accordingly, the award stands.
EMERITUS SECURITY & MAINTENANCE SYSTEMS, INC. VS. DAILIG

G.R. No. 204761; April 2, 2014
Facts:
Respondent Dailig is one of the security guards employed by Petitioner Emeritus Security & Maintenance. During his
employment, respondent was assigned to petitioner's various clients, the last of which was Panasonic in Calamba, Laguna starting 16
December 2004.
On December 10, 2005, he was relieved from his post.
On 16 June 2006, respondent filed a complaint for illegal dismissal and payment of separation pay against petitioner before
the Conciliation and Mediation Center of the NLRC. On 14 July 2006, respondent filed another complaint for illegal dismissal,
underpayment of salaries and non-payment of full backwages before the NLRC
Respondent claimed that on various dates in December 2005 and from January to May 2006, he went to petitioner's office
to follow-up his next assignment. After more than six months since his last assignment, still respondent was not given a new
assignment. Respondent argued that if an employee is on floating status for more than six months, such employee is deemed illegally
dismissed.
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Petitioner admits it relieved respondent from his last assignment on December 10 2005, but it required respondent to
report to the head office within 48 hours from receipts of the order of relief. Petitioner claims that respondent allegedly failed to
comply with this notice as well as a second notice sent to his last known address requiring him to report to the office within 72 hours
or else he would be deemed to be no longer interested to continue his employment. In addition, petitioner claims that there was no
termination letter sent to respondent purportedly proved that respondent was not dismissed.
The Labor Arbiter held that respondent was illegally dismissed and is thus entitled to reinstatement along with backwages,
and his claim for underpayment is denied for lack of merit. Petitioner appealed before the NLRC but was dismissed, and its motion for
reconsideration was denied. The Court of Appeals affirmed the finding of the Labor Arbiter and the NLRC but it set aside the
reinstatement order and ordered the payment of separation pay, invoking the doctrine of strained relations between the parties. The
petition thus brought the case before the Supreme Court.
Issues:
1.Whether or not respondent was illegally dismissed by respondent
2. Whether or not respondent is entitled to separation pay, instead of reimbursement.
Ruling:
The Court affirms the finding of illegal dismissal of the Labor Arbiter, NLRC, and Court of Appeals. However, the Court sets
aside the Court of Appeals' award of separation pay in favor of respondent, and reinstates the Labor Arbiter's reinstatement order.
Petitioner admits relieving respondent from his post as security guard on 10 December 2005. There is also no dispute that
respondent remained on floating status at the time he filed his complaint for illegal dismissal on 16 June 2006. In other words,
respondent was on floating status from 10 December 2005 to 16 June 2006 or more than six months. Petitioner's allegation of sending
respondent a notice sometime in January 2006, requiring him to report for work, is unsubstantiated, and thus, self-serving
The Court agrees with the ruling of the Labor Arbiter, NLRC and Court of Appeals that a floating status of a security guard,
such as respondent, for more than six months constitutes constructive dismissal. In Nationwide Security and Allied Services, Inc. v.
Valderama, the Court held:
The temporary inactivity or "floating status" of security guards should continue only for six
months. Otherwise, the security agency concerned could be liable for constructive dismissal. The failure of
petitioner to give respondent a work assignment beyond the reasonable six-month period makes it liable
for constructive dismissal.
On the issue of separation pay:
Reinstatement is the general rule, while the award of separation pay is the exception. The circumstances warranting the
grant of separation pay, in lieu of reinstatement, are laid down by the Court in Globe-Mackay Cable and Radio Corporation v.
National Labor Relations Commission, thus:
Over time, the following reasons have been advanced by the Court for denying reinstatement under the
facts of the case and the law applicable thereto; that reinstatement can no longer be effected in view of
the long passage of time (22 years of litigation) or because of the realities of the situation; or that it
would be 'inimical to the employer's interest;' or that reinstatement may no longer be feasible; or, that it
will not serve the best interests of the parties involved; or that the company would be prejudiced by the
workers' continued employment; or that it will not serve any prudent purpose as when supervening
facts have transpired which make execution on that score unjust or inequitable or, to an increasing
extent, due to the resultant atmosphere of 'antipathy and antagonism' or 'strained relations' or
'irretrievable estrangement' between the employer and the employee.
Contrary to the Court of Appeals' ruling, there is nothing in the records showing any strained relations between the parties
to warrant the award of separation pay. There is neither allegation nor proof that such animosity existed between petitioner and
respondent. In fact, petitioner complied with the Labor Arbiter's reinstatement order.
Considering that (1) petitioner reinstated respondent in compliance with the Labor Arbiter's decision, and (2) there is no
ground, particularly strained relations between the parties, to justify the grant of separation pay, the Court of Appeals erred in
ordering the payment thereof, in lieu of reinstatement.
Lopez v Irvine Construction Corp

GR No. 207253, August 20, 2014
FACTS:
Irvine Construction Corp. (Irvine) is a construction firm with office address at San Juan, Manila.6 It initially hired Lopez as
laborer in November 1994 and, thereafter, designated him as a guard at its warehouse in Dasmarifias. On December 18, 2005, Lopez
was purportedly terminated from his employment.
Respondent denied the said claims and contended that Lopez was employed only as a laborer who, however, sometimes
doubled as a guard. LA concluded that the dismissal of Lopez went beyond the six-month period fixed by Article 286 of the Labor
Code and was therefore deemed to be a permanent one effectuated without a valid cause and due process.
ISSUE:
Whether Lopez was a project or a regular employee, and whether or not there was a valid cause for the termination
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RULING:
CA Resolution denied and reinstated.

Case law states that the principal test for determining whether particular employees are properly characterized as "project
employees" as distinguished from "regular employees," is whether or not the "project employees" were assigned to carry out a
"specific project or undertaking," the duration and scope of which were specified at the time the employees were engaged for that
project. The project could either be (1) a particular job or undertaking that is within the regular or usual business of the employer
company, but which is distinct and separate, and identifiable as such, from the other undertakings of the company; or (2) a particular
job or undertaking that is not within the regular business of the corporation.
NLRC found that no substantial evidence had been presented by Irvine to show that Lopez had been assigned to carry out a
"specific project or undertaking," with its duration and scope specified at the time of engagement. In view of the weight accorded by
the courts to factual findings of labor tribunals such as the NLRC, the Court, absent any cogent reason to hold otherwise, concurs with
its ruling that Lopez was not a project but a regular employee.
In this case, Irvine failed to prove compliance with the parameters of Article 286 of the Labor Code. As the records would show, it
merely completed one of its numerous construction projects which does not, by and of itself, amount to a bona fide suspension of
business operations or undertaking. In invoking Article 286 of the Labor Code, the paramount consideration should be the dire
exigency of the business of the employer that compels it to put some of its employees temporarily out of work.51 This means that the
employer should be able to prove that it is faced with a clear and compelling economic reason which reasonably forces it to
temporarily shut down its business operations or a particular undertaking, incidentally resulting to the temporary lay-off of its
employees.
EXOCET SECURITY AND ALLIED SERVICES CORPORATION and/or MA. TERESA MARCELO, VS ARMANDO D.
SERRANO
GR NO 198538, Sept. 29, 2014
FACTS:
Exocet assigned respondent Armando D. Serrano (Serrano) on September 24, 1994 as "close-in" security personnel for one of JG
Summit's corporate officers, Johnson Robert L. Go. After eight years, Serrano was re-assigned as close-in security for Lance
Gokongwei, and then to his wife, Mary Joyce Gokongwei.
Apparently Serrano was relieved by JG Summit from his duties. Upon his returned into service, there has been reassignment for more
than six (6) months. This resulted to his filing of a complaint for illegal dismissal against Exocet with the NLRC.
Exocet in its defense said that Serreno after being relieved failed to report as VIP security nd was even demanding for VIP security
detail to another client. However since Exocet did not have clients in need of
VIP security assignment, Serrano was temporarily assigned to general security service which Serreno refused to take.
ISSUE: WHETHER OR NOT Serreno was constructively dismissed
HELD:
While there is no specific provision in the Labor Code which governs the "floating status" or temporary "off-detail" of security guards
employed by private security agencies, Jurisprudence considered such case as a form of temporary retrenchment or lay-off. The
concept has been defined as that period of time when security guards are in between assignments or when they are made to wait after
being relieved from a previous post until they are transferred to a new one. It takes place when the security agency's clients decide
not to renew their contracts with the agency, resulting in a situation where the available posts under its existing contracts are less
than the number of guards in its roster. It also happens in instances where contracts for security services stipulate that the client may
request the agency for the replacement of the guards assigned to it, even for want of cause, such that the replaced security guard may
be placed on temporary "off-detail" if there are no available posts under the agency's existing contracts.
As the circumstance is generally outside the control of the security agency or the employer, the Court has ruled that when a security
guard is placed on a "floating status," he or she does not receive any salary or financial benefit provided by law.
As provided for in COLE Department Order No 14, Series of 2001. If after the period of 6 months, the security agency/employer
cannot provide work or give assignment to the reserved security guard, the latter can be dismissed from service and shall be entitled
to separation pay as described in subsection 6.5. Security guards on reserved status who accept employment in other security
agencies or employers before the end of the above six-month period may not also be given separation pay.
While the Court has recognized the security guards' right to security of tenure under the "floating status" rule, the Court has similarly
acknowledged the management prerogative of security agencies to transfer security guards when necessary in conducting its
business, provided it is done in good faith.
There is no question that the security guard, Serrano, was placed on floating status after his relief from his post as a VIP security by
his security agency's client. Yet, there is no showing that his security agency, petitioner Exocet, acted in bad faith when it placed
Serrano on such floating status. The present case is not a situation where Exocet did not recall Serrano to work within the six-month
period as required by law and jurisprudence. Exocet did, in fact, make an offer to Serrano to go back to work. It is just that the
assignment — although it does not involve a demotion in rank or diminution in salary, pay, benefits or privileges — was not the
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security detail desired by Serrano. Clearly, Serrano's lack of assignment for more than six months cannot be attributed to petitioner
Exocet.
The security guard's right to security of tenure does not give him a vested right to the position as would deprive the company of its
prerogative to change the assignment of, or transfer the security guard to, a station where his services would be most beneficial to the
client. Indeed, an employer has the right to transfer or assign its employees from one office or area of operation to another, or in
pursuit of its legitimate business interest, provided there is no demotion in rank or diminution of salary, benefits, and other privileges,
and the transfer is not motivated by discrimination or bad faith, or effected as a form of punishment or demotion without sufficient
cause.
VII. DISEASE AS A GROUND FOR TERMINATION
Sy vs. Court of Appeals

G.R. No. 142293; February 27, 2003
Facts:
Jaime Sahot started working as a truck helper for petitioners’ family-owned trucking business named Vicente Sy Trucking. In 1965, he
became a truck driver of the same family business. Throughout the changes in names and for 36 years, private respondent
continuously served the trucking business of petitioners.
Sahot was already 59 years old. He had been incurring absences as he was suffering from various ailments. Sahot had filed a week-
long leave to be medically examined and treated for EOR, presleyopia, hypertensive retinopathy G II HPM, UTI, Osteoarthritis and
heart enlargement. On said grounds, Belen Paulino of the SBT Trucking Service management told him to file a formal request for
extension of his leave. At the end of his week-long absence, Sahot applied for extension of his leave for the whole month of June, 1994.
It was at this time when petitioners allegedly threatened to terminate his employment should he refuse to go back to work.
Ultimately, petitioners carried out their threat and dismissed him from work. He ended up sick, jobless and penniless.
Sahot filed with the NLRC NCR Arbitration Branch, a complaint for illegal dismissal, He prayed for the recovery of separation pay and
attorneys fees against herein petitioners.
Petitioners contended that Sahot was not illegally dismissed as a driver because he was in fact petitioner’s industrial partner and that
due to Sahot’s refusal to work after the expiration of his authorized leave of absence, he should be deemed to have voluntarily
resigned from his work. The NLRC NCR Arbitration Branch, ruled that there was no illegal dismissal in Sahot’s case. Private
respondent had failed to report to work. Moreover, said the Labor Arbiter, petitioners and private respondent were industrial
partners. On appeal, the NLRC declared that private respondent was an employee, not an industrial partner, since the start. In its
decision the appellate court affirmed with modification the judgment of the NLRC. It held that private respondent was indeed an
employee of petitioners since 1958.
Issues:
Whether or not an employer-employee relationship existed between petitioners and respondent Sahot;
Whether or not there was valid dismissal; and Whether or not respondent Sahot is entitled to separation pay.
Held:
Private respondent Jaime Sahot was not an industrial partner but an employee of petitioners from 1958 to 1994.
In termination cases, the burden is upon the employer to show by substantial evidence that the termination was for lawful cause and
validly made. Article 277(b) of the Labor Code puts the burden of proving that the dismissal of an employee was for a valid or
authorized cause on the employer, without distinction whether the employer admits or does not admit the dismissal. For an
employee’s dismissal to be valid, (a) the dismissal must be for a valid cause and (b) the employee must be afforded due process.
In order to validly terminate employment under Article 284 of the Labor Code on the ground of a disease, Book VI, Rule I, Section 8 of
the Omnibus Implementing Rules of the Labor Code requires:
Sec. 8. Disease as a ground for dismissal- Where the employee suffers from a disease and his continued employment is prohibited by
law or prejudicial to his health or to the health of his co-employees, the employer shall not terminate his employment unless there is a
certification by competent public health authority that the disease is of such nature or at such a stage that it cannot be cured within a
period of six (6) months even with proper medical treatment. If the disease or ailment can be cured within the period, the employer
shall not terminate the employee but shall ask the employee to take a leave. The employer shall reinstate such employee to his former
position immediately upon the restoration of his normal health.
In the case at bar, the employer clearly did not comply with the medical certificate requirement before Sahot’s dismissal was effected.
From the records, it clearly appears that procedural due process was not observed in the separation of private respondent by the
management of the trucking company. The employer is required to furnish an employee with two written notices before the latter is
dismissed: (1) the notice to apprise the employee of the particular acts or omissions for which his dismissal is sought, which is the
equivalent of a charge; and (2) the notice informing the employee of his dismissal, to be issued after the employee has been given
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reasonable opportunity to answer and to be heard on his defense. These, the petitioners failed to do, even only for record purposes.
What management did was to threaten the employee with dismissal, then actually implement the threat when the occasion presented
itself because of private respondent’s painful left thigh.
All told, both the substantive and procedural aspects of due process were violated. Clearly, therefore, Sahot’s dismissal is tainted with
invalidity.
On the last issue, respondent Jaime Sahot is entitled to separation pay. An employee who is terminated because of disease is entitled
to "separation pay equivalent to at least one month salary or to one-half month salary for every year of service, whichever is greater.
Manly Express, Inc. vs. Payong

G.R. No. 167462; October 25, 2005
Facts:
Romualdo Payong, Jr. was employed as a welder by petitioner. Sometime in December 1999, he was complaining of eyesight
problems. Brought to an eye specialist by private respondent Ching, he was diagnosed to be suffering from eye cataract. Despite
having the cataract removed in January of 2000, he was disallowed to return to his work by Ching. Much later, on August 1, 2000, he
was given a letter of termination of employment.
Thus, a complaint for illegal dismissal with money claims was filed against Manly.
The Labor Arbiter rendered a judgment ordering the respondent company to pay complainant Payong, the total amount of SEVENTY-
FIVE THOUSAND NINE HUNDRED PESOS (P75, 900.00).
The appellate court observed that considering that the termination was based on his alleged partial blindness, Manly should have
presented a certification by a competent public health authority that Payong was suffering from such a disease and his continued
employment is prejudicial to his health and that of his co-employees. Without the certification, the dismissal was illegal.
Issue:
Whether or not there was a valid termination.
Held:
The petition lacks merit.
Article 284 of the Labor Code authorizes an employer to terminate an employee on the ground of disease, thus:
Art. 284. Disease as ground for termination. – An employer may terminate the services of an employee who has been found
to be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health as well
as to the health of his co-employees: ….
The rule is explicit. For a dismissal on the ground of disease to be considered valid, two requisites must concur: (a) the employee
suffers from a disease which cannot be cured within six months and his continued employment is prohibited by law or prejudicial to
his health or to the health of his co-employees, and (b) a certification to that effect must be issued by a competent public health
authority.
In the present case, there was no proof that Payong’s continued employment was prohibited by law or prejudicial to his health and
that of his co-employees. No medical certificate by a competent public health authority was submitted that Payong was suffering from
a disease that cannot be cured within a period of six months. In the absence of such certification, Payong’s dismissal must necessarily
be declared illegal.
The burden of proving the validity of the dismissal rests on the employer. As such, the employer must prove that the requisites for a
valid dismissal due to a disease have been complied with. In the absence of the required certification by a competent public health
authority, this Court has ruled against the validity of the employee’s dismissal.
We also note that Manly failed to comply with the procedure for terminating an employee. In dismissing an employee, the employer
has the burden of proving that the employee has been served two notices: (1) one to apprise him of the particular acts or omissions
for which his dismissal is sought, and (2) the other to inform him of his employer’s decision to dismiss
him.http://www.supremecourt.gov.ph/jurisprudence/2005/oct2005/165282.htm - _ftn8#_ftn8 The first notice
must state that dismissal is sought for the act or omission charged against the employee, otherwise, the notice cannot be considered
sufficient compliance with the rules.
All told, Payong’s dismissal did not comply with both the substantive and procedural aspects of due process. Clearly, his dismissal is
tainted with invalidity.
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Duterte vs. Kingswood Trading Co.

G.R. No. 160325; October 4, 2007
Facts:
Roque Duterte was hired as truck/trailer driver by respondent Kingswood Trading Company, Inc., of which co-respondent Filemon
Lim is the President.
On November 8, 1998, petitioner had his first heart attack and was confined for two weeks at the Philippine Heart Center. This was
confirmed by respondent KTC which admitted that petitioner was declared on sick leave with corresponding notification.
A month later, petitioner returned to work armed with a medical certificate signed by his attending physician at the PHC, attesting to
petitioner’s fitness to work. However, said certificate was not honored by the respondents who refused to allow petitioner to work.
Respondents refused to declare petitioner fit to work unless physically examined by the company physician. Respondents’ promise to
pay petitioner his separation pay turned out to be an empty one. Instead, petitioner was presented, for his signature, a document as
proof of his receipt of the amount of P14,375.00 as first installment of his Social Security System (SSS) benefits. Having received no
such amount, petitioner refused to affix his signature thereon and instead requested for the necessary documents from respondents
to enable him to claim his SSS benefits, but the latter did not heed his request.
Petitioner filed against his employer a complaint for illegal dismissal and damages.
Issue: Whether or not there was legality of the termination.
Held:
Art. 284. DISEASE AS GROUND FOR TERMINATION. -- An employer may terminate the services of an employee who has been found to
be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health as well as to the
health of his co-employees: Provided, That he is paid separation pay equivalent to at least one (1) month salary or to one-half (1/2)
month salary for every year of service, whichever is greater, a fraction of at least six (6) months being considered as one (1) whole
year.
Corollarily, in order to validly terminate employment on the basis of disease, Book VI, Rule I, Section 8 of the Omnibus Implementing
Rules of the Labor Code requires:
Disease as a ground for dismissal. -- Where the employee suffers from a disease and his continued employment is prohibited by law or
prejudicial to his health or to the health of his co-employees, the employer shall not terminate his employment unless there is a
certification by a competent public health authority that the disease is of such nature or at such a stage that it cannot be cured within
a period of six (6) months even with proper medical treatment. If the disease or ailment can be cured within the period, the employer
shall not terminate the employee but shall ask the employee to take a leave. The employer shall reinstate such employee to his former
position immediately upon the restoration of his normal health. (Book VI, Rule 1, Sec. 8 of the Implementing Rules)
The law is unequivocal: the employer, before it can legally dismiss its employee on the ground of disease, must adduce a certification
from a competent public authority that the disease of which its employee is suffering is of such nature or at such a stage that it cannot
be cured within a period of six months even with proper treatment.
Here, the record does not contain the required certification. And when the respondents asked the petitioner to look for another job
because he was unfit to work, such unilateral declaration, even if backed up by the findings of its company doctors, did not meet the
quantum requirement mandated by the law, i.e., there must be a certification by a competent public authority.
The requirement for a medical certificate under Article 284 of the Labor Code cannot be dispensed with; otherwise, it would sanction
the unilateral and arbitrary determination by the employer of the gravity or extent of the employee’s illness and thus defeat the public
policy on the protection of labor.
Villaruel vs. Yeo Han Guan

G.R. No. 169191; June 1, 2011
Facts:
Petitioner alleged that in June 1963, he was employed as a machine operator by Ribonette Manufacturing Company, an enterprise
engaged in the business of manufacturing and selling PVC pipes and is owned and managed by herein respondent Yeo Han Guan. Over
a period of almost twenty (20) years, the company changed its name four times. Starting in 1993 up to the time of the filing of
petitioner's complaint in 1999, the company was operating under the name of Yuhans Enterprises. Despite the changes in the
company's name, petitioner remained in the employ of respondent. Petitioner further alleged that on October 5, 1998, he got sick and
was confined in a hospital; on December 12, 1998, he reported for work but was no longer permitted to go back because of his illness;
he asked that respondent allow him to continue working but be assigned a lighter kind of work but his request was denied; instead, he
was offered a sum of P15,000.00 as his separation pay; however, the said amount corresponds only to the period between 1993 and
1999; petitioner prayed that he be granted separation pay computed from his first day of employment in June 1963, but respondent
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refused. Aside from separation pay, petitioner prayed for the payment of service incentive leave for three years as well as attorney's
fees.
The Labor Arbiter found for the respondent, granting him separation pay from the June 1963 up to the time of separation, and service
incentive leave equivalent to 15 days. The NLRC affirmed. On appeal, the CA reversed the NLRC on the issue of separation pay.
Issue: WON petitioner is entitled to separation pay under the provisions of the Labor Code, particularly Article 284
Held:
Article 284 of the Labor Code reads:
An employer may terminate the services of an employee who has been found to be suffering from any disease and whose
continued employment is prohibited by law or is prejudicial to his health as well as to the health of his co-employees:
Provided, That he is paid separation pay equivalent to at least one (1) month salary or to one-half (½) month salary for
every year of service whichever is greater, a fraction of at least six months being considered as one (1) whole year.
A plain reading of the abovequoted provision clearly presupposes that it is the employer who terminates the services of the employee
found to be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health as well as
to the health of his co-employees. It does not contemplate a situation where it is the employee who severs his or her employment ties.
This is precisely the reason why Section 8, Rule 1, Book VI of the Omnibus Rules Implementing the Labor Code, directs that an
employer shall not terminate the services of the employee unless there is a certification by a competent public health authority that
the disease is of such nature or at such a stage that it cannot be cured within a period of six (6) months even with proper medical
treatment.
On the other hand, the Court agrees with the CA in its observation of the following circumstances as proof that respondent did not
terminate petitioner's employment: first, the only cause of action in petitioner's original complaint is that he was “offered a very low
separation pay”; second, there was no allegation of illegal dismissal, both in petitioner's original and amended complaints and position
paper; and, third, there was no prayer for reinstatement.
In consonance with the above findings, the Court finds that petitioner was the one who initiated the severance of his employment
relations with respondent. It is evident from the various pleadings filed by petitioner that he never intended to return to his
employment with respondent on the ground that his health is failing. Indeed, petitioner did not ask for reinstatement. In fact, he
rejected respondent's offer for him to return to work. This is tantamount to resignation.
Resignation is defined as the voluntary act of an employee who finds himself in a situation where he believes that personal reasons
cannot be sacrificed in favor of the exigency of the service and he has no other choice but to disassociate himself from his
employment.
It may not be amiss to point out at this juncture that aside from Article 284 of the Labor Code, the award of separation pay is also
authorized in the situations dealt with in Article 283 of the same Code and under Section 4 (b), Rule I, Book VI of the Implementing
Rules and Regulations of the said Code where there is illegal dismissal and reinstatement is no longer feasible. By way of exception,
this Court has allowed grants of separation pay to stand as “a measure of social justice” where the employee is validly dismissed for
causes other than serious misconduct or those reflecting on his moral character. However, there is no provision in the Labor Code
which grants separation pay to voluntarily resigning employees. In fact, the rule is that an employee who voluntarily resigns from
employment is not entitled to separation pay, except when it is stipulated in the employment contract or CBA, or it is sanctioned by
established employer practice or policy. In the present case, neither the abovementioned provisions of the Labor Code and its
implementing rules and regulations nor the exceptions apply because petitioner was not dismissed from his employment and there is
no evidence to show that payment of separation pay is stipulated in his employment contract or sanctioned by established practice or
policy of herein respondent, his employer.

Since petitioner was not terminated from his employment and, instead, is deemed to have resigned therefrom, he is not entitled to
separation pay under the provisions of the Labor Code.
The foregoing notwithstanding, this Court, in a number of cases, has granted financial assistance to separated employees as a measure
of social and compassionate justice and as an equitable concession. Taking into consideration the factual circumstances obtaining in
the present case, the Court finds that petitioner is entitled to this kind of assistance.
In this regard, the Court finds credence in petitioner's contention that he is in the employ of respondent for more than 35 years. In the
absence of a substantial refutation on the part of respondent, the Court agrees with the findings of the Labor Arbiter and the NLRC
that respondent company is not distinct from its predecessors but, in fact, merely continued the operation of the latter under the same
owners and the same business venture. The Court further notes that there is no evidence on record to show that petitioner has any
derogatory record during his long years of service with respondent and that his employment was severed not by reason of any
infraction on his part but because of his failing physical condition. Add to this the willingness of respondent to give him financial
assistance. Hence, based on the foregoing, the Court finds that the award of P50,000.00 to petitioner as financial assistance is deemed
equitable under the circumstances.
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Deoferio vs. Intel Technology Phils.,

GR No. 202996, June 18, 2014
FACTS
Deoferio, an employee of Intel Technology Phils. in the US repatriated for being diagnosed of major depression, underwent a series of
medical and psychiatric treatment at Intel’s expense after his confinement in the United States. In 2002, Dr. Elizabeth Rondain of
Makati Medical Center diagnosed him to be suffering from mood disorder, major depression, and auditory hallucination.6 He was also
referred to Dr. Norieta Balderrama, Intel’s forensic psychologist, and to a certain Dr. Cynthia Leynes who both confirmed his mental
condition.7 On August 8, 2005, Dr. Paul Lee, a consultant psychiatrist of the Philippine General Hospital, concluded that Deoferio was
suffering from schizophrenia. After several consultations, Dr. Lee issued a psychiatric report dated January 17,2006 concluding and
stating that Deoferio’s psychotic symptoms are not curable within a period of six months and "will negatively affect his work and
social relation with his co-worker[s]."8 Pursuant to these findings, Intel issued Deoferio a notice of termination on March 10, 2006.9
Deoferio filed a complaint for illegal dismissal.
ISSUES
(1) Whether Deoferio was suffering from schizophrenia and whether his continued employment was prejudicial to his health, as well
as to the health of his co-employees;
(2) Whether the twin-notice requirement in dismissals applies to terminations due to disease; and
RULING
YES. Intel had an authorized cause to dismiss Deoferio from employment
The present case involves termination due to disease – an authorized cause for dismissal under Article 284 of the Labor Code. As
substantive requirements, the Labor Code and its IRR require the presence of the following elements:
(1) An employer has been found to be suffering from any disease.
(2) His continued employment is prohibited by law or prejudicial to his health, as well as to the health of his co-employees.
(3) A competent public health authority certifies that the disease is of such nature or at such a stage that it cannot be cured within a
period of six months even with proper medical treatment. With respect to the first and second elements, the Court liberally construed
the phrase "prejudicial to his health as well as to the health of his co-employees" to mean "prejudicial to his health or to the health of
his co-employees." We did not limit the scope of this phrase to contagious diseases for the reason that this phrase is preceded by the
phrase "any disease" under Article 284 of the Labor Code, to wit:
Art. 284. Disease as ground for termination. – An employer may terminate the services of an employee who has been found to be
suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health as well as to the
health of his co-employees: Provided, That he is paid separation pay equivalent to at least one (1) month salary or to one-half (1/2)
month salary for every year of service, whichever is greater, a fraction of at least six (6) months being considered as one (1) whole
year. [underscores, italics and emphases ours]
Consistent with this construction, we applied this provision in resolving illegal dismissal cases due to non-contagious diseases such as
stroke, heart attack, osteoarthritis, and eye cataract, among others.
The third element substantiates the contention that the employee has indeed been suffering from a disease that: (1) is prejudicial to
his health as well as to the health of his co-employees; and (2) cannot be cured within a period of six months even with proper
medical treatment. Without the medical certificate, there can be no authorized cause for the employee’s dismissal. The absence of this
element thus renders the dismissal void and illegal.
Simply stated, this requirement is not merely a procedural requirement, but a substantive one. The certification from a competent
public health authority is precisely the substantial evidence required by law to prove the existence of the disease itself, its non-
curability within a period of six months even with proper medical treatment, and the prejudice that it would cause to the health of the
sick employee and to those of his co-employees.
In the current case, we agree with the CA that Dr. Lee’s psychiatric report substantially proves that Deoferio was suffering from
schizophrenia, that his disease was not curable within a period of six months even with proper medical treatment, and that his
continued employment would be prejudicial to his mental health. This conclusion is further substantiated by the unusual and bizarre
acts that Deoferio committed while at Intel’s employ.
The twin-notice requirement applies to terminations under Article 284 of the Labor Code
The Labor Code and its IRR are silent on the procedural due process required in terminations due to disease. Despite the seeming gap
in the law, Section 2, Rule 1, Book VI of the IRR expressly states that the employee should be afforded procedural due process in all
cases of dismissals.
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VIII. OTHER CAUSES OF SEVERANCE OF EMPLOYMENT RELATION
Pantranco North Express, Inc. vs. NLRC

259 SCRA 161
Facts:
Private respondent was hired by petitioner in 1964 as a bus conductor. He eventually joined the Pantranco Employees Association-
PTGWO. He continued in petitioner's employ until August 12, 1989, when he was retired at the age of fifty-two (52) after having
rendered twenty five years' service. The basis of his retirement was the compulsory retirement provision of the collective bargaining
agreement between the petitioner and the aforenamed union. Private respondent received P49,300.00 as retirement pay.
On February 15, 1990, private respondent filed a
complainthttp://sc.judiciary.gov.ph/jurisprudence/1996/jul1996/95940.htm - _edn4 for illegal dismissal against
petitioner with the Sub-Regional Arbitration Branch of the respondent Commission in Dagupan City. The complaint was consolidated
with two other cases of illegal dismissal http://sc.judiciary.gov.ph/jurisprudence/1996/jul1996/95940.htm - _edn5
having similar facts and issues, filed by other employees, non-union members.
Issue:
Whether the CBA stipulation on compulsory retirement after twenty-five years of service is legal and enforceable.
Ruling:
Art. 287 of the Labor Code as worded permits employers and employees to fix the applicable retirement age at below 60 years.
Moreover, providing for early retirement does not constitute diminution of benefits. In almost all countries today, early retirement,
i.e., before age 60, is considered a reward for services rendered since it enables an employee to reap the fruits of his labor —
particularly retirement benefits, whether lump-sum or otherwise — at an earlier age, when said employee, in presumably better
physical and mental condition, can enjoy them better and longer. As a matter of fact, one of the advantages of early retirement is that
the corresponding retirement benefits, usually consisting of a substantial cash windfall, can early on be put to productive and
profitable uses by way of income-generating investments, thereby affording a more significant measure of financial security and
independence for the retiree who, up till then, had to contend with life's vicissitudes within the parameters of his fortnightly or
weekly wages. Thus we are now seeing many CBAs with such early retirement provisions. And the same cannot be considered a
diminution of employment benefits.
Being a product of negotiation, the CBA between the petitioner and the union intended the provision on compulsory retirement to be
beneficial to the employees-union members, including herein private respondent. When private respondent ratified the CBA with the
union, he not only agreed to the CBA but also agreed to conform to and abide by its provisions. Thus, it cannot be said that he was
illegally dismissed when the CBA provision on compulsory retirement was applied to his case.
Incidentally, we call attention to Republic Act No. 7641, known as "The Retirement Pay Law," which went into effect on January 7,
1993. Although passed many years after the compulsory retirement of herein private respondent, nevertheless, the said statute sheds
light on the present discussion when it amended Art. 287 of the Labor Code, to make it read as follows:
"ART. 7. Retirement. — Any employee may be retired upon reaching the retirement age establish in the collective bargaining
agreement or other applicable employment contract.
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 x x x."
The aforequoted provision makes clear the intention and spirit of the law to give employers and employees a free hand to determine
and agree upon the terms and conditions of retirement. Providing in a CBA for compulsory retirement of employees after twenty-five
(25) years of service is legal and enforceable so long as the parties agree to be governed by such CBA. The law presumes that
employees know what they want and what is good for them absent any showing that fraud or intimidation was employed to secure
their consent thereto.
Cainta Catholic School vs. Cainta Catholic School Employees Union

G.R. NO. 151021 MAY 4, 2006
Facts:
On 6 March 1986, a Collective Bargaining Agreement (CBA) was entered into between Cainta Catholic School (School) and the Cainta
Catholic School Employees Union (Union) effective 1 January 1986 to 31 May 1989. This CBA provided, among others, that:
This Collective Bargaining Agreement shall become effective and binding upon the parties from January 1, 1986 up to May 31, 1989.
At least sixty (60) days before the expiration of this Agreement, the parties hereto shall submit written proposals which shall be made
the basis of negotiations for the execution of a new agreement.
If no new agreement is reached by the parties at the expiration of this agreement, all the provisions of this Agreement shall remain full
force and in effect, up to the time a new Agreement shall be executed.
On 15 October 1993, the School retired Llagas and Javier, who had rendered more than twenty (20) years of continuous service,
pursuant to Section 2, Article X of the CBA, to wit:
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An employee may be retired, either upon application by the employee himself or by the decision of the Director of the School, upon
reaching the age of sixty (60) or after having rendered at least twenty (20) years of service to the School the last three (3) years of
which must be continuous.
Issue:
Whether the forced retirement of Llagas and Javier was a valid exercise of management prerogative.
Ruling:
ART. 287. Retirement. –
Any employee may be retired upon reaching the retirement age established in the collective bargaining agreement or other applicable
employment contract.
In case of retirement, the employee shall be entitled to receive such retirement benefits as he may have earned under existing laws
and any collective bargaining agreement and other agreements: Provided, however, That an employee’s retirement benefits under
any collective bargaining agreement and other agreements shall not be less than those provided herein.
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.
The CBA in the case at bar established 60 as the compulsory retirement age. However, it is not alleged that either Javier or Llagas had
reached the compulsory retirement age of 60 years, but instead that they had rendered at least 20 years of service in the School, the
last three (3) years continuous. Clearly, the CBA provision allows the employee to be retired by the School even before reaching the
age of 60, provided that he/she had rendered 20 years of service. Jurisprudence affirms the position of the School.
We affirm the continued validity of Pantranco and its kindred cases, and thus reiterate that under Article 287 of the Labor Code, a CBA
may validly accord management the prerogative to optionally retire an employee under the terms and conditions mutually agreed
upon by management and the bargaining union, even if such agreement allows for retirement at an age lower than the optional
retirement age or the compulsory retirement age.
Alpha C. Jaculbe vs. Silliman University

G.R. NO. 156934 MARCH 16, 2007
Facts:
Sometime in 1958, petitioner began working for respondent’s university medical center as a nurse.
In a letter dated December 3, 1992, respondent, through its Human Resources Development Office, informed petitioner that she was
approaching her 35th year of service with the university and was due for automatic retirement on November 18, 1993, at which time
she would be 57 years old. This was pursuant to respondent’s retirement plan for its employees which provided that its members
could be automatically retired "upon reaching the age of 65 or after 35 years of uninterrupted service to the university." Respondent
required certain documents in connection with petitioner’s impending retirement.
Petitioner emphatically insisted that the compulsory retirement under the plan was tantamount to a dismissal and pleaded with
respondent to be allowed to work until the age of 60 because this was the minimum age at which she could qualify for suspension. But
respondent stood pat on its decision to retire her, citing "company policy."
Issue:
Whether or not respondent commit illegal dismissal by retiring petitioner solely by reason of such provision in its retirement plan?
Ruling:
Retirement plans allowing employers to retire employees who are less than the compulsory retirement age of 65 are not per se
repugnant to the constitutional guaranty of security of tenure. Article 287 of the Labor Code provides:
ART. 287. Retirement - Any employee may be retired upon reaching the retirement age established in the collective bargaining
agreement or other applicable employment contract.
By its express language, the Labor Code permits employers and employees to fix the applicable retirement age at below 60 years.
However, after reviewing the assailed decision together with the rules and regulations of respondent’s retirement plan, we find that
the plan runs afoul of the constitutional guaranty of security of tenure contained in Article XIII, also known as the provision on Social
Justice and Human Rights.
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.
The truth was that petitioner had no choice but to participate in the plan, given that the only way she could refrain from doing so was
to resign or lose her job. It is axiomatic that employer and employee do not stand on equal footing, a situation which often causes an
employee to act out of need instead of any genuine acquiescence to the employer. This was clearly just such an instance.
Not only was petitioner still a good eight years away from the compulsory retirement age but she was also still fully capable of
discharging her duties as shown by the fact that respondent’s board of trustees seriously considered rehiring her after the affectivity
of her "compulsory retirement."
As already stated, an employer is free to impose a retirement age less than 65 for as long as it has the employees’ consent. Stated
conversely, employees are free to accept the employer’s offer to lower the retirement age if they feel they can get a better deal with
the retirement plan presented by the employer. Thus, having terminated petitioner solely on the basis of a provision of a retirement
plan which was not freely assented to by her, respondent was guilty of illegal dismissal.
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Globe Telecom vs. Crisologo

G.R. NO. 17644 AUGUST 10, 2007
Facts:
Respondent Jenette Marie B. Crisologo, a lawyer, joined Globe Telecom (Globe) on November 3, 1998 as a manager in its corporate
legal services department. Her tasks included negotiating, drafting and reviewing the company’s supply contracts.
On April 5, 2002, respondent (who was then pregnant) was rushed to the Makati Medical Center due to profuse bleeding. It was later
diagnosed as a possible miscarriage.
After a week-long absence, respondent reported back to work on April 12, 2002.On the same day, she tendered her resignation letter
explaining that she was advised by her doctor to rest for the duration of her pregnancy. She also requested permission to exhaust her
unused leaves until the effective date of her resignation on May 30, 2002. Globe accepted her resignation.
On April 30, 2002, respondent called on her immediate supervisor, petitioner Ma. Caridad Gonzales. In the course of their
conversation, petitioner Gonzales casually informed respondent of an e-mail circulating within the company to the effect that she
(respondent) allegedly solicited money from one of the company’s suppliers. Because the e-mail was not forwarded to her (being its
subject), respondent requested a copy and an opportunity to confront the person(s) responsible. Petitioner Gonzales declined as there
was no longer any reason to pursue the matter.
On May 2, 2002, respondent sent petitioner Gonzales a letter complaining of her "ill-treatment" by the company after she submitted
her resignation letter.She also confided that she resigned only because the e-mail damaged her name and reputation. For that reason,
she requested petitioner Gonzales to issue a certification clearing her of "any wrongdoing, misconduct or transgression."
Believing that Globe would not comply with her demands, respondent filed a complaint for illegal dismissal against petitioners on July
3, 2002.According to respondent, petitioners fired her on the basis of a rumor whose veracity was never proven. She was neither
furnished a copy of the e-mail nor allowed to confront the person(s) who circulated it. Petitioner Gonzales immediately closed the
matter with finality without conducting any inquiry. Furthermore, petitioners failed not only to adduce clear and substantial proof of
loss of confidence but also to observe due processas petitioner Gonzales summarily forced her to resign.
Petitioners, on the other hand, contended that respondent’s clear and unequivocal resignation letter showed her unconditional desire
to resign.
Issue:
Whether or not respondent was illegally dismissed by petitioner.
Ruling:
To support their contention that respondent voluntarily resigned, petitioners presented her resignation letter dated April 12, 2002:
This is to inform you that as per my doctor’s advice, I have to take a long rest due to a very difficult pregnancy and other health
reasons. I am therefore tendering my resignation effective 30 May 2002 and would like to request that I be allowed to exhaust all
leaves due to me until such date. Furthermore, I hereby undertake to turn over all my pending work to other lawyers until said
effective date of my termination.
Thank you very much.
Respondent personally drafted her resignation letter in a clear, concise and categorical language. Its content, as quoted above,
confirmed her unequivocal intent to resign.
An employee of respondent’s accomplished educational background and professional standing will not easily relinquish her legal
rights unless she intends to. Respondent’s resignation letter without doubt proved petitioners’ assertion that she voluntarily resigned
from her job.
Resignation is the voluntary act of an employee who finds herself in a situation where shebelieves that personal reasons cannot be
sacrificed in favor of the exigency of the service and that she has no other choice but to disassociate herself from employment.
Employees resign for various reasons. A big salary is certainly no hindrance to a voluntary cessation of employment. Human resource
studies reveal that various factors (in and out of the workplace) affect an employee’s employment decision. In this instance,
respondent would have suffered a miscarriage had she continued to work. She obviously resigned for the sake of her child's well-
being, motherhood clearly taking precedence over her job.
Coercion exists when there is a reasonable or well-grounded fear of an imminent evil upon a person or his property or upon the
person or property of his spouse, descendants or ascendants.No such situation existed in this case.
BMG Records Phils. vs. Aparecio

G.R. NO. 153290 SEPTEMBER 5, 2007
Facts:
Petitioner BMG Records (Phils.), Inc. (BMG) is engaged in the business of selling various audio records nationwide. On September 2,
1990, it hired private respondent Aida C. Aparecio (Aparecio) as one of the promo girls in its Cebu branch. For working from Monday
to Sunday, she received a salary of P181.00 per day.
On May 25, 1998, Aparecio filed a complaint against BMG and its Branch Manager, Jose Yap, Jr., co-petitioner herein, for illegal
dismissal and non-payment of overtime pay, holiday pay, premium pay for rest day, 13 th month pay, service incentive leave, and
separation pay.
Petitioners, however, proffer a different version of the facts. They narrate that Aparecio was initially performing well as an employee
but as years passed by she seemed to be complacent in the performance of her job and had been comparing the salaries of promo girls
in other companies. It appeared that she was no longer interested in her job. In April 1998, Aparecio and two other promo girls,
Jovelina V. Soco and Veronica P. Mutya, intimated to their supervisor that they were intending to resign and were requesting for some
financial assistance. BMG made it clear that, as a company policy, an employee who resigns from service is not entitled to financial
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assistance, but considering the length of their service and due to humanitarian consideration it would accede to the request after they
secure their respective clearances. Forthwith, the three employees tendered their resignations, which were accepted. When they
processed the required individual clearance, it was found out that they had incurred some shortages after inventory. Per agreement,
said shortages were deducted from the amounts due them. Thus, Soco and Mutya received their last salary, a proportion of the 13 th
month pay, tax refund and financial assistance less the deductions, and they executed their releases and quitclaims. Except for the
financial assistance, Aparecio also obtained the same yet refused to sign the release and quitclaim, protesting the amount of P9,170.12
deducted from the financial assistance. She was adamant but BMG stood by the previous agreement.
Aparecio submits that fraud, undue influence, intimidation, and/or mistake were attendant upon her resignation from BMG. As her
consent was allegedly vitiated, the act of resigning became involuntary; hence, petitioners are guilty of illegal dismissal.
Issue:
Whether or not respondent voluntarily resigned or illegally dismissed.
Ruling:
Resignation is the voluntary act of an employee who is in a situation where one believes that personal reasons cannot be sacrificed in
favor of the exigency of the service, and one has no other choice but to dissociate oneself from employment. It is a formal
pronouncement or relinquishment of an office, with the intention of relinquishing the office accompanied by the act of
relinquishment. As the intent to relinquish must concur with the overt act of relinquishment, the acts of the employee before and after
the alleged resignation must be considered in determining whether in fact, he or she intended to sever from his or her employment.
Thus, this Court agrees with petitioners' contention that the circumstances surrounding Aparecio's resignation should be given due
weight in determining whether she had intended to resign. In this case, such intent is very evident:
First, Aparecio already communicated to other people that she was about to resign to look for a better paying job since she had been
complaining that employees like her in other companies were earning much more;
Second, prior to the submission of her resignation letter, Aparecio and two other promo girls, Soco and Mutya, approached their
supervisor, intimated their desire to resign, and requested that they be given financial assistance, which petitioners granted on the
condition that deductions would be made in case of shortage after inventory;
Third, Aparecio, Soco, and Mutya submitted their duly signed resignation letters, which were accepted by petitioners; and
Fourth, Aparecio already initiated the processing of her clearance; thus, she was able to receive her last salary, 13 th month pay, and tax
refund but refused to receive the financial assistance less the deductions made.
The acceptance by petitioners of Aparecio's resignation rendered the same effective. Upon such acceptance, it may not be unilaterally
withdrawn without the consent of petitioners. When the employee later signified the intention of continuing his or her work, it was
already up to the employer to accept the withdrawal of his or her resignation. The mere fact that the withdrawal was not accepted
does not constitute illegal dismissal, the acceptance of the withdrawal of the resignation being the employer's sole prerogative.
Certainly, what transpired here was caused by an employee's error of judgment and not by the employer's application of means
vitiating the consent to resign. It would be utterly unfair to attribute to petitioners the commission of illegal dismissal and to impose
upon them the burden of accepting back Aparecio who unequivocally manifested her intent and willingness to sever her employment
ties.
Once an employee resigns and his resignation is accepted, he no longer has any right to the job. If the employee later changes his
mind, he must ask for approval of the withdrawal of his resignation from his employer, as if he were re-applying for the job. It will
then be up to the employer to determine whether or not his service would be continued. If the employer accepts said withdrawal, the
employee retains his job. If the employer does not x x x the employee cannot claim illegal dismissal for the employer has the right to
determine who his employees will be. To say that an employee who has resigned is illegally dismissed, is to encroach upon the right of
employers to hire persons who will be of service to them.
A resigned employee who desires to take his job back has to re-apply therefor, and he shall have the status of a stranger who cannot
unilaterally demand an appointment. He cannot arrogate unto himself the same position which he earlier decided to leave. To allow
him to do so would be to deprive the employer of his basic right to choose whom to employ. Such is tantamount to undue oppression
of the employer. It has been held that an employer is free to regulate, according to his own discretion and judgment, all aspects of
employment including hiring. The law, in protecting the rights of the laborer, impels neither the oppression nor self-destruction of the
employer.
Cercado vs. UNIPROM, Inc.

G.R. NO. 188154 OCTOBER 13, 2010
Facts:
Petitioner Lourdes A. Cercado (Cercado) started working for respondent UNIPROM, Inc. (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.
On April 1, 1980, 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. The retirement plan was
later on amended on January 1, 2001 wherein UNIPROM reserved the option to retire employees who were qualified to retire under
the program.
Respondent implemented a company-wide early retirement program in 2000 for 41 employees, including petitioner who was 47
years old at that time with 22 years of continuous service to the company. UNIPROM exercised its option under the retirement plan,
and decided to retire Cercado effective at the end of business hours on February 15, 2001. She rejected the early retirement package
offered to her and also refused to accept the check issued to her representing her benefits from the regular retirement package.
Cercado filed a complaint with the Labor Arbiter for illegal dismissal alleging that UNIPROM does not have a bona fide retirement
plan, and even if there was, she did not consent thereto.
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Issue:
WON UNIPROM has a bona fide retirement plan; and whether petitioner was validly retired pursuant thereto.
Ruling:
Article 287 of the Labor Code, as amended by R.A. No. 7641, pegs the age for compulsory retirement at 65 years, while the minimum
age for optional retirement is set at 60 years. An employer is, however, free to impose a retirement age earlier than the foregoing
mandates. This has been upheld in numerous cases as a valid exercise of management prerogative.
In this case, petitioner was retired by UNIPROM at the age of 47, after having served the company for 22 years, pursuant to UNIPROMs
Employees Non-Contributory Retirement Plan, which provides that employees who have rendered at least 20 years of service may be
retired at the option of the company. At first blush, respondents retirement plan can be expediently stamped with validity and
justified under the all encompassing phrase "management prerogative," which is what the CA did. But the attendant circumstances in
this case, vis-à -vis the factual milieu of the string of jurisprudence on this matter, impel us to take a deeper look.
It is axiomatic that a retirement plan giving the employer the option to retire its employees below the ages provided by law must be
assented to and accepted by the latter, otherwise, its adhesive imposition will amount to a deprivation of property without due
process of law.
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, UNIPROMs Employees Non-Contributory Retirement Plan was unilaterally and
compulsorily imposed on them. 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 CA simply declared that petitioner was deemed aware of the retirement plan on account of the length of
her employment with respondent. Implied knowledge, regardless of duration, cannot equate to the voluntary acceptance required by
law in granting an early retirement age option to an employer. The law demands more than a passive acquiescence on the part of
employees, considering that an employers early retirement age option involves a concession of the formers constitutional right to
security of tenure.
We reiterate the well-established meaning of retirement in this jurisdiction: 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 Courts ruling in Jaculbe, 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. Petitioner is thus entitled to reinstatement
without loss of seniority rights and to full backwages computed from the time of her illegal dismissal in February 16, 2001 until the
actual date of her reinstatement. If reinstatement is no longer possible because the position that petitioner held no longer exists,
UNIPROM shall pay backwages as computed above, plus, in lieu of reinstatement, separation pay equivalent to one-month pay for
every year of service. This is consistent with the preponderance of jurisprudence relative to the award of separation pay in case
reinstatement is no longer feasible.
Skippers United Pacific vs. Doza et. al.

G.R. NO. 175558 FEBRUARY 8, 2012
Facts:
Petitioner deployed De Gracia, Lata and Aprosta to work on board the vessel MV Wisdom Star.
On December 3 1998, Skippers alleges that De Garcia smelling strongly of alcohol, went to the cabin of Gabriel Oleszek, MV Wisdom
Stars’ Master. Skippers claims that he was rude and shouted noisily to the master. De Gracia left the master’s cabin after a few minutes
and was heard shouting very loudly somewhere down the corridors. The incident was evidenced by the Captain’s Report sent on said
date.
Furthermore, Skippers also claim that on January 22, 1999, Aprosta, De Gracia, Lata and Daza arrived in the master’s cabin and
demanded immediate repatriation because they were not satisfied with the ship. De Gracia, et al. threatened that they may become
crazy any moment and demanded for all outstanding payments due to them. The incident is evidenced by a telex of Cosmoship MV
Wisdom to skippers but had conflicting dates.
De Gracia claims that Skippers failed to remit their respective allotments, compelling them to vent their grievances with the Romanian
Seafarers Union. On January 28, 1999, the Filipino seafarers were unceremoniously discharged and immediately repatriated. Upon
arrival in the Philippines, they filed a complaint for illegal dismissal with the LA.
The LA dismissed the seafarers’ complaint as the seafarers’ demand for immediate repatriation due to the dissatisfaction with the ship
is considered a voluntary pre-termination of employment. Such act was deemed akin to resignation recognized under Article 285 of
the LC. The LA gave credence to the telex of the master’s report that the seafarers indeed demanded immediate repatriation.
The NLRC agreed with the LA’s decision.
The CA however reversed the LA’s and the NLRC’s decision. The Court deemed the telex message as a self-serving document that does
not satisfy the requirement of substantial evidence, or that amount of relevant evidence which a reasonable mind might accept as
adequate to justify the conclusion that petitioners indeed voluntarily demanded their immediate repatriation.
Aggrieved, Skippers appeals the case with the Supreme Court.
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Issue:
WON the seafarer’s demand for immediate repatriation can be considered an act of voluntary resignation.
Ruling:
For a worker's dismissal to be considered valid, it must comply with both procedural and substantive due process. The legality of the
manner of dismissal constitutes procedural due process, while the legality of the act of dismissal constitutes substantive due process.
Procedural due process in dismissal cases 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 notice apprises the employee
of the particular acts or omissions for which his dismissal is sought; and (2) the second notice informs the employee of the employer's
decision to dismiss him. Before the issuance of the second notice, the requirement of a hearing must be complied with by giving the
worker an opportunity to be heard. It is not necessary that an actual hearing be conducted.
Substantive due process, on the other hand, requires that dismissal by the employer be made under a just or authorized cause under
Articles 282 to 284 of the Labor Code.
In this case, there was no written notice furnished to De Gracia, et al., regarding the cause of their dismissal. Cosmoship furnished a
written notice (telex) to Skippers, the local manning agency, claiming that De Gracia, et al., were repatriated because the latter
voluntarily pre-terminated their contracts. This telex was given credibility and weight by the Labor Arbiter and NLRC in deciding that
there was pre-termination of the employment contract "akin to resignation" and no illegal dismissal. However, as correctly ruled by
the CA, the telex message is "a biased and self-serving document that does not satisfy the requirement of substantial evidence." If,
indeed, De Gracia, et al., voluntarily pre-terminated their contracts, then De Gracia, et al., should have submitted their written
resignations.
Article 285 of the Labor Code recognizes termination by the employee of the employment contract by "serving written notice on the
employer at least one (1) month in advance." Given that provision, the law contemplates the requirement of a written notice of
resignation. In the absence of a written resignation, it is safe to presume that the employer terminated the seafarers. In addition, the
telex message relied upon by the Labor Arbiter and NLRC bore conflicting dates of 22 January 1998 and 22 January 1999, giving doubt
to the veracity and authenticity of the document. In 22 January 1998, De Gracia, et al., were not even employed yet by the foreign
principal.
Auza, Jr. et al. vs. Mol Phils., Inc.

G.R. NO. 175481 NOVEMBER, 21, 2012
Facts:
Petitioners were employees of MOL Phils., a common carrier engaged in transporting cargoes to and from the different parts of the
world. Petitioners tendered their resignation, and they received their separation pay and monetary value of their leave credits, 13 th
month pay, and other benefits. After which, they executed a Release and Quitclaims and then issued a separation clearance. However,
15 months after the severance of their employment, petitioners filed a complaint for illegal dismissal. They alleged that their consent
to resign was not voluntarily given but was instead obtained through mistake and fraud. They claimed that they were led to believe
that MOL's Cebu branch would be downsized into a mere skeletal force due to alleged low productivity and profitability volume.
Pressured into resigning prior to the branch's closure as they might be denied separation pay, petitioners were constrained to resign.
Later, they discovered that the planned downsizing of the Cebu branch was a mere malicious scheme to oust them and to
accommodate Tiutan's own people. This is because after they were duped to resign, additional employees were hired by the
management as their replacement; they moved to a bigger office; and more telephone lines were installed.
Issue:
Ruling:
NO. "Resignation is the formal pronouncement or relinquishment of an office." The overt act of relinquishment should be coupled with
intent to relinquish, which intent could be inferred from the acts of the employee before and after the alleged resignation. It appears
that petitioners, on their own volition, decided to resign from their positions after being informed of the management's decision that
the Cebu branch would eventually be manned by a mere skeletal force. As proven by the email correspondences presented,
petitioners were fully aware and had, in fact, acknowledged that Cebu branch has been incurring losses and was already unprofitable
to operate. Note that there was evidence produced to prove that indeed the Cebu branch's productivity had deteriorated as shown in
a Profit and Loss Statement for the years 2001 and 2002. As aptly observed by the CA, no element of force can be deduced from their
letters of resignation as the same even contained expressions of gratitude and thus contradicting their allegations that same were
prepared by their employer. Petitioners aver that right after receiving their separation pay, they found out that the Cebu branch was
not closed but merely transferred to a bigger office and staffed by newly hired employees. Notably, however, despite such knowledge,
petitioners did not immediately contest their resignations but waited for more than a year or nearly 15 months before contesting
them. This negates their claim that they were victims of deceit.
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Gan vs. Galderma Philippines, Inc.

G.R. NO. 177167 JANUARY 17, 2013
Facts:
Galderma is engaged in the business of selling, marketing, and distribution of Cetaphil Brand Product Lines (CBPL) that include
Cetaphil liquid and bar cleansers, and pharmaceutical products, such as Locetar, Benzac and other prescription drugs. Nelson Gan was
hired by Galderma as Product Manager for its Customer Products Division to handle the marketing of CBPL. Gan received a Fully
Effective rating for his Overall performance for the first year. Galderma surpassed their forecasted sales to the extent that it almost
reached a 100 percent increase. The increase was due to the excellent performance of Gan specifically on its marketing skills. The
management gave Gan additional product management responsibilities in which it provided Gan with product knowledge training on
Benzac and Locetar brands in December 2001. However, on April 11, 2002, Gan tendered his resignation letter which was accepted by
the management. Three months after the severance of his employment, Gan filed a complaint for illegal constructive dismissal against
Galderma. He alleged that, he was unfairly and falsely accused of being remiss in his duties as Product Manager. That he was
lambasted by the General Manager Veneracion for his alleged negative work behavior and for his poor performance, and that he was
required to voluntarily resign by Veneracion, and that his incentive scheme was revised which lowered its benifits. On the other hand,
Galderma on its side alleged that Veneracion did not lambast him or insinuate that Gan should resign from Galderma. It was alleged
also that Gan had a change of attitude from the time the management decided to include the Benzac and Locetar brands under his
responsibility. Despite the fact that the company provided [Gan] with product knowledge training on the said brands, he initially
refused to accept the additional assignment. Labor arbiter and NLRC ruled in favor of Galderma.
Issue:
Ruling:
NO. To begin with, constructive dismissal is defined as quitting or cessation of work because continued employment is rendered
impossible, unreasonable or unlikely; when there is a demotion in rank or a diminution of pay and other benefits. It exists 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. There is involuntary resignation 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 employment/position under the circumstances. On the other hand, "[r]esignation is
the voluntary act of an employee who is in a situation where one believes that personal reasons cannot be sacrificed in favor of the
exigency of the service, and one has no other choice but to dissociate oneself from employment. It is a formal pronouncement or
relinquishment of an office, with the intention of relinquishing the office accompanied by the act of relinquishment. As the intent to
relinquish must concur with the overt act of relinquishment, the acts of the employee before and after the alleged resignation must be
considered in determining whether he or she, in fact, intended to sever his or her employment."
Since Gan submitted a resignation letter, it is incumbent upon him to prove with clear, positive, and convincing evidence that his
resignation was not voluntary but was actually a case of constructive dismissal; that it is a product of coercion or intimidation. He has
to prove his allegations with particularity. What the records of this case reveal is that Gan deliberately wrote and filed a resignation
letter that is couched in a clear, concise, and categorical language. Its content confirmed his unmistakable intent to resign. The
resignation letter indicates that he was resigning "to pursue the establishment of [his] own business or explore opportunities with other
companies." The reasons stated for relinquishing his position are but logical options for a person of his experience and standing. The
instances of "harassment" alleged by Gan are more apparent than real. Aside from the need to treat his accusations with caution for
being self-serving due to lack of substantial documentary or testimonial evidence to corroborate the same, the acts of "harassment," if
true, do not suffice to be considered as "peculiar circumstances" material to the execution of the subject resignation letter. First, the
words allegedly uttered by Veneracion which asked Gan to "reconsider his stay," "make [his] move," or that "[Galderma] will be better
off without him,"are ambivalent and susceptible of varying interpretations depending on one's feelings, bias, and emotional threshold.
All these are subjective and highly speculative or even presumptuous. Second, Gan repeatedly boasts of his "excellent performance" in
and "immense contribution" to Galderma's success. If that is the case, his proper mindset towards Veneracion's attacks on his
purported work ethics (such as "slow," "lacking in initiative," "uncooperative," "negative attitude," "remiss in duties as product
manager," "negative work behaviour," "poor performance," "incompetence," "distraction/liability in Galderma") should have been to
simply brush them aside and continue doing what he is supposed to do as the product manager of CBPL, Locetar and Benzac brands.
His oversensitivity, which is rather surprising for an experienced sales and marketing manager who should have been so used to
customer rejection or indifference and to superior's assertive or temperamental side due to constant pressure of keeping up and
beating market competition, would not help him make a case. Third, the revision of Gan's 2002 incentive scheme cannot be
considered as a form of harassment. The change is not a diminution of benefits, since Gan would have also received the same sum if he
achieved the desired targets for the Locetar and Benzac brands, the two new products which were added under his watch. Lastly, he
also appears to have a good professional track record that highlights his marketability. At the time he resigned, he had more than a
decade of experience in sales and marketing with expertise in product management. Indeed, it would be absurd to assume that he did
not understand the full import of the words he used in his resignation letter and the consequences of executing the same.
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Padillo vs. Rural bank of Nabunturan, Inc.

G.R. NO. 199338 JANUARY 21, 2013
Facts:
Padillo was employed by respondent bank as SA bookkeeper. The bank took out insurance plans with Philam life for all its employees
in anticipation of its possible closure and the concomitant severance of its personnel. On October 14, 2004, Mark Oropeza, President
of the Bank, bought majority shares of stocks of the bank and took over its management brought about its gradual rehabilitation. The
bank’s liquidity was eventually regained. During 2007, Padillo suffered a mild stroke due to hypertension which consequently
impaired his ability to effectively pursue his work. On September 10, 2007, he wrote a letter addressed to respondent Oropeza
expressing his intention to avail of an early retirement package. Despite several follow-ups, his request remained unheeded. Padillo
resigned, at the age of fifty-five due to his poor and failing health. He did not received his claimed retirement benefits, thus he filed a
complaint for the recovery of the unpaid retirement benefits. He asserted, among others, that the Bank had adopted a policy of
granting its aging employees early retirement packages, pointing out that one of his co-employees, Nenita Lusan (Lusan), was
accorded retirement benefits in the amount of P348,672.72 when she retired at
the age of only fifty-three (53).
Issue:
WON Padillo is entitled to retirement benefits.
Ruling:
NO. The Labor Code provision on termination on the ground of disease under Article 297 does not apply in this case, considering that
it was the petitioner and not the Bank who severed the employment relations. As borne from the records, the clear import of Padillo's
September 10, 2007 letter and the fact that he stopped working before the foregoing date and never reported for work even
thereafter show that it was Padillo who voluntarily retired and that he was not terminated by the Bank. Art. 300. Retirement. — Any
employee may be retired upon reaching the retirement age established in the collective bargaining agreement or other applicable
employment contract. 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. Simply stated, in the absence of any applicable agreement, an employee must (1) retire
when he is at least sixty (60) years of age and (2) serve at least (5) years in the company to entitle him/her to a retirement benefit of
at least one-half (1/2) month salary for every year of service, with a fraction of at least six (6) months being considered as one whole
year. Notably, these age and tenure requirements are cumulative and non-compliance with one negates the employee's entitlement to
the retirement benefits under Article 300 of the Labor Code altogether.
In this case, it is undisputed that there exists no retirement plan, collective bargaining agreement or any other equivalent contract
between the parties which set out the terms and condition for the retirement of employees, with the sole exception of the Philam Life
Plan which premiums had already been paid by the Bank. Neither was it proven that there exists an established company policy of
giving early retirement packages to the Bank's aging employees. In the case of Metropolitan Bank and Trust Company v. National Labor
Relations Commission, it has been pronounced that to be considered a company practice, the giving of the benefits should have been
done over a long period of time, and must be shown to have been consistent and deliberate. Unfortunately, while Padillo was able to
comply with the five (5) year tenure requirement — as he served for twenty-nine (29) years — he, however, fell short with respect to
the sixty (60) year age requirement given that he was only fifty-five (55) years old when he retired. Therefore, without prejudice to
the proceeds due under the Philam Life Plan, petitioners' claim for retirement benefits must be denied.
Intel Technology Phils Inc. vs. NLRC et al

G.R. NO. 200575. FEBRUARY 5, 2014
Facts:
Private respondent Jeremias Cabiles (Cabiles) was hired by petitioner Intel Technology Philippines, Inc. (Intel Phil) in April 16, 1997.
Throgh the years, Cabiles was promoted several times and was also assigned to Intel Arizona and Intel Chengdu. He later applied for a
position in Intel Hong Kong (Intel HK). In December of 2006, Cabiles received an offer by Intel HK for the position of Finance Manager.
Before accepting such offer, Cabiles inquired with Intel Phil through an email as to the consequences of him accepting the offer,
specifically on his retirement benefits from Intel Phil. Intel Phil, through Penny Gabronino, replied to Cabiles that he is not yet eligible
for the retirement plan as he has not reached the minimum 10 years of service with them (just over 9 years of service) and such
counting of the period will be suspended if he does indeed transfer to Intel HK but will be continued if he decides to work for Intel Phil
again in the future. Despite such, Cabiles signed the job offer on January 31, 2007.
On March 8, 2007, Intel Phil issued his “Intel Final Pay Separation Voucher” to which he accepted and executed a Waiver and
Quitclaim in favor of Intel Phil. On September8, 2007, after 7 months of employment in Intel HK, he resigned. About 2 years after, or
on August 18, 2009, he filed a Complaint for non-payment of retirement benefits against Intel Phil before the NLRC RAB-IV.
The LA ordered Intel Phil to pay the retirement pay to Cabiles holding that he did not sever his employment with Intel Phil when he
moved to Intel HK, similar to when he was assigned at Intel Arizona and Intel Chengdu. The NLRC affirmed the LA decision. The CA
affirmed the findings of the NLRC.
Issue:
Whether or not the transfer of Cabiles to Intel HK was tantamount to resignation from Intel Phil.
Ruling:
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The petition is granted and the decision of the CA is reversed and set aside and Cabiles is ordered to restitute to petitioner whatever
amount he has received.
Resignation is the formal relinquishment of an office, the overt act of which is coupled with an intent to renounce. This intent could
be inferred from the acts of the employee before and after the alleged resignation.
In this case, Cabiles, while still on a temporary assignment in Intel Chengdu, was offered by Intel HK the job of a Finance Manager. The
words he used in his inquiry email — local hire, close, clearance — denote nothing but his firm resolve to voluntarily disassociate
himself from Intel Phil. and take on new responsibilities with Intel HK. Despite a non-favorable reply as to his retirement concerns,
Cabiles still accepted the offer of Intel HK. His acceptance of the offer meant letting go of the retirement benefits he now claims as he
was informed through email correspondence that his 9.5 years of service with Intel Phil. would not be rounded off in his favor.
The continuity, existence or termination of an employer-employee relationship in a typical secondment contract or any employment
contract for that matter is measured by the following yardsticks: 1. the selection and engagement of the employee; 2. the payment of
wages; 3. the power of dismissal; and 4. the employer's power to control the employee's conduct.
As applied, all of the above benchmarks ceased upon Cabiles' assumption of duties with Intel HK on February 1, 2007. Intel HK
became the new employer. It provided Cabiles his compensation. Cabiles then became subject to Hong Kong labor laws, and
necessarily, the rights appurtenant thereto, including the right of Intel HK to fire him on available grounds. Lastly, Intel HK had control
and supervision over him as its new Finance Manager. Evidently, Intel Phil. no longer had any control over him.
Although in various instances, his move to Hong Kong was referred to as an "assignment," it bears stressing that it was categorized as
a "permanent transfer." In Sta. Maria v. Lopez, the Court held that "no permanent transfer can take place unless the officer or
employee is first removed from the position held, and then appointed to another position." Undoubtedly, Cabiles' decision to move
to Hong Kong required the abandonment of his permanent position with Intel Phil. in order for him to assume a position in an entirely
different company. Clearly, the "transfer" was more than just an assignment. It constituted a severance of Cabiles' relationship
with Intel Phil., for the assumption of a position with a different employer, rank, compensation and benefits.
Sutherland & Global Services Phils Inc., vs. Labrador

G.R. NO. 193107. MARCH 24, 2014
Facts:
In August 2006, Sutherland hired Labrador as one of its call center agents with the main responsibility of answering carious queries
and complaints through phoned-in calls. In his two years of working at Sutherland, Labrador committed several infractions. But it was
only on June 17, 2008 that Labrador was finally charged with violation for transgressing the "Non-Compliance Sale Attribute" policy
clause stated in the Employee Handbook. Labrador created a second account for a customer which charged the same customer twice
by using the credit card number given supposedly only for verification purposes.
Under Sutherland's Employee Handbook, Labrador's action is classified as an act of dishonesty or fraud. On May 24, 2008, Sutherland
sent Labrador a Notice to Explain in writing why he should not be held administratively liable. On May 28, 2008, an administrative
hearing was conducted that took into consideration Labrador's past infractions. After investigation, a recommendation was issued
finding Labrador guilty of violating the Employee Handbook due to gross or habitual neglect of duty.
On June 17, 2008, Labrador submitted his resignation letter. On October 27, 2008, Labrador filed a complaint for constructive/illegal
dismissal before the NLRC.
On February 27, 2009, the LA dismissed the complaint for lack of merit. The LA found just cause to terminate Labrador's employment,
and that his resignation letter had been voluntarily executed. The NLRC reversed the LA's ruling on May 21, 2009.
The CA affirmed the NLRC’s finding of illegal dismissal. It ruled that Sutherland's decision to terminate Labrador's services was the
proximate cause of his resignation; the resignation letter was submitted solely for the purpose of avoiding any derogatory record that
would adversely affect his future employment. In effect, he cannot be deemed to have voluntarily resigned because he was forced to
relinquish his position in order to avoid the inevitable termination of employment.
Issue:
Whether or not Labrador’s resignation was a valid termination of his employment.
Ruling:
The appeal is granted and the decision of the CA is reversed and set aside and the complaint for illegal dismissal is dismissed.
In the evidence leading to Labrador's dismissal — evidence that Labrador had acknowledged to have received, thus binding him to its
terms — no dispute exists that Labrador committed several infractions. In fact, the final infraction that brought on his termination
was actually a repetition of the first offense.
The first offense (committed on September 24, 2007) already gave rise to a "Last Written Warning" with the statement that it was a
serious offense, constituting neglect of duty for deviating from the program/department's standard operating procedures. Under this
clear warning, a second similar offense would necessarily lead to his dismissal; otherwise the purpose of a "Last Written
Warning" would have been negated.
The failure to faithfully comply with the company rules and regulations is considered to be a just cause in terminating one's
employment, depending on the nature, severity and circumstances of non-compliance. "An employer 'has the right to regulate,
according to its discretion and best judgment, all aspects of employment, including work assignment, working methods, processes to
be followed, working regulations, transfer of employees, work supervision, lay-off of workers and the discipline, dismissal and recall
of workers.'"
It was within Sutherland's prerogative to terminate Labrador's employment when he committed a serious infraction and, despite a
previous warning, repeated it. To Sutherland's credit, it duly complied with the procedural requirement in dismissing an employee; it
clearly observed both substantive and procedural due process. Its action was based on a just and authorized cause, and the dismissal
was effected after due notice and hearing. But before Sutherland could finally pronounce its verdict, Labrador submitted his
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resignation letter, impelled no doubt, as Sutherland alleged, by the need to protect his reputation and his future
employment chances.
The issue of whether the resignation letter was voluntarily executed is now moot. Even if Labrador had not submitted his
resignation letter, Sutherland could still not be held liable for constructive dismissal given the existing just cause to
terminate Labrador's employment.
Chiang Kai Shek College et al., vs. Torres

G.R. NO. 189456. APRIL 2, 2014
Facts:
Respondent had been employed as a grade school teacher of the school from July 1970 until 31 May 2003. She was accused of leaking
a copy of a special quiz given to Grade 5 students in HEKASI (Heograpiya, Kasaysayan at Sibika (Geography, History and Civics)). Ms.
Benabese narrated that after giving a special quiz, she borrowed the book of one of her students, Aileen Regine M. Anduyan (Aileen),
for the purpose of making an answer key. When she opened Aileen's book, a piece of paper fell. Said paper turned out to be a copy of
the same quiz she had just given and the same already contained answers.
Ms. Benabese informed the school's Assistant Supervisor Mrs. Gloria Caneda (Mrs. Caneda) about the incident. Mrs. Caneda conferred
with Assistant Supervisor Encarnacion Koo (Mrs. Koo), who was in charge of the HEKASI area, and Supervisor Luningning Tibi (Ms.
Tibi). Mrs. Koo confronted respondent, who had initially denied leaking the test paper but later on admitted that she gave the test
paper to Mrs. Teresita Anduyan (Mrs. Anduyan), her co-teacher and the mother of Aileen. Respondent and Mrs. Anduyan were both
directed to submit their written statement on the incident.
On 5 August 2002, Mrs. Koo, Mrs. Caneda and Ms. Tibi executed a written statement stating that when confronted by Mrs. Koo,
respondent initially denied leaking a copy of the quiz but later on admitted to doing the same. An administrative hearing was
conducted on 28 August 2002 wherein respondent and Mrs. Anduyan were asked questions by the Investigating Committee relative
to the leakage of test paper. On 30 August 2002, the Investigating Committee held a meeting and found respondent and Mrs. Anduyan
guilty of committing a grave offense of the school policies by leaking a special quiz. As shown in the Minutes of the Meeting on 30
August 2002, the Committee decided to impose the penalty of one-month suspension without pay on respondent and forfeiture of all
the benefits scheduled to be given on Teacher's Day.
The Investigating Committee had actually decided to terminate respondent and had in fact prepared a memorandum of termination,
but respondent allegedly pleaded for a change of punishment in a short letter dated 5 September 2002, to wit: “Request for
change of punishment from termination to suspension and I am resigning at the end of the school year. - Mrs. Rosalinda M. Torres”
Petitioners acceded to the request and suspended respondent and Mrs. Anduyan effective 16 September to October 2002. The duo
was directed to report to work on 4 November 2002. Respondent continued her employment from 4 November 2002 until the
end of the school year on 26 March 2003.
However, respondent filed on February 14, 2003 a complaint with the tenor of accusing petitioner school of constructive dismissal
alleging that she was forced and pressured to submit the written request for a change of penalty and commitment to resign at the end
of the school year.
The LA dismissed the complaint for lack of merit. The LA deemed respondent's suspension coupled with petitioner's allowance of
respondent's resignation at the end of the school year as generous acts considering the offense committed. The LA held that there was
no constructive dismissal because respondent was not coerced nor pressured to write her resignation letter. The NLRC affirmed the
LA's findings but ordering petitioners to pay respondent separation pay equivalent to one-half (1/2) month salary for every year of
service on the grounds of equity and social justice.
The CA reversed the NLRC decision and held that respondent was constructively dismissed as there was no voluntary resignation.
Issue:
Whether or not the school's act of imposing the penalty of suspension instead of immediate dismissal from service at the request of
the erring employee, in exchange for the employee's resignation at the end of the school year, constitutes constructive dismissal.
Ruling:
Petition is granted and the decision of the CA is reversed and set aside and the NLRC decision reinstated.
Resignation is the voluntary act of an employee who is in a situation where one believes that personal reasons cannot be sacrificed for
the favor of employment, and opts to leave rather than stay employed. It is a formal pronouncement or relinquishment of an office,
with the intention of relinquishing the office accompanied by the act of relinquishment. As the intent to relinquish must concur
with the overt act of relinquishment, the acts of the employee before and after the alleged resignation must be considered in
determining whether, he or she, in fact, intended to sever his or her employment.
Respondent had admitted to leaking a copy of the HEKASI 5 special quiz. On 30 August 2002, the Investigating Committee found
respondent guilty of leaking a copy of the special quiz. Based on this infraction alone, Chiang Kai Shek College would have been
justified to validly terminate respondent from service. Before the Investigating Committee could formalize respondent's
dismissal, respondent handwrote a letter requesting that the penalty be lowered from dismissal to suspension in exchange
for respondent's resignation at the end of the school year.
There is nothing irregular with respondent's handwritten letter. The letter came about because respondent was faced with an
imminent dismissal and opted for an honorable severance from employment. That respondent voluntarily resigned is a logical
conclusion.
Given the indications of voluntary resignation, therefore there is no constructive dismissal in this case. There was here no
discrimination committed by petitioners. While respondent did not tender her resignation wholeheartedly, circumstances of
her own making did not give her any other option. With due process, she was found to have committed the grave offense of
leaking test questions. Dismissal from employment was the justified equivalent penalty. Having realized that, she asked for, and was
granted, not just a deferred imposition of, but also an acceptable cover for the penalty.
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Respondent should not be rewarded for reneging on her promise to resign at the end of the school year. Otherwise, employers placed
in similar situations would no longer extend compassion to employees. Compromise agreements, like that in the instant case, which
lean towards desired liberality that favor labor, would be discouraged.
IX. PRESCRIPTION OF CLAIMS
Ludo & Luym vs. Saornido

G.R. No. 140960; January 20, 2003
Facts:
Petitioner LUDO & LUYM CORPORATION (LUDO for brevity) is a domestic corporation engaged in the manufacture of coconut oil,
corn starch, glucose and related products. It operates a manufacturing plant located at Tupas Street, Cebu City and a wharf where raw
materials and finished products are shipped out.
In the course of its business operations, LUDO engaged the arrastre services of Cresencio Lu Arrastre Services (CLAS) for the loading
and unloading of its finished products at the wharf. Accordingly, several arrastre workers were deployed by CLAS to perform the
services needed by LUDO.
These arrastre workers were subsequently hired, on different dates, as regular rank-and-file employees of LUDO every time the latter
needed additional manpower services. Said employees thereafter joined respondent union, the LUDO Employees Union (LEU), which
acted as the exclusive bargaining agent of the rank-and-file employees.
Respondent union entered into a collective bargaining agreement with LUDO which provides certain benefits to the employees, the
amount of which vary according to the length of service rendered by the availing employee.
Thereafter, the union requested LUDO to include in its members’ period of service the time during which they rendered arrastre
services to LUDO through the CLAS so that they could get higher benefits. LUDO failed to act on the request. Thus, the matter was
submitted for voluntary arbitration.
The parties accordingly executed a submission agreement raising the sole issue of the date of regularization of the workers for
resolution by the Voluntary Arbitrator.
Voluntary Arbitrator ruled that: (1) the respondent employees were engaged in activities necessary and desirable to the business of
petitioner, and (2) CLAS is a labor-only contractor of petitioner.
Court of Appeals affirmed in toto the decision of the Voluntary Arbitrator.
Issue: Whether or not petitioners are considered regular employees from the moment they started working for private respondents
thru CLAS.
Held:
Supreme Court upheld the decision of the voluntary arbitrator affirmed by the Court of Appeals that the 214 complainants shall be
considered regular employees of the respondents six (6) months from the first day of service at CLAS. Consequently, the said
complainants, being entitled to the CBA benefits during the regular employment, are awarded sick leave, vacation leave & annual
wage and salary increases during such period in the amount of FIVE MILLION SEVEN HUNDRED SEVEN THOUSAND TWO HUNDRED
SIXTY ONE PESOS AND SIXTY ONE CENTAVOS (P5,707,261.61).
The issue of regularization should be viewed as two-tiered issue. While the submission agreement mentioned only the determination
of the date or regularization, law and jurisprudence give the voluntary arbitrator enough leeway of authority as well as adequate
prerogative to accomplish the reason for which the law on voluntary arbitration was created – speedy labor justice. It bears stressing
that the underlying reason why this case arose is to settle, once and for all, the ultimate question of whether respondent employees
are entitled to higher benefits. To require them to file another action for payment of such benefits would certainly undermine labor
proceedings and contravene the constitutional mandate providing full protection to labor.
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Degamo vs. Avant Lard Shipping Lines

G.R. No. 154460; November 22, 2005
Facts:
Avantgarde, acting in behalf of its foreign principal, Sembawang Johnson Management, Pte., Ltd. (Sembawang), hired Lauro C. Degamo
as Oiler of the vessel for a period of ten months. While working in the vessel's engine room, a spanner dropped and hit petitioner on
his right thigh. He was hospitalized and was repatriated to the Philippines on March 4, 1995.
Upon his arrival, petitioner reported to respondent Avantgarde's office, but there was no one to assist him, so he went to Cebu for
operation. Avantgarde paid all his hospital bills and promised to work out his sickness benefit with Sembawang as soon as he was
declared fit to work. Petitioner was treated until early 1997. Thereafter, petitioner was declared fit to work.
On December 24, 1997, Demago asked Avantgarde to pay his sickness benefits. On January 6, 1998, Avantgarde replied that it could
no longer act on petitioner's claim as he had deviated from the legal procedure. Petitioner wrote a letter to Sembawang regarding his
claim but the latter did not reply.
Petitioner filed a complaint for payment of disability benefits and other money claims against the respondents with the RAB. The
labor arbiter dismissed the case without prejudice, stating that the action had already prescribed. On appeal, the NLRC likewise ruled
that petitioner's cause of action had prescribed as a mere letter of demand would not toll the prescriptive period for filing the
complaint. Hence this petition.
Issue:Whether petitioner's cause of action had already prescribed.
Held:
YES. Petitioner’s cause of action has already prescribed.
Petitioner, citing Article 1155 of the New Civil Code, contends that his cause of action had not prescribed as the running of the
prescriptive period was tolled by his extrajudicial demand for unpaid sickness benefits on Dec. 24, 1997.
Respondents counter that the Civil Code provision on extinctive prescription applies only to obligations that are intrinsically civil in
nature and is inapplicable to labor cases. Respondents assert that that petitioner's demand was made more than one year from his
date of arrival in the Philippines, contrary to what is prescribed in Sec. 28 of the POEA Memorandum Circular No. 55, Series of 1996.
They add that the institution of the action was beyond the three-year period prescribed in Article 291 of the Labor Code as his
employment with the respondents' ended on March 4, 1995 but the complaint was filed only on March 2, 2001.
POEA Circular No. 55, Series of 1996 became effective only on January 1, 1997 while the employment contract between the parties
was entered earlier on November 8, 1994. The earlier standard employment contract issued by the POEA did not have a provision on
prescription of claims. Hence, the applicable provision in this case is Article 291 of the Labor Code.
In Cadalin v. POEA's Administrator, we held that Article 291 covers all money claims from employer-employee relationship and is
broader in scope than claims arising from a specific law. It is not limited to money claims recoverable under the Labor Code, but
applies also to claims of overseas contract workers.
Article 291 provides that all money claims arising from employer-employee relations shall be filed within three years from the time
the cause of action accrued, otherwise, these shall be forever barred. A cause of action accrues upon the categorical denial of claim.
Petitioner's cause of action accrued only on January 6, 1998, when Avantgarde denied his claim and so breached its obligation to
petitioner. Petitioner could not have a cause of action prior to this because his earlier requests were warded off by indefinite
promises. The complaint filed on March 2, 2001 is beyond the three-year period mandated by the Labor Code.
Intercontinental Broadcasting Corp., vs. Panganiban

G.R. No. 151407; February 6, 2007
Facts:
Ireneo Panganiban was employed as Assistant General Manager of the petitioner Intercontinental Broadcasting Corporation from May
1986 until his preventive suspension on August 26, 1988. Respondent resigned from his employment on September 2, 1988. On April
12, 1989, respondent filed with the trial court a case against the members of the Board of Administrators (BOA) of petitioner alleging,
among others, non-payment of his unpaid commissions.
A motion to dismiss was filed by Joselito Santiago, one of the defendants, on the ground of lack of jurisdiction, as respondent's claim
was a labor money claim, but this was denied by the RTC.
Thus, Santiago filed a petition for certiorari with the CA, which granted Santiago's petition for lack of jurisdiction and set aside the
RTC's Orders. Thereafter, respondent was elected by the BOA as Vice-President for Marketing in July 1992. He resigned in April 1993.
On July 24, 1996, respondent filed against petitioner a complaint for illegal dismissal, separation pay, retirement benefits, unpaid
commissions, and damages.
Issue: Whether or not respondent's claim for unpaid commissions has already prescribed.
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Held:
Yes.
The applicable law in this case is Article 291 of the Labor Code which provides that "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 be forever barred." The term "money claims" covers all money claims arising from an employer-employee
relation.
Like other causes of action, the prescriptive period for money claims is subject to interruption, and in the absence of an equivalent
Labor Code provision for determining whether the said period may be interrupted, Article 1155 of the Civil Code may be applied.
Thus, the prescription of an action is interrupted by (a) the filing of an action, (b) a written extrajudicial demand by the creditor, and
(c) a written acknowledgment of the debt by the debtor. On this point, the Court ruled that although the commencement of a civil
action stops the running of the statute of prescription or limitations, its dismissal or voluntary abandonment by plaintiff
leaves the parties in exactly the same position as though no action had been commenced at all.
Hence, while the filing of the civil could have interrupted the running of the three-year prescriptive period, its consequent dismissal
by the CA due to lack of jurisdiction effectively canceled the tolling of the prescriptive period within which to file his money claim,
leaving respondent in exactly the same position as though no civil case had been filed at all. The running of the three-year prescriptive
period not having been interrupted by the filing of the civil case, respondent's cause of action had already prescribed on September 2,
1991, three years after his cessation of employment on September 2, 1988. Consequently, when respondent filed his complaint for
illegal dismissal, separation pay, retirement benefits, and damages in July 24, 1996, his claim, clearly, had already been barred by
prescription.
Far East Agricultural Supply, Inc. vs. Lebatique

G.R. No. 162813; February 12, 2007
Facts:
Petitioner Far East Agricultural Supply, Inc. (Far East) hired private respondent Jimmy Lebatique as truck driver with a daily wage of
P223.50. He delivered animal feeds to the company’s clients.
Lebatique complained of nonpayment of overtime work particularly on January 22, 2000, when he was required to make a second
delivery in Novaliches, Quezon City. That same day, Manuel Uy, brother of Far East’s General Manager and petitioner Alexander Uy,
suspended Lebatique apparently for illegal use of company vehicle. Even so, Lebatique reported for work the next day but he was
prohibited from entering the company premises.
Lebatique sought the assistance of the Department of Labor and Employment (DOLE) Public Assistance and Complaints Unit
concerning the nonpayment of his overtime pay. According to Lebatique, two days later, he received a telegram from petitioners
requiring him to report for work. When he did the next day, January 29, 2000, Alexander asked him why he was claiming overtime
pay. Lebatique explained that he had never been paid for overtime work since he started working for the company. He also told
Alexander that Manuel had fired him. After talking to Manuel, Alexander terminated Lebatique and told him to look for another job.
On March 20, 2000, Lebatique filed a complaint for illegal dismissal and nonpayment of overtime pay. The Labor Arbiter found that
Lebatique was illegally dismissed, and ordered his reinstatement and the payment of his full back wages, 13 th month pay, service
incentive leave pay, and overtime pay.
Petitioners contend that, (1) Lebatique was not dismissed from service but merely suspended for a day due to violation of company
rules; (2) Lebatique was not barred from entering the company premises since he never reported back to work; and (3) Lebatique is
estopped from claiming that he was illegally dismissed since his complaint before the DOLE was only on the nonpayment of his
overtime pay.
Also, petitioners maintain that Lebatique, as a driver, is not entitled to overtime pay since he is a field personnel whose time outside
the company premises cannot be determined with reasonable certainty. According to petitioners, the drivers do not observe regular
working hours unlike the other office employees. The drivers may report early in the morning to make their deliveries or in the
afternoon, depending on the production of animal feeds and the traffic conditions. Petitioners also aver that Lebatique worked for
less than eight hours a day.
Issue: Whether or not Respondent is Illegally Dismiss and/or was not paid an Overtime pay.
Held:
Even petitioners admit that the drivers can report early in the morning, to make their deliveries, or in the afternoon, depending on the
production of animal feeds. Drivers, like Lebatique, are under the control and supervision of management officers. Lebatique,
therefore, is a regular employee whose tasks are usually necessary and desirable to the usual trade and business of the company.
Thus, he is entitled to the benefits accorded to regular employees of Far East, including overtime pay and service incentive leave pay.
The Decision dated September 30, 2003 of the Court of Appeals in CA-G.R. SP No. 76196 and its Resolution dated March 15, 2004 are
AFFIRMED with MODIFICATION to the effect that the case is hereby REMANDED to the Labor Arbiter for further proceedings to
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determine the exact amount of overtime pay and other monetary benefits due Jimmy Lebatique which herein petitioners should pay
without further delay.
Victory Liner vs. Race; G.R. No. 164820

March 28, 2007
Facts:
Race was employed by Victory Liner, Inc. as a bus driver. On August 24, 1994, while he was driving his route, he met an accident. As a
result, he suffered a fractured leg and was rushed to the hospital. His confinement lasted for a month. On January 1998, Race reported
for work but he was informed that he was considered resigned from his job. He then filed a complaint for illegal dismissal. Victory
Liner contend that respondent’s action had already prescribed because when he instituted the complaint on September 1, 1999, more
than five years had already lapsed from the accrual his cause of action on August 24, 1994.
Issue: Whether or not the respondent’s cause of action had already prescribed.
Held:
Respondent’s cause of action had not yet prescribed.
In illegal dismissal cases, the employee concerned is given a period of four years from the time of his dismissal within which to
institute a complaint. This is based on Article 1146 of the New Civil Code which states that actions based upon an injury to the
rights of the plaintiff must be brought within four years.
The four-year prescriptive period shall commence to run only upon the accrual of a cause of action of the worker. It is settled that in
illegal dismissal cases, the cause of action accrues from the time the employment of the worker was unjustly terminated. Thus,
the four-year prescriptive period shall be counted and computed from the date of the employee’s dismissal up to the date of the filing
of complaint for unlawful termination of employment.
Proceeding therefrom, we shall now discuss and determine when the respondent’s cause of action accrued in order to ascertain
whether the same had already prescribed.
It is error to conclude that the employment of the respondent was unjustly terminated on 10 November 1994 because he was, at that
time, still confined at the Specialist Group Hospital, Dagupan City, for further treatment of his fractured left leg. He must be
considered as merely on sick leave at such time. Likewise, the respondent cannot also be deemed as illegally dismissed from work
upon his release from the said hospital in December 1994 up to December 1997 since the records show that the respondent still
reported for work to the petitioner and was granted sick and disability leave by the petitioner during the same period.
The respondent must be considered as unjustly terminated from work in January 1998 since this was the first time he was informed
by the petitioner that he was deemed resigned from his work. During that same occasion, the petitioner, in fact, tried to convince the
respondent to accept an amount of P50,000.00 as a consolation for his dismissal but the latter rejected it. Thus, it was only at this
time that the respondent’s cause of action accrued. Consequently, the respondent’s filing of complaint for illegal dismissal on 1
September 1999 was well within the four-year prescriptive period.
It is also significant to note that from 10 November 1994 up to December 1997, the petitioner never formally informed the
respondent of the fact of his dismissal either through a written notice or hearing. Indeed, it cannot be gainfully said that respondent
was unlawfully dismissed on 10 November 1994 and that the cause of action accrued on that date.
J.K. Mercado & Sons Agricultural Enterprises vs. Hon. Sto. Tomas
G.R. No. 158084; August 29, 2008
Facts:
On December 3, 1993, the Regional Tripartite Wages and Productivity Board, Region XI, issued a wage order, granting a Cost of Living
Allowance (COLA) to covered workers. Notwithstanding the said order, private respondents were not given the benefits due them
under the wage order. On July 10, 1998, private respondents filed a motion for writ of execution and writ of garnishment.
On October 7, 1998, the OIC-Regional Director, Region XI, issued a writ of execution for the enforcement of the Order dated April 11,
1994 of the Regional Tripartite Wages and Productivity Board. On November 17, 1998 and November 23, 1998, respectively,
petitioner filed a motion to quash the writ of execution and a supplemental motion to the motion to quash. Petitioner argued that
herein private respondents' right had already prescribed due to their failure to move for the execution of the April 11, 1994 Order
within the period provided under Article 291 of the Labor Code, as amended, or within three (3) years from the finality of the said
order.
Ruling that the benefits which remained unpaid have not prescribed and that the private respondents need not file a claim to be
entitled thereto, the Regional Director denied the motion to quash in an Order dated January 7, 1999.
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Petitioner argued that the Regional Director abused his discretion in issuing the writ of execution in the absence of any motion filed
by private respondents. Petitioner claimed that since more than three (3) years have already elapsed from the time of the finality of
the order dated April 11, 1994, the right of private respondents to claim the benefits under the same had already prescribed.
Issue: Whether a money claim must be filed first by private respondents against petitioner for the latter's refusal to pay the COLA
granted under the wage order.
Held:
It must be emphasized that the order dated April 11, 1994 had long become final and executory. Petitioner did not appeal the said
order. Having failed to avail of the remedy of appeal of the said order, petitioner cannot belatedly avoid its duty to comply with the
said order by insisting that a money claim must first be filed by herein private respondents. A contrary ruling would result to
absurdity and would even unjustly benefit petitioner who for quite some time had exerted every effort to avoid the obligation of
giving the wage differential or COLA granted under the wage order.
Art. 291 of the Labor Code applies to money claims in general and provides for a 3-year prescriptive period to file them.
On the other hand, respondent employees' money claims in this case had been reduced to a judgment, in the form of a Wage Order,
which has become final and executory. The prescription applicable, therefore, is not the general one that applies to money claims, but
the specific one applying to judgments. Thus, the right to enforce the judgment, having been exercised within five years, has not yet
prescribed.
Stated otherwise, a claimant has three years to press a money claim. Once judgment is rendered in her favor, she has five years to ask
for execution of the judgment, counted from its finality. This is consistent with the rule on statutory construction that a general
provision should yield to a specific one and with the mandate of social justice that doubts should be resolved in favor of labor.
Reyes vs. NLRC, CCBPI

G.R. No. 180551; February 10, 2009
Facts:
The present Petition arose from a Complaint for illegal dismissal with claims for moral and exemplary damages and attorney’s fees
filed by petitioner against respondents Coca Cola Bottlers Philippines (CCBP) and Rotaida Taguibao (Taguibao) before the Labor
Arbiter on 14 June 2004. Respondent CCBP is a corporation engaged in the business of production and distribution of carbonated
drinks, and Taguibao is its Human Resource Manager.
In his Complaint, petitioner alleged that he was first employed by respondent CCBP, through Interserve Manpower Agency
(Interserve), as a Leadman in February 1988. Petitioner was initially assigned to the Mendiola Sales Office of respondent CCBP.
Petitioner’s employment contract was renewed every five months and he was assigned a different task every time. Such an
arrangement continued until petitioner was directly hired by respondent CCBP as a Route Salesman on 15 September 2000. Exactly
one year from the time of petitioner’s employment as a Route Salesman, respondent CCBP, thru Taguibao, terminated his services on
15 September 2001. Since he already acquired the status of a regular employee, petitioner asserted that his dismissal from
employment without the benefit of due process was unlawful.
Issue:
Whether or not respondent’s claim for backwages has already prescribed.
Held:
The Court was more emphatic in Philippine Industrial Security Agency Corporation v. Dapiton, when it ruled that backwages had to be
paid by the employer as part of the price or penalty he had to pay for illegally dismissing his employee . It was to be computed from
the time of the employee’s illegal dismissal (or from the time his compensation was withheld from him) up to the time of his
reinstatement.
One of the natural consequences of a finding that an employee has been illegally dismissed is the payment of backwages
corresponding to the period from his dismissal up to actual reinstatement. The statutory intent of this matter is clearly discernible.
The payment of backwages allows the employee to recover from the employer that which he has lost by way of wages as a result of his
dismissal. Logically, it must be computed from the date of petitioner’s illegal dismissal up to the time of actual reinstatement. There
can be no gap or interruption, lest we defeat the very reason of the law in granting the same. That petitioner did not immediately file
his Complaint should not affect or diminish his right to backwages, for it is a right clearly granted to him by law -- should he be found
to have been illegally dismissed -- and for as long as his cause of action has not been barred by prescription.
The law fixes the period of time within which petitioner could seek remedy for his illegal dismissal and for as long as he filed his
Complaint within the prescriptive period, he shall be entitled to the full protection of his right to backwages. In illegal dismissal cases,
the employee concerned is given a period of four years from the time of his illegal dismissal within which to institute the complaint.
This is based on Article 1146 of the New Civil Code which states that actions based upon an injury to the rights of the plaintiff must be
brought within four years. The four-year prescriptive period shall commence to run only upon the accrual of a cause of action of the
worker. Here, petitioner was dismissed from service on 15 September 2001. He filed his complaint for illegal dismissal on 14 June
2004.
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Clearly, then, the instant case was filed within the prescriptive period.
LWV Construction Corp. vs. Dupo

G.R. No. 172342; July 13, 2009
Facts:
Petitioner, a domestic corporation which recruits Filipino workers, hired respondent Marcelo Dupo as Civil Structural Superintendent
to work in Saudi Arabia for its principal, Mohammad Al-Mojil Group/Establishment (MMG). On February 26, 1992, respondent signed
his first overseas employment contract, renewable after one year. It was renewed five times on the following dates: May 10, 1993,
November 16, 1994, January 22, 1996, April 14, 1997, and March 26, 1998. All were fixed-period contracts for one year. The sixth
and last contract stated that respondent’s employment starts upon reporting to work and ends when he leaves the work site.
Respondent left Saudi Arabia on April 30, 1999 and arrived in the Philippines on May 1, 1999. Respondent then has signed 6 overseas
contracts and worked for seven years in Saudi Arabia.
On July 6, 1999, respondent through a letter resigned from his work and asked MMG to give him his ‘long service award’ in
accordance with the Article 87 of Saudi Law which states that;
Article 87.
Where the term of a labor contract concluded for a specified period comes to an end or where the employer cancels a
contract of unspecified period, the employer shall pay to the workman an award for the period of his service to be computed
on the basis of half a month’s pay for each of the first five years and one month’s pay for each of the subsequent years. The
last rate of pay shall be taken as basis for the computation of the award. For fractions of a year, the workman shall be
entitled to an award which is proportionate to his service period during that year. Furthermore, the workman shall be
entitled to the service award provided for at the beginning of this article in the following cases:
A. If he is called to military service.
B. If a workman resigns because of marriage or childbirth.
C. If the workman is leaving the work as a result of a force majeure beyond his control. (Emphasis supplied.)
However, MMG did not reply to the letter of the respondent Dupo which led to the filing of the case before the labor arbiter for the
payment of the long service award in the amount of US$12,640.33.
On the other hand, petitioner presented two defenses namely payment and prescription. Firstly, petitioner said the long service
award has already been paid every time each of the contracts of employment of the respondent comes to an end, since, the contract is
for a fixed period of time. In effect, the severance pay received by the respondent every time each of the 6 contracts of employment
comes to an end, is also the longevity service award. Petitioner claimed that long service award is the same with severance pay.
Secondly, petitioner insists that prescription barred respondent’s claim for long service award because under Article 13 of the Saudi
Labor Law it provides that no case or claim relating to any of the rights provided for under said law shall be heard after the lapse of 12
months from the date of the termination of the contract. Respondent’s sixth contract ended on April 30, 1999 the date he left his work
which was also in effect the date of the termination of his contract, and he filed the case on December 11, 2000 which is 1 year and
seven months from the date of the termination of his contract.
Issue:
(1) Whether or not CA erred in ruling that respondent is entitled to long service pay which is different from severance pay.
(2) Whether or not the cause of action has prescribed.
Held:
SC said that CA has committed an error in ruling that the long service pay is different from severance pay. According to SC the
severance pay received by the respondent at the end of each of the six contracts of employment is equivalent to the long service pay.
This is the reason why the formula in computing the severance pay is the same with the computation of the long service award.
Moreover, SC said that respondent’s employment contracts expressly stated that his employment ended upon his departure from
work. Each year he departed from work and successively new contracts were executed before he reported for work anew. His service
was not cumulative. Pertinently, in Brent School, Inc. v. Zamora, we said that “a fixed term is an essential and natural appurtenance” of
overseas employment contracts as in this case. We also said in that case that under American law, “[w]here a contract specifies the
period of its duration, it terminates on the expiration of such period. A contract of employment for a definite period terminates by its
own terms at the end of such period.” As it is, Article 72 of the Saudi Labor Law is also of similar import. It reads:
A labor contract concluded for a specified period shall terminate upon the expiry of its term. If both parties continue to enforce the
contract, thereafter, it shall be considered renewed for an unspecified period.
(2) SC ruled that the claim has not yet prescribed because the law that should be applied on prescription is not the Saudi Law which
grants 12 months period of time to file the claim from the time of the termination of contract but it should be the Labor Code
particularly 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 be forever barred. The
reason is because prescription is a procedural law and under the conflict of laws rules of the Philippines the procedural law of the lex
fori or law of the forum (law of the place where the case is filed) must be applied. However, an argument can be raised that even if the
conflict of laws rule provides that the procedural law of the lex fori must be followed, Sec. 48 of our Code of Civil Procedure which is a
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borrowing statute provides that “If by the laws of the state or country where the cause of action arose, the action is barred, it is also
barred in the Philippine Islands.” Section 48 has not been repealed or amended by the Civil Code of the Philippines. Article 2270 of
said Code repealed only those provisions of the Code of Civil Procedure as to which were inconsistent with it. There is no provision in
the Civil Code of the Philippines, which is inconsistent with or contradictory to Section 48 of the Code of Civil Procedure (Paras,
Philippine Conflict of Laws, 104 [7th ed.]).
In the light of the 1987 Constitution, however, Section 48 [of the Code of Civil Procedure] cannot be enforced ex proprio vigore insofar
as it ordains the application in this jurisdiction of [Article] 156 of the Amiri Decree No. 23 of 1976.
The courts of the forum will not enforce any foreign claim obnoxious to the forum’s public policy. To enforce the one-year
prescriptive period of the Saudi Law as regards the claims in question would contravene the public policy on the protection
to labor.
Respondent’s complaint was filed well within the three-year prescriptive period under Article 291 of our Labor Code. This point,
however, has already been mooted by SC’s finding that respondent’s service award had been paid, albeit the payroll termed such
payment as severance pay. Petition is Granted.
PLDT vs. Roberto R. Pingol

G.R. No. 182622; September 8, 2010
Facts:
In 1979, respondent Roberto R. Pingol (Pingol) was hired by petitioner PLDT as a maintenance technician.
From September 16, 1999 to December 31, 1999, Pingol was absent from work without official leave. According to PLDT, notices were
sent to him with a stern warning that he would be dismissed from employment if he continued to be absent without official leave
"pursuant to PLDT Systems Practice A-007 which provides that ‘Absence without authorized leaves for seven (7) consecutive days is
subject to termination from the service.’" Despite the warning, he failed to show up for work. On January 1, 2000, PLDT terminated his
services on the grounds of unauthorized absences and abandonment of office.
On March 29, 2004, four years later, Pingol filed a Complaint for Constructive Dismissal and Monetary Claims against PLDT. In his
complaint, he alleged that he was hastily dismissed from his employment
on January 1, 2000.
In response, PLDT filed a motion to dismiss claiming, among others, that respondent’s cause of action had already prescribed as the
complaint was filed four (4) years and three (3) months after his dismissal.
Issue: Whether or not respondent Pingol filed his complaint for constructive dismissal and money claims within the prescriptive
period of four (4) years as provided in Article 1146 of the Civil Code and three (3) years as provided in Article 291 of the Labor
Code, respectively.
Held:
Parties apparently do not dispute the applicable prescriptive period. Article 1146 of the New Civil Code provides:
Art. 1146. The following actions must be instituted within four years:
(1) Upon an injury to the rights of the plaintiff;
x xx x xx x xx
As this Court stated in Callanta v. Carnation, when one is arbitrarily and unjustly deprived of his job or means of livelihood, the action
instituted to contest the legality of one's dismissal from employment constitutes, in essence, an action predicated "upon an injury to
the rights of the plaintiff," as contemplated under Art. 1146 of the New Civil Code, which must be brought within four (4) years.
With regard to the prescriptive period for money claims, Article 291 of the Labor Code states:
Article 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 be barred forever.
The pivotal question in resolving the issues is the date when the cause of action of respondent Pingol accrued.
It is a settled jurisprudence that a cause of action has three (3) elements, to wit: (1) a right in favor of the plaintiff by whatever means
and under whatever law it arises or is created; (2) an obligation on the part of the named defendant to respect or not to violate such
right; and (3) an act or omission on the part of such defendant violative of the right of the plaintiff or constituting a breach of the
obligation of the defendant to the plaintiff.
In the case at bench, Pingol himself alleged the date January 1, 2000 as the date of his dismissal in his complaint filed on March 29,
2004, exactly four (4) years and three (3) months later. Respondent never denied making such admission or raised palpable mistake
as the reason therefor. Thus, the petitioner correctly relied on such allegation in the complaint to move for the dismissal of the case on
the ground of prescription.
The Labor Code has no specific provision on when a claim for illegal dismissal or a monetary claim accrues. Thus, the general
law on prescription applies. Article 1150 of the Civil Code states:
Article 1150. The time for prescription for all kinds of actions, when there is no special provision which ordains otherwise, shall be
counted from the day they may be brought
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The day the action may be brought is the day a claim starts as a legal possibility. In the present case, January 1, 2000 was the date that
respondent Pingol was not allowed to perform his usual and regular job as a maintenance technician. Respondent Pingol cited the
same date of dismissal in his complaint before the LA. As, thus, correctly ruled by the LA, the complaint filed had already prescribed.
Like other causes of action, the prescriptive period for money claims is subject to interruption, and in the absence of an equivalent
Labor Code provision for determining whether the said period may be interrupted, Article 1155 of the Civil Code may be applied, to
wit:
ART. 1155. The prescription of actions is interrupted when they are filed before the Court, when there is a written
extrajudicial demand by the creditors, and when there is any written acknowledgment of the debt by the debtor.
Thus, the prescription of an action is interrupted by (a) the filing of an action, (b) a written extrajudicial demand by the creditor, and
(c) a written acknowledgment of the debt by the debtor.
In this case, respondent Pingol never made any written extrajudicial demand. Neither did petitioner make any written
acknowledgment of its alleged obligation. Thus, the claimed "follow-ups" could not have validly tolled the running of the prescriptive
period. It is worthy to note that respondent never presented any proof to substantiate his allegation of follow-ups.
Medline Management, Inc. vs. Roslinda

G.R. No. 1687151; Spetember 15, 2010
Facts:
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.
Held:
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."
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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.
University of the East vs. University of the East Employees' Association

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.
Held:
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.
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X. JURISDICTION OF THE LABOR ARBITER
Tolosa vs. NLRC;

G.R. No. 149578; April 10, 2003
Facts:
Evelyn Tolosa is the widow of Captain Virgilio Tolosa who was hired by Qwana-Kaiun, through its manning agent, Asia Bulk Transport
Phils. Inc., to be the master of the vessel named M/V Lady Dona.Capt. Tolosa died while performing his duties during their voyage
from Japan to Long Beach California. Because of her husband’s death, Evelyn filed a complaint before the POEA against Qwana-Kaiun,
through its resident-agent, Mr. Fumio Nakagawa, Asia Bulk, Pedro Garate and Mario Asis (Lady Dona’s Chief Mate and Second mate in-
charge of the primary medical care of the crew and who took care of Capt. Tolosa while he was sick). The case was transferred to the
NLRC and the Labor Arbiter held the respondents solidarily liable and granted all the damages as prayed for by petitioner including
lost income, moral and exemplary damages, attorney’s fees plus interest. On appeal, NLRC dismissed the case for lack of jurisdiction
over the subject matter of the action pursuant to the provision of the Labor Code. Sustaining the NLRC, the CA ruled that the labor
commission had no jurisdiction over the subject matter of the action filed by petitioner. Her cause did not arise from an employer-
employee relation, but from a quasi delict or tort. Further, there is no reasonable causal connection between her suit for damages and
her claim under Article 217 (a)(4) of the Labor Code, which allows an award of damages incident to an employer-employee relation.
Issue:
Whether the labor arbiter and the NLRC had jurisdiction over petitioner's action
Held:
The NLRC and the labor arbiter had no jurisdiction over petitioner's claim for damages, because that ruling was based on a quasi
delict or tort per Article 2176 of the Civil Code. The allegations in her complaint are in the nature of an action based on a quasi delict
or tort. It is evident that she sued Pedro Garate and Mario Asis for gross negligence. Petitioner's complaint/position paper refers to
and extensively discusses the negligent acts of shipmates Garate and Asis, who had no employer-employee relation with Captain
Tolosa.
The pivotal question is whether the Labor Code has any relevance to the relief sought by petitioner. From her paper, it is evident that
the primary reliefs she seeks are as follows: (a) loss of earning capacity denominated therein as "actual damages" or "lost income" and
(b) blacklisting. The loss she claims does not refer to the actual earnings of the deceased, but to his earning capacity based on a life
expectancy of 65 years. This amount is recoverable if the action is based on a quasi delict as provided for in Article 2206 of the Civil
Code, but not in the Labor Code.
While it is true that labor arbiters and the NLRC have jurisdiction to award not only reliefs provided by labor laws, but also damages
governed by the Civil Code, these reliefs must still he based on an action that has a reasonable causal connection with the Labor Code,
other labor statutes, or collective bargaining agreements. It must be noted that a worker's loss of earning capacity and blacklisting are
not to be equated with wages, overtime compensation or separation pay, and other labor benefits that are generally cognized in labor
disputes. The loss of earning capacity is a relief or claim resulting from a quasi delict or a similar cause within the realm of civil law.
Claims for damages under paragraph 4 of Article 217 must have a reasonable causal connection with any of the claims provided for in
the article in order to be cognizable by the labor arbiter. Only if there is such a connection with the other claims can the claim for
damages be considered as arising from employer-employee relations." In the present case, petitioner's claim for damages is not
related to any other claim under Article 217, other labor statutes, or collective bargaining agreements.
Petitioner cannot anchor her claim for damages to Article 161 of the Labor Code, which does not grant or specify a claim or relief. This
provision is only a safety and health standard under Book IV of the same Code. The enforcement of this labor standard rests with the
labor secretary. Thus, claims for an employer's violation thereof are beyond the jurisdiction of the labor arbiter. In other words,
petitioner cannot enforce the labor standard provided for in Article 161 by suing for damages before the labor arbiter.
It is not the NLRC but the regular courts that have jurisdiction over actions for damages, in which the employer-employee relation is
merely incidental, and in which the cause of action proceeds from a different source of obligation such as a tort. Since petitioner's
claim for damages is predicated on a quasi delict or tort that has no reasonable causal connection with any of the claims provided for
in Article 217, other labor statutes, or collective bargaining agreements, jurisdiction over the action lies with the regular courts -- not
with the NLRC or the labor arbiters.
Austria vs. NLRC;

312 SCRA 413
Facts:
Pastor Dionisio V. Austria worked with the SDA for twenty eight (28) years from 1963 to 1991.He held the position of district pastor
until his services were terminated on 31 October 1991.
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On various occasions from August up to October, 1991, petitioner received several communications from Mr. Eufronio Ibesate, the
treasurer of the Negros Mission asking him to admit accountability and responsibility for the church tithes and offerings collected by
his wife, Mrs. Thelma Austria, in his district which amounted to P15,078.10, and to remit the same to the Negros Mission.
On 16 October 1991, at around 7:30 a.m., petitioner went to the office of Pastor Buhat, the president of the Negros Mission. During
said call, petitioner tried to persuade Pastor Buhat to convene the Executive Committee for the purpose of settling the dispute
between him and the private respondent, Pastor David Rodrigo. The dispute between Pastor Rodrigo and petitioner arose from an
incident in which petitioner assisted his friend, Danny Diamada, to collect from Pastor Rodrigo the unpaid balance for the repair of the
latter's motor vehicle which he failed to pay to Diamada. Due to the assistance of petitioner in collecting Pastor Rodrigo's debt, the
latter harbored ill-feelings against petitioner. When news reached petitioner that Pastor Rodrigo was about to file a complaint against
him with the Negros Mission, he immediately proceeded to the office of Pastor Buhat and asked the latter to convene the Executive
Committee. Pastor Buhat denied the request of petitioner since some committee members were out of town and there was no quorum.
Thereafter, the two exchanged heated arguments. Petitioner then left the office of Pastor Buhat. While on his way out, petitioner
overheard Pastor Buhat saying, "Pastor daw inisog na ina iya (Pador you are talking tough)." Irked by such remark, petitioner
returned to the office of Pastor Buhat, and tried to overturn the latter's table, though unsuccessfully, since it was heavy. Thereafter,
petitioner banged the attaché case of Pastor Buhat on the table, scattered the books in his office, and threw the phone.
Thereafter, petitioner received a letter inviting him and his wife to attend the Executive Committee meeting at the Negros Mission
Conference Room on 21 October 1991, at nine in the morning. To be discussed in the meeting were the non-remittance of church
collection and the events that transpired on 16 October 1991. Subsequently, petitioner received a letter of dismissal citing
misappropriation of denominational funds, willful breach of trust, serious misconduct, gross and habitual neglect of duties, and
commission of an offense against the person of employer's duly authorized representative, as grounds for the termination of his
services.
Issues:
1. Whether or not the termination of the services of petitioner is an ecclesiastical affair, and, as such, involves the separation of
church and state and as such, the Labor Arbiter/NLRC has no jurisdiction to try and decide the case
2. Whether or not the dismissal was valid
3. Whether or not there was breach of trust
4. Whether or not there was serious misconduct.
Held:
1. The principle of separation of church and state finds no application in this case.
An ecclesiastical affair is "one that concerns doctrine, creed, or form of worship of the church, or the adoption and enforcement
within a religious association of needful laws and regulations for the government of the membership, and the power of excluding from
such associations those deemed unworthy of membership. Based on this definition, an ecclesiastical affair involves the relationship
between the church and its members and relate to matters of faith, religious doctrines, worship and governance of the congregation.
While the matter at hand relates to the church and its religious minister it does not ipso facto give the case a religious significance.
Simply stated, what is involved here is the relationship of the church as an employer and the minister as an employee. It is purely
secular and has no relation whatsoever with the practice of faith, worship or doctrines of the church.
Under the Labor Code, the provision which governs the dismissal of employees, is comprehensive enough to include religious
corporations, such as the SDA, in its coverage. Article 278 of the Labor Code on post-employment states that "the provisions of this
Title shall apply to all establishments or undertakings, whether for profit or not." Obviously, the cited article does not make any
exception in favor of a religious corporation. This is made more evident by the fact that the Rules Implementing the Labor Code,
particularly, Section 1, Rule 1, Book VI on the Termination of Employment and Retirement, categorically includes religious institutions
in the coverage of the law, to wit:
Sec. 1. Coverage. — This Rule shall apply to all establishments and undertakings, whether operated for profit or not, including
educational, medical, charitable and religious institutions and organizations, in cases of regular employment with the exception of the
Government and its political subdivisions including government-owned or controlled corporations.
2. The issue being the legality of petitioner's dismissal, the same must be measured against the requisites for a valid dismissal,
namely: (a) the employee must be afforded due process, i.e., he must be given an opportunity to be heard and to defend himself, and;
(b) the dismissal must be for a valid cause as provided in Article 282 of the Labor Code. Without the concurrence of this twin
requirements, the termination would, in the eyes of the law, be illegal.
Before the services of an employee can be validly terminated, Article 277 (b) of the Labor Code and Section 2, Rule XXIII, Book V of the
Rules Implementing the Labor Code further require the employer to furnish the employee with two (2) written notices, to wit: (a) a
written notice served on the employee specifying the ground or grounds for termination, and giving to said employee reasonable
opportunity within which to explain his side; and, (b) 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.
The first notice, which may be considered as the proper charge, serves to apprise the employee of the particular acts or omissions for
which his dismissal is sought. The second notice on the other hand seeks to inform the employee of the employer's decision to dismiss
him. This decision, however, must come only after the employee is given a reasonable period from receipt of the first notice within
which to answer the charge and ample opportunity to be heard and defend himself with the assistance of a representative, if he so
desires. Private respondent failed to substantially comply with the above requirements. With regard to the first notice, the letter,
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dated 17 October 1991, which notified petitioner and his wife to attend the meeting on 21 October 1991, cannot be construed as the
written charge required by law. It never categorically stated the particular acts or omissions on which petitioner's impending
termination was grounded. In fact, the letter never even mentioned that petitioner would be subject to investigation. The letter
merely mentioned that petitioner and his wife were invited to a meeting wherein what would be discussed were the alleged
unremitted church tithes and the events that transpired on 16 October 1991. The alleged grounds for the dismissal of petitioner from
the service were only revealed to him when the actual letter of dismissal was finally issued. For this reason, it cannot be said that
petitioner was given enough opportunity to properly prepare for his defense. While admittedly, private respondents complied with
the second requirement, the notice of termination, this does not cure the initial defect of lack of the proper written charge required by
law.
3. The validity of dismissal cannot be sustained based on the ground of breach of trust. Private respondents allege that they have lost
their confidence in petitioner for his failure, despite demands, to remit the tithes and offerings amounting to P15,078.10, which were
collected in his district. Settled is the rule that under Article 282 (c) of the Labor Code, the breach of trust must be willful. A breach is
willful if it is done intentionally, knowingly and purposely, without justifiable excuse, as distinguished from an act done carelessly,
thoughtlessly, heedlessly or inadvertently. It must rest on substantial grounds and not on the employer's arbitrariness, whims,
caprices or suspicion; otherwise the employee would eternally remain at the mercy of the employer.39 It should be genuine and not
simulated. In fact, as admitted by their own witness, Naomi Geniebla, petitioner remitted the amounts which he collected to the
Negros Mission for which corresponding receipts were issued to him. Thus, the allegations of private respondents that petitioner
breached their trust have no leg to stand on.
4. No. and, as such, do not warrant petitioner's dismissal from the service.
Misconduct has been defined as improper or wrong conduct. It is the transgression of some established and definite rule of action, a
forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error in judgment.For misconduct
to be considered serious it must be of such grave and aggravated character and not merely trivial or unimportant. Based on this
standard, we believe that the act of petitioner in banging the attaché case on the table, throwing the telephone and scattering the
books in the office of Pastor Buhat, although improper, cannot be considered as grave enough to be considered as serious misconduct.
After all, as correctly observed by the Labor Arbiter, though petitioner committed damage to property, he did not physically assault
Pastor Buhat or any other pastor present during the incident. In fact, the alleged offense committed upon the person of the employer's
representatives was never really established or proven by private respondents. Hence, there is no basis for the allegation that
petitioner's act constituted serious misconduct or that the same was an offense against the person of the employer's duly authorized
representative. As such, the cited actuation of petitioner does not justify the ultimate penalty of dismissal from employment.
Eviota vs. Court of Appeals;

407 SCRA 394
Facts:
Standard Chartered Bank and petitioner Eduardo G. Eviota executed a contract of employment under which the petitioner was
employed by the respondent bank as Compensation and Benefits Manager, VP (M21). However, the petitioner abruptly resigned from
the respondent bank barely a month after his employment and rejoined his former employer.
Standard Charter Bank filed with the Regional Trial court of Makati a complaint against Eviota’s acts which it claimed constitute a
clear violation of Articles 19, 20 and 21 of Republic Act No. 386, as amended (the "Civil Code") and that Eviota not only violated
Presidential Decree No. 442, as amended (the Labor Code), wherein it states that an employee may terminate without just cause the
employer-employee relationship by serving written notice on the employer at least one (1) month in advance But he also violated,
Section 13 of the his Employment Contract specifically provides that: "Your [i.e., Eviota's] employment may be terminated by either
party giving notice of at least one month.
According to the bank Eviota is liable for damages. For in good faith the Bank has complied with its part of the agreement, among
them were the purchase of a CRV for Evita’s use, making traveling arrangement for him to join a Conference in Singapore for the bank,
and furnishing him with a new office. Aside form Eviota’s sudden resignation he also took a diskette with him containing and other
papers and documents containing confidential information on employee compensation and other Bank matters
Although Eviota has already returned his singing bonus and he has paid for the expenses of the CRV but he had induced the Bank to
believe that he was committed to fulfilling his obligations under the Employment Contract. As a result, the Bank incurred expenses in
carrying out its part of the contract. Thus the bank is asking not only for actual damages, but also moral and exemplary damages.
The petitioner filed a motion to dismiss the complaint on the ground that the action for damages of the respondent bank was within
the exclusive jurisdiction of the Labor Arbiter under paragraph 4, Article 217 of the Labor Code of the Philippines, as amended, which
states that the Labor Arbiter and Commission has jurisdiction over claims for actual, moral, exemplary and other forms of damages
arising from the employer-employee relations.
The petitioner averred that the respondent bank's claim for damages arose out of or were in connection with his employer-employee
relationship with the respondent bank or some aspect or incident of such relationship.
Issue:
Whether or not the Regional Trial Court has jurisdiction
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Held:
The action was for breach of a contractual obligation, which is intrinsically a civil dispute. While seemingly the cause of action arose
from employer-employee relations, the employer's claim for damages is grounded on "wanton failure and refusal" without just cause
to report to duty coupled with the averment that the employee "maliciously and with bad faith" violated the terms and conditions of
the contract to the damage of the employer. Such averments removed the controversy from the coverage of the Labor Code of the
Philippines and brought it within the purview of the Civil Law.
Jurisprudence has evolved the rule that claims for damages under paragraph 4 of Article 217, to be cognizable by the Labor Arbiter,
must have a reasonable causal connection with any of the claims provided for in that article. Only if there is such a connection with the
other claims can the claim for damages be considered as arising from employer-employee relations.
Petitioner does not ask for any relief under the Labor Code of the Philippines. It seeks to recover damages agreed upon in the contract
as redress for private respondent's breach of his contractual obligation to its "damage and prejudice". Such cause of action is within
the realm of Civil Law, and jurisdiction over the controversy belongs to the regular courts. More so when we consider that the
stipulation refers to the post-employment relations of the parties.
In this case, the private respondent's first cause of action for damages is anchored on the petitioner's employment of deceit and of
making the private respondent believe that he would fulfill his obligation under the employment contract with assiduousness and
earnestness. The petitioner volte face when, without the requisite thirty-day notice under the contract and the Labor Code of the
Philippines, as amended, he abandoned his office and rejoined his former employer; thus, forcing the private respondent to hire a
replacement. The private respondent was left in a lurch, and its corporate plans and program in jeopardy and disarray. Moreover, the
petitioner took off with the private respondent's computer diskette, papers and documents containing confidential information on
employee compensation and other bank matters. On its second cause of action, the petitioner simply walked away from his
employment with the private respondent sans any written notice, to the prejudice of the private respondent, its banking operations
and the conduct of its business. Anent its third cause of action, the petitioner made false and derogatory statements that the private
respondent reneged on its obligations under their contract of employment; thus, depicting the private respondent as unworthy of
trust.
It is evident that the causes of action of the private respondent against the petitioner do not involve the provisions of the Labor Code
of the Philippines and other labor laws but the New Civil Code. Thus, the said causes of action are intrinsically civil. There is no causal
relationship between the causes of action of the private respondent's causes of action against the petitioner and their employer-
employee relationship. The fact that the private respondent was the erstwhile employer of the petitioner under an existing
employment contract before the latter abandoned his employment is merely incidental. In fact, the petitioner had already been
replaced by the private respondent before the action was filed against the petitioner. The Petition is DENIED.
Dynamic Signmaker Outdoor Advertising Services vs. Potongan;

G.R. No. 156589; June 27, 2005
Facts:
Respondent started working for Dynamic Signmaker as a Production Supervisor. In early February 1996, the union of rank and file
employees of petitioner corporation, declared a strike on account of which petitioner corporation replaced all its supervisors and
designated, by letter memorandum, certain persons to take over the operations of the corporation including Rufino Hornilla who took
over respondent’s functions.
Potongan’s salary was withheld and was advised to take a leave of absence until further notice and later received a letter from
petitioner Hernandez, President/General Manager of the corporation, “inviting” him to answer the following charges:
1.) that he entered the company fabrication shop where he was assigned as supervisor and caused to create fire by secretly
switching ‘on’ the idle plastic oven and grounded the 2 electric machine welders while the ‘strike’ was on-going outside the
premises.
2.) that he allegedly on several occasions, urged strongly contractors led by Mr. Luis Mimay, working on some left over jobs
at the factory, to slow down work or not to work at all in sympathy to the ‘strikers’ who are in the ranking files.
Potongan, through counsel, denied the charges against him and insisted that those were only fabricated to justify his termination due
to suspicions that he was a strike-sympathizer. He later on filed a complaint of illegal dismissal against the corporation contending
that although he was not sent a formal notice of termination, he was effectively dismissed from employment because after he was
asked to take a leave of absence, he was not instructed nor allowed to return to work, nor paid his salaries. On the other hand,
petitioners insisted that respondent was not illegally dismissed as the “management [having] merely opted to reorganize.” The Labor
Arbiter dismissed the complaint on the ground that respondent’s cause of action was barred by prior judgment that was rendered on
June 24, 1996 by Labor Arbiter Nieves V. De Castro which found respondent among those guilty of committing prohibited acts and
whose employment was consequently declared lost.
Respondent appealed to the NLRC and argued that the Labor Arbiter did not acquire jurisdiction over his person in the above-said
consolidated cases since service of summons to the therein respondents President of the union, of which he is not a member, cannot
be considered proper service to him. Respondent thus concluded that a void judgment such as one rendered without jurisdiction over
the person of the party maybe assailed at any time, either directly or collaterally.
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Issues:
1. Whether or not respondent was illegally or constructively dismissed.
2. Whether or not the Labor Arbiter in the prior consolidated cases was able to take jurisdiction over the person of
respondent.
Held:
1. A letter sent by petitioner to respondent confirmed that respondent’s employment was terminated as early as February 21, 1996
(when he was instructed to go on indefinite leave and his salary was since then withheld), not for any of the just or authorized causes
under the Labor Code, but on account of the filing against him by petitioner corporation of a labor case and a criminal case.
Surely, this Court recognizes that management has wide latitude to regulate, according to its own discretion and judgment, all aspects
of employment, including the freedom to transfer and reassign employees according to the requirements of its business. The scope
and limits of the exercise of management prerogatives, must, however, be balanced against the security of tenure given to labor.
If exercised in good faith for the purpose of advancing business interests, not of defeating or circumventing the rights of employees,
the managerial prerogative to transfer personnel from one area of operation to another is justified.
This Court finds it difficult, however, to attribute good faith on the part of petitioners because reespondent was instructed to go on
indefinite leave and was asked to return to work only after more than three years during which period his salaries were withheld, and
only after the NLRC promulgated its decision.
2. Petitioners fault the appellate court for failure to recognize the final and executory nature of the NLRC Decision rendered in the
consolidated cases and for affirming the nullification of said decision, with respect to respondent, which could be attacked only by
direct action.
Contrary to petitioners’ position, the validity of a judgment or order of a court or quasi-judicial tribunal which has become final and
executory may be attacked when the records show that it lacked jurisdiction to render the judgment. For a judgment rendered against
one in a case where jurisdiction over his person was not acquired is void, and a void judgment maybe assailed or impugned at any
time either directly or collaterally by means of a petition filed in the same or separate case, or by resisting such judgment in any action
or proceeding wherein it is invoked.
Petitioners in fact do not even dispute respondent’s claim that no summons was ever issued and served on him either personally or
through registered mail as required under Rule III, Sections 3 and 6 of the Rules of Procedure of the NLRC, as amended by Resolution
No. 01-02, Series of 2002:
SEC. 3. Issuance of Summons. Within two (2) days from receipt of a case, the Labor Arbiter shall issue the required summons,
attaching thereto a copy of the complaint/petition and supporting documents, if any. The summons, together with a copy of the
complaint, shall specify the date, time and place of the conciliation and mediation conference in two (2) settings.
SEC. 6. Service of Notices and Resolutions. a) Notices or summonses and copies of orders, shall be served on the parties to the case
personally by the bailiff or duly authorized public officer within three (3) days from receipt thereof or by registered mail, provided
that in special circumstances, service of summons may be effected in accordance with the pertinent provisions of the Rules of Court;
xxx
Supplementary or applied by analogy to these provisions are the provisions and prevailing jurisprudence in Civil Procedure. Where
there is then no service of summons on or a voluntary general appearance by the defendant, the court acquires no jurisdiction to
pronounce a judgment in the cause.
At all events, even if administrative tribunals exercising quasi-judicial powers are not strictly bound by procedural requirements, they
are still bound by law and equity to observe the fundamental requirements of due process.
Metromedia Times Corp. vs. Pastorin;

G.R. No. 154295; July 29, 2005
Facts:
Pastorin was employed by Metromedia Times Corporation (Petitioner) as a Field Representative/Collector. His task entailed the
periodic collection of receivables from dealers of petitioner's newspapers. Prior to the subject incident, respondent claimed to have
received a termination letter dated 7 May 1998 from management terminating his services for tardiness effective 16 June 1988.
Respondent, member of Metro Media Times Employees Union, was not dismissed due to the intervention of the labor union, the
collective bargaining agent in the company.
In May 1998, he obtained a loan from one of the dealers whom he dealt with, De Manuel, amounting to P9,000.00. After paying
P1,125.00, respondent reneged on the balance of his loan. De Manuel wrote a letter to petitioner, and seeking assistance for collection
on the remainder of the loan. She claimed that when respondent became remissed on his personal obligation, he stopped collecting
periodically the outstanding dues of De Manuel.
Petitioner sent a letter addressed to respondent, requiring an explanation for the transaction with De Manuel, as well as for his failure
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to pay back the loan according to the conditions agreed upon. In his reply letter, respondent admitted having incurred the loan, but
offered no definitive explanation for his failure to repay the same.
Petitioner, through a Memorandum, imposed the penalty of suspension on respondent for 4 days for violating Company Policy and
ordered his transfer to the Administration Department. Respondent wrote a letter to petitioner, stating that he wanted to sign a
transfer memo before assuming his new position. Later, he was handed the Payroll Change Advice indicating his new assignment to
the Traffic and Order Department of Metromedia. Nonetheless, respondent stopped reporting for work. Respondent sent a letter to
petitioner communicating his refusal to accept the transfer. Respondent duly filed a complaint for constructive dismissal, non-
payment of back wages and other money claims with the Labor Arbiter.
Issue:
Whether or not Metromedia is estopped from questioning the jurisdiction of the Labor Arbiter over the subject matter of the case for
the first time only in their appeal before the NLRC.
Held:
Applying the general rule that estoppel does not confer jurisdiction, petitioner is not estopped from assailing the jurisdiction of the
labor arbiter before the NLRC on appeal.
Respondent relied solely on estoppel to oppose petitioner’s claim of lack of jurisdiction on the part of the labor arbiter. He adduced
no other legal ground in support of his contention that the Labor Arbiter had jurisdiction over the case. Thus, his claim falls flat in
light of our pronouncement, and more so considering the NLRC’s correct observation that jurisdiction over grievance Issue, such as
the propriety of the reassignment of a union member falls under the jurisdiction of the voluntary arbitrator.
Yusen Air & Sea Service Phils vs. Villamor;

G.R. No. 154942; August 16, 2005
Facts:
Petitioner is engaged in the business of freight forwarding. As such, it is contracted by clients to pick-up, unpack, consolidate, deliver,
transport and distribute all kinds of cargoes, acts as cargo or freight accommodation and enters into charter parties for the carriage of
all kinds of cargoes or freight. On August 16, 1993, petitioner hired respondent as branch manager in its Cebu Office. Later,
petitioner reclassified respondent’s position to that of Division Manager, which position respondent held until his resignation on
February 1, 2002. Immediately after his resignation, respondent started working for Aspac International, a corporation engaged in
the same line of business as that of petitioner. On February 11, 2002, in the Regional Trial Court at Parañ aque City, petitioner filed
against respondent a complaint for injunction and damages with prayer for a temporary restraining order. The complaint alleged that
[respondent] duly signed an undertaking to abide by the policies of the [Petitioner] which includes the provision on the employees’
responsibility and obligation in cases of conflict of interest, which reads:
No employee may engage in any business or undertaking that is directly or indirectly in competition with that of the
company and its affiliates or engage directly or indirectly in any undertaking or activity prejudicial to the interests of the
company or to the performance of his/her job or work assignments. The same provision will be implemented for a period
of two (2) years from the date of an employee’s resignation, termination or separation from the company.
That in clear violation and breach of his undertaking and agreement with the policies of [petitioner], [respondent] joined Aspac
International, within two years from [his] date of resignation, whose business is directly in conflict with that of [petitioner].
Petitioner thus prayed for a judgment enjoining respondent from “further pursuing his work at Aspac International”, and awarding it
P2,000,000 as actual damages; P300,000 as exemplary damages; and another P300,000 as attorney’s fees. On March 4, 2002,
apparently not to be outdone, respondent filed against petitioner a case for illegal dismissal before the National Labor Relations
Commission. Meanwhile, instead of filing his answer in the civil case, respondent filed a Motion to Dismiss, arguing that the RTC has
no jurisdiction over the subject matter of said case because an employer-employee relationship is involved. On March 20, 2002, the
trial court issued the herein first assailed order dismissing petitioner’s complaint for lack of jurisdiction over the subject matter
thereof on the ground that the action was for damages arising from employer-employee relations. Citing Article 217 of the Labor
Code, the trial court ruled that it is the labor arbiter which had jurisdiction over petitioner’s complaint. In time, petitioner moved for a
reconsideration but its motion was denied by the trial court in its subsequent order of June 21, 2002.
Issue:
Whether or not the petitioner’s cause of action arises from employer-employee relations even if the claim therein is based on a
provision in its handbook.
Held:
No, the petitioner’s cause of action does not arises from employer-employee relations, because, petitioner does not ask for any relief
under the Labor Code of the Philippines. It seeks to recover damages agreed upon in the contract as redress for private respondent’s
breach of his contractual obligation to its “damage and prejudice”. Such cause of action is within the realm of Civil Law, and
jurisdiction over the controversy belongs to the regular courts. More so when we consider that the stipulation refers to the post-
employment relations of the parties.
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While seemingly the cause of action arose from employer-employee relations, the employer’s claim for damages is grounded on
wanton failure and refusal without just cause to report to duty coupled with the averment that the employee maliciously and with bad
faith violated the terms and conditions of the contract to the damage of the employer. Such averments removed the controversy from
the coverage of the Labor Code of the Philippines and brought it within the purview of Civil Law.
Indeed, jurisprudence has evolved the rule that claims for damages under paragraph 4 of Article 217, to be cognizable by the Labor
Arbiter, must have a reasonable causal connection with any of the claims provided for in that article. Only if there is such a connection
with the other claims can a claim for damages be considered as arising from employer-employee relations.
Article 217, as amended by Section 9 of RA 6715, provides:

Art. 217. Jurisdiction of Labor Arbiters and the Commission. — (a) Except as otherwise provided under this Code, the Labor
Arbiters shall have original and exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the
submission of the case by the parties for decision without extension, even in the absence of stenographic notes, the
following cases involving all workers, whether agricultural or non-agricultural:
xxx xxx xxx
4. Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations;"
xxx xxx xxx
In San Miguel Corporation vs. National Labor Relations Commission, we had occasion to construe Article 217, as amended by B.P. Blg.
227. Article 217 then provided that the Labor Arbiter had jurisdiction over all money claims of workers, but the phrase ‘arising from
employer-employee relation’ was deleted. We ruled thus:
While paragraph 3 above refers to “all money claims of workers,” it is not necessary to suppose that the entire universe of money
claims that might be asserted by workers against their employers has been absorbed into the original and exclusive jurisdiction of
Labor Arbiters. In the first place, paragraph 3 should be read not in isolation from but rather within the context formed by paragraph
1 (relating to unfair labor practices), paragraph 2 (relating to claims concerning terms and conditions of employment), paragraph 4
(claims relating to household services, a particular species of employer-employee relations), and paragraph 5 (relating to certain
activities prohibited to employees or employers). It is evident that there is a unifying element which runs through paragraph 1 to 5
and that is, that they all refer to cases or disputes arising out of or in connection with an employer-employee relationship. This is, in
other words, a situation where the rule of noscitur a sociis may be usefully invoked in clarifying the scope of paragraph 3, and any
other paragraph of Article 217 of the Labor Code, as amended. We reach the above conclusion from an examination of the terms
themselves of Article 217, as last amended by B.P. Blg 227, and even though earlier versions of Article 217 of the Labor Code expressly
brought within the jurisdiction of the Labor Arbiters and the NLRC “cases arising from employer-employee relations,” which clause
was not expressly carried over, in printer’s ink, in Article 217 as it exists today. For it cannot be presumed that money claims of
workers which do not arise out of or in connection with their employer-employee relationship, and which would therefore fall within
the general jurisdiction of regular courts of justice, were intended by the legislative authority to be taken away from the jurisdiction of
the courts and lodged with Labor Arbiters on an exclusive basis. The Court, therefore, believes and so holds that the “money claims of
workers” referred to in paragraph 3 of Article 217 embraces money claims which arise out of or in connection with the employer-
employee relationship, or some aspect or incident of such relationship. Put a little differently, that money claims of workers which
now fall within the original and exclusive jurisdiction of Labor Arbiters are those money claims which have some reasonable causal
connection with the employer-employee relationship.
When, as here, the cause of action is based on a quasi-delict or tort, which has no reasonable causal connection with any of the claims
provided for in Article 217, jurisdiction over the action is with the regular courts.
It is basic that jurisdiction over the subject matter is determined upon the allegations made in the complaint, irrespective of whether
or not the plaintiff is entitled to recover upon the claim asserted therein, which is a matter resolved only after and as a result of a
trial. Neither can jurisdiction of a court be made to depend upon the defenses made by a defendant in his answer or motion to
dismiss. If such were the rule, the question of jurisdiction would depend almost entirely upon the defendant.
Duty Free Philippines vs. Mojica;

G.R. No. 166365; September 30, 2005
Facts:
The Discipline Committee of Duty Free Philippines (DFP) on November 28, 2007 found Stock Clerk Rossano A. Mojica guilty of Neglect
of Duty by causing considerable damage to or loss of materials, assets and property of DFP. Thus, Mojica was considered forcibly
resigned from the service with forfeiture of all benefits except his salary and the monetary value of the accrued leave credits. He was
formally informed of his forced resignation on January 14, 1998. Thereupon, he filed a complaint for illegal dismissal with prayer for
reinstatement, payment of full back wages, damages, and attorney’s fees, against DFP before the National Labor Relations Commission
(NLRC).
The Labor Arbiter rendered a decision finding that Mojica was illegally dismissed. The NLRC later reversed the ruling of the arbiter.
The CA sustained the ruling of the arbiter.
Issue:
WON the Labor Arbiter and the NLRC had jurisdiction to decide the case
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Held:
NO. Mojica is a civil service employee; therefore, jurisdiction is lodged not with the NLRC, but with the Civil Service Commission.
DFP was created under Executive Order (EO) No. 46 on September 4, 1986 primarily to augment the service facilities for tourists and
to generate foreign exchange and revenue for the government. In order for the government to exercise direct and effective control
and regulation over the tax and duty free shops, their establishment and operation was vested in the Ministry, now Department of
Tourism (DOT), through its implementing arm, the Philippine Tourism Authority (PTA). All the net profits from the merchandising
operations of the shops accrued to the DOT.
As provided under Presidential Decree (PD) No. 564, PTA is a corporate body attached to the DOT. As an attached agency, the
recruitment, transfer, promotion and dismissal of all its personnel was governed by a merit system established in accordance with the
civil service rules. In fact, all PTA officials and employees are subject to the Civil Service rules and regulations.
Accordingly, since DFP is under the exclusive authority of the PTA, it follows that its officials and employees are likewise subject to
the Civil Service rules and regulations. Clearly then, Mojica’s recourse to the Labor Arbiter was not proper. He should have followed
the procedure laid down in DFP’s merit system and the Civil Service rules and regulations.
In sum, the labor arbiter and the NLRC erred in taking cognizance of the complaint as jurisdiction over the complaint for illegal
dismissal is lodged with the Civil Service Commission. The Court of Appeals likewise erred in sustaining the labor arbiter.
Easycall Communication Phils. vs. King;

G.R. No. 145901; December 15, 2005
Facts:
Easycall Communications Phils., Inc. was a domestic corporation primarily engaged in the business of message handling. Petitioner,
through its general manager, Roberto B. Malonzo, hired the services of respondent as assistant to the general manager which became
vice-president for nationwide expansion.
Malonzo reviewed the sales performance of respondent. He also scrutinized the status of petitioner’s Nationwide Expansion Program
(NEP) which was under respondent’s responsibility. He found that respondent’s actual sales for the period October 1992–March 1993
was 78% of his sales commitment and 70% of his sales target.
Malonzo also checked the frequency and duration of the provincial sales development visits made by respondent for the same period
to expansion areas under his jurisdiction. He discovered that the latter spent around 40% of the total number of working days for that
period in the field.
Rockwell Gohu, petitioner’s deputy general manager, talked to respondent to discuss his sales performance. In the course of the
conversation, Gohu informed respondent that Malonzo wanted his resignation. This prompted respondent to write a memorandum to
Malonzo. In his memorandum, he inquired whether Malonzo really wanted him to resign. He emphasized that his work performance
had yet to be evaluated. He also stated that, based on the approved budget for fiscal year ending in June 1993, he was within the
budget and targets set forth by petitioner. He further declared that he had no intention of resigning from his position.
Respondent received a notice of termination signed by Malonzo.
Issue:
Whether the termination was valid or not.
Held:
While loss of confidence is a valid ground for dismissing an employee, it should not be simulated. It must not be indiscriminately used
as a shield by the employer against a claim that the dismissal of an employee was arbitrary.

To be a valid ground for an employee’s dismissal, loss of trust and confidence must be based on a willful breach and founded on
clearly established facts. A breach is willful if it is done intentionally, knowingly and purposely, without justifiable excuse, as
distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. Thus, a willful breach cannot be a breach
resulting from mere carelessness.
In this case, the labor arbiter’s finding, affirmed by the NLRC, was that the sales record of respondent and the time he spent in the field
were “clear indications of complainant’s inefficiency and/or negligence.” Inefficiency implies negligence, incompetence, ignorance and
carelessness. Negligence is the want or lack of care required by the circumstances.

The grounds cited by petitioner, i.e., respondent’s alleged poor sales performance and the allegedly excessive time he spent in the
field, were not sufficient to support a claim of loss of confidence as a ground for dismissal.

Furthermore, the alleged loss of confidence was not founded on clearly established facts. First, petitioner included the sales
performance of respondent for the period covering October 1992 to December 1992 in arriving at the conclusion that his sales record
was dismal. However, as the CA correctly pointed out, petitioner previously recognized that respondent’s performance for that period
“was not merely satisfactory” but “more than extra-ordinary that it merited his promotion not only to the position of assistant vice
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president, to which he was recommended by his supervisor, but to the even higher position of vice president.” This self-contradictory
position of petitioner negates its claim of loss of confidence in repondent.
Moreover, the promotion of an employee negates the employer’s claim that it has lost its trust and confidence in the employee. Hence,
petitioner’s claim of loss of confidence crumbles in the light of respondent’s promotion not only to assistant vice-president but to the
even higher position of vice- president.
Second, the sales record of respondent for the period October 1992–December 1992 was recognized as so exemplary that it merited
his promotion. Later, however, this very same record was suddenly deemed poor and dismal to justify loss of confidence. Thus,
petitioner interpreted one and the same sales record as proof of respondent’s simultaneous efficiency and inefficiency. This could only
mean that there was no sufficient standard with which to measure the performance of respondent, an indication of the arbitrariness
of petitioner.

Finally, during the hearing of this case before the labor arbiter, Malonzo stated that the percentage of the time spent by respondent in
his sales area was actually “not below par.” This admission of petitioner’s general manager only proves all the more the lack of
sufficient standard for determining respondent’s performance.
The lack of just cause in respondent’s dismissal was aggravated by the absence of due process.
The twin requirements of notice and hearing constitute the essential elements of due process. The law requires the employer to
furnish the employee sought to be dismissed with two written notices before termination of employment can be legally effected: (1) a
written notice apprising the employee of the particular acts or omissions for which his dismissal is sought in order to afford him an
opportunity to be heard and to defend himself with the assistance of counsel, if he desires, and (2) a subsequent notice informing the
employee of the employer’s decision to dismiss him. This procedure is mandatory and its absence taints the dismissal with illegality.

In this case, respondent was served with one notice only ― the notice of his termination. The series of dialogues between petitioner’s
management and respondent was not enough as it failed to show that the latter was apprised of the cause of his dismissal. These
dialogues or consultations could not validly substitute for the actual observance of notice and hearing.
San Miguel Foods Inc. vs. San Miguel Corp Employees Union – PTGWO;
G.R. No. 168569; October 5, 2007
Facts:
San Miguel Corporation Employees Union – PTWGO (the Union), was the sole bargaining agent of all the monthly paid employees of
petitioner San Miguel Foods, Incorporated (SMFI). On November 9, 1992, some employees of SMFI’s Finance Department, through the
Union represented by Edgar Moraleda, brought a grievance against Finance Manager Gideon Montesa (Montesa), for “discrimination,
favoritism, unfair labor practices, not flexible [sic], harassment, promoting divisiveness and sectarianism, etc.,”before SMFI Plant
Operations Manager George Nava in accordance with Step 1 of the grievance machinery adopted in the Collective Bargaining
Agreement (CBA) forged by SMFI and the Union.
The Union sought the “1. review, evaluat[ion] & upgrad[ing of] all Finance staff and 2. promot[ion of] G.Q. Montesa to other SMC
affiliate[s] & subsidiaries.”
At the grievance meeting held on January 14, 1993, SMFI informed the Union that it planned to address the grievance through a “work
management review” which would be completed by March 1993, hence, it asked the finance personnel to give it their attention and
cooperation. The “work management review” was not completed by March 1993, however, prompting the Union to, on March 26,
1993, elevate the grievance to Step 2。
Almost nine months after the grievance meeting was held or on October 6, 1993, SMFI rendered a “Decision on Step 1 Grievance”
stating that it was still in the process of completing the “work management review,”[4] hence, the Union’s requests could not be
granted.
The Union thereupon filed a complaint on October 20, 1993 before the National Labor Relations Commission (NLRC), Arbitration
Branch, against SMFI,[5] its President Amadeo P. Veloso, and its Finance Manager Montesa for “unfair labor practice, [and] unjust
discrimination in matters of promotion . . . ” It prayed that SMFI et al. be ordered to promote the therein named employees “with the
corresponding pay increases or adjustment including payment of salary differentials plus attorney’s fees[,] and to cease and desist
from committing the same unjust discrimination in matters of promotion.”
Instead of filing a position paper as required by the Labor Arbiter, SMFI et al. filed a motion to dismiss, contending that the Issue
raised in the complaint were grievance Issue and, therefore, “should be resolved in the grievance machinery provided in [the]
collective bargaining agreements [sic] of the parties or in the mandated provision of voluntary arbitration which is also provided in
the CBA.”[9] The Union opposed the motion to dismiss.
In its Position Paper, the Union specified acts of ULP of SMFI et al. under Article 248, paragraphs (e) and (i) of the Labor Code[10]
which Article reads:
Art. 248. Unfair labor practices of employers. – It shall be unlawful for an employer to commit any of the following unfair
labor practices:
xxxx
(e) To discriminate in regard to wages, hours of work, and other terms and conditions of employment in order to encourage
or discourage membership in any labor organization. x x x
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xxxx
(i) To violate a collective bargaining agreement.
xxxx
Held:
The jurisdiction of Labor Arbiters, enumerated in Article 217 of the Labor Code, includes complaints for ULP.
As stated above, the Union, in its Position Paper, mentioned the particular acts of ULP and the ultimate facts in support thereof.
1. large scale and wanton unjust discrimination in matters of promotion, particularly upon the following members of
complainant: Ellen Ventura, Julie Geronimo, Ronnie Cruz, Rita Calasin, Romy de Peralta, Malou Alano, And E. M. Moraleda, all
assigned with the Finance Department or respondent SMFI.
2. gross and blatant violations by respondent SMFI of Section 5, Article III (Job Security) and Section 4, Article VIII
(Grievance Machinery) of the current collective bargaining agreement (CBA) between complainant and respondent SMFI,
which provisions of said CBA are hereunder quoted for easy reference. (Emphasis and underscoring supplied)
On the questioned promotions, the Union did not allege that they were done to encourage or discourage membership in a labor
organization. In fact, those promoted were members of the complaining Union. The promotions do not thus amount to ULP under
Article 248(e) of the Labor Code.
As for the alleged ULP committed under Article 248(i), for violation of a CBA, this Article is qualified by Article 261 of the Labor Code,
the pertinent portion of which latter Article reads:
x x x violations of a Collective Bargaining Agreement, except those which are gross in character, shall no longer be treated as unfair
labor practice and shall be resolved as grievances under the Collective Bargaining Agreement. For purposes of this article, gross
violations of Collective Bargaining Agreement shall mean flagrant and/or malicious refusal to comply with the economic provisions of
such agreement. (Emphasis and underscoring supplied)
Silva v. NLRC instructs that for a　ULP case to be cognizable by the Labor Arbiter, and the NLRC to exercise its appellate jurisdiction,
the allegations in the complaint should show prima facie the concurrence of two things, namely: (1) gross violation of the CBA; AND
(2) the violation pertains to the economic provisions of the CBA.[17] (Emphasis and underscoring supplied)
As reflected in the above-quoted allegations of the Union in its Position Paper, the Union charges SMFI to have violated the grievance
machinery provision in the CBA. The grievance machinery provision in the CBA is not an economic provision, however, hence, the
second requirement for a Labor Arbiter to exercise jurisdiction of a ULP is not present.
The Union likewise charges SMFI, however, to have violated the Job Security provision in the CBA, specifically the seniority rule, in
that SMFI “appointed less senior employees to positions at its Finance Department, consequently intentionally by-passing more senior
employees who are deserving of said appointment.”
Article 4 of the Labor Code provides that “All doubts in the implementation and interpretation of the provisions of this Code, including
implementing rules and regulations, shall be resolved in favor of labor.” Since the seniority rule in the promotion of employees has a
bearing on salary and benefits, it may, following a liberal construction of Article 261 of the Labor Code, be considered an “economic
provision” of the CBA.
As above-stated, the Union charges SMFI to have promoted less senior employees, thus bypassing others who were more senior and
equally or more qualified. It may not be seriously disputed that this charge is a gross or flagrant violation of the seniority rule under
the CBA, a ULP over which the Labor Arbiter has jurisdiction.
SMFI, at all events, questions why the Court of Appeals came out with a finding that it (SMFI) disregarded the seniority rule under the
CBA when its petition before said court merely raised a question of jurisdiction. The Court of Appeals having affirmed the NLRC
decision finding that the Labor Arbiter has jurisdiction over the Union’s complaint and thus remanding it to the Labor Arbiter for
continuation of proceedings thereon, the appellate court’s said finding may be taken to have been made only for the purpose of
determining jurisdiction.
Leyte IV Electric Cooperative, Inc. vs. LEYECO IV Employees Union-ALU;

G.R. No. 157745; October 19, 2007
Facts:
On April 6, 1998, Leyte IV Electric Cooperative, Inc. (petitioner) and Leyeco IV Employees Union-ALU (respondent) entered into a
CBAS covering petitioner rank-and-file employees, for a period of five (5) years effective January 1, 1998.
On June 7, 2000, respondent, through its Regional Vice-President, Vicente P. Casilan, sent a letter to petitioner demanding holiday pay
for all employees, as provided for in the CBA.
On June 20, 2000, petitioner, through its legal counsel, sent a letter-reply to Casilan, explaining that after perusing all available pay
slips, it found that it had paid all employees all the holiday pays enumerated in the CBA.
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After exhausting the procedures of the grievance machinery, the parties agreed to submit the Issue of the interpretation and
implementation of Section 2, Article VIII of the CBA on the payment of holiday pay, for arbitration of the National Conciliation and
Mediation Board (NCMB), Regional Office No. VIII in Tacloban City.[6] The parties were required to submit their respective position
papers, after which the dispute was submitted for decision.
While admitting in its Position Paper[7] that the employees were paid all of the days of the month even if there was no work,
respondent alleged that it is not prevented from making separate demands for the payment of regular holidays concomitant with the
provisions of the CBA, with its supporting documents consisting of a letter demanding payment of holiday pay, petitioner's reply
thereto and respondent's rejoinder, a computation in the amount of P1,054,393.07 for the unpaid legal holidays, and several pay slips.
Petitioner, on the other hand, in its Position Paper,[8] insisted payment of the holiday pay in compliance with the CBA provisions,
stating that payment was presumed since the formula used in determining the daily rate of pay of the covered employees is Basic
Monthly Salary divided by 30 days or Basic Monthly Salary multiplied by 12 divided by 360 days, thus with said formula, the
employees are already paid their regular and special days, the days when no work is done, the 51 un-worked Sundays and the 51 un-
worked Saturdays.
On March 1, 2001, Voluntary Arbitrator Antonio C. Lopez, Jr. rendered a Decision[9] in favor of respondent, holding petitioner liable
for payment of unpaid holidays from 1998 to 2000 in the sum of P1,054,393.07. He reasoned that petitioner miserably failed to show
that it complied with the CBA mandate that holiday pay be “reflected during any payroll period of occurrence” since the payroll slips
did not reflect any payment of the paid holidays. He found unacceptable not only petitioner's presumption of payment of holiday pay
based on a formula used in determining and computing the daily rate of each covered employee, but also petitioner's further
submission that the rate of its employees is not less than the statutory minimum wage multiplied by 365 days and divided by twelve.
On April 11, 2001, petitioner filed a Motion for Reconsideration[10] but it was denied by the Voluntary Arbitrator in a
Resolution、dated June 17, 2002. Petitioner received said Resolution on June 27, 2002.[12]
Thirty days later, or on July 27, 2002　petitioner filed a Petition for Certiorariin the CA, ascribing grave abuse of discretion amounting
to lack of jurisdiction to the Voluntary Arbitrator: (a) for ignoring that in said company the divisor for computing the applicable daily
rate of rank-and-file employees is 360 days which already includes payment of 13 un-worked regular holidays under Section 2, Article
VIII of the CBA;　and (b) for holding the petitioner liable for the unpaid holidays just because the payroll slips submitted as evidence
did not show any payment for the regular holidays.　In a Resolution dated September 4, 2002, the CA dismissed outright petitioner's
Petition for Certiorari for adopting a wrong mode of appeal. It reasoned:
Considering that what is assailed in the present recourse is a Decision of a Voluntary Arbitrator, the proper remedy is a petition for
review under Rule 43 of the 1997 Rules of Civil Procedure; hence, the present petition for certiorari under Rule 65 filed on August 15,
2002, should be rejected, as such a petition cannot be a substitute for a lost appeal. And in this case, the period for appeal via a
petition for review has already lapsed since the petitioner received a copy of the Resolution denying its motion for reconsideration on
June 27, 2002, so that its last day to appeal lapsed on July 12, 2002.
Held:
It has long been settled in the landmark case Luzon Development Bank that a voluntary arbitrator, whether acting solely or in a panel,
enjoys in law the status of a quasi-judicial agency; hence, his decisions and awards are appealable to the CA. This is so because the
awards of voluntary arbitrators become final and executory upon the lapse of the period to appeal;[27] and since their awards
determine the rights of parties, their decisions have the same effect as judgments of a court. Therefore, the proper remedy from an
award of a voluntary arbitrator is a petition for review to the CA, following Revised Administrative Circular No. 1-95, which provided
for a uniform procedure for appellate review of all adjudications of quasi-judicial entities, which is now embodied in Section 1, Rule
43 of the 1997 Rules of Civil Procedure, which reads:
SECTION 1. Scope. — This Rule shall apply to appeals from judgments or final orders of the Court of Tax Appeals and from
awards, judgments, final orders or resolutions of or authorized by any quasi-judicial agency in the exercise of its quasi-
judicial functions. Among these agencies are the Civil Service Commission, Central Board of Assessment Appeals, Securities
and Exchange Commission, Office of the President, Land Registration Authority, Social Security Commission, Civil
Aeronautics Board, Bureau of Patents, Trademarks and Technology Transfer, National Electrification Administration,
Energy Regulatory Board, National Telecommunications Commission, Department of Agrarian Reform under Republic Act
No. 6657, Government Service Insurance System, Employees Compensation Commission, Agricultural Inventions Board,
Insurance Commission, Philippine Atomic Energy Commission, Board of Investments, Construction Industry Arbitration
Commission, and voluntary arbitrators authorized by law.[28] (Emphasis supplied)
Section 2, Rule 43 of the 1997 Rules of Civil Procedure which provides that:
SEC. 2. Cases not covered. - This Rule shall not apply to judgments or final orders issued under the Labor Code of the
Philippines.
It did not alter the Court's ruling in Luzon Development Bank. Section 2, Rule 42 of the 1997 Rules of Civil Procedure, is nothing more
than a reiteration of the exception to the exclusive appellate jurisdiction of the CA,[29] as provided for in Section 9, Batas Pambansa
Blg. 129,[30] as amended by Republic Act No. 7902:[31]
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(3) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders or awards of Regional Trial Courts and
quasi-judicial agencies, instrumentalities, boards or commissions, including the Securities and Exchange Commission, the Employees’
Compensation Commission and the Civil Service Commission, except those falling within the appellate jurisdiction of the Supreme
Court in accordance with the Constitution, the Labor Code of the Philippines under Presidential Decree No. 442, as amended, the
provisions of this Act and of subparagraph (1) of the third paragraph and subparagraph (4) of the fourth paragraph of Section 17 of
the Judiciary Act of 1948.
The Court took into account this exception in Luzon Development Bank but, nevertheless, held that the decisions of voluntary
arbitrators issued pursuant to the Labor Code do not come within its ambit, thus:
x x x. The fact that [the voluntary arbitrator’s] functions and powers are provided for in the Labor Code does not place him
within the exceptions to said Sec. 9 since he is a quasi-judicial instrumentality as contemplated therein. It will be noted that,
although the Employees’ Compensation Commission is also provided for in the Labor Code, Circular No. 1-91, which is the
forerunner of the present Revised Administrative Circular No. 1-95, laid down the procedure for the appealability of its
decisions to the Court of Appeals under the foregoing rationalization, and this was later adopted by Republic Act No. 7902 in
amending Sec. 9 of B.P. 129.
A fortiori, the decision or award of the voluntary arbitrator or panel of arbitrators should likewise be appealable to the Court of
Appeals, in line with the procedure outlined in Revised Administrative Circular No. 1-95, just like those of the quasi-judicial agencies,
boards and commissions enumerated therein.
This would be in furtherance of, and consistent with, the original purpose of Circular No. 1-91 to provide a uniform procedure for the
appellate review of adjudications of all quasi-judicial entities not expressly excepted from the coverage of Sec. 9 of B.P. 129 by either
the Constitution or another statute. Nor will it run counter to the legislative intendment that decisions of the NLRC be reviewable
directly by the Supreme Court since, precisely, the cases within the adjudicative competence of the voluntary arbitrator are excluded
from the jurisdiction of the NLRC or the labor arbiter.[32]
This ruling has been repeatedly reiterated in subsequent cases[33] and continues to be the controlling doctrine. Thus, the general
rule is that the proper remedy from decisions of voluntary arbitrators is a petition for review under Rule 43 of the Rules of Court.
Nonetheless, a special civil action for certiorari under Rule 65 of the Rules of Court is the proper remedy for one who complains that
the tribunal, board or officer exercising judicial or quasi-judicial functions acted in total disregard of evidence material to or decisive
of the controversy.[34] As this Court elucidated in Garcia v. National Labor Relations Commission[35] -
[I]n Ong v. People, we ruled that certiorari can be properly resorted to where the factual findings complained of are not supported by
the evidence on record. Earlier, in Gutib v. Court of Appeals, we emphasized thus:
[I]t has been said that a wide breadth of discretion is granted a court of justice in certiorari proceedings. The cases in which certiorari
will issue cannot be defined, because to do so would be to destroy its comprehensiveness and usefulness. So wide is the discretion of
the court that authority is not wanting to show that certiorari is more discretionary than either prohibition or mandamus. In the
exercise of our superintending control over inferior courts, we are to be guided by all the circumstances of each particular case “as the
ends of justice may require.” So it is that the writ will be granted where necessary to prevent a substantial wrong or to do substantial
justice.
In addition, while the settled rule is that an independent action for certiorari may be availed of only when there is no appeal or any
plain, speedy and adequate remedy in the ordinary course of law[37] and certiorari is not a substitute for the lapsed remedy of
appeal,[38] there are a few significant exceptions when the extraordinary remedy of certiorari may be resorted to despite the
availability of an appeal, namely: (a) when public welfare and the advancement of public policy dictate; (b) when the broader
interests of justice so require; (c) when the writs issued are null; and (d) when the questioned order amounts to an oppressive
exercise of judicial authority.
In this case, while the petition was filed on July 27, 2002,[40] 15 days after July 12, 2002, the expiration of the 15-day reglementary
period for filing an appeal under Rule 43, the broader interests of justice warrant relaxation of the rules on procedure. Besides,
petitioner alleges that the Voluntary Arbitrator’s conclusions have no basis in fact and in law; hence, the petition should not be
dismissed on procedural grounds.
The Voluntary Arbitrator gravely abused its discretion in giving a strict or literal interpretation of the CBA provisions that the holiday
pay be reflected in the payroll slips. Such literal interpretation ignores the admission of respondent in its Position Paper[41] that the
employees were paid all the days of the month even if not worked. In light of such admission, petitioner's submission of its 360
divisor in the computation of employees’ salaries gains significance.
In this case, the employees are required to work only from Monday to Friday. Thus, the minimum allowable divisor is 263, which is
arrived at by deducting 51 un-worked Sundays and 51 un-worked Saturdays from 365 days. Considering that petitioner used the
360-day divisor, which is clearly above the minimum, indubitably, petitioner's employees are being given their holiday pay.
Thus, the Voluntary Arbitrator should not have simply brushed aside petitioner's divisor formula. In granting respondent's claim of
non-payment of holiday pay, a “double burden” was imposed upon petitioner because it was being made to pay twice for its
employees' holiday pay when payment thereof had already been included in the computation of their monthly salaries. Moreover, it is
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absurd to grant respondent's claim of non-payment when they in fact admitted that they were being paid all of the days of the month
even if not worked. By granting respondent's claim, the Voluntary Arbitrator sanctioned unjust enrichment in favor of the respondent
and caused unjust financial burden to the petitioner. Obviously, the Court cannot allow this.
Atty. Garcia vs. Eastern Telecommunications Phils., et al.;

G.R. No. 173115 & 173163-64; April 16, 2009
Facts:
Atty. Virgilio R. Garcia was the Vice President and Head of Business Support Services and Human Resource Departments of the
Eastern Telecommunications Philippines, Inc. (ETPI). Atty. Garcia was placed under preventive suspension based on three complaints
for sexual harassment filed by Atty. Maria Larrie Alinsunurin, former manager of ETPIs Office of the Legal Counsel; Ms. Emma Valeros-
Cruz, Assistant Vice President of ETPI and former secretary of Atty. Garcia; and Dr. Mercedita M. Macalintal, medical
retainer/company physician of ETPI. In response to the complaints, the Human Resources Department constituted a Committee on
Decorum to investigate the complaints. By reason of said complaints, Atty. Garcia was placed in preventive suspension. The committee
conducted an investigation where Atty. Garcia was given copies of affidavits of the witnesses against him and a chance to defend
himself and to submit affidavits of his witnesses. The Committee submitted a report which recommended his dismissal. In a letter
dated 14 April 2000, Atty. Hizon advised Atty. Garcia that his employment with ETPI was, per recommendation of the Committee,
terminated effective 16 April 2000.
The Labor Arbiter Reyes found the preventive suspension and subsequent dismissal of Atty. Garcia illegal. On 21 March 2003, the
NLRC rendered its decision in NLRC NCR CA Case No. 028901-01 reversing the decision of Labor Arbiter Reyes and dismissing the
case for lack of jurisdiction. The decretal portion of the decision reads: The Commission ruled that the dismissal of Atty. Garcia, being
ETPIs Vice President, partook of the nature of an intra-corporate dispute cognizable by Regional Trial Courts and not by Labor
Arbiters. It added that ETPI and Atty. Hizon were not barred by estoppel from challenging the jurisdiction of the Labor Arbiter over
the instant case.
Atty. Garcia moved for the reconsideration of the decision, which ETPI and Atty. Hizon opposed.In a resolution dated 16 December
2003, the motion for reconsideration was denied for lack of merit. 　On 3 April 2003, the NLRC made permanent the TRO it issued
pursuant to its ruling in NLRC NCR CA Case No. 028901-01, that since the Labor Arbiter had no jurisdiction over the case, the decision
of the Labor Arbiter dated 30 September 2002 was void. 　On 6 March 2004, the resolution dated 16 December 2003 became final
and executory. Consequently, on 14 June 2004, an entry of judgment was made recording said resolution in the Book of Entries of
Judgments.
The CA ruled that Atty. Garcia, being the Vice President for Business Support Services and Human Resource Departments of ETPI, was
a corporate officer at the time he was removed. Being a corporate officer, his removal was a corporate act and/or an intra-corporate
controversy, the jurisdiction of which rested with the Securities and Exchange Commission (now with the Regional Trial Court), and
not the Labor Arbiter and the NLRC. It added that ETPI and Atty. Hizon were not estopped from questioning the jurisdiction of the
Labor Arbiter before the NLRC on appeal, inasmuch as said issue was seasonably raised by ETPI and Atty. Hizon in their reply
memorandum before the Labor Arbiter. On 18 April 2006, Atty. Garcia filed his Motion for Reconsideration. On 20 April 2006, ETPI
and Atty. Hizon filed a Motion for Partial Reconsideration.The parties filed their respective comments thereon. On 14 June 2006, the
Court of Appeals denied the motions for reconsideration.
Atty. Garcia is now before us via a Petition for Review, which he filed on 3 August 2006.The petition was docketed as G.R. No. 173115.
On 8 August 2006, he filed an Amended Petition for Review.He prays that the decision of the NLRC dated 21 March 2003 and its
resolution dated 16 December 2003, and the decision of the Court of Appeals dated 24 March 2006 and its resolution dated 14 June
2006, be reconsidered and set aside and that the decision of the Labor Arbiter dated 30 September 2002 be affirmed and reinstated.
Issue:
WHETHER THE QUESTION OF LEGALITY OR ILLEGALITY OF THE REMOVAL OR TERMINATION OF EMPLOYMENT OF AN OFFICER
OF A CORPORATION IS AN INTRA-CORPORATE CONTROVERSY THAT FALLS UNDER THE ORIGINAL EXCLUSIVE JURISDICTION OF
THE REGIONAL TRIAL COURTS?
Held:
The issue raised by Atty. Garcia whether the termination or removal of an officer of a corporation is an intra-corporate controversy
that falls under the original exclusive jurisdiction of the regional trial courts is not novel. The Supreme Court, in a long line of cases,
has decreed that a corporate officers dismissal or removal is always a corporate act and/or an intra-corporate controversy, over
which the Securities and Exchange Commission [SEC] (now the Regional Trial Court) has original and exclusive jurisdiction.
We have ruled that an intra-corporate controversy is one which pertains to any of the following relationships: (1) between the
corporation, partnership or association and the public; (2) between the corporation, partnership or association and the State insofar
as the formers franchise, permit or license to operate is concerned; (3) between the corporation, partnership or association and its
stockholders, partners, members or officers; and (4) among the stockholders, partners or associates themselves.In Lozon v. National
Labor Relations Commission, we declared that Presidential Decree No. 902-A confers on the SEC original and exclusive jurisdiction to
hear and decide controversies and cases involving intra-corporate and partnership relations between or among the corporation,
officers and stockholders and partners, including their elections or appointments x x x. c
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Before a dismissal or removal could properly fall within the jurisdiction of the SEC, it has to be first established that the person
removed or dismissed was a corporate officer. Corporate officers in the context of Presidential Decree No. 902-A are those officers of
the corporation who are given that character by the Corporation Code or by the corporations by-laws.There are three specific officers
whom a corporation must have under Section 25 of the Corporation Code.These are the president, secretary and the treasurer. The
number of officers is not limited to these three. A corporation may have such other officers as may be provided for by its by-laws like,
but not limited to, the vice-president, cashier, auditor or general manager. The number of corporate officers is thus limited by law and
by the corporations by-laws.
In the case before us, the by-laws of ETPI provide:
ARTICLE V
Officers。 Section 1. Number. The officers of the Company shall be a Chairman of the Board, a President, one or
more Vice-Presidents, a Treasurer, a Secretary, an Assistant Secretary, and such other officers as may be from time to time
be elected or appointed by the Board of Directors. One person may hold any two compatible offices.
Atty. Garcia tries to deny he is an officer of ETPI. Not being a corporate officer, he argues that the Labor Arbiter has jurisdiction over
the case. One of the corporate officers provided for in the by-laws of ETPI is the Vice-President. It can be gathered from Atty. Garcias
complaint-affidavit that he was Vice President for Business Support Services and Human Resource Departments of ETPI when his
employment was terminated effective 16 April 2000. It is therefore clear from the by-laws and from Atty. Garcia himself that he is a
corporate officer. One who is included in the by-laws of a corporation in its roster of corporate officers is an officer of said corporation
and not a mere employee.Being a corporate officer, his removal is deemed to be an intra-corporate dispute cognizable by the SEC and
not by the Labor Arbiter.
We agree with both the NLRC and the Court of Appeals that Atty. Garcias ouster as Vice-President, who is a corporate officer of ETPI,
partakes of the nature of an intra-corporate controversy, jurisdiction over which is vested in the SEC (now the RTC). The Labor
Arbiter thus erred in assuming jurisdiction over the case filed by Atty. Garcia, because he had no jurisdiction over the subject matter
of the controversy.
Having ruled which body has jurisdiction over the instant case, we find it unnecessary, due to mootness, to further discuss and rule on
the Issue raised by ETPI and Atty. Hizon regarding the NLRC order dated 23 August 2004 granting Atty. Garcias Motion to Set Aside
Finality of Judgment with Opposition to Motion to Discharge Appeal Bond, and its resolution dated 10 January 2005 denying their
motion for reconsideration thereon. The decision of the Labor Arbiter, who had jurisdiction over the case, was properly dismissed by
the NLRC. Consequently, Supersedeas Bond No. JCL (15) 00823 SICI Bond No. 75069 dated 18 November 2002, posted by ETPI as a
requirement for the filing of an appeal before the NLRC, is ordered discharged.
Halaguena et al., vs. Phil Airlines;

G.R. No. 172013; October 2, 2009
Facts:
Petitioners were employed as female flight attendants of respondent Philippine Airlines (PAL) on different dates prior to November
22, 1996. They are members of the Flight Attendants and Stewards Association of the Philippines (FASAP), a labor organization
certified as the sole and exclusive bargaining representative of the flight attendants, flight stewards and pursers of respondent.
On July 11, 2001, respondent and FASAP entered into a Collective Bargaining Agreement[3] incorporating the terms and conditions of
their agreement for the years 2000 to 2005. Section 144, Part A of the PAL-FASAP CBA, provides that:
A. For the Cabin Attendants hired before 22 November 1996:

x x x x
3. Compulsory Retirement

Subject to the grooming standards provisions of this Agreement, compulsory retirement shall be fifty-five (55) for females and sixty
(60) for males. x x x.
Petitioners and several female cabin crews manifested that the aforementioned CBA provision on compulsory retirement is
discriminatory, and demanded for an equal treatment with their male counterparts. Hence, they filed a case with the RTC.
On August 9, 2004, the RTC issued an Order　upholding its jurisdiction over the present case. The RTC reasoned that:
In the instant case, the thrust of the Petition is Sec. 144 of the subject CBA which is allegedly discriminatory as it
discriminates against female flight attendants, in violation of the Constitution, the Labor Code, and the CEDAW. The
allegations in the Petition do not make out a labor dispute arising from employer-employee relationship as none is shown to
exist. This case is not directed specifically against respondent arising from any act of the latter, nor does it involve a claim
against the respondent. Rather, this case seeks a declaration of the nullity of the questioned provision of the CBA, which is
within the Court's competence, with the allegations in the Petition constituting the bases for such relief sought.
Upon appeal, The CA rendered a Decision, dated August 31, 2005, granting the respondent's petition, and ruled that the RTC is by us
declared to have NO JURISDICTION OVER THE CASE BELOW and, consequently, all the proceedings, orders and processes it has so far
issued therein are ANNULED and SET ASIDE.
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Issue:
Whether the RTC has jurisdiction over the petitioners' action challenging the legality or constitutionality of the provisions on the
compulsory retirement age contained in the CBA between respondent PAL and FASAP.
Held:
The petition is meritorious. Jurisdiction of the court is determined on the basis of the material allegations of the complaint and the
character of the relief prayed for irrespective of whether plaintiff is entitled to such relief.
In the case at bar, the allegations in the petition for declaratory relief plainly show that petitioners' cause of action is the annulment of
Section 144, Part A of the PAL-FASAP CBA.
From the petitioners' allegations and relief prayed for in its petition, it is clear that the issue raised is whether Section 144, Part A of
the PAL-FASAP CBA is unlawful and unconstitutional. Here, the petitioners' primary relief in Civil Case No. 04-886 is the annulment of
Section 144, Part A of the PAL-FASAP CBA, which allegedly discriminates against them for being female flight attendants. The subject
of litigation is incapable of pecuniary estimation, exclusively cognizable by the RTC, pursuant to Section 19 (1) of Batas Pambansa Blg.
129, as amended. Being an ordinary civil action, the same is beyond the jurisdiction of labor tribunals.
The said issue cannot be resolved solely by applying the Labor Code. Rather, it requires the application of the Constitution, labor
statutes, law on contracts and the Convention on the Elimination of All Forms of Discrimination Against Women, and the power to
apply and interpret the constitution and CEDAW is within the jurisdiction of trial courts, a court of general jurisdiction.
In Georg Grotjahn GMBH & Co. v. Isnani, this Court held that not every dispute between an employer and employee involves matters
that only labor arbiters and the NLRC can resolve in the exercise of their adjudicatory or quasi-judicial powers. The jurisdiction of
labor arbiters and the NLRC under Article 217 of the Labor Code is limited to disputes arising from an employer-employee
relationship which can only be resolved by reference to the Labor Code, other labor statutes, or their collective bargaining agreement.
In Eviota v. Court of Appeals, Not every controversy or money claim by an employee against the employer or vice-versa is within the
exclusive jurisdiction of the labor arbiter. Actions between employees and employer where the employer-employee relationship is
merely incidental and the cause of action precedes from a different source of obligation is within the exclusive jurisdiction of the
regular court. Here, the employer-employee relationship between the parties is merely incidental and the cause of action ultimately
arose from different sources of obligation, i.e., the Constitution and CEDAW.
Thus, where the principal relief sought is to be resolved not by reference to the Labor Code or other labor relations statute or a
collective bargaining agreement but by the general civil law, the jurisdiction over the dispute belongs to the regular courts of justice
and not to the labor arbiter and the NLRC. In such situations, resolution of the dispute requires expertise, not in labor management
relations nor in wage structures and other terms and conditions of employment, but rather in the application of the general civil law.
Clearly, such claims fall outside the area of competence or expertise ordinarily ascribed to labor arbiters and the NLRC and the
rationale for granting jurisdiction over such claims to these agencies disappears.

If we divest the regular courts of jurisdiction over the case, then which tribunal or forum shall determine the constitutionality or
legality of the assailed CBA provision?

This Court holds that the grievance machinery and voluntary arbitrators do not have the power to determine and settle the Issue at
hand. They have no jurisdiction and competence to decide constitutional Issue relative to the questioned compulsory retirement age.
Their exercise of jurisdiction is futile, as it is like vesting power to someone who cannot wield it.
In Saura v. Saura, Jr., this Court emphasized the primacy of the regular court's judicial power enshrined in the Constitution that is true
that the trend is towards vesting administrative bodies like the SEC with the power to adjudicate matters coming under their
particular specialization, to insure a more knowledgeable solution of the problems submitted to them. This would also relieve the
regular courts of a substantial number of cases that would otherwise swell their already clogged dockets. But as expedient as this
policy may be, it should not deprive the courts of justice of their power to decide ordinary cases in accordance with the general laws that
do not require any particular expertise or training to interpret and apply. Otherwise, the creeping take-over by the administrative
agencies of the judicial power vested in the courts would render the judiciary virtually impotent in the discharge of the duties assigned to
it by the Constitution.

To be sure, in Rivera v. Espiritu, after Philippine Airlines (PAL) and PAL Employees Association (PALEA) entered into an agreement,
which includes the provision to suspend the PAL-PALEA CBA for 10 years, several employees questioned its validity via a petition for
certiorari directly to the Supreme Court. They said that the suspension was unconstitutional and contrary to public policy. Petitioners
submit that the suspension was inordinately long, way beyond the maximum statutory life of 5 years for a CBA provided for in Article
253-A of the Labor Code. By agreeing to a 10-year suspension, PALEA, in effect, abdicated the workers' constitutional right to bargain
for another CBA at the mandated time. In that case, this Court denied the petition for certiorari, ruling that there is available to
petitioners a plain, speedy, and adequate remedy in the ordinary course of law. The Court said that while the petition was
denominated as one for certiorari and prohibition, its object was actually the nullification of the PAL-PALEA agreement. As such,
petitioners' proper remedy is an ordinary civil action for annulment of contract, an action which properly falls under the jurisdiction
of the regional trial courts.
The trial court in this case is not asked to interpret Section 144, Part A of the PAL-FASAP CBA. Interpretation, as defined in Black's
Law Dictionary, is the art of or process of discovering and ascertaining the meaning of a statute, will, contract, or other written
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document. The provision regarding the compulsory retirement of flight attendants is not ambiguous and does not require
interpretation. Neither is there any question regarding the implementation of the subject CBA provision, because the manner of
implementing the same is clear in itself. The only controversy lies in its intrinsic validity.
The rule is settled that pure questions of fact may not be the proper subject of an appeal by certiorari under Rule 45 of the Revised
Rules of Court. This mode of appeal is generally limited only to questions of law which must be distinctly set forth in the petition. The
Supreme Court is not a trier of facts.

The question as to whether said Section 114, Part A of the PAL-FASAP CBA is discriminatory or not is a question of fact. A full-blown
trial is necessary, which jurisdiction to hear the same is properly lodged with the the RTC. Therefore, a remand of this case to the RTC
for the proper determination of the merits of the petition for declaratory relief is just and proper
Okol vs. Slimmer’s World International et al.;

G.R. No. 160146; December 11, 2009
Facts:
Slimmers World International employed Leslie Okol as a management trainee on 15 June 1992. She rose up the ranks to become Head
Office Manager and then Director and Vice President from 1996 until her dismissal on 22 September 1999. Prior to Okol’s dismissal,
Slimmers World preventively suspended Okol because the seizure by the Bureau of Customs of equipments belonging to or consigned
to Slimmers World. The shipment of the equipment was placed under the names of Okol for being undervalued. Okol filed her
written explanation, however, Slimmers World found it to be unsatisfactory. Through a letter dated 22 September 1999 signed by its
president Ronald Joseph Moy, Slimmers World terminated Okol’s employment.

Okol filed a complaint with the Arbitration branch of the NLRC against Slimmers World, Behavior Modifications, Inc. and Moy
(collectively called respondents) for illegal suspension, illegal dismissal, unpaid commissions, damages and attorney’s fees, with
prayer for reinstatement and payment of backwages. Respondents asserted that the NLRC had no jurisdiction over the subject matter
of the complaint.The labor arbiter granted the motion to dismiss. The labor arbiter ruled that Okol was the vice-president of
Slimmers World at the time of her dismissal. Since it involved a corporate officer, the dispute was an intra-corporate controversy
falling outside the jurisdiction of the Arbitration branch.
Okol filed an appeal with the NLRC, which reversed and set aside the labor arbiter’s order. Respondents contended that the relief
prayed for was confined only to the question of jurisdiction. The NLRC denied the motion for lack of merit. The appellate court set
aside the NLRC’s Resolution and affirmed the labor arbiter’s Order. It ruled that the case, being an intra-corporate dispute, falls
within the jurisdiction of the regular courts pursuant to Republic Act No. 8799 and that the NLRC had acted without jurisdiction in
giving due course to the complaint and deprived respondents of their right to due process in deciding the case on the merits.
Issue:
Whether or not the NLRC has jurisdiction over the illegal dismissal case filed by petitioner (whether or not the petitioner was an
employee or a corporate officer of Slimmers World)
Held:
The petition lacks merit. Petitioner insists that the Court of Appeals erred in ruling that she was a corporate officer and that the case
is an intra-corporate dispute falling within the jurisdiction of the regular courts. Petitioner asserts that even as vice-president, the
work that she performed conforms to that of an employee rather than a corporate officer. Mere title or designation in a corporation
will not, by itself, determine the existence of an employer-employee relationship. It is the “four-fold” test, namely (1) the power to
hire, (2) the payment of wages, (3) the power to dismiss, and (4) the power to control, which must be applied.
Petitioner enumerated the instances that she was under the power and control of Moy, Slimmers World’s president: (1) petitioner
received salary evidenced by pay slips, (2) Moy deducted Medicare and SSS benefits from petitioner’s salary, and (3) petitioner was
dismissed from employment not through a board resolution but by virtue of a letter from Moy. Thus, having shown that an employer-
employee relationship exists, the jurisdiction to hear and decide the case is vested with the labor arbiter and the NLRC.
Respondents maintain that petitioner was a corporate officer at the time of her dismissal from Slimmers World as supported by the
General Information Sheet and Director’s Affidavit attesting that petitioner was an officer. Also, the factors cited by petitioner that she
was a mere employee do not prove that she was not an officer of Slimmers World. Even the alleged absence of any resolution of the
Board of Directors approving petitioner’s termination does not constitute proof that petitioner was not an officer. Respondents assert
that petitioner was not only an officer but also a stockholder and director; which facts provide further basis that petitioner’s
separation from Slimmers World does not come under the NLRC’s jurisdiction.
The issue is whether petitioner was an employee or a corporate officer of Slimmers World. Section 25 of the Corporation Code
enumerates corporate officers as the president, secretary, treasurer and such other officers as may be provided for in the by-laws. In
Tabang v. NLRC, we held that an “office” is created by the charter of the corporation and the officer is elected by the directors or
stockholders. On the other hand, an “employee” usually occupies no office and generally is employed not by action of the directors or
stockholders but by the managing officer of the corporation who also determines the compensation to be paid to such employee.
The respondents, in their motion to dismiss filed before the labor arbiter, questioned the jurisdiction of the NLRC in taking cognizance
of petitioner’s complaint. In the motion, respondents attached the General Information Sheet (GIS), Minutes of the meeting of the
Board of Directors and Secretary’s Certificate, and the Amended By-Lawsof Slimmers World as submitted to the SEC to show that
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petitioner was a corporate officer whose rights do not fall within the NLRC’s jurisdiction. The GIS and minutes of the meeting of the
board of directors indicated that petitioner was a member of the board of directors, holding one subscribed share of the capital stock,
and an elected corporate officer.

Petitioner was a director and officer of Slimmers World. The charges of illegal suspension, illegal dismissal, unpaid commissions,
reinstatement and back wages imputed by petitioner against respondents fall squarely within the ambit of intra-corporate disputes.
A corporate officer’s dismissal is always a corporate act, or an intra-corporate controversy which arises between a stockholder and a
corporation. The question of remuneration involving a stockholder and officer, not a mere employee, is not a simple labor problem
but a matter that comes within the area of corporate affairs and management and is a corporate controversy in contemplation of the
Corporation Code.
Prior to its amendment, Section 5(c) PD 902-A provided that intra-corporate disputes fall within the jurisdiction of the Securities and
Exchange Commission (SEC). However, Subsection 5.2, Section 5 of Republic Act No. 8799, which took effect on 8 August 2000,
transferred to regional trial courts the SEC’s jurisdiction over all cases listed in Section 5 of PD 902-A:
5.2. The Commission’s jurisdiction over all cases enumerated under Section 5 of Presidential Decree No. 902-A is hereby
transferred to the Courts of general jurisdiction or the appropriate Regional Trial Court. x x x

Jurisdiction over the subject matter is conferred by law. The determination of the rights of a director and corporate officer dismissed
from his employment as well as the corresponding liability of a corporation, if any, is an intra-corporate dispute subject to the
jurisdiction of the regular courts. Thus, the appellate court correctly ruled that it is not the NLRC but the regular courts which have
jurisdiction over the present case.

Hugo et al. vs. Light Rail Transit Authority;

G.R. No. 181866; March 18, 2010
Facts:
Respondent Light Rail Transit Authority (LRTA), a government-owned and controlled corporation, constructed a light rail transit
system which traverses from Baclaran in Parañ aque City to Monumento in Kalookan City, Metro Manila pursuant to its mandate under
its charter.
To effectively carry out its mandate, LRTA entered into a ten-year Agreement for the Management and Operation of the Metro Manila
Light Rail Transit System (the Agreement) from June 8, 1984 until June 8, 1994 with Metro Transit Organization, Inc. (METRO). One of
the stipulations in the Agreement was:
“METRO shall be free to employ such employees and officers as it shall deem necessary in order to carry out the requirements of the
Agreement. Such employees and officers shall be the employees of METRO and not of LRTA. METRO shall prepare a compensation
schedule for the salaries and fringe benefits of its personnel”
METRO thus hired its own employees including herein petitioners-members of the Pinag-isang Lakas ng Manggagawa sa METRO, Inc.-
National Federation of Labor, otherwise known as PIGLAS-METRO, INC.-NFL-KMU (the Union), the certified exclusive collective
bargaining representative of METRO’s rank-and-file employees.
LRTA later purchased the shares of stocks of METRO via Deed of Sale of June 9, 1989. The two entities, however, continued with their
distinct and separate juridical personalities such that when the ten-year Agreement expired on June 8, 1994, they renewed the same.
On July 25, 2000, on account of a deadlock in the negotiation for the forging of a new collective bargaining agreement between METRO
and the Union, petitioners filed a Notice of Strike before the National Conciliation and Mediation Board, National Capital Region
(NCR). On even date, the Union went on strike, completely paralyzing the operations of the light rail transit system.
Then Secretary of Labor Bienvenido E. Laguesma assumed jurisdiction over the conflict and directed the striking employees including
herein petitioners to immediately return to work and METRO to accept them back under the same terms and conditions of
employment prevailing prior to the strike.
By LRTA’s claim, the striking employees including petitioners defied the return-to-work order. Contradicting such claim, petitioners
alleged that upon learning of the order, they attempted to comply with it but the security guards of METRO barred them from entering
their workplace for security reasons, the latter being afraid that they (the striking employees) might sabotage the vital machineries
and equipment of the light rail transit system.
When the Agreement expired on July 31, 2000, LRTA did not renew it. It instead took over the management and operations of the light
rail transit system, hiring new personnel for the purpose. METRO thus considered the employment of all its personnel terminated
effective September 30, 2000. 　 Petitioners filed a complaint for illegal dismissal and unfair labor practice with prayer for
reinstatement and damages against METRO and LRTA before the NCR Arbitration Branch, National Labor Relations Commission
(NLRC).
In impleading LRTA in their complaint, petitioners alleged that the "non-renewal of the [Agreement] is but an ingenious, albeit
unlawful, scheme carried out by the respondents to get rid of personnel they perceived as activists and troublemakers, thus,
terminating the complainants without any just or lawful cause."
LRTA filed a motion to dismiss the complaint on the ground that the Labor Arbiter and the NLRC have no jurisdiction over it, for, by
petitioners’ own admission, there was no employer-employee relationship between it and petitioners.
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Issue:
Whether or not Labor Arbiter and the NLRC have jurisdiction over LRTA?
Held:
The Labor Arbiter and the NLRC do not have jurisdiction over LRTA. Petitioners themselves admitted in their complaint that LRTA "is
a government agency organized and existing pursuant to an original charter (Executive Order No. 603)," and that they are employees
of METRO.
Light Rail Transit Authority v. Venus, Jr., which has a similar factual backdrop, holds that LRTA, being a government-owned or
controlled corporation created by an original charter, is beyond the reach of the Department of Labor and Employment which has
jurisdiction over workers in the private sector, viz:
. . . [E]mployees of petitioner METRO cannot be considered as employees of petitioner LRTA. The employees hired by METRO are
covered by the Labor Code and are under the jurisdiction of the Department of Labor and Employment, whereas the employees of
petitioner LRTA, a government-owned and controlled corporation with original charter, are covered by civil service rules. Herein
private respondent workers cannot have the best of two worlds, e.g., be considered government employees of petitioner LRTA, yet
allowed to strike as private employees under our labor laws.
In sum, petitioner LRTA cannot be held liable to the employees of petitioner METRO.
Matling Industrial and Commercial Corporation et. al. vs. Coros;

G.R. No. 157802; October 13, 2010
Facts:
After his dismissal by Matling as its Vice President for Finance and Administration, the respondent filed on August 10, 2000 a
complaint for illegal suspension and illegal dismissal against Matling and some of its corporate officers (petitioners) in the NLRC, Sub-
Regional Arbitration Branch XII, Iligan City.
The petitioners moved to dismiss the complaint, raising the ground, among others, that the complaint pertained to the jurisdiction of
the Securities and Exchange Commission (SEC) due to the controversy being intra-corporate inasmuch as the respondent was a
member of Matling’s Board of Directors aside from being its Vice-President for Finance and Administration prior to his termination.
The petitioners contend that the position of Vice President for Finance and Administration was a corporate office, having been created
by Matling’s President pursuant to By-Law No. V, as amended
In justification, they cite Tabang v. National Labor Relations Commission, which held that "other offices are sometimes created by the
charter or by-laws of a corporation, or the board of directors may be empowered under the by-laws of a corporation to create
additional officers as may be necessary."
The respondent counters that Matling’s By-Laws did not list his position as Vice President for Finance and Administration as one of
the corporate offices; that Matling’s By-Law No. III listed only four corporate officers, namely: President, Executive Vice President,
Secretary, and Treasurer; that the corporate offices contemplated in the phrase "and such other officers as may be provided for in the
by-laws" found in Section 25 of the Corporation Code should be clearly and expressly stated in the By-Laws;
Issue:
Whether the respondent was a corporate officer of Matling or not. That whether the LA or the RTC had jurisdiction over his complaint
for illegal dismissal.
Held:
As a rule, the illegal dismissal of an officer or other employee of a private employer is properly cognizable by the LA. This is pursuant
to Article 217 (a) 2 of the Labor Code, as amended, which provides as follows:
Article 217. Jurisdiction of the Labor Arbiters and the Commission. - (a) Except as otherwise provided under this Code, the Labor
Arbiters shall have original and exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the submission of the
case by the parties for decision without extension, even in the absence of stenographic notes, the following cases involving all
workers, whether agricultural or non-agricultural:
2. Termination disputes;
Where the complaint for illegal dismissal concerns a corporate officer, however, the controversy falls under the jurisdiction of the
Securities and Exchange Commission (SEC), because the controversy arises out of intra-corporate or partnership relations between
and among stockholders, members, or associates, or between any or all of them and the corporation, partnership, or association of
which they are stockholders, members, or associates, respectively; and between such corporation, partnership, or association and the
State insofar as the controversy concerns their individual franchise or right to exist as such entity; or because the controversy
involves the election or appointment of a director, trustee, officer, or manager of such corporation, partnership, or association. 14 Such
controversy, among others, is known as an intra-corporate dispute.
Effective on August 8, 2000, upon the passage of Republic Act No. 8799, 15 otherwise known as The Securities Regulation Code, the
SEC’s jurisdiction over all intra-corporate disputes was transferred to the RTC, pursuant to Section 5.2 of RA No. 8799.
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Issue:
Whether or not the respondent is a corporate officer
Held:
We agree with respondent. Section 25 of the Corporation Code provides:
Section 25. Corporate officers, quorum.--Immediately after their election, the directors of a corporation must formally organize by the
election of a president, who shall be a director, a treasurer who may or may not be a director, a secretary who shall be a resident and
citizen of the Philippines, and such other officers as may be provided for in the by-laws. Any two (2) or more positions may be held
concurrently by the same person, except that no one shall act as president and secretary or as president and treasurer at the same
time.
Conformably with Section 25, a position must be expressly mentioned in the By-Laws in order to be considered as a corporate office.
Thus, the creation of an office pursuant to or under a By-Law enabling provision is not enough to make a position a corporate office.
Guerrea v. Lezama, the first ruling on the matter, held that the only officers of a corporation were those given that character either by
the Corporation Code or by the By-Laws; the rest of the corporate officers could be considered only as employees or subordinate
officials.
Thus, it was held in Easycall Communications Phils., Inc. v. King:

An "office" is created by the charter of the corporation and the officer is elected by the directors or stockholders. On the other hand,
an employee occupies no office and generally is employed not by the action of the directors or stockholders but by the managing
officer of the corporation who also determines the compensation to be paid to such employee.
In this case, respondent was appointed vice president for nationwide expansion by Malonzo, petitioner’'s general manager, not by the
board of directors of petitioner. It was also Malonzo who determined the compensation package of respondent. Thus, respondent
was an employee, not a "corporate officer." The CA was therefore correct in ruling that jurisdiction over the case was properly with the
NLRC, not the SEC (now the RTC).
This interpretation is the correct application of Section 25 of the Corporation Code, which plainly states that the corporate officers are
the President, Secretary, Treasurer and such other officers as may be provided for in the By-Laws. Accordingly, the corporate officers
in the context of PD No. 902-A are exclusively those who are given that character either by the Corporation Code or by the
corporation’s By-Laws.
Thus, pursuant to the above provision (Section 25 of the Corporation Code), whoever are the corporate officers enumerated in the by-
laws are the exclusive Officers of the corporation and the Board has no power to create other Offices without amending first the
corporate By-laws. However, the Board may create appointive positions other than the positions of corporate Officers, but the
persons occupying such positions are not considered as corporate officers within the meaning of Section 25 of the
Corporation Code and are not empowered to exercise the functions of the corporate Officers, except those functions lawfully
delegated to them. Their functions and duties are to be determined by the Board of Directors/Trustees.
In Nacpil v. Intercontinental Broadcasting Corporation, which may be the more appropriate ruling, the position subject of the
controversy was not expressly mentioned in the By-Laws, but was created pursuant to a By-Law enabling provision authorizing the
Board of Directors to create other offices that the Board of Directors might see fit to create. The Court held there that the position was
a corporate office, relying on the obiter dictum in Tabang.
Manila Electric Company et. al. vs. Rosario Gopez 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
By Memorandum dated July 4, 2008, petitioner Alexander Deyto, Head of MERALCO’s Human 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 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. No response to her request having been received, 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 refusalto provide her with
details or information about the alleged report which MERALCO purportedly receivedconcerning threats to her safety and
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security amount to a violation of her right to privacy in life, liberty and security, correctible by habeas data. Respondent thus prayed
for the issuance of a writ commanding petitioners to file a written return containing the following:
a) a full disclosure of the data or information about respondent in relation to the report purportedly received by petitioners on the
alleged threat to her safety and security; the nature of such data and the purpose for its collection;
b) the measures taken by petitioners to ensure the confidentiality of such data or information; and
c) the currency and accuracy of such data or information obtained.
Additionally, respondent prayed for the issuance of a Temporary Restraining Order (TRO) enjoining petitioners from effecting her
transfer to the MERALCO Alabang Sector.
Maintaining that the RTC has no jurisdiction over what they contend is clearly a labor dispute, petitioners argue that "although
ingeniously crafted as a petition for 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.
Issue:
Whether or not RTC has jurisdiction
Held:
No. Section 1. Habeas Data. – The writ of habeas data is a remedy available to any person whose right to privacy in life, liberty or
security is violated or threatened by an unlawful act or omission of a public official or employee or of a private individual or
entity engaged in the gathering, collecting or storing of data or information regarding the person, family, home and correspondence of
the aggrieved party.
Castillo v. Cruz underscores the emphasis laid down in Tapuz v. del Rosario that the writs of amparo and habeas data will NOT issue
to protect purely property or commercial concerns nor when the grounds invoked in support of the petitions therefor are vague or
doubtful. Employment constitutes a property right under the context of the due process clause of the Constitution. 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.
In another vein, there is no showing from the facts presented that petitioners committed any unjustifiable or unlawful violation of
respondent’s right to privacy vis-a-vis the right to life, liberty or security. To argue that petitioners’ refusal to disclose the contents of
reports allegedly received on the threats to respondent’s safety amounts to a violation of her right to privacy is at best speculative.
Hongkong and Shanghai Banking Corp. vs. Sps. Broqueza;

G.R. No. 178610; November 17, 2010
Facts:
Sps. Broqueza are employees of Hongkong and Shanghai Banking Corporation (HSBC). They are also members of respondent
Hongkong Shanghai Banking Corporation, Ltd. Staff Retirement Plan (HSBCL-SRP, plaintiff below). The HSBCL-SRP is a retirement
plan established by HSBC through its Board of Trustees for the benefit of the employees.
Petitioner [Editha] Broqueza obtained a car loan in the amount of Php175,000.00. On December 12, 1991, she again applied and was
granted an appliance loan in the amount of Php24,000.00. On the other hand, petitioner Gerong applied and was granted an
emergency loan in the amount of Php35,780.00. These loans are paid through automatic salary deduction.
A labor dispute arose between HSBC and its employees. Majority of HSBC’s employees were terminated, among whom are petitioners
Editha Broqueza and Fe Gerong. The employees then filed an illegal dismissal case before the National Labor Relations Commission
(NLRC) against HSBC. The legality or illegality of such termination is now pending before the supreme Court in CA G.R. CV No. 56797,
entitled Hongkong Shanghai Banking Corp. Employees Union, et al. vs. National Labor Relations Commission, et al.
Because of their dismissal, petitioners were not able to pay the monthly amortizations of their respective loans. Thus, respondent
HSBCL-SRP considered the accounts of petitioners delinquent. Demands to pay the respective obligations were made upon
petitioners, but they failed to pay HSBCL-SRP, acting through its Board of Trustees and represented by Alejandro L. Custodio, filed
Civil Case No. 52400 against the spouses Broqueza on 31 July 1996. On 19 September 1996, HSBCL-SRP filed Civil Case No. 52911
against Gerong. Both suits were civil actions for recovery and collection of sums of money.
Held:
The RTC is correct in ruling that since the Promissory Notes do not contain a period, HSBCL-SRP has the right to demand immediate
payment.
Article 1179 of the Civil Code applies. The spouses Broqueza’s obligation to pay HSBCL-SRP is a pure obligation. The fact that HSBCL-
SRP was content with the prior monthly check-off from Editha Broqueza’s salary is of no moment. Once Editha Broqueza defaulted in
her monthly payment, HSBCL-SRP made a demand to enforce a pure obligation.
In their Answer, the spouses Broqueza admitted that prior to Editha Broqueza’s dismissal from HSBC in December 1993, she
"religiously paid the loan amortizations, which HSBC collected through payroll check-off." 16 A definite amount is paid to HSBCL-SRP
on a specific date. Editha Broqueza authorized HSBCL-SRP to make deductions from her payroll until her loans are fully paid. Editha
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Broqueza, however, defaulted in her monthly loan payment due to her dismissal. Despite the spouses Broqueza’s protestations, the
payroll deduction is merely a convenient mode of payment and not the sole source of payment for the loans. HSBCL-SRP never agreed
that the loans will be paid only through salary deductions. Neither did HSBCL-SRP agree that if Editha Broqueza ceases to be an
employee of HSBC, her obligation to pay the loans will be suspended. HSBCL-SRP can immediately demand payment of the loans at
anytime because the obligation to pay has no period. Moreover, the spouses Broqueza have already incurred in default in paying the
monthly installments.
Finally, the enforcement of a loan agreement involves "debtor-creditor relations founded on contract and does not in any way concern
employee relations. As such it should be enforced through a separate civil action in the regular courts and not before the Labor
Arbiter."
Real vs. Sangu Phils, Inc. et. al;

G.R. No. 168757; January 19, 2011
Facts:
Petitioner Renato Real was the Manager of respondent corporation Sangu Philippines, Inc., a corporation engaged in the business of
providing manpower for general services, like janitors, janitresses and other maintenance personnel, to various clients. In 2001,
petitioner, together with 29 others, filed their respective Complaints for illegal dismissal against the latter and respondent Kiichi Abe,
the corporation’s Vice-President and General Manager.
With regard to petitioner, he was removed from his position as Manager through Board Resolution 2001-03 adopted by respondent
corporation Board of Directors. Petitioner complained that he was neither notified of the Board Meeting during which said board
resolution was passed nor formally charged with any infraction. He just received from respondents a letter dated March 26, 2001
stating that he has been terminated from service effective March 25, 2001 for the following reasons: (1) continuous absences at his
post at Ogino Philippines Inc. for several months which was detrimental to the corporation’s operation; (2) loss of trust and
confidence; and, (3) to cut down operational expenses to reduce further losses being experienced by respondent corporation.
Respondents raised as one of the Issue the lack of jurisdiction of the Labor Arbiter over petitioner’s complaint. Respondents claimed
that petitioner is both a stockholder and a corporate officer of respondent corporation, hence, his action against respondents is an
intra-corporate controversy over which the Labor Arbiter has no jurisdiction.
Petitioner continues to insist that he is not a corporate officer. He argues that a corporate officer is one who holds an elective position
as provided in the Articles of Incorporation or one who is appointed to such other positions by the Board of Directors as specifically
authorized by its By-Laws.
He believes that his action against the respondents does not arise from intra-corporate relations but rather from employer-employee
relations. This, according to him, was even impliedly recognized by respondents as shown by the earlier quoted portion of the
termination letter they sent to him.
Issue:
Whether petitioner’s complaint for illegal dismissal constitutes an intra-corporate controversy and thus, beyond the jurisdiction of
the Labor Arbiter.
Held:
Two-tier test in determining the existence of intra-corporate controversy
It is worthy to note, however, that before the promulgation of the Tabang case, the Court provided in Mainland Construction Co., Inc.
v. Movilla a "better policy" in determining which between the Securities and Exchange Commission (SEC) and the Labor Arbiter has
jurisdiction over termination disputes, or similarly, whether they are intra-corporate or not
The fact that the parties involved in the controversy are all stockholders or that the parties involved are the stockholders and the
corporation does not necessarily place the dispute within the ambit of the jurisdiction of the SEC (now the Regional Trial Court). The
better policy to be followed in determining jurisdiction over a case should be to consider concurrent factors such as the status or
relationship of the parties or the nature of the question that is subject of their controversy. In the absence of any one of these factors,
the SEC will not have jurisdiction. Furthermore, it does not necessarily follow that every conflict between the corporation and its
stockholders would involve such corporate matters as only SEC (now the Regional Trial Court) can resolve in the exercise of its
adjudicatory or quasi-judicial powers
And, while Tabang was promulgated later than Mainland Construction Co., Inc., the "better policy" enunciated in the latter appears to
have developed into a standard approach in classifying what constitutes an intra-corporate controversy. This is explained lengthily
in Reyes v. Regional Trial Court of Makati,
Intra-Corporate Controversy
A review of relevant jurisprudence shows a development in the Court’s approach in classifying what constitutes an intra-corporate
controversy. Initially, the main consideration in determining whether a dispute constitutes an intra-corporate controversy was
limited to a consideration of the intra-corporate relationship existing between or among the parties. The types of relationships
embraced under Section 5(b) x x x were as follows:
a) between the corporation, partnership or association and the public;
b) between the corporation, partnership or association and its stockholders, partners, members or officers;
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c) between the corporation, partnership or association and the State as far as its franchise, permit or license to operate is concerned;
and
d) among the stockholders, partners or associates themselves.
The existence of any of the above intra-corporate relations was sufficient to confer jurisdiction to the SEC (now the RTC), regardless of
the subject matter of the dispute. This came to be known as the relationship test.
However, in the 1984 case of DMRC Enterprises v. Esta del Sol Mountain Reserve, Inc., the Court introduced the nature of the
controversy test. We declared in this case that it is not the mere existence of an intra-corporate relationship that gives rise to an intra-
corporate controversy; to rely on the relationship test alone will divest the regular courts of their jurisdiction for the sole reason that
the dispute involves a corporation, its directors, officers, or stockholders. We saw that there is no legal sense in disregarding or
minimizing the value of the nature of the transactions which gives rise to the dispute.
Under the nature of the controversy test, the incidents of that relationship must also be considered for the purpose of ascertaining
whether the controversy itself is intra-corporate. The controversy must not only be rooted in the existence of an intra-corporate
relationship, but must as well pertain to the enforcement of the parties’ correlative rights and obligations under the Corporation Code
and the internal and intra-corporate regulatory rules of the corporation. If the relationship and its incidents are merely incidental to
the controversy or if there will still be conflict even if the relationship does not exist, then no intra-corporate controversy exists.
The Court then combined the two tests and declared that jurisdiction should be determined by considering not only the status or
relationship of the parties, but also the nature of the question under controversy. This two-tier test was adopted in the recent case
of Speed Distribution Inc. v. Court of Appeals:
‘To determine whether a case involves an intra-corporate controversy, and is to be heard and decided by the branches of the RTC
specifically designated by the Court to try and decide such cases, two elements must concur: (a) the status or relationship of the
parties, and (2) the nature of the question that is the subject of their controversy.
The first element requires that the controversy must arise out of intra-corporate or partnership relations between any or all of the
parties and the corporation, partnership, or association of which they are not stockholders, members or associates, between any or all
of them and the corporation, partnership or association of which they are stockholders, members or associates, respectively; and
between such corporation, partnership, or association and the State insofar as it concerns the individual franchises. The second
element requires that the dispute among the parties be intrinsically connected with the regulation of the corporation. If the nature of
the controversy involves matters that are purely civil in character, necessarily, the case does not involve an intra-corporate
controversy.’
Guided by this recent jurisprudence, we thus find no merit in respondents’ contention that the fact alone that petitioner is a
stockholder and director of respondent corporation automatically classifies this case as an intra-corporate controversy. To reiterate,
not all conflicts between the stockholders and the corporation are classified as intra-corporate. There are other factors to consider in
determining whether the dispute involves corporate matters as to consider them as intra-corporate controversies.
Corporate officers’ in the context of Presidential Decree No. 902-A are those officers of the corporation who are given that character
by the Corporation Code or by the corporation’s by-laws. There are three specific officers whom a corporation must have under
Section 25 of the Corporation Code. These are the president, secretary and the treasurer. The number of officers is not limited to these
three. A corporation may have such other officers as may be provided for by its by-laws like, but not limited to, the vice-president,
cashier, auditor or general manager. The number of corporate officers is thus limited by law and by the corporation’s by-laws.
With the elements of intra-corporate controversy being absent in this case, we thus hold that petitioner’s complaint for illegal
dismissal against respondents is not intra-corporate. Rather, it is a termination dispute and, consequently, falls under the jurisdiction
of the Labor Arbiter pursuant to Section 217 3 of the Labor Code.
Portillo vs. Rudolf Lietz, Inc. et al.;

G.R. No. 196539; October 10, 2012
Facts:
Marietta Portillo was hired by Rudolf Lietz, Inc.. After ten years of service, she was promoted to Sales Representative. In this regard,
Portillo signed a letter agreement containing a "Goodwill Clause” which provides that on the termination of his employment by act of
either him or respondent, and for a period of three (3) years thereafter, she shall not engage directly or indirectly as employee,
manager, proprietor, or solicitor for himself or others in a similar or competitive business or the same character of work which he was
employed by Lietz, Inc. to do and perform. Should she breach such clause, she shall pay as liquidated damages the amount of 100% of
her gross compensation over the last 12 months, it being agreed that this sum is reasonable and just.
Three years thereafter, Portillo resigned from Rudolf Lietz, Inc., and subsequently, they learned that Portillo had been hired by Ed
Keller Philippines, Limited to head its Pharma Raw Material Department. Ed Keller Limited is purportedly a direct competitor of Lietz,
Inc.
Meanwhile, Portillo's demands from the respondents for the payment of her remaining salaries and commissions went unheeded.
Respondents gave Portillo the run around, on the pretext that her salaries and commissions were still being computed.
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It was then that Portillo filed a complaint with NLRC for non-payment of 1 1/2 months' salary, two (2) months' commission, 13th
month pay, plus moral, exemplary and actual damages and attorney's fees.
Lietz, Inc. admitted liability for Portillo's money claims. However, Lietz, Inc. raised the defense of legal compensation that Portillo's
money claims should be offset against her liability to Lietz, Inc. for liquidated damages for Portillo's alleged breach of the "Goodwill
Clause" in the employment contract when she became employed with Ed Keller Philippines, Limited.
The Labor Arbiter Daniel J. Cajilig granted Portillo's complaint ordering respondents Rudolf Lietz, Inc. to pay complainant Marietta N.
Portillo the amount representing her salary and commissions, including 13th month pay.
On appeal by respondents, the NLRC, through its Second Division, affirmed the ruling of Labor Arbiter. On motion for reconsideration,
the NLRC stood pat on its ruling.
Expectedly, respondents filed a petition for certiorari before the Court of Appeals, alleging grave abuse of discretion in the labor
tribunals' rulings. CA denied the respondents petition but modified its previous decision on respondents motion for reconsideration
allowing the legal compensation or set-off invoked by the respondents.
Issue:
Whether or not, Portillo's money claims for unpaid salaries may be offset against respondents' claim for liquidated damages?
Held:
No. It cannot be offset.
Paragraph 4 of Article 217 of the Labor Code to wit:
Art. 217. Jurisdiction of Labor Arbiters and the Commission. — (a) Except as otherwise provided under this code, the
Arbiters shall have original and exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the
submission of the case by the parties for decision without extension, even in the absence of stenographic notes, the
following case involving all workers, whether agricultural or non-agricultural:
xxx xxx xxx
4.Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations;
The Court of Appeals was convinced that the claim for liquidated damages emanates from the "Goodwill Clause” of the employment
contract and, therefore, is a claim for damages arising from the employer-employee relations.
But, as early as Singapore Airlines Limited v. Pañ o, it has already been established that not all disputes between an employer and his
employee(s) fall within the jurisdiction of the labor tribunals.
In the case at bar, there is no causal connection between the petitioner employees' claim for unpaid wages and the respondent
employers' claim for damages for the alleged "Goodwill Clause" violation . Portillo's claim for unpaid salaries did not have anything to
do with her alleged violation of the employment contract as, in fact, her separation from employment is not "rooted" in the alleged
contractual violation. She resigned from her employment. She was not dismissed. The alleged contractual violation did not arise
during the existence of the employer-employee relationship. It was a post-employment matter, a post-employment violation.
The cause of action is based on a quasi-delict or tort, which has no reasonable causal connection with any of the claims provided for in
Article 217, jurisdiction over the action is with the regular courts. As it is, petitioner does not ask for any relief under the Labor Code,
rather, merely seeks to recover damages based on the parties' contract of employment as redress for respondent's breach thereof.
Such cause of action is within the realm of Civil Law, and jurisdiction over the controversy belongs to the regular courts. More so must
this be in the present case, what with the reality that the stipulation refers to the post-employment relations of the parties. Thus, the
original decision of the appellate court, the right ruling, should not have been reconsidered.
Ace Navigation Co., Inc. et al. vs. Fernandez;

G.R. No. 197309; October 10, 2012
Facts:
Seaman Teodorico Fernandez, assisted by his wife, Glenita Fernandez, filed with the NLRC a complaint for disability benefits, with
prayer for moral and exemplary damages, plus attorney's fees, against Ace Navigation Co., Inc., Vela International Marine Ltd., and/or
Rodolfo Pamintuan.
The petitioners moved to dismiss the complaint, contending that the labor arbiter had no jurisdiction over the dispute. They argued
that exclusive original jurisdiction is with the voluntary arbitrator or panel of voluntary arbitrators, pursuant to Section 29 of the
POEA Standard Employment Contract (POEA-SEC), since the parties are covered by the AMOSUP-TCC or AMOSUP-VELA collective
bargaining agreement (CBA). Under Section 14 of the CBA, a dispute between a seafarer and the company shall be settled through the
grievance machinery and mandatory voluntary arbitration. Fernandez opposed the motion. He argued that inasmuch as his complaint
involves a money claim, original and exclusive jurisdiction over the case is vested with the labor arbiter.
Issue:
Whether or not, the labor arbiter has the original and exclusive jurisdiction over Fernandez's disability claim under Section 10 of R.A.
No. 8042?
Held:
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No. It is not within the original and exclusive jurisdiction of the Labor Arbiter but rather with the voluntary arbitrators.
The POEA-SEC, which governs the employment of Filipino seafarers, provides that in cases of claims and disputes arising from this
employment, the parties covered by a collective bargaining agreement shall submit the claim or dispute to the original and
exclusive jurisdiction of the voluntary arbitrator or panel of voluntary arbitrators.
The voluntary arbitrator or panel of voluntary arbitrators has original and exclusive jurisdiction over Fernandez's disability claim.
There is no dispute that the claim arose out of Fernandez's employment with the petitioners and that their relationship is covered by
a CBA — the AMOSUP/TCC or the AMOSUP-VELA CBA. The CBA provides for a grievance procedure for the resolution of grievances or
disputes which occur during the employment relationship and, like the grievance machinery created under Article 261 of the Labor
Code, it is a two-tiered mechanism, with voluntary arbitration as the last step.
What might have caused the CA to miss the clear intent of the parties in prescribing a grievance procedure in their CBA is, as the
petitioners' have intimated, the use of the auxiliary verb "may" in Article 14.7 (a) of the CBA which, to reiterate, provides that "[i]f by
reason of the nature of the Dispute, the parties are unable to amicably settle the dispute, either party may refer the case to a
MANDATORY ARBITRATION COMMITTEE."
It is reasonable to conclude that it viewed as optional the referral of a dispute to the mandatory arbitration committee when the
parties are unable to amicably settle the dispute.
It bears stressing at this point that we are upholding the jurisdiction of the voluntary arbitrator or panel of voluntary arbitrators over
the present dispute, not only because of the clear language of the parties' CBA on the matter; more importantly, we so uphold the
voluntary arbitrator's jurisdiction, in recognition of the State's express preference for voluntary modes of dispute settlement, such as
conciliation and voluntary arbitration as expressed in the Constitution, the law and the rules.
It is settled that when the parties have validly agreed on a procedure for resolving grievances and to submit a dispute to voluntary
arbitration then that procedure should be strictly observed.
Cosare vs. Broadcom Asia, Inc.

GR No. 201298; February 5, 2014
Facts:
Cosare was employed as a salesman by Broadcom. Several years later, he was named as an incorporator of the said company having
been assigned 100 shares of stocks. He was also promoted to the position of Assistant Vice President for Sales (AVP for Sales)
Cosare accused his immediate superior (Alex Abiog) for committing some irregularities in his office. Instead of acting the accusation
thrown against Abiog, it was Cosare who was asked by the employer to tender his resignation and offered him financial assistance.
Cosare refused. He was charged of serious misconduct and willful breach of trust, and according to the employer (Broadcom) it was
him (Cosare) who committed some irregularities and anomalies in his office. In line with that, Cosare was suspended and precluded
from entering the work premises.
A complaint was filed for illegal dismissal was filed against Broadcom before the Labor Arbiter. The latter moved for the dismissal of
the case on the ground that Cosare was a corporate officer which means that the controversy is an intra-corporate dispute that falls
within the jurisdiction of the RTC.
Issue:
Whether or not the controversy is an intra-corporate dispute which would be beyond the jurisdiction of the Labor Arbiter.
Held:
The LA had the original jurisdiction over the complaint for illegal dismissal because Cosare, although an officer of Broadcom for being
its AVP for Sales, was not a "corporate officer" as the term is defined by law. “‘Corporate officers’ in the context of Presidential Decree
No. 902-A are those officers of the corporation who are given that character by the Corporation Code or by the corporation’s by-laws.
There are three specific officers whom a corporation must have under Section 25 of the Corporation Code. These are the president,
secretary and the treasurer. The number of officers is not limited to these three. A corporation may have such other officers as may be
provided for by its by-laws like, but not limited to, the vice-president, cashier, auditor or general manager. The number of corporate
officers is thus limited by law and by the corporation’s by-laws."
It has been held that an "office" is created by the charter of the corporation and the officer is elected by the directors and
stockholders. On the other hand, an "employee" usually occupies no office and generally is employed not by action of the directors or
stockholders but by the managing officer of the corporation who also determines the compensation to be paid to such employee.
Nowhere in the Broadcom’s by-laws that an AVP for Sales is a corporate officer neither is there any indication that Cosare was
appointed by the Board of Directors. Broadcom failed to sufficiently establish that the position of AVP for Sales was created by virtue
of an act of Broadcom’s board, and that Cosare was specifically elected or appointed to such position by the directors.
Hence, in line with the above findings, the said controversy falls within the jurisdiction of the Labor Arbiter and not with the RTC.
Amecos Innovators Inc. vs lopez

GR no. 178055, July 2, 2014
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FACTS:
Petitioner Amecos Innovations, Inc. (Amecos) is a corporation duly incorporated under Philippine laws engaged in the business of
selling assorted products created by its President and herein co-petitioner, Antonio F. Mateo (Mateo). Social Security System (SSS)
filed a complaint for alleged delinquency in the remittance of SSS contributions and penalty liabilities in violation of Section 22 (a) and
22 (d) in relation to Section 28 (e) of the SSS law, as amended. Amecos attributed the failure to remit to respondent Lopez. But
Amecos settled its obligation with the SSS. Subsequently, Amecos filed a demand against Lopez for her share in the SSS contributions
and also claimed for actual, moral, and exemplary damages, attorney’s fee, and costs of the suit. Respondent claimed that she is a
former employee of Amecos prior to her alleged illegal dismissal and she moved for dismissal alleging that the regular courts do not
have jurisdiction because the claim arose out of their employer-employee relationship.
The MeTC dismissed the petition for lack of jurisdiction. On appeal, the RTC affirmed MeTC’s ruling. The Court of Appeals reaffirmed
the rulings of the lower courts. Thus this petition. The petitioner argue that their Complaint is one for recovery of a sum of money and
damages based on Articles 19, 27 22, 28 and 2154 29 of the Civil Code; that their cause of action is based on solutio indebiti or unjust
enrichment, which arose from respondent's misrepresentation that there was no need to enroll her with the SSS as she was
concurrently employed by another outfit, Triple A Glass and Aluminum Company, and that she was self-employed as well. They argue
that the employer-employee relationship between Amecos and respondent is merely incidental, and does not necessarily place their
dispute within the exclusive jurisdiction of the labor tribunals. Respondent, on the other hand, maintains that jurisdiction over
petitioners' case lies with the Labor Arbiter, as their cause of action remains necessarily connected to and arose from their employer-
employee relationship.
ISSUES:
(1) Whether the regular civil court and not the labor arbiter or . . . The national labor relations commission has jurisdiction over
claim[s] for reimbursement arising from employer-employee relations.
(2) Whether the regular civil court and not the labor arbiter or . . . The national labor relations commission has jurisdiction over
claim[s] for damages for misrepresentation arising from employer-employee relations.
RULING:
This Court holds that as between the parties, Article 217 (a) (4) of the Labor Code is applicable. Said provision bestows upon the
Labor Arbiter original and exclusive jurisdiction over claims for damages arising from employer-employee relations. The observation
that the matter of SSS contributions necessarily flowed from the employer-employee relationship between the parties — shared by
the lower courts and the CA — is correct; thus, petitioners' claims should have been referred to the labor tribunals. In this connection,
it is noteworthy to state that "the Labor Arbiter has jurisdiction to award not only the reliefs provided by labor laws, but also damages
governed by the Civil Code."
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XI. 2011 NLRC RULES OF PROCEDURE
ISLRIZ Trading/Lu vs. Capade;

G.R. No. 168501; January 31, 2011
Facts:
Respondents were employees of Islriz Trading, a gravel and sand business owned and operated by petitioner Victor Hugo Lu.
Claiming that they were illegally dismissed, respondents filed a Complaint for illegal dismissal and non-payment of overtime pay,
holiday pay, rest day pay, allowances and separation pay against petitioner. On his part, petitioner imputed abandonment of work
against respondents.
The Labor Arbiter rendered judgment declaring Islriz Trading guilty of illegal dismissal and ordered the latter to reinstate the
respondents and for payment of backwages until actual reinstatement. Upon appeal, the NLRC set aside the Decision of Labor Arbiter.
Finding that respondents’ failure to continue working for petitioner was neither caused by termination nor abandonment of work, the
NLRC ordered respondents’ reinstatement but without backwages. However, pending appeal, respondents moved for the execution of
the reinstatement aspect of the Labor Arbiter’s decision. However, until the issuance of the NLRC Resolution overturning Labor
Arbiter Gan’s decision, petitioner still failed to reinstate respondents or effect payroll reinstatement. This prompted respondents to
apply for a Writ of Execution to enforce the monetary award. A Writ of Execution was issued by Labor Arbiter Castillon. The
proceedings thereafter were likewise upheld by the CA.
Issue:
Whether respondents may collect their wages during the period between the Labor Arbiter’s order of reinstatement pending appeal
and the NLRC Resolution overturning that of the Labor Arbiter.
Held:
The petition is not meritorious.
Petitioner contends that the CA’s act in upholding the issuance of the questioned Writ of Execution for the enforcement of
respondents’ accrued salaries, said Decision and Resolution, in effect, altered the NLRC Resolution which only decreed respondents’
reinstatement without backwages.
Paragraph 3 of Article 223 of the Labor Code reads:
‘In any event, the decision of the Labor Arbiter reinstating a dismissed or separated employee, insofar as the reinstatement aspect is
concerned, shall immediately be executory, pending appeal. The employee shall either be admitted back to work under the same
terms and conditions prevailing prior to his dismissal or separation or, at the option of the employer, merely reinstated in the payroll.
The posting of a bond by the employer shall not stay the execution for reinstatement provided herein.’
Thus in several cases, it has maintained that even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is
reversal by the higher court. On the other hand, if the employee has been reinstated during the appeal period and such reinstatement
order is reversed with finality, the employee is not required to reimburse whatever salary he received for he is entitled to such, more
so if he actually rendered services during the period. In other words, a dismissed employee whose case was favorably decided by the
Labor Arbiter is entitled to receive wages pending appeal upon reinstatement, which is immediately executory. Unless there is a
restraining order, it is ministerial upon the Labor Arbiter to implement the order of reinstatement and it is mandatory on the
employer to comply therewith.
To come up with the answer to the present issue, we shall apply the two-fold test used in Garcia. Was there an actual delay or was the
order of reinstatement pending appeal executed prior to its reversal? As can be recalled, until the issuance of the September 5, 2002
NLRC Resolution overturning Labor Arbiter Gan’s Decision, petitioner still failed to reinstate respondents or effect payroll
reinstatement in accordance with Article 223 of the Labor Code. This was what actually prompted respondents to move for the
issuance of a computation of the award of backwages and Alias Writ of Execution for its enforcement. It cannot therefore be denied
that there was an actual delay in the execution of the reinstatement aspect of the Decision of Labor Arbiter Gan prior to the issuance
of the NLRC Resolution overturning the same.
Now, the next question is: Was the delay not due to the employer’s unjustified act or omission? Unlike in Garcia where PAL, as the
employer, was then under corporate rehabilitation, Islriz Trading here did not undergo rehabilitation or was under any analogous
situation which would justify petitioner’s non-exercise of the options provided under Article 223 of the Labor Code. Petitioner,
without any satisfactory reason, failed to fulfill its obligation and respondents remained to be not reinstated until the NLRC resolved
petitioner’s appeal. Evidently, the delay in the execution of respondents’ reinstatement was due to petitioner’s unjustified refusal to
effect the same.
Hence, the conclusion is that respondents have the right to collect their accrued salaries during the period between the Labor
Arbiter’s Decision ordering their reinstatement pending appeal and the NLRC Resolution overturning the same because petitioner’s
failure to reinstate them either actually or through payroll was due to petitioner’s unjustified refusal to effect reinstatement. In order
to enforce this, Labor Arbiter Castillon thus correctly issued the Writ of Execution dated March 9, 2004 as well as the Order dated June
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3, 2004 denying petitioner’s Motion to Quash Writ of Execution and granting respondents’ Urgent Motion for Issuance of Break-Open
Order. Consequently, we find no error on the part of the CA in upholding these issuances and in dismissing the petition for certiorari
before it.
To clarify, respondents are entitled to their accrued salaries only from the time petitioner received a copy of Labor Arbiter Gan’s
Decision declaring respondents’ termination illegal and ordering their reinstatement up to the date of the NLRC Resolution
overturning that of the Labor Arbiter. This is because it is only during said period that respondents are deemed to have been illegally
dismissed and are entitled to reinstatement pursuant to Labor Arbiter Gan’s Decision which was the one in effect at that time. Beyond
that period, the NLRC Resolution declaring that there was no illegal dismissal is already the one prevailing. From such point,
respondents’ salaries did not accrue not only because there is no more illegal dismissal to speak of but also because respondents have
not yet been actually reinstated and have not rendered services to petitioner.
Panlilio et al. vs. RTC Br. 51, City of manila;

G.R. No. 173846; February 2, 2011
Facts:
On October 15, 2004, Jose Marcel Panlilio, Erlinda Panlilio, Nicole Morris and Marlo Cristobal (petitioners), as corporate officers of
Silahis International Hotel, Inc. (SIHI), filed with the Regional Trial Court (RTC) of Manila, Branch 24, a petition for Suspension of
Payments and Rehabilitation[4] in SEC Corp. Case No. 04-111180.
On October 18, 2004, the RTC of Manila, Branch 24, issued an Order staying all claims against SIHI upon finding the petition sufficient
in form and substance.
At the time, however, of the filing of the petition for rehabilitation, there were a number of criminal charges[7] pending against
petitioners in Branch 51 of the RTC of Manila. These criminal charges were initiated by respondent Social Security System (SSS) and
involved charges of violations of Section 28 (h)[8] of Republic Act 8282, or the Social Security Act of 1997 (SSS law), in relation to
Article 315 (1) (b)[9] of the Revised Penal Code, or Estafa. Consequently, petitioners filed with the RTC of Manila, Branch 51, a
Manifestation and Motion to Suspend Proceedings.[10] Petitioners argued that the stay order issued by Branch 24 should also apply
to the criminal charges pending in Branch 51. Petitioners, thus, prayed that Branch 51 suspend its proceedings until the petition for
rehabilitation was finally resolved.
Branch 51 issued an Order[11] denying petitioners’ motion to suspend the proceedings. It ruled that the stay order issued by Branch
24 did not cover criminal proceedings, to wit:
Xxxx
The Court shares the view of the private complainants and the SSS that the said stay order does not include the prosecution of
criminal offenses. Precisely, the law “criminalizes” the non-remittance of SSS contributions by an employer to protect the employees
from unscrupulous employers. Clearly, in these cases, public interest requires that the said criminal acts be immediately investigated
and prosecuted for the protection of society.
Issue:
Whether or not the stay order issued by branch 24, regional trial court of manila, in sec corp. Case no. 04-111180 covers also violation
of sss law for non-remittance of premiums and violation of [article] [3] 515 of the revised penal code.
Held:
Yes. Rosario is at fours with the case at bar. Petitioners are charged with violations of Section 28 (h) of the SSS law, in relation to
Article 315 (1) (b) of the Revised Penal Code, or Estafa. The SSS law clearly “criminalizes” the non-remittance of SSS contributions by
an employer to protect the employees from unscrupulous employers. Therefore, public interest requires that the said criminal acts be
immediately investigated and prosecuted for the protection of society.
The rehabilitation of SIHI and the settlement of claims against the corporation is not a legal ground for the extinction of petitioners’
criminal liabilities. There is no reason why criminal proceedings should be suspended during corporate rehabilitation, more so, since
the prime purpose of the criminal action is to punish the offender in order to deter him and others from committing the same or
similar offense, to isolate him from society, reform and rehabilitate him or, in general, to maintain social order.[26] As correctly
observed in Rosario,[27] it would be absurd for one who has engaged in criminal conduct could escape punishment by the mere filing
of a petition for rehabilitation by the corporation of which he is an officer.
The prosecution of the officers of the corporation has no bearing on the pending rehabilitation of the corporation, especially since
they are charged in their individual capacities. Such being the case, the purpose of the law for the issuance of the stay order is not
compromised, since the appointed rehabilitation receiver can still fully discharge his functions as mandated by law. It bears to stress
that the rehabilitation receiver is not charged to defend the officers of the corporation. If there is anything that the rehabilitation
receiver might be remotely interested in is whether the court also rules that petitioners are civilly liable. Such a scenario, however, is
not a reason to suspend the criminal proceedings, because as aptly discussed in Rosario, should the court prosecuting the officers of
the corporation find that an award or indemnification is warranted, such award would fall under the category of claims, the execution
of which would be subject to the stay order issued by the rehabilitation court.[28] The penal sanctions as a consequence of violation
of the SSS law, in relation to the revised penal code can therefore be implemented if petitioners are found guilty after trial. However,
any civil indemnity awarded as a result of their conviction would be subject to the stay order issued by the rehabilitation court. Only
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to this extent can the order of suspension be considered obligatory upon any court, tribunal, branch or body where there are pending
actions for claims against the distressed corporation.
Ando vs. Campo;

G.R. No. 184007; February 16, 2011
Facts:
Petitioner was the president of Premier Allied and Contracting Services, Inc. (PACSI), an independent labor contractor. Respondents
were hired by PACSI as haulers tasked to manually carry bags of sugar from the warehouse of Victorias Milling Company and load
them on trucks. The respondents were dismissed from employment and thereafter, filed a case for illegal dismissal and some money
claims with the NLRC. Labor Arbiter promulgated a decision, ruling in respondents’ favor.
Petitioner and PACSI appealed to the NLRC and the NLRC ruled that petitioner failed to perfect his appeal because he did not pay the
supersedeas bond. It also affirmed the Labor Arbiter’s decision and upon finality of the decision, respondents moved for its execution.

To answer for the monetary award, NLRC Acting Sheriff Romeo Pasustento issued a Notice of Sale on Execution of Personal Property
over the property in the name of “Paquito V. Ando x x x married to Erlinda S. Ando.”

This prompted petitioner to file an action for prohibition and damages with prayer for the issuance of a TRO before RTC claiming that
the property belonged to him and his wife, not to the corporation, and, hence, could not be subject of the execution sale. But the RTC
issued an order denying the prayer for a TRO, holding that the trial court had no jurisdiction to try and decide the case. The RTC ruled
that, pursuant to the NLRC Manual on the Execution of Judgment, petitioner’s remedy was to file a third-party claim with the NLRC
Sheriff.

Petitioner filed a petition for certiorari under Rule 65 before the CA contending that the RTC acted without or in excess of jurisdiction
or with grave abuse of discretion amounting to lack or excess of jurisdiction in issuing the Order. The CA, however, affirmed the RTC
Order in so far as it dismissed the complaint on the ground that it had no jurisdiction over the case, and nullified all other
pronouncements in the same Order. Petitioner moved for reconsideration, but the motion was denied.
Held:
Regular courts have no jurisdiction to hear and decide questions which arise from and are incidental to the enforcement of decisions,
orders, or awards rendered in labor cases by appropriate officers and tribunals of the Department of Labor and Employment. To hold
otherwise is to sanction splitting of jurisdiction which is obnoxious to the orderly administration of justice.

The NLRC Manual on the Execution of Judgment governs any question on the execution of a judgment of that body(NLRC). The Rules
of Court apply only by analogy or in a suppletory character.

NLRC Manual on the Execution of Judgment deals specifically with third-party claims in cases brought before that body. It defines a
third-party claim as one where a person, not a party to the case, asserts title to or right to the possession of the property levied
upon. It also sets out the procedure for the filing of a third-party claim, to wit:
SECTION 2. Proceedings. — If property levied upon be claimed by any person other than the losing party or his agent,
such person shall make an affidavit of his title thereto or right to the possession thereof, stating the grounds of such right or
title and shall file the same with the sheriff and copies thereof served upon the Labor Arbiter or proper officer issuing the
writ and upon the prevailing party. Upon receipt of the third party claim, all proceedings with respect to the execution of the
property subject of the third party claim shall automatically be suspended and the Labor Arbiter or proper officer issuing
the writ shall conduct a hearing with due notice to all parties concerned and resolve the validity of the claim within ten (10)
working days from receipt thereof and his decision is appealable to the Commission within ten (10) working days from
notice, and the Commission shall resolve the appeal within same period.

There is no doubt in our mind that petitioner’s complaint is a third- party claim within the cognizance of the NLRC. Petitioner may
indeed be considered a “third party” in relation to the property subject of the execution vis-à -vis the Labor Arbiter’s decision. There is
no question that the property belongs to petitioner and his wife, and not to the corporation. It can be said that the property belongs to
the conjugal partnership, not to petitioner alone. Thus, the property belongs to a third party, i.e., the conjugal partnership. At the
very least, the Court can consider that petitioner’s wife is a third party within contemplation of the law.
There is no denying that the present controversy arose from the complaint for illegal dismissal. The subject matter of petitioner’s
complaint is the execution of the NLRC decision. Execution is an essential part of the proceedings before the NLRC. Jurisdiction, once
acquired, continues until the case is finally terminated, and there can be no end to the controversy without the full and proper
implementation of the commission’s directives.

Further underscoring the RTC’s lack of jurisdiction over petitioner’s complaint is Article 254 of the Labor Code, to wit:

ART. 254. INJUNCTION PROHIBITED. – No temporary or permanent injunction or restraining order in any case involving or
growing out of labor disputes shall be issued by any court or other entity, except as otherwise provided in Articles 218 and
264 of this Code.

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Moreover, the power of the NLRC, or the courts, to execute its judgment extends only to properties unquestionably belonging to the
judgment debtor alone. A sheriff, therefore, has no authority to attach the property of any person except that of the judgment
debtor. Likewise, there is no showing that the sheriff ever tried to execute on the properties of the corporation.
The TCT of the property bears out that, indeed, it belongs to petitioner and his wife and the latter stands to lose the property subject
of execution without ever being a party to the case. This will be tantamount to deprivation of property without due process.
Exodus International Construction Corp. vs. Biscocho;

G.R. No. 166109; February 23, 2011
Facts:
Petitioner Exodus International Construction Corporation (Exodus) is a duly licensed labor contractor for the painting of residential
houses, condominium units and commercial buildings. Petitioner Antonio P. Javalera is the President and General Manager of Exodus.
Exodus obtained from Dutch Boy Philippines, Inc. (Dutch Boy) a contract for the painting of the Imperial Sky Garden. Dutch Boy
awarded another contract to Exodus for the painting. In the furtherance of its business, Exodus hired respondents as painters on
different dates.
Guillermo Biscocho (Guillermo) was assigned at the Imperial Sky Garden from February 8, 1999 to February 8, 2000. Fernando
Pereda (Fernando) worked in the same project from February 8, 1999 to June 17, 2000. Likewise, Ferdinand Mariano (Ferdinand)
worked there from April 12, 1999 to February 17, 2000. All of them were then transferred to Pacific Plaza Towers.
Gregorio S. Bellita (Gregorio) was assigned to work at the house of Mr. Teofilo Yap in Ayala Alabang, Muntinlupa City from May 20,
1999 to December 4, 1999. Afterwards he was transferred to Pacific Plaza Towers.
Miguel B. Bobillo (Miguel) was hired and assigned at Pacific Plaza Towers on March 10, 2000.
On November 27, 2000, Guillermo, Fernando, Ferdinand, and Miguel filed a complaint for illegal dismissal and non-payment of holiday
pay, service incentive leave pay, 13th month pay and night-shift differential pay.
On December 1, 2000, Gregorio also filed a complaint. He claimed that he was dismissed from the service on September 12, 2000
while Guillermo, Fernando, Ferdinand, and Miguel were orally notified of their dismissal from the service on November 25, 2000.
Petitioners denied respondents’ allegations. As regards Gregorio, petitioners averred that on September 15, 2000, he absented
himself from work and applied as a painter with SAEI-EEI which is the general building contractor of Pacific Plaza Towers. Since then,
he never reported back to work.
Guillermo absented himself from work without leave on November 27, 2000. When he reported for work the following day, he was
reprimanded for being Absent Without Official Leave (AWOL). Because of the reprimand, he worked only half-day and thereafter was
unheard of until the filing of the instant complaint.
On March 21, 2002, the Labor Arbiter rendered a Decision exonerating petitioners from the charge of illegal dismissal as respondents
chose not to report for work. The Labor Arbiter ruled that since there is neither illegal dismissal nor abandonment of job,
respondents should be reinstated but without any backwages. She disallowed the claims for premium pay for holidays and rest days
and nightshift differential pay as respondents failed to prove that actual service was rendered on such non-working days. However,
she allowed the claims for holiday pay, service incentive leave pay and 13th month pay.
Petitioners sought recourse to the NLRC limiting their appeal to the award of service incentive leave pay, 13th month pay, holiday pay
and 10% attorney’s fees in the sum of P70,183.23. NLRC dismissed the appeal. It ruled that petitioners, who have complete control
over the records of the company, could have easily rebutted the monetary claims against it. As to the award of attorney’s fees, the
NLRC found the same to be proper because respondents were forced to litigate in order to validate their claim.
The CA also affirmed LA and NLRC decision, hence this petition.
Held:
No illegal dismissal.
The rule is that one who alleges a fact has the burden of proving it; thus, petitioners were burdened to prove their allegation that
respondents dismissed them from their employment. It must be stressed that the evidence to prove this fact must be clear, positive
and convincing. The rule that the employer bears the burden of proof in illegal dismissal cases finds no application here because the
respondents deny having dismissed the petitioners.
In this case, petitioners were able to show that they never dismissed respondents. As to the case of Fernando, Miguel and Ferdinand,
it was shown that on November 25, 2000, at around 7:30 a.m., the petitioners’ foreman, Wenifredo Lalap (Wenifredo) caught the
three still eating when they were supposed to be working already. Wenifredo reprimanded them and, apparently, they resented it so
they no longer reported for work. In the case of Gregorio, he absented himself from work on September 15, 2000 to apply as a painter
with SAEI-EEI, the general contractor of Pacific Plaza Towers. Since then he never reported back to work. Lastly, in the case of
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Guillermo, he absented himself without leave on November 27, 2000, and so he was reprimanded when he reported for work the
following day. Because of the reprimand, he did not report for work anymore.
Respondents must be reinstated and paid their holiday pay, service incentive leave pay, and 13th month pay.
However, petitioners are of the position that the reinstatement of respondents to their former positions, which were no longer
existing, is impossible, highly unfair and unjust. Having completed their tasks, their positions automatically ceased to exist.
Consequently, there were no more positions where they can be reinstated as painters.
Petitioners are misguided. They forgot that there are two types of employees in the construction industry. The first is referred to as
project employees or those employed in connection with a particular construction project or phase thereof and such employment is
coterminous with each project or phase of the project to which they are assigned. The second is known as non-project employees or
those employed without reference to any particular construction project or phase of a project.
The second category is where respondents are classified. As such they are regular employees of petitioners. It is clear from the
records of the case that when one project is completed, respondents were automatically transferred to the next project awarded to
petitioners. There was no employment agreement given to respondents which clearly spelled out the duration of their employment,
the specific work to be performed and that such is made clear to them at the time of hiring. It is now too late for petitioners to claim
that respondents are project employees whose employment is coterminous with each project or phase of the project to which they are
assigned.
A project employee x x x may acquire the status of a regular employee when the following [factors] concur:
1. There is a continuous rehiring of project employees even after cessation of a project; and
2. The tasks performed by the alleged “project employee” are vital, necessary and indespensable to the usual business or trade of the
employer.”
In this case, the evidence on record shows that respondents were employed and assigned continuously to the various projects of
petitioners. As painters, they performed activities which were necessary and desirable in the usual business of petitioners, who are
engaged in subcontracting jobs for painting of residential units, condominium and commercial buildings. As regular employees,
respondents are entitled to be reinstated without loss of seniority rights.
Respondents are also entitled to the payment of attorney’s fees.
Even though respondents were not represented by counsel in most of the stages of the proceedings of this case, the award of
attorney’s fees as ruled by the Labor Arbiter, the NLRC and the CA to the respondents is still proper. In Rutaquio v. National Labor
Relations Commission,[29] this Court held that:
It is settled that in actions for recovery of wages or where an employee was forced to litigate and, thus, incur expenses to protect his
rights and interest, the award of attorney’s fees is legally and morally justifiable.
In Producers Bank of the Philippines v. Court of Appeals[30] this Court ruled that:
Attorney’s fees may be awarded when a party is compelled to litigate or to incur expenses to protect his interest by reason of an
unjustified act of the other party.
In this case, respondents filed a complaint for illegal dismissal with claim for payment of their holiday pay, service incentive leave pay,
and 13th month pay. The Labor Arbiter, the NLRC and the CA were one in ruling that petitioners did not pay the respondents their
holiday pay, service incentive leave pay, and 13th month pay as mandated by law. For sure, this unjustified act of petitioners had
compelled the
respondents to institute an action primarily to protect their rights and interests.
As to Backwages
In cases where there is no evidence of dismissal, the remedy is reinstatement but without backwages. In this case, both
the Labor Arbiter and the NLRC made a finding that there was no dismissal much less an illegal one. “It is settled that factual findings
of quasi-judicial agencies are generally accorded respect and finality so long as these are supported by substantial evidence.” Thus,
inasmuch as no finding of illegal dismissal had been made, and considering that the absence of such finding is supported by the
records of the case, this Court is bound by such conclusion and cannot allow an award of the payment of backwages.
Pfizer, Inc. vs. Velasco;

G.R. No. 177467; March 9, 2011
Facts:
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Private respondent Geraldine L. Velasco was employed with petitioner PFIZER, INC. as Professional Health Care Representative since
1 August 1992. Sometime in April 2003, Velasco had a medical work up for her high-risk pregnancy and was subsequently advised
bed rest which resulted in her extending her leave of absence. Velasco filed her sick leave for the period from 26 March to 18 June
2003, her vacation leave from 19 June to 20 June 2003, and leave without pay from 23 June to 14 July 2003.
On 26 June 2003, while Velasco was still on leave, PFIZER through its Area Sales Manager, herein petitioner Ferdinand Cortez,
personally served Velasco a "Show-cause Notice" dated 25 June 2003. Aside from mentioning about an investigation on her possible
violations of company work rules regarding "unauthorized deals and/or discounts in money or samples and unauthorized withdrawal
and/or pull-out of stocks" and instructing her to submit her explanation on the matter within 48 hours from receipt of the same, the
notice also advised her that she was being placed under "preventive suspension" for 30 days .In response, Velasco sent a letter
addressed to Cortez dated 28 June 2003 denying the charges.
On 12 July 2003, Velasco received a "Second Show-cause Notice" informing her of additional developments in their investigation.
According to the notice, a certain Carlito Jomen executed an affidavit pointing to Velasco as the one who transacted with a printing
shop to print PFIZER discount coupons. Velasco sent a letter to PFIZER via Aboitiz courier service asking for additional time to answer
the second Show-cause Notice.
That same day, Velasco filed a complaint for illegal suspension with money claims before the Regional Arbitration Branch. The
following day, 17 July 2003, PFIZER sent her a letter inviting her to a disciplinary hearing to be held on 22 July 2003. On 25 July 2003,
Velasco received a "Third Show-cause Notice," together with copies of the affidavits of two Branch Managers of Mercury Drug, asking
her for her comment within 48 hours. Finally, on 29 July 2003, PFIZER informed Velasco of its "Management Decision" terminating
her employment.
On 5 December 2003, the Labor Arbiter rendered its decision declaring the dismissal of Velasco illegal, ordering her reinstatement
with backwages and further awarding moral and exemplary damages with attorney’s fees. On appeal, the NLRC affirmed the same but
deleted the award of moral and exemplary damages.
Undaunted, PFIZER filed with the Court of Appeals a special civil action for the issuance of a writ of certiorariunder Rule 65 of the
Rules of Court to annul and set aside the aforementioned NLRC issuances. In a Decision dated November 23, 2005, the Court of
Appeals upheld the validity of respondent’s dismissal from employment, the dispositive portion of which reads as follows:
IN VIEW WHEREOF, the dismissal of private respondent Geraldine Velasco is AFFIRMED, but petitioner PFIZER, INC. is hereby
ordered to pay her the wages to which she is entitled to from the time the reinstatement order was issued until November 23, 2005,
the date of promulgation of Our Decision.11
Issue:
Whether or not the Court of Appeals committed a serious but reversible error when it ordered Pfizer to pay Velasco wages from the
date of the Labor Arbiter’s decision ordering her reinstatement until November 23, 2005, when the Court of Appeals rendered its
decision declaring Velasco’s dismissal valid.13
Held:
The petition is without merit.
At the outset, we note that PFIZER’s previous payment to respondent of the amount of P1,963,855.00 (representing her wages from
December 5, 2003, or the date of the Labor Arbiter decision, until May 5, 2005) that was successfully garnished under the Labor
Arbiter’s Writ of Execution dated May 26, 2005 cannot be considered in its favor. Not only was this sum legally due to respondent
under prevailing jurisprudence but also this circumstance highlighted PFIZER’s unreasonable delay in complying with the
reinstatement order of the Labor Arbiter
As far back as 1997 in the seminal case of Pioneer Texturizing Corporation v. National Labor Relations Commission, the Court held that
an award or order of reinstatement is immediately self-executory without the need for the issuance of a writ of execution in
accordance with the third paragraph of Article 22322 of the Labor Code. In that case, we discussed in length the rationale for that
doctrine, to wit:
The provision of Article 223 is clear that an award [by the Labor Arbiter] for reinstatement shall be immediately executory even
pending appeal and the posting of a bond by the employer shall not stay the execution for reinstatement. The legislative intent is quite
obvious, i.e., to make an award of reinstatement immediately enforceable, even pending appeal. To require the application for and
issuance of a writ of execution as prerequisites for the execution of a reinstatement award would certainly betray and run counter to
the very object and intent of Article 223, i.e., the immediate execution of a reinstatement order. The reason is simple. An application
for a writ of execution and its issuance could be delayed for numerous reasons. A mere continuance or postponement of a scheduled
hearing, for instance, or an inaction on the part of the Labor Arbiter or the NLRC could easily delay the issuance of the writ thereby
setting at naught the strict mandate and noble purpose envisioned by Article 223. In other words, if the requirements of Article
224 [including the issuance of a writ of execution] were to govern, as we so declared in Maranaw, then the executory nature of a
reinstatement order or award contemplated by Article 223 will be unduly circumscribed and rendered ineffectual. In enacting the law,
the legislature is presumed to have ordained a valid and sensible law, one which operates no further than may be necessary to achieve
its specific purpose. Statutes, as a rule, are to be construed in the light of the purpose to be achieved and the evil sought to be
prevented. x x x In introducing a new rule on the reinstatement aspect of a labor decision under Republic Act No. 6715, Congress
should not be considered to be indulging in mere semantic exercise. x x x 23 (Italics in the original; emphasis and underscoring
supplied.)
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In the case at bar, PFIZER did not immediately admit respondent back to work which, according to the law, should have been done as
soon as an order or award of reinstatement is handed down by the Labor Arbiter without need for the issuance of a writ of execution.
Thus, respondent was entitled to the wages paid to her under the aforementioned writ of execution. At most, PFIZER’s payment of the
same can only be deemed partial compliance/execution of the Court of Appeals Resolution dated October 23, 2006 and would not bar
respondent from being paid her wages from May 6, 2005 to November 23, 2005.
To reiterate, under Article 223 of the Labor Code, an employee entitled to reinstatement "shall either be admitted back to work under
the same terms and conditions prevailing prior to his dismissal or separation or, at the option of the employer, merely reinstated in
the payroll."
The view as maintained in a number of cases is that:
x x x [E]ven if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory on the part of
the employer to reinstate and pay the wages of the dismissed employee during the period of appeal until reversal
by the higher court. On the other hand, if the employee has been reinstated during the appeal period and such
reinstatement order is reversed with finality, the employee is not required to reimburse whatever salary he received for he
is entitled to such, more so if he actually rendered services during the period.(Emphasis in the original; italics and
underscoring supplied)
In other words, a dismissed employee whose case was favorably decided by the Labor Arbiter is entitled to receive wages pending
appeal upon reinstatement, which is immediately executory. Unless there is a restraining order, it is ministerial upon the Labor
Arbiter to implement the order of reinstatement and it is mandatory on the employer to comply therewith.
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Luna vs. Allado Construction Co., Inc.;

G.R. No. 175251; May 30, 2011
Facts:
Petitioner Luna was the employee of the constructions company of the Respondent. He was assigned in Saranggani Province. As he
was caught pilfering the respondent’s property, he was dismissed from his employment, and thereby filed a case of illegal dismissal
against the respondent.
The Labor Arbiter ruled that there was no illegal dismissal, but awarded financial assistance in favour of the petitioner. The
respondent then appealed to the NLRC questioning solely the LA’s decision in awarding financial assistance. The NLRC reversed the
LA’s decision, finding out that there was illegal dismissal and awarded the backwages to the petitioner.
Aggrieved by such an unfavourable decision, the respondent via Rule 65 posed in its appeal the validity of the NLRC’s decision on the
ground that it has no jurisdiction to entertain questions not alleged in the appeal. The respondent’s ground was only questioning the
propriety of the award of the financial assistance, yet NLRC entertained issues other than that posed in the appeal. With the same
adverse decision by the CA, the respondents came before the SC via petition for certiorari still questioning the validity of the decision.
Respondent argued that the NLRC does not have authority to review issues not brought before it for appeal.
Issue:
WON the NLRC has jurisdiction to review issues not brought before it for appeal
Held:
NO.
Section 4(c), Rule VI of the 2002 Rules of Procedure of the NLRC, which was in effect at the time respondents appealed the Labor
Arbiter’s decision, expressly provided that, on appeal, the NLRC shall limit itself only to the specific issues that were elevated for
review, to wit:
RULE VI
Appeals
Section 4. Requisites for Perfection of Appeal. x x x.
xxxx
(c) Subject to the provisions of Article 218, once the appeal is perfected in accordance with these Rules, the Commission
shall limit itself to reviewing and deciding specific issues that were elevated on appeal.
As a testament to its effectivity and the NLRC’s continued implementation of this procedural policy, the same provision was retained
as Section 4(d), Rule VI of the 2005 Revised Rules of Procedure of the NLRC.
In the case at bar, the NLRC evidently went against its own rules of procedure when it passed upon the issue of illegal dismissal
although the question raised by respondents in their appeal was concerned solely with the legality of the labor arbiter’s award of
financial assistance despite the finding that petitioner was lawfully terminated.
An appeal from a decision, award or order of the labor arbiter must be brought to the NLRC within ten (10) calendar days from
receipt of such decision, award or order, otherwise, the same becomes final and executory [Art. 223, Labor Code; Rule VIII, Sec. 1(a),
Revised Rules of the NLRC]. Moreover, the rules of the NLRC expressly provide that on appeal, the Commission shall limit itself only to
the specific issues that were elevated for review, all other matters being final and executory [Rule VIII, Sec. 5(c), Revised Rules of the
NLRC, italics supplied].
In the present case, petitioner, aggrieved by the labor arbiter’s decision ordering the extension of financial assistance to Galagar
despite the finding that his termination was for just cause, specifically limited his appeal to a single legal question, i.e., the validity of
the award of financial assistance to an employee dismissed for pilfering company property. On the other hand, private respondent
did not appeal.
When petitioner limited the issue on appeal, necessarily the NLRC may review only that issue raised. All other matters,
including the issue of the validity of private respondent’s dismissal, are final. If private respondent wanted to challenge the
finding of a valid dismissal, he should have appealed his case seasonably to the NLRC. By raising new issues in the reply to
appeal, private respondent is in effect appealing his case although he has, in fact, allowed his case to become final by not
appealing within the reglementary period. A reply/opposition to appeal cannot take the place of an appeal. Therefore, in this case,
the dismissal of the complaint for illegal dismissal and the denial of the prayer for reinstatement, having become final, can no longer
be reviewed.
The Labor Code provision, read in its entirety, states that the NLRC’s power to correct errors, whether substantial or formal,
may be exercised only in the determination of a question, matter or controversywithin its jurisdiction [Art. 218, Labor
Code]. Therefore, by considering the arguments and issues in the reply/opposition to appeal which were not properly raised by
timely appeal nor comprehended within the scope of the issue raised in petitioner’s appeal, public respondent committed grave abuse
of discretion amounting to excess of jurisdiction.
The contention that the NLRC may nevertheless look into other issues although not raised on appeal since it is not bound by technical
rules of procedure, is likewise devoid of merit.
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The law does not provide that the NLRC is totally free from "technical rules of procedure", but only that the rules of evidence
prevailing in courts of law or equity shall not be controlling in proceedings before the NLRC [Art. 221, Labor Code]. This is
hardly license for the NLRC to disregard and violate the implementing rules it has itself promulgated. Having done so, the
NLRC committed grave abuse of discretion.
BANAHAW BROADCASTING CORP. VS. PACANA III;

G.R No. 171673; May 30, 2011
Facts:
On August 29, 1995, the DXWG personnel (Pacana III et al.) filed with the Labor Arbiter a complaint for illegal dismissal, unfair labor
practice, reimbursement of unpaid Collective Bargaining Agreement (CBA) benefits, and attorney’s fees against IBC and BBC.
On June 21, 1996, Labor Arbiter Abdullah L. Alug rendered his Decision awarding the DXWG personnel a total ofP12,002,157.28 as
unpaid CBA benefits consisting of unpaid wages and increases, 13th month pay, longevity pay, sick leave cash conversion, rice and
sugar subsidy, retirement pay, loyalty reward and separation pay. The Labor Arbiter denied the other claims of the DXWG personnel
for Christmas bonus, educational assistance, medical check-up and optical expenses. Both sets of parties appealed to the National
Labor Relations Commission (NLRC).
The NLRC issued a resolution vacating the decision of the Labor Arbiter and remanded the case to arbitration branch of origin. On
October 15, 1998, Labor Arbiter Nicodemus G. Palangan rendered a Decision adjudging BBC to be liable for the same amount in the
vacated Decision of Labor Arbiter Alug.
Both BBC and respondents appealed to the NLRC anew. In their appeal, the DXWG personnel reasserted their claim for the remaining
CBA benefits not awarded to them, and alleged error in the reckoning date of the computation of the monetary award. BBC, in its own
Memorandum of Appeal, challenged the monetary award itself, claiming that such benefits were only due to IBC, not BBC,
employees. In the same Memorandum of Appeal, BBC incorporated a Motion for the Recomputation of the Monetary Award (of the
Labor Arbiter), in order that the appeal bond may be reduced.
The NLRC issued an Order denying the Motion for the Recomputation of the Monetary Award. According to the NLRC, such
recomputation would result in the premature resolution of the issue raised on appeal. The NLRC ordered BBC to post the required
bond within 10 days from receipt of said Order, with a warning that noncompliance will cause the dismissal of the appeal for
non-perfection. Instead of complying with the Order to post the required bond, BBC filed a Motion for Reconsideration, alleging this
time that since it is wholly owned by the Republic of the Philippines, it need not post an appeal bond.
Issue:
Whether or not Banahaw Broadcasting Corporation (BBC), a Government Owned and Controlled Corporation is exempt from posting
an appeal bond
Held:
We can infer from the foregoing jurisprudential precedents that, as a general rule, the government and all the attached agencies with
no legal personality distinct from the former are exempt from posting appeal bonds, whereas government-owned and controlled
corporations (GOCCs) are not similarly exempted. This distinction is brought about by the very reason of the appeal bond itself: to
protect the presumptive judgment creditor against the insolvency of the presumptive judgment debtor. When the State litigates,
it is not required to put up an appeal bond because it is presumed to be always solvent. This exemption, however, does not, as a
general rule, apply to GOCCs for the reason that the latter has a personality distinct from its shareholders.
In the case at bar, BBC was organized as a private corporation, sequestered in the 1980’s and the ownership of which was
subsequently transferred to the government in a compromise agreement. Further, it is stated in its Amended Articles of Incorporation
that BBC has the following primary function:
To engage in commercial radio and television broadcasting, and for this purpose, to establish, operate and maintain such stations, both
terrestrial and satellite or interplanetary, as may be necessary for broadcasting on a network wide or international basis.
It is therefore crystal clear that BBC’s function is purely commercial or proprietary and not governmental. As such, BBC cannot be
deemed entitled to an exemption from the posting of an appeal bond.
Consequently, the NLRC did not commit an error, and much less grave abuse of discretion, in dismissing the appeal of BBC on account
of non-perfection of the same.
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Social Security Commission vs. Rizal Poultry et al.;

G.R. No. 167050; June 1, 2011
Facts:
The instant case stemmed from a petition filed by Alberto Angeles (Angeles) before the Social Security Commission (SSC) to compel
respondents Rizal Poultry and Livestock Association, Inc. (Rizal Poultry) or BSD Agro Industrial Development Corporation (BSD Agro)
to remit to the Social Security System (SSS) all contributions due for and in his behalf.
Angeles had earlier filed a complaint for illegal dismissal against BSD Agro and/or its owner, Benjamin San Diego (San Diego). The
Labor Arbiter initially found that Angeles was an employee and that he was illegally dismissed. On appeal, however, the NLRC
reversed the Labor Arbiter’s Decision and held that no employer-employee relationship existed between Angeles and respondents.
The ruling was anchored on the finding that the duties performed by Angeles, such as carpentry, plumbing, painting and electrical
works, were not independent and integral steps in the essential operations of the company, which is engaged in the poultry business.
Angeles elevated the case to the Court of Appeals via petition for certiorari. The appellate court affirmed the NLRC ruling and upheld
the absence of employer-employee relationship. Angeles moved for reconsideration but it was denied by the Court of Appeals. No
further appeal was undertaken, hence, an entry of judgment was made on 26 May 2001.
At any rate, the SSC did not take into consideration the decision of the NLRC. It denied respondents’ motion to dismiss in an Order
dated 19 February 2002. The SSC ratiocinated, thus:
Decisions of the NLRC and other tribunals on the issue of existence of employer-employee relationship between parties are not
binding on the Commission. At most, such finding has only a persuasive effect and does not constitute res judicata as a ground for
dismissal of an action pending before Us. While it is true that the parties before the NLRC and in this case are the same, the issues and
subject matter are entirely different. The labor case is for illegal dismissal with demand for backwages and other monetary claims,
while the present action is for remittance of unpaid SS[S] contributions. In other words, although in both suits the respondents invoke
lack of employer-employee relationship, the same does not proceed from identical causes of action as one is for violation of the Labor
Code while the instant case is for violation of the SS[S] Law.
Respondents sought recourse before the Court of Appeals by way of a petition for certiorari. The Court of Appeals reversed the rulings
of the SSC and held that there is a common issue between the cases before the SSC and in the NLRC; and it is whether there existed an
employer-employee relationship between Angeles and respondents. Thus, the case falls squarely under the principle of res judicata,
particularly under the rule on conclusiveness of judgment, as enunciated in Smith Bell and Co. v. Court of Appeals.
Issue:
WON the decision of the NLRC and the Court of Appeals, finding no employer-employee relationship, constitutes res judicata as a rule
on conclusiveness of judgment as to preclude the relitigation of the issue of employer-employee relationship in a subsequent case
filed before the petitioner.
Held:
The elements of res judicata are: (1) the judgment sought to bar the new action must be final; (2) the decision must have been
rendered by a court having jurisdiction over the subject matter and the parties; (3) the disposition of the case must be a judgment on
the merits; and (4) there must be as between the first and second action, identity of parties, subject matter, and causes of action.
Should identity of parties, subject matter, and causes of action be shown in the two cases, then res judicata in its aspect as a "bar by
prior judgment" would apply. If as between the two cases, only identity of parties can be shown, but not identical causes of action,
then res judicata as "conclusiveness of judgment" applies.
Verily, the principle of res judicata in the mode of "conclusiveness of judgment" applies in this case. The first element is present in this
case. The NLRC ruling was affirmed by the Court of Appeals. It was a judicial affirmation through a decision duly promulgated and
rendered final and executory when no appeal was undertaken within the reglementary period. The jurisdiction of the NLRC, which is
a quasi-judicial body, was undisputed. Neither can the jurisdiction of the Court of Appeals over the NLRC decision be the subject of a
dispute. The NLRC case was clearly decided on its merits; likewise on the merits was the affirmance of the NLRC by the Court of
Appeals.
With respect to the fourth element of identity of parties, we hold that there is substantial compliance.
The parties in SSC and NLRC cases are not strictly identical. Rizal Poultry was impleaded as additional respondent in the SSC case.
Jurisprudence however does not dictate absolute identity but only substantial identity. There is substantial identity of parties when
there is a community of interest between a party in the first case and a party in the second case, even if the latter was not impleaded
in the first case.
A case in point is Smith Bell and Co. v. Court of Appeals25 which, contrary to SSC, is apt and proper reference. Smith Bell availed of the
services of private respondents to transport cargoes from the pier to the company's warehouse. Cases were filed against Smith Bell,
one for illegal dismissal before the NLRC and the other one with the SSC, to direct Smith Bell to report all private respondents to the
SSS for coverage. While the SSC case was pending before the Court of Appeals, Smith Bell presented the resolution of the Supreme
Court in G.R. No. L-44620, which affirmed the NLRC, Secretary of Labor, and Court of Appeals’ finding that no employer-employee
relationship existed between the parties, to constitute as bar to the SSC case. We granted the petition of Smith Bell and ordered the
dismissal of the case. We held that the controversy is squarely covered by the principle of res judicata, particularly under the rule on
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"conclusiveness of judgment." Therefore, the judgment in G.R. No. L-44620 bars the SSC case, as the relief sought in the latter case is
inextricably related to the ruling in G.R. No. L-44620 to the effect that private respondents are not employees of Smith Bell.
University Plans, Inc. vs. Solano;

G.R. No. 170416; June 22, 2011
Facts:
Respondents filed before the Labor Arbiter complaints for illegal dismissal, illegal deductions, overriding commissions, unfair labor
practice, moral and exemplary damages, and actual damages against petitioner University Plans Incorporated.
The Labor Arbiter found petitioner guilty of illegal dismissal and ordered respondents' reinstatement as well as the payment of their
full backwages, proportionate 13th month pay, moral/exemplary damages, and attorney's fees.
Petitioner appealed the Decision of the LA to the NLRC and filed its Memorandum on Appeal as well as a Motion to Reduce Bond.
Simultaneous with the filing of said pleadings, it posted a cash bond in the amount of P30,000.00.
In its Motion to Reduce Bond, petitioner alleged that it was under receivership and that it cannot dispose of its assets at such a short
notice. Because of this, it could not post the required bond. Nevertheless, it has P30,000.00 available for immediate disposition and
thus prayed that said amount be deemed sufficient to satisfy the required bond for the perfection of its appeal. The NLRC denied
petitioner's Motion to Reduce Bond and directed it to post an additional appeal bond in the amount of P3,013,599.50 within an
unextendible period of 10 days from notice, otherwise the appeal shall be dismissed for non-perfection.
The NLRC denied petitioner's motion for reconsideration ratiocinating that while it has the discretion to reduce the appeal bond, it is
nevertheless not persuaded that petitioner was incapable of posting the required bond. It noted that petitioner failed to submit any
financial statement or provide details anent its alleged receivership or its sources of income.
Unsatisfied, petitioner went to the CA through a Petition for Certiorari. The CA upheld the NLRC Resolution.
Issue:
Whether or not the NLRC erred in not considering the merit or lack of merit of petitioner’s Motion to Reduce Bond.
Held:
There is merit in the petition.
The NLRC erred in not considering the merit or lack of merit of petitioner's Motion to Reduce Bond.
Petitioner attached to its Motion to Reduce Bond the SEC Orders dated August 23, 1999 and May 23, 2000. The Order of August 23,
1999 is a Cease and Desist Order which, among others, prohibited the officers and agents of petitioner from withdrawing from its
trust funds or from making any disposition thereof and, ordered the freeze of all its assets and properties. On the other hand, the May
23, 2000 Order placed UPI, Inc. under the management and control of a RECEIVER.
From the said SEC Orders, it is unmistakable that petitioner was under receivership. And from the tenor and contents of said Orders, it
is possible that petitioner has no liquid asset which it could use to post the required amount of bond. Also, it is quite understandable
that because of petitioner's financial state, it cannot raise the amount of more than P3 million within a period of 10 days from receipt
of the Labor Arbiter's judgment.
However, the NLRC ignored petitioner's allegations and instead remained adamant that since the amount of bond is fixed by law,
petitioner must post an additional bond of more than P3 million. This, to us, is an utter disregard of the provision of the Labor Code
and of the NLRC Revised Rules of Procedure allowing the reduction of bond in meritorious cases. While the NLRC tried to correct this
error in its March 21, 2003 Resolution by further explaining that it was not persuaded by petitioner's alleged incapability of posting
the required amount of bond for failure to submit financial statement, list of sources of income and other details with respect to the
alleged receivership, we still find the hasty denial of the motion to reduce bond not proper.
Notwithstanding petitioner's failure to submit its financial statement and list of sources of income and to give more details relative to
its receivership, it was nevertheless able to show through the abovementioned SEC Orders that it was indeed under a state of
receivership. This should have been sufficient reason for the NLRC to not outrightly deny petitioner's motion. As to the lacking
documents and details on the receivership, it is true that they are needed by the NLRC in determining petitioner's capacity to post the
required amount of bond. However, their absence should not lead to the outright denial of the motion since as earlier discussed, the
NLRC is not precluded from conducting a preliminary determination on the merit or lack of merit of a motion to reduce bond. Here,
considering the clear showing of petitioner's state of receivership, the NLRC should have conducted such preliminary determination
and therein require the submission of said documents and other necessary evidence before proceeding to resolve the subject motion.
After all, the present case falls under those cases where the bond requirement on appeal may be relaxed considering that (1) there
was substantial compliance with the Rules; (2) the surrounding facts and circumstances constitute meritorious grounds to reduce the
bond; and (3) the petitioner, at the very least, exhibited its willingness and/or good faith by posting a partial bond during the
reglementary period. Also, such a procedure would be in keeping with the Labor Code's mandate to use every and all reasonable
means to ascertain the facts in each case speedily and objectively, without regard to technicalities of law or procedure, all in the
interest of due process. We thus find error on the part of the NLRC when it denied petitioner's Motion to Reduce Bond and likewise on
the part of the CA when it affirmed said denial.
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In view of the foregoing, a remand of this case to the NLRC for the conduct of preliminary determination of the merit or lack of merit
of petitioner's Motion to Reduce Bond is proper.
BPI Employees Union – Metro manila vs. Bank of the Phil. Islands;
G.R No. 178699; September 21, 2011
Facts:
Petitioner Uy was a bank teller of the respondent BPI. She was separated from her job allegedly because of insubordination,
disrespect and absence without leave. She together with the Union, filed a case for illegal dismissal against respondent in the
Voluntary Arbitrator. The VA ruled in favour of her, ordering the respondent to reinstate her and award full backwages.
Both appealed to the CA which affirmed the VA’s decision with modifications. Still unsatisfied, Uy and the Union went to SC and
alleged that BPI’s remedy is not a certiorari petition under Rule 65 of the Rules of Court but an appeal from judgments, final orders
and resolutions of voluntary arbitrators under Rule 43 of the Rules of Court. They also contended that BPI’s petition is wanting in
substance.
Issue:
WON BPI’s remedy of certiorari petition under Rule 65 is proper
Held:
YES.
Section 1, Rule 41 of the Rules of Court explicitly provides that no appeal may be taken from an order of execution, the remedy of an
aggrieved party being an appropriate special civil action under Rule 65 of the Rules of Court. Thus, BPI correctly availed of the remedy
of certiorari under Rule 65 of the Rules of Court when it assailed the December 6, 2005 order of execution of the Voluntary Arbitrator.
DUP SOUND PHILS. VS. CA;

G.R. No. 168317; November 21, 2011
Facts:
Private respondent, Pial is an employee of herein petitioner DUP Sound Phils. (DUP); petitioner Tan is the owner and manager of DUP.
Pial was given the job of "mastering tape"; his main function was to adjust the sound level and intensity of the music to be recorded as
well as arrange the sequence of the songs to be recorded in the cassette tapes. Pial got absent from work because he got sick. The
following day when he was ready for work, he was informed by the office secretary not to report for work until such time that they
will advise him to do so. After three weeks without receiving any notice, Pial again called up their office. This time the office secretary
advised him to look for another job because, per instruction of Tan, he is no longer allowed to work at DUP. Pial filed a complaint for
illegal dismissal and prayed for the payment of his unpaid service incentive leave pay, full backwages, separation pay, moral and
exemplary damages as well as attorney's fees.
Petitioners DUP and Tan denied the material allegations of Pial; that the latter failed to report for work following an altercation with
his supervisor the previous day and that Pial called up their office and informed the office secretary that he will be going back to work
on September 17, 2001. However, he failed to report for work on the said date. Petitioners were subsequently surprised when they
learned that Pial filed a complaint for illegal dismissal against them; Pial was never dismissed, instead, it was his unilateral decision
not to work at DUP anymore.
The Labor Arbiter rendered a decision declaring Pial to have been illegally dismissed and ordering DUP and Tan to reinstate him to
his former position and pay him backwages, cost of living allowance, service incentive leave pay and attorney's fees. On appeal, the
NLRC modified the decision by deleting the award of backwages and attorney's fees. The NLRC ruled that there was no illegal
dismissal on the part of DUP and Tan, but neither was there abandonment on the part of Pial. Pial then filed a special civil action
for certiorari with the CA. The CA set aside the decision of the NLRC and reinstated the decision of the LA.
Issue:
Whether or not Pial was illegally dismissed.
Held:
This Court cannot give credence to petitioners' claim that private respondent abandoned his job. Pial was illegally dismissed.
The settled rule in labor cases is that the employer has the burden of proving that the employee was not dismissed, or, if dismissed,
that the dismissal was not illegal, and failure to discharge the same would mean that the dismissal is not justified and, therefore,
illegal. In the instant case, what betrays petitioners' claim that private respondent was not dismissed from his employment but
instead abandoned his job is their failure to prove that the latter indeed stopped reporting for work without any justifiable cause or a
valid leave of absence.
If private respondent indeed abandoned his job, petitioners should have afforded him due process by serving him written notices, as
well as a chance to explain his side, as required by law. It is settled that, procedurally, if the dismissal is based on a just cause under
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Article 282 of the Labor Code, 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. Again,
petitioners failed to do these. Thus, the foregoing bolsters private respondent's claim that he did not abandon his work but was, in
fact, dismissed.
Neither may private respondent's refusal to report for work subsequent to the LA's issuance of an order for his reinstatement be
considered as another abandonment of his job. It is a settled rule that failure to report for work after a notice to return to work has
been served does not necessarily constitute abandonment. As defined under established jurisprudence, abandonment is the
deliberate and unjustified refusal of an employee to resume his employment. It is a form of neglect of duty, hence, a just cause for
termination of employment by the employer. For a valid finding of abandonment, these two factors should be present: (1) the failure
to report for work or absence without valid or justifiable reason; and (2) a clear intention to sever employer-employee relationship,
with the second as the more determinative factor which is manifested by overt acts from which it may be deduced that the employee
has no more intention to work. The intent to discontinue the employment must be shown by clear proof that it was deliberate and
unjustified. In the instant case, private respondent claimed that his subsequent refusal to report for work despite the Labor Arbiter's
order for his reinstatement is due to the fact that he was subsequently made to perform the job of a "bodegero" of which he is
unfamiliar and which is totally different from his previous task of "mastering tape." Moreover, he was assigned to a different
workplace, which is a warehouse, where he was isolated from all other employees. The Court notes that petitioners failed to refute the
foregoing claims of private respondent
Under the existing law, an employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority
rights. Article 279 of the Labor Code clearly provides that an employee who is dismissed without just cause and without due process
is entitled to backwages and reinstatement or payment of separation pay in lieu thereof. Article 223 of the same Code also provides
that an employee entitled to reinstatement shall either be admitted back to work under the same terms and conditions prevailing
prior to his dismissal or separation, or, at the option of the employer, merely reinstated in the payroll. It is established in
jurisprudence that reinstatement means restoration to a state or condition from which one had been removed or separated. The
person reinstated assumes the position he had occupied prior to his dismissal. Reinstatement presupposes that the previous position
from which one had been removed still exists, or that there is an unfilled position which is substantially equivalent or of similar
nature as the one previously occupied by the employee.
This Court has ruled in many instances that reinstatement is no longer viable where, among others, the relations between the
employer and the employee have been so severely strained, that it is not in the best interest of the parties, nor is it advisable or
practical to order reinstatement, or where the employee decides not to be reinstated. In the instant case, the resulting circumstances
show that reinstatement would be impractical and would hardly promote the best interest of the parties. Resentment and enmity
between petitioners and private respondent necessarily strained the relationship between them or even provoked antipathy and
antagonism as shown by the acts of the parties subsequent to the order of reinstatement. Besides, private respondent expressly
prayed for an award of separation pay in lieu of reinstatement from the very start of the proceedings before the Labor Arbiter. By so
doing, he forecloses reinstatement as a relief by implication.
Where reinstatement is no longer viable as an option, separation pay equivalent to one (1) month salary for every year of service
should be awarded as an alternative. This has been the consistent ruling in the award of separation pay to illegally dismissed
employees in lieu of reinstatement.
Aujero vs. Phil. Communications Satellite Corp.;

G.R. No. 193484; January 18, 2012
Facts
Petitioner started working for Philcomsat in 1967 as an accountant. On August 15, 2001 or after 34 years of service, he applied for
early retirement and the same was approved on September 15, 2001. During that time, he was the Senior Vice-President. He executed
a Deed of Release and Quitclaim in Philcomsat’s favor on September 12, 2002 with a receipt from the latter of a check in the amount of
P 9,439, 327.91.After almost 3 years, petitioner filed a complaint for unpaid retirement benefits claiming that the actual amount of his
retirement pay is P 14, 015, 055.00 and the P 9, 439, 327.91 that he received as supposed settlement is unconscionable. Thus, his
quitclaim must be declared as null and void. He said that he had no choice but to accept said amount because he was in dire need
thereof and he was ready to return to his hometown so he signed the quitclaim despite the deficiency as no money would be released
if he did not execute a release and waiver in Philcomsat’s favor. According to him, the letter of Philcomsat’s chairman and president
addressed to UCPB for the release of P 9,439,327.91 to him and P 4,575,727.09 to Philcomsat, which predated the execution of his
quitclaim, indicates the company’s pre-conceived plans to deprive him of a portion of his retirement pay. The LA decided in favor of
the petitioner and ordered Philcomsat to pay him P 4,575,727.09and P 274,805.00 as balance of his retirement benefits and salary for
the period from August 15 to September 15, 2001. Petitioner’s complaint for unpaid retirement benefits and salary was dismissed
because he failed to prove that Philcomsat employed means to vitiate his consent to the quitclaim. Philcomsat’s appeal to the NLRC
from LA’s decision was filed and its surety bond posted beyond the prescribed period of 10 days but since it was only one day
delayed, the NLRC disregard the procedural lapse & proceeded with the appeal. Petitioner later filed for a petition for certiorari
accusing NRLC with grave abuse of discretion for proceeding despite respondent’s belated appeal. He claimed that when Philcomsat
filed its appeal and posted its surety bond, LA’s decision became final and executory and the failure of Philcomsat’s counsel to verify
the copy does not constitute excusable negligence. The CA however, found no merit in the claim of petitioner and ruled that the NLRC
was correct in upholding the validity of the quitclaim because the terms of the Deed of Release and Quitclaim were reasonable and
there was no showing that Philcomsat employed coercion, fraud or undue influence upon petitioner to compel him to sign the same.
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Issues:
1. Whether or not the delay in the filing of Philcomsat’s appeal and posting of surety bond is inexcusable; and
2. Whether or not the quitclaim executed by the petitioner in Philcomsat’s favor is valid, thereby foreclosing his right to institute
any claim against Philcomsat
Held:
The Court rules in Philcomsat’s favor since procedural rules may be waived or dispensed with in absolutely meritorious
cases. According to Philcomsat, when petitioner made the execution of the quitclaim, it was voluntary. His educational attainment and
the position he occupied also militate against his claim that he was pressured or coerced into signing the quitclaim. Absent any
evidence that any vices of consent is present and considering the petitioner’s position and education, the quitclaim executed by the
petitioner constitutes a valid and binding agreement.
Since petitioner’s claim of fraud and bad faith against Philcomsat is unsubstantiated, this Court
thus, finds the quitclaim to be legitimate waiver. The factual issues were determined by the NLRC and were affirmed by the CA.
Petition is denied.
Sarona vs. NLRC;

G.R. No. 185280; January 18, 2012
Facts:
Petitioner, a security guard in Sceptre since April 1976, was asked by Sceptre’s operations manager on June 2003, to submit a
resignation letter as a requirement for an application in Royale and to fill up an employment application form for the said company.
He was then assigned at Highlight Metal Craft Inc. from July 29 to August 8, 2003 and was later transferred to Wide Wide World
Express Inc. On September 2003, he was informed that his assignment at WWWE Inc. was withdrawn because Royale has been
allegedly replaced by another security agency which he later discovered to be untrue. Nevertheless, he was once again assigned at
Highlight Metal sometime in September 2003 and when he reported at Royale’s office on October 1, 2003, he was informed that he
would no longer be given any assignment as instructed by Sceptre’s general manager. He thus filed a complaint for illegal dismissal.
The LA ruled in petitioner’s favor as he found him illegally dismissed and was not convinced by the respondent’s claim on petitioner’s
abandonment.
Respondents were ordered to pay backwages computed from the day he was dismissed up to the promulgation of his decision on May
11, 2005.The LA also ordered for the payment of separation pay but refused to pierce Royale’s corporate veil.
Respondents appealed to the NLRC claiming that the LA acted with grave abuse of discretion upon ruling on the illegal dismissal of
petitioner. NLRC partially affirmed the LA’s decision with regard to petitioner’s illegal dismissal and separation pay but modified the
amount of backwages and limited it to only 3 months of his last month salary reducing P95, 600 to P15, 600 since he worked for
Royale for only 1 month and 3 days.
Petitioner did not appeal to LA but raised the validity of LA’s findings on piercing Royale’s corporate personality and computation of
his separation pay and such petition was dismissed by the NLRC.
Petitioner elevated NLRC’s decision to the CA on a petition for certiorari, and the CA disagreed with the NLRC’s decision of not
proceeding to review the evidence for determining if Royale is Sceptre’s alter ego that would warrant the piercing of its corporate veil.
Issues:
1) Whether or not Royale’s corporate fiction should be pierced for the purpose of compelling it to recognize the petitioner’s length of
service with Sceptre and for holding it liable for the benefits that have accrued to him arising from his employment with Sceptre; and
2) Whether or not petitioner’s backwages should be limited to his salary for 3 months
Held:
The doctrine of piercing the corporate veil is applicable on alter ego cases, where a corporation is merely a farce since it is a mere
alter ego or business conduit of a person, or where the corporation is so organized and controlled and its affairs are so conducted as
to make it merely an instrumentality, agency, conduit or adjunct of another corporation. The way on how petitioner was made to
resign from Sceptre then later on made an employee of Royale, reflects the use of the legal fiction of the separate corporate
personality and is an implication of continued employment. Royale is a continuation or successor or Sceptre since the employees of
Sceptre and of Royale are the same and said companies have the same principal place of business.
Because petitioner’s rights were violated and his employer has not changed, he is entitled to separation pay which must be computed
from the time he was hired until the finality of this decision. Royale is also ordered to pay him backwages from his dismissal on
October 1, 2003 until the finality of this decision. However, the amount already received by petitioner from the respondents shall be
deducted. He is also awarded moral and exemplary damages amounting to P 25, 000.00 each for his dismissal which was tainted with
bad faith and fraud. Petition is granted. CA’s decision is reversed and set aside.
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Salenga et al. vs. CA;

G.R. No. 174941; February 1, 2012
Facts:
President/Chief Executive Officer (CEO) Rufo Colayco issued an Order informing petitioner that, pursuant to the decision of the board
of directors of respondent CDC, the position of head executive assistant – the position held by petitioner – was declared redundant.
Petitioner filed a Complaint for illegal dismissal with a claim for reinstatement and payment of back wages, benefits, and moral and
exemplary damages against respondent CDC and Colayco. Respondents, represented by the Office of the Government Corporate
Counsel (OGCC), alleged that the NLRC had no jurisdiction to entertain the case on the ground that petitioner was a corporate officer
and, thus, his dismissal was an intra-corporate matter falling properly within the jurisdiction of the Securities and Exchange
Commission (SEC). LA Darlucio rendered a Decision in favor of petitioner. From the decision, the OCGCC filed an appeal with the
National Labor Relations Commission (NLRC) via a Memorandum of Appeal verified and certified by Hilana Timbol-Roman, the
executive vice president of respondent CDC. The petitioner opposed the appeal on the ground that the Memorandum of Appeal and
Joint Affidavit were not accompanied by a board resolution from respondent’s board of directors authorizing either Timbol-Roman or
Atty. Mallare, or both, to pursue the case or to file the appeal on behalf of respondent.
Issue:
Whether or not the NLRC has jurisdiction to entertain the appeal.
Held:
NLRC has no jurisdiction to entertain the appeal. It is clear from the NLRC Rules of Procedure that appeals must be verified and
certified against forum-shopping by the parties-in-interest themselves. A corporation can only exercise its powers and transact its
business through its board of directors and through its officers and agents when authorized by a board resolution or its bylaws.
Absent the requisite board resolution, neither Timbol-Roman nor Atty. Mallari, who signed the Memorandum of Appeal and Joint
Affidavit of Declaration allegedly on behalf of respondent corporation, may be considered as the “appellant” and “employer” referred
to by Rule VI, Sections 4 to 6 of the NLRC Rules of Procedure. The court cannot agree with the OGCC’s attempt to downplay this
procedural flaw by claiming that, as the statutorily assigned counsel for GOCCs, it does not need such authorization. In Constantino-
David v. Pangandaman-Gania, 456 Phil. 273, 294-298 (2003), the court exhaustively explained why it was necessary for government
agencies or instrumentalities to execute the verification and the certification against forum-shopping through their duly authorized
representatives. The purpose of verification is to secure an assurance that the allegations in the pleading are true and correct and
have been filed in good faith. Unless equitable circumstances which are manifest from the record of a case prevail, it therefore
becomes necessary for the concerned government agency or its authorized representatives to certify for non-forum shopping if only
to be sure that no other similar case or incident is pending before any other court.
Anent the corporation’s liability, the decision of the LA still stands. In the case at bar, respondents failed to adduce any evidence
showing that the position of Head Executive Assistant is superfluous. There is no evidence on record to show that the position of Head
Executive Assistant was abolished by the Board of Directors in its meetings. Hence, the ground of redundancy is merely a device made
by respondent Colayco in order to ease out the complainant from the respondent corporation. Moreover, the complainant was not
accorded his right to due process prior to his termination. He was not given the opportunity to be heard and defend himself. However,
the court notes that with regards to respondent Colayco’s solidary liability with the corporation, petitioner notably in the case at
hand, did not question the ruling made by NLRC in finding that respondent Colayco may not be held solidarily responsible to him. As a
result, it dropped him as a respondent. Based on the foregoing, all other subsequent proceedings regarding the issue of petitioner’s
dismissal are null and void for having been conducted without jurisdiction.
Lockheed Detective & Watchman Agency vs. University of the Phils.;

G.R No. 185918; April 18, 2012
Facts:
Petitioner entered into a contract for security services with respondent University of the Philippines and they were both sued by
several security guards in 1998 for payment of underpaid wages and other benefits. The labor arbiter found the claims meritorious
and held both petitioner and respondent solidarily liable as job contractor and principal. Upon appeal by both, the decision was only
modified by dismissing some claims (premium pay and service incentive leave pay) for lack of basis but they were still held solidarily
liable. An MR on this was also denied by the NLRC. The NLRC decision became final and executor on 2002 and a writ of execution was
issued but later quashed by the LA on motion of UP due to the disputes regarding the amount of the award. But, such order quashing
the writ was reversed by the NLRC.
UP moved to reconsider the NLRC resolution but it was upheld with the modification that the satisfaction of the judgment award in
favor of Lockheed will be only against the funds of UP which are not identified as public funds. The order and resolution became final
and an alias writ of execution was issued.
Pursuant to such order, a notice of garnishment was issued to PNB for the satisfaction of the award. UP filed a motion to quash the
writ of garnishment and argued that the funds are public in nature and are earmarked for educational purposes. After 10 days from
the receipt of the notice, PNB released the garnished funds in favor of the NLRC.
UP filed a petition for certiorari before the CA on the garnishment order which was initially upheld by the CA but upon
reconsideration, it reversed itself and ruled in favor of UP after applying the principles in the NEA case. Thus, Lockheed filed the
petition before the SC.
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Issue:
WON the money claim against UP, being a Government instrumentality, should have been coursed to the COA first.
Held:
Yes.
This Court held that like in the NED case, UP is a juridical personality separate and distinct from the government and has the capacity
to sue and be sued and being such, it cannot evade execution, and its funds may be subject to garnishment or levy. However, before
execution may be had, a claim for payment of the judgment award must first be filed with the COA. Under Commonwealth Act No. 327
as amended by Section 26 of P.D. No. 1445, it is the COA which has primary jurisdiction to examine, audit and settle "all debts and
claims of any sort" due from or owing the Government or any of its subdivisions, agencies and instrumentalities, including
government-owned or controlled corporations and their subsidiaries. With respect to money claims arising from the implementation
of Republic Act No. 6758, their allowance or disallowance is for COA to decide, subject only to the remedy of appeal by petition
for certiorari to this Court.
As to the fait accompli argument of Lockheed, contrary to its claim that there is nothing that can be done since the funds of UP had
already been garnished, since the garnishment was erroneously carried out and did not go through the proper procedure (the filing of
a claim with the COA), UP is entitled to reimbursement of the garnished funds plus interest of 6% per annum, to be computed from
the time of judicial demand to be reckoned from the time UP filed a petition for certiorari before the CA which occurred right after the
withdrawal of the garnished funds from PNB.
Petitioner Lockheed Detective and Watchman Agency, Inc. was ordered to reimburse University of the Philippines the amount of
P12,062,398.71 plus interest of 6% per annum, to be computed from September 12, 2005 up to the finality of the decision, and 12%
interest on the entire amount from date of finality of the court’s decision until fully paid.
3rd Alert Security and Detective Services, Inc. vs. Navia;

G.R. No. 200653; June 13, 2012
Facts:
Romualdo Navia filed an illegal dismissal complaint against 3rd Alert and the labor arbiter issued a decision that Navia's dismissal
was illegal. 3rd Alert appealed to the NLRC which affirmed the ruling of the labor arbiter and later on, it issued an Entry of Judgment
certifying that the NLRC resolution has become final and executory. The labor arbiter issued a writ of execution to enforce the
recomputed monetary awards upon Navia’s motion.
3rd Alert appealed the recomputed amount and alleged that the writ was issued with grave abuse of discretion since there was
already a notice of reinstatement sent to Navia. The NLRC dismissed the appeal, ruling that 3rd Alert is guilty of bad faith since there
was no earnest effort to reinstate Navia and that there was no notice or reinstatement sent to Navia's counsel. A motion for
reconsideration was filed, but it was likewise denied.
3rd Alert filed a petition for certiorari with the CA which found the petition without merit because Navia had not been reinstated
either physically or in the payroll. The CA also denied the motion for reconsideration filed by 3rd Alert; hence, this petition.
Issue:
Whether or not, the CA erred in ruling that the NLRC did not commit any grave abuse of discretion?
Held:
No. CA did not erred in ruling that the NLRC did not commit any grave abuse of discretion
Article 223 of the Labor Code provides that in case there is an order of reinstatement, the employer must admit the dismissed
employee under the same terms and conditions, or merely reinstate the employee in the payroll. The order shall be immediately
executory. Thus, 3rd Alert cannot escape liability by simply invoking that Navia did not report for work. The law states that the
employer must still reinstate the employee in the payroll. Where reinstatement is no longer viable as an option, separation pay
equivalent to one (1) month salary for every year of service could be awarded as an alternative.
In the case at bar, 3rd Alert resorted to legal tactics to frustrate the execution of the labor arbiter's order; for about four (4) years, it
evaded the obligation to reinstate Navia. By so doing, 3rd Alert has made a mockery of justice. We thus find it proper, under the
circumstances, to impose treble costs against 3rd Alert for its utter disregard to comply with the writ of execution. To reiterate, no
indication exists showing that 3rd Alert exerted any efforts to reinstate Navia; worse, 3rd Alert's lame excuse of having sent a notice
of reinstatement to a certain "Biznar" only compounded the intent to mislead the courts. Failure to adduce additional evidence, it was
held that indeed there was no earnest effort for 3 rd alert to reinstate Navia. Thus, CA was correct in affirming the judgment of the
NLRC in this regard.
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Radio Philippines Network, Inc. vs. Yap;

G.R No. 187713; August 1, 2012
Facts:
Petitioner RPN, represented by OGCC, is a government sequestered corporation, while petitioners Concio, Linao, Barrameda and
Angeles were the President, General Manager, Assistant General Manager for Finance, and Human Resources Manager, respectively, of
RPN who were impleaded and charged with indirect contempt, the subject matter of the present petition. Respondents Yap, San
Miguel, Dayon, Lemina and Baptista were employees of RPN and former members of RPNEU, the bargaining agent of the rank-and-file
employees of the said company.
RPN and RPNEU entered into a CBA with a union security clause providing that a member who has been expelled from the union shall
also be terminated from the company.
A conflict arose between the respondents and other members of RPNEU and recommended to the union's board of directors the
expulsion of the respondents from the union. On January 24, 2006, the union wrote to RPN President Concio demanding the
termination of the respondents' employment from the company.
RPN notified the respondents that their employment would be terminated whereupon the respondents filed with the Labor Arbiter
(LA) a complaint for illegal dismissal and non-payment of benefits.
The LA rendered a decision ordering the reinstatement of the respondents with payment of backwages and full benefits and without
loss of seniority rights after finding that the petitioners failed to establish the legal basis of the termination of respondents'
employment. The LA also directed the company to pay the respondents certain aggregate monetary benefits.
The petitioner submitted a Manifestation and Compliance. Respondents alleging that there was no compliance yet and that no notice
was received, respondents filed with the LA a Manifestation and Urgent Motion to Cite for Contempt.
The petitioners denied any liability, insisting that the respondents had been duly informed through a letter of their payroll
reinstatement. The petitioners explained that because of the intra-union dispute between the respondents and the union leaders, they
deemed it wise not to allow the respondents inside the company premises to prevent any more untoward incidents, and to release
their salaries only at the gate.This measure was for the protection not only of respondents but also for the other employees of RPN as
well.
Unswayed by these manifestations, the LA cited the petitioners for indirect contempt for committing disobedience to lawful order.
On appeal, the NLRC dismissed the same and it also denied the petitioners' motion for reconsideration.
The CA dismissed the petition for failure to attach copies of pertinent pleadings mentioned in the petition.
Issue:
WON petitioner has fully complied with the decision of the labor arbiter.
Held:
GRANTED
The manner of reinstating a dismissed employee in the payroll generally involves an exercise of management prerogative.
The general policy of labor law is to discourage interference with an employer's judgment in the conduct of his business. Even as the
law is solicitous of the welfare of the employees, it must also protect the right of an employer to exercise what are clearly
management prerogatives. As long as the company's exercise of judgment is in good faith to advance its interest and not for the
purpose of defeating or circumventing the rights of employees under the laws or valid agreements, such exercise will be
upheld. Neither does labor law authorize the substitution of judgment of the employer in the conduct of his business, unless it is
shown to be contrary to law, morals, or public policy. The only condition is that the exercise of management prerogatives should not
be done in bad faith or with abuse of discretion.
The circumstances of the present case have more than amply shown that the physical restoration of the respondents to their former
positions would be impractical and would hardly promote the best interest of both parties. Respondents have accused the petitioners
of being directly complicit in the plot to expel them from the union and to terminate their employment, while petitioners have
charged the respondents with trying to sabotage the peace of the workplace in "furthering their dispute with the union." The
resentment and enmity between the parties have so strained their relationship and even provoked antipathy and antagonism, as
amply borne out by the physical clashes that had ensued every time the respondents attempted to enter the RPN compound, that
respondents' presence in the workplace will not only be distracting but even disruptive, to say the least.
Petitioners have substantially complied in good faith with the terms of payroll reinstatement.
The petitioners insist that the respondents were immediately reinstated, albeit in the payroll, in compliance with the order of the LA,
and their salaries have since been regularly paid without fail. And granting that there were occasional delays, the petitioners assert
that the respondents in their combative hostility toward the petitioners were partly to blame for their recalcitrant demands as to the
place and schedule of payment, and their refusal to cooperate in the opening of their ATM accounts.All these clearly show that the
petitioners have substantially complied with the LA's Decision
Petitioners are not guilty of indirect contempt.
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Indirect contempt refers to contumacious or stubbornly disobedient acts perpetrated outside of the court or tribunal, any abuse or
any unlawful interference with the process or proceedings of a court not constituting direct contempt; or any improper conduct
tending directly or indirectly to impede, obstruct or degrade the administration of justice. To be considered contemptuous, an act
must be clearly contrary to or prohibited by the order of the court or tribunal. A person cannot, for disobedience, be punished for
contempt unless the act which is forbidden or required to be done is clearly and exactly defined, so that there can be no reasonable
doubt or uncertainty as to what specific act or thing is forbidden or required.
It is not denied that after the order of reinstatement of the respondents, RPN forthwith restored them in its payroll without
diminution of their benefits and privileges, or loss of seniority rights. They retained their entitlement to the benefits under the CBA
and there was no sufficient basis for the charge of indirect contempt against the petitioners, and that the same was made without due
regard for their right to exercise their management prerogatives to preserve the viability of the company and the harmony of the
workplace.
Gonzales vs. Solid Cement Corp.;

G.R. No. 198423; October 23, 2012
Facts:
The current petition arose from the execution of the final and executory judgment in the parties' illegal dismissal dispute. Since the LA
found that an illegal dismissal took place, the company reinstated petitioner Gonzales in the payroll.
In the meanwhile, the parties continued to pursue the original case on the merits. The case was appealed to the NLRC and from there
to the CA. The LA's ruling of illegal dismissal was largely left undisturbed in these subsequent recourses. The original case eventually
came to this Court. We denied the petition of respondent Solid Cement Corporation for lack of merit. Our ruling became final
and entry of judgment took place on July 12, 2005.
Soon after its finality, the original case was remanded to the LA for execution. The LA decision declared the respondents guilty of
illegal dismissal and ordered the reinstatement of Gonzales to his former position "with full backwages and without loss of seniority
rights and other benefits. Actual reinstatement and return to work for Gonzales (who had been on payroll reinstatement since
January 22, 2001) came on July 15, 2008.
When Gonzales moved for the issuance of an alias writ of execution on August 4, 2008, he included several items as components in
computing the amount of his backwages.
Acting on the motion, the LA added P57,900.00 as rice allowance and P14,675.00 as medical reimbursement (with the company's
apparent conformity), and excluded the rest of the items prayed for in the motion, either because these items have been paid or that,
based on the records of the case, Gonzales was not entitled thereto. Under the LA's execution Gonzales was entitled to a total
of P965,014.15.
The NLRC, in its decision modified the LA's execution order by including the following amounts as part of the judgment award. This
ruling increased Gonzales' entitlement to P2,805,698.04.
The CA set aside the NLRC's decision and reinstated the LA's order, prompting Gonzales to come to the Court via a petition for review
on certiorari.
From that point, only the implementation or execution of the final ruling remained to be done. EDI
Issue:
Whether the CA was legally correct in finding that the NLRC acted outside its jurisdiction when it modified the LA's execution order.
Held:
PARTIALLY GRANTED.
LA is DIRECTED to issue the appropriate writ of execution incorporating these additional awards.
Re-computation of awards during execution of an illegal dismissal decision

Gonzales was almost immediately reinstated pending appeal, although only by way of a payroll reinstatement as allowed by law. Upon
the finality of the decision on the appeal, Gonzales was actually reinstated.
Since Gonzales received his salary and benefit entitlements during his payroll reinstatement; the general concern in the present case
is more on the items that should be included in the award, part of which are the backwages.
The current petition only generally involves a determination of the scope of the awards that include the backwages.
The components of the backwages

a.Salary and 13th month differential due after dismissal
The Court ruled that in computing backwages, salary increases from the time of dismissal until actual reinstatement, and benefits not
yet granted at the time of dismissal are excluded. Hence, we cannot fault the CA for finding that the NLRC committed grave abuse of
discretion in awarding the salary differential amounting to P617,517.48 and the 13th month pay differentials amounting to
P51,459.48 that accrued subsequent to Gonzales' dismissal.
b.Legal interest of 12% on total judgment
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Gonzales is entitled to 12% interest on the total unpaid judgment amount, from the time the Court's decision (on the merits in the
original case) became final. When the judgment of the court awarding a sum of money becomes final and executory, the rate of legal
interest shall be 12% per annum from such finality until its satisfaction.
c.Additional backwages and 13th month pay

Even where the plaintiff must allege non-payment, the general rule is that the burden rests on the defendant to prove payment, rather
than on the plaintiff to prove non-payment.
Thus, even without proof of nonpayment, the NLRC was right in requiring the payment of the 13th month pay and the salaries due
after the LA's decision until the illegally dismissed petitioner was reinstated in the payroll, i.e., from December 13, 2000 to January 21,
2001. It follows that the CA was wrong when it concluded that the NLRC acted outside its jurisdiction by including these monetary
awards as items for execution.
These amounts are not excluded from the concept of backwages as the salaries fell due after Gonzales should have been reinstated,
while the 13th month pay fell due for the same period by legal mandate. These are entitlements that cannot now be glossed over if the
final decision on the merits in this case were to be respected.
Martos vs. new San Jose Builders;

G.R. No. 192650; October 24, 2012
Facts:
Petitioner New San Jose Builders, Inc. is a domestic corporation duly organized and existing under the laws of the Philippines and is
engaged in the construction of road, bridges, buildings, and low cost houses primarily for the government. One of the projects of
petitioner is the San Jose Plains Project. SJPP, calls for the construction of low cost housing, which are being turned over to the
National Housing Authority to be awarded to deserving poor families.
Private respondents alleged that, on various dates, petitioner hired them on different positions.
Sometime in 2000, petitioner was constrained to slow down and suspend most of the works on the SJPP project due to lack of funds of
the National Housing Authority. Thus, the workers were informed that many of them would be laid off and the rest would be
reassigned to other projects.
Some who were retained and were issued new appointment papers to their respective assignments, indicating therein that they are
project employees. However, they refused to sign the appointment papers as project employees and subsequently refused to continue
to work.
On different dates, three (3) Complaints for Illegal Dismissal and for money claims were filed before the NLRC against petitioner and
Jose Acuzar, by private respondents who claimed to be the former employees of petitioner.
Petitioner denies that private respondents were illegally dismissed, and alleged that they were project employees, whose
employments were automatically terminated upon completion of the project for which they were hired. On the other hand, private
respondents claim that petitioner hired them as regular employees, continuously and without interruption.
Ruling of the Labor Arbiter

As earlier stated, on May 23, 2003, the LA handed down a decision declaring, among others, that petitioner Felix Martos (Martos) was
illegally dismissed and entitled to separation pay, backwages and other monetary benefits; and dismissing, without prejudice, the
complaints/claims of the other complainants (petitioners).
Ruling of the NLRC

Both parties appealed the LA decision to the NLRC. Petitioners appealed that part which dismissed all the complaints, without
prejudice, except that of Martos. On the other hand, New San Jose Builders, Inc. (respondent) appealed that part which held that
Martos was its regular employee and that he was illegally dismissed. The NLRC resolved the appeal by dismissing the one filed by
respondent and partially granting that of the other petitioners.
Ruling of the CA
The CA stated that the factual circumstances of Martos' employment and his dismissal from work could not equally apply to
petitioners because they were not similarly situated. The NLRC did not even bother to look at the evidence on record and
inappropriately granted monetary awards to petitioners who had either denied having filed a case or withdrawn the case against
respondent. According to the CA, the position papers should have covered only those claims and causes of action raised in the
complaint excluding those that might have been amicably settled.
With respect to Martos, the CA ruled that he was a regular employee of respondent and his termination was illegal. It explained that
Martos should have been considered a regular employee because there was no indication that he was merely a project employee
when he was hired.
Issue:
Whether or not Martos should be reinstated.
Held:
DENIED
The verification requirement is significant, as it is intended to secure an assurance that the allegations in the pleading are true and
correct and not the product of the imagination or a matter of speculation, and that the pleading is filed in good faith. Verification is
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deemed substantially complied with when, as in this case, 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.
The absence of a proper verification is cause to treat the pleading as unsigned and dismissible.
The lone signature of Martos would have been sufficient if he was authorized by his co-petitioners to sign for them. Unfortunately,
petitioners failed to adduce proof that he was so authorized.
The Court agrees with the CA that the dismissal of the other complaints were brought about by the own negligence and passive
attitude of the complainants themselves.
As to Martos, the Court agrees that the reinstatement being sought by him was no longer practicable because of strained relation
between the parties. Indeed, he can no longer question this fact. This issue was never raised or taken up on appeal before the NLRC. It
was only after he lost the appeal in the CA that he raised it.
The accepted doctrine is that separation pay may avail in lieu of reinstatement if reinstatement is no longer practical or in the best
interest of the parties. Separation pay in lieu of reinstatement may likewise be awarded if the employee decides not to be reinstated.
its employ a worker it could no longer trust.
Loon et al. vs. Power Masters, Inc.;

G.R. No. 189404; December 11, 2013
Facts:
Respondents Power Master, Inc. and Tri-C General Services employed and assigned the petitioners as janitors and leadsmen in
various Philippine Long Distance Telephone Company (PLDT) offices in Metro Manila area. Subsequently, the petitioners filed a
complaint for money claims against Power Master, Inc., Tri-C General Services and their officers, the spouses Homer and Carina
Alumisin (collectively, the respondents). The petitioners alleged in their complaint that they were not paid minimum wages, overtime,
holiday, premium, service incentive leave, and thirteenth month pays. They further averred that the respondents made them sign
blank payroll sheets. On June 11, 2001, the petitioners amended their complaint and included illegal dismissal as their cause of action.
They claimed that the respondents relieved them from service in retaliation for the filing of their original complaint. Notably, the
respondents did not participate in the proceedings before the Labor Arbiter except on April 19, 2001 and May 21, 2001 when Mr.
Romulo Pacia, Jr. appeared on the respondents' behalf. The respondents' counsel also appeared in a preliminary mandatory
conference on July 5, 2001. However, the respondents neither filed any position paper nor proffered pieces of evidence in their defense
despite their knowledge of the pendency of the case.
In a decision dated March 15, 2002, Labor Arbiter (LA) Elias H. Salinas partially ruled in favor of the petitioners. The LA awarded the
petitioners salary differential, service incentive leave, and thirteenth month pays. In awarding these claims, the LA stated that
the burden of proving the payment of these money claims rests with the employer. The LA also awarded attorney's fees in favor of
the petitioners, pursuant to Article 111 of the Labor Code.
However, the LA denied the petitioners' claims for backwages, overtime, holiday, and premium pays. The LA observed that the
petitioners failed to show that they rendered overtime work and worked on holidays and rest days without compensation. The LA
further concluded that the petitioners cannot be declared to have been dismissed from employment because they did not show any
notice of termination of employment. They were also not barred from entering the respondents' premises.
Both parties appealed the LA's ruling with the National Labor Relations Commission. The petitioners disputed the LA's denial of their
claim for backwages, overtime, holiday and premium pays. Meanwhile, the respondents questioned the LA's ruling on the ground that
the LA did not acquire jurisdiction over their persons.
The respondents insisted that they were not personally served with summons and other processes. They also claimed that they paid
the petitioners minimum wages, service incentive leave and thirteenth month pays. As proofs, they attached photocopied and
computerized copies of payroll sheets to their memorandum on appeal. They further maintained that the petitioners were
validly dismissed. They argued that the petitioners' repeated defiance to their transfer to different workplaces and their violations of
the company rules and regulations constituted serious misconduct and willful disobedience.
On January 3, 2003, the respondents filed an unverified supplemental appeal. They attached photocopied and computerized
copies of list of employees with automated teller machine (ATM) cards to the supplemental appeal. This list also showed the
amounts allegedly deposited in the employees' ATM cards. 11 They also attached documentary evidence showing that the
petitioners were dismissed for cause and had been accorded due process.
On January 22, 2003, the petitioners filed an Urgent Manifestation and Motion where they asked for the deletion of the
supplemental appeal from the records because it allegedly suffered from infirmities. First, the supplemental appeal was not verified.
Second, it was belatedly filed six months from the filing of the respondents' notice of appeal with memorandum on appeal. The
petitioners pointed out that they only agreed to the respondents' filing of a responsive pleading until December 18, 2002. Third, the
attached documentary evidence on the supplemental appeal bore the petitioners' forged signatures.
They reiterated these allegations in an Urgent Motion to Resolve Manifestation and Motion (To Expunge from the Records
Respondents' Supplemental Appeal, Reply and/or Rejoinder) dated January 31, 2003. Subsequently, the petitioners filed an
Urgent Manifestation with Reiterating Motion to Strike-Off the Record Supplemental Appeal/Reply, Quitclaims and Spurious
Documents Attached to Respondents' Appeal dated August 7, 2003. The petitioners argued in this last motion that the payrolls
should not be given probative value because they were the respondents' fabrications. They reiterated that the genuine payrolls bore
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their signatures, unlike the respondents' photocopies of the payrolls. They also maintained that their signatures in the respondents'
documents (which showed their receipt of thirteenth month pay) had been forged.
In a resolution dated November 27, 2003, the NLRC partially ruled in favor of the respondents. The NLRC affirmed the LA's awards of
holiday pay and attorney's fees. It also maintained that the LA acquired jurisdiction over the persons of the respondents through
their voluntary appearance.
However, it allowed the respondents to submit pieces of evidence for the first time on appeal on the ground that they had
been deprived of due process. It found that the respondents did not actually receive the LA's processes. It also admitted the
respondents' unverified supplemental appeal on the ground that technicalities may be disregarded to serve the greater interest of
substantial due process. Furthermore, the Rules of Court do not require the verification of a supplemental pleading.
The NLRC also vacated the LA's awards of salary differential, thirteenth month and service incentive leave pays. In so ruling, it
gave weight to the pieces of evidence attached to the memorandum on appeal and the supplemental appeal. It maintained that the
absence of the petitioners' signatures in the payrolls was not an indispensable factor for their authenticity. It pointed out that the
payment of money claims was further evidenced by the list of employees with ATM cards. It also found that the petitioners' signatures
were not forged. It took judicial notice that many people use at least two or more different signatures. AHTICD
The NLRC further ruled that the petitioners were lawfully dismissed on grounds of serious misconduct and willful disobedience.
It found that the petitioners failed to comply with various memoranda directing them to transfer to other workplaces and to attend
training seminars for the intended reorganization and reshuffling.
The NLRC denied the petitioners' motion for reconsideration in a resolution dated April 28, 2006. 17 Aggrieved, the petitioners filed a
petition for certiorari under Rule 65 of the Rules of Court before the CA. 18 AEaSTC
The CA affirmed the NLRC's ruling. The CA held that the petitioners were afforded substantive and procedural due process.
Accordingly, the petitioners deliberately did not explain their side. Instead, they continuously resisted their transfer to other PLDT
offices and violated company rules and regulations. It also upheld the NLRC's findings on the petitioners' monetary claims.
The CA denied the petitioners' motion for reconsideration in a resolution dated August 28, 2009, prompting the petitioners to file the
present petition. 19
Issue:
1. Whether the CA erred when it did not find that the NLRC committed grave abuse of discretion in giving due course to the
respondents' appeal;
2. Whether the respondents perfected their appeal before the NLRC; and
3. Whether the NLRC properly allowed the respondents' supplemental appeal
4. Whether the respondents were estopped from submitting pieces of evidence for the first time on appeal;
5. Whether the petitioners were illegally dismissed and are thus entitled to backwages;
Held:
1. The respondents perfected their appeal with the NLRC because the revocation of the bonding company's authority has a
prospectiveapplication
Paragraph 2, Article 223 of the Labor Code provides that "[i]n case of a judgment involving a monetary award, an appeal by the
employer may be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited
by the Commission in the amount equivalent to the monetary award in the judgment appealed from."
Contrary to the respondents' claim, the issue of the appeal bond's validity may be raised for the first time on appeal since its proper
filing is a jurisdictional requirement. The requirement that the appeal bond should be issued by an accredited bonding
company is mandatory and jurisdictional. The rationale of requiring an appeal bond is to discourage the employers from using an
appeal to delay or evade the employees' just and lawful claims. It is intended to assure the workers that they will receive the money
judgment in their favor upon the dismissal of the employer's appeal.
In the present case, the respondents filed a surety bond issued by Security Pacific Assurance Corporation (Security Pacific) on
June 28, 2002. At that time, Security Pacific was still an accredited bonding company. However, the NLRC revoked its accreditation
on February 16, 2003. Nonetheless, this subsequent revocation should not prejudice the respondents who relied on its then
subsisting accreditation in good faith. A bonding company's revocation of authority is prospective in application.
However, the respondents should post a new bond issued by an accredited bonding company in compliance with paragraph 4,
Section 6, Rule 6 of the NLRC Rules of Procedure. This provision states that "[a] cash or surety bond shall be valid and effective from
the date of deposit or posting, until the case is finally decided, resolved or terminated or the award satisfied."
2. The CA correctly ruled that theNLRC properly gave due course tothe respondents' supplemental appeal
The CA also correctly ruled that the NLRC properly gave due course to the respondents' supplemental appeal. Neither the laws nor
the rules require the verification of the supplemental appeal. Furthermore, verification is a formal, not a jurisdictional,
requirement. It is mainly intended for the assurance that the matters alleged in the pleading are true and correct and not of mere
speculation. 27 Also, a supplemental appeal is merely an addendum to the verified memorandum on appeal that was earlier filed in
the present case; hence, the requirement for verification has substantially been complied with.
The respondents also timely filed their supplemental appeal on January 3, 2003. The records of the case show that the petitioners
themselves agreed that the pleading shall be filed until December 18, 2002. The NLRC further extended the filing of the supplemental
pleading until January 3, 2003 upon the respondents' motion for extension.
3. A party may only adduce evidence for the first time on appeal if headequately explains his delay in thesubmission of
evidence and hesufficiently proves the allegations sought to be proven
In labor cases, strict adherence to the technical rules of procedure is not required. Time and again, we have allowed evidence to be
submitted for the first time on appeal with the NLRC in the interest of substantial justice . Thus, we have consistently supported
the rule that labor officials should use all reasonable means to ascertain the facts in each case speedily and objectively, without regard
to technicalities of law or procedure, in the interest of due process.
However, this liberal policy should still be subject to rules of reason and fairplay.
The liberality of procedural rules is qualified by two requirements:
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(1) a party should adequately explain any delay in the submission of evidence; and
(2) a party should sufficiently prove the allegations sought to be proven.
Guided by these principles, the CA grossly erred in ruling that the NLRC did not commit grave abuse of discretion in arbitrarily
admitting and giving weight to the respondents' pieces of evidence for the first time on appeal.
A.The respondents failed toadequately explain their delayin the submission of evidence
We cannot accept the respondents' cavalier attitude in blatantly disregarding the NLRC Rules of Procedure. The CA gravely erred
when it overlooked that the NLRC blindly admitted and arbitrarily gave probative value to the respondents' evidence despite their
failure to adequately explain their delay in the submission of evidence. Notably, the respondents' delay was anchored on their
assertion that they were oblivious of the proceedings before the LA. However, the respondents did not dispute the LA's finding that
Mr. Romulo Pacia, Jr. appeared on their behalf on April 19, 2001 and May 21, 2001. The respondents also failed to contest the
petitioners' assertion that the respondents' counsel appeared in a preliminary mandatory conference on July 5, 2001.
Indeed, the NLRC capriciously and whimsically admitted and gave weight to the respondents' evidence despite its finding that they
voluntarily appeared in the compulsory arbitration proceedings. The NLRC blatantly disregarded the fact that the respondents
voluntarily opted not to participate, to adduce evidence in their defense and to file a position paper despite their knowledge of the
pendency of the proceedings before the LA. The respondents were also grossly negligent in not informing the LA of the specific
building unit where the respondents were conducting their business and their counsel's address despite their knowledge of their non-
receipt of the processes.
B.The respondents failed tosufficiently prove theallegations sought to beproven
Furthermore, the respondents failed to sufficiently prove the allegations sought to be proven. Why the respondents' photocopied and
computerized copies of documentary evidence were not presented at the earliest opportunity is a serious question that lends
credence to the petitioners' claim that the respondents fabricated the evidence for purposes of appeal. While we generally admit in
evidence and give probative value to photocopied documents in administrative proceedings, allegations of forgery and
fabrication should prompt the adverse party to present the original documents for inspection. It was incumbent upon the
respondents to present the originals, especially in this case where the petitioners had submitted their specimen signatures. Instead,
the respondents effectively deprived the petitioners of the opportunity to examine and controvert the alleged spurious evidence by
not adducing the originals. This Court is thus left with no option but to rule that the respondents' failure to present the
originals raises the presumption that evidence willfully suppressed would be adverse if produced.
It was also gross error for the CA to affirm the NLRC's proposition that "[i]t is of common knowledge that there are many people who
use at least two or more different signatures." 37 The NLRC cannot take judicial notice that many people use at least two signatures,
especially in this case where the petitioners themselves disown the signatures in the respondents' assailed documentary evidence.
The NLRC's position is unwarranted and is patently unsupported by the law and jurisprudence.
3. The petitioners are entitled tobackwages
In termination cases, the burden of proving just and valid cause for dismissing an employee from his employment rests upon the
employer. The employer's failure to discharge this burden results in the finding that the dismissal is unjustified. 40 This is exactly
what happened in the present case.
4. The petitioners are entitled to salarydifferential, service incentive,holiday, and thirteenth month pays
As in illegal dismissal cases, the general rule is that the burden rests on the defendant to prove payment rather than on the plaintiff to
prove non-payment of these money claims. The rationale for this rule is that the pertinent personnel files, payrolls, records,
remittances and other similar documents — which will show that differentials, service incentive leave and other claims of workers
have been paid — are not in the possession of the worker but are in the custody and control of the employer. 42
5. The petitioners are not entitled toovertime and premium pays
The burden of proving entitlement to overtime pay and premium pay for holidays and rest days rests on the employee because these
are not incurred in the normal course of business. 43 In the present case, the petitioners failed to adduce any evidence that
would show that they actually rendered service in excess of the regular eight working hours a day, and that they in fact
worked on holidays and rest days.
6. The petitioners are entitled toattorney's fees
The award of attorney's fees is also warranted under the circumstances of this case. An employee is entitled to an award of attorney's
fees equivalent to ten percent (10%) of the amount of the wages in actions for unlawful withholding of wages. 44
As a final note, we observe that Kodelito Ayala, Winelito Ojel, Renato Rodrego and Welito Loon are also named as petitioners in this
case. However, we deny their petition for the reason that they were not part of the proceedings before the CA. Their failure to timely
seek redress before the CA precludes this Court from awarding them monetary claims.
WHEREFORE, based on these premises, we REVERSE and SET ASIDE the decision dated June 5, 2009, and the resolution dated
August 28, 2009 of the Court of Appeals in CA-G.R. SP No. 95182. This case is REMANDED to the Labor Arbiter for the sole purpose of
computing petitioners' full backwages (computed from the date of their respective dismissals up to the finality of this decision) and
their salary differential, service incentive leave, holiday, thirteenth month pays, and attorney's fees equivalent to ten percent (10%) of
the withheld wages.
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Lepanto Consolidated Mining Corp. vs. Icao;

G.R. No. 196047; January 15, 2014
Facts:
The instant petition stemmed from a complaint for illegal dismissal and damages filed by private respondent Belio C. Icao [Icao]
against petitioners Lepanto Consolidated Mining Company (LCMC) and its Chief Executive Officer [CEO] Felipe U. Yap [Yap] before
the Arbitration Branch of the NLRC.
Private respondent claimed that his dismissal from work was without just or authorized cause since petitioners failed to prove
by ample and sufficient evidence that he stole gold bearing highgrade ores from the company premises. If private respondent
was really placing a wrapped object inside his boots, he should have been sitting or bending down to insert the same, instead of
just standing on a muckpile as alleged by petitioners. Moreover, it is beyond imagination that a person, knowing fully well that
he was being chased for allegedly placing wrapped ore inside his boots, will transfer it to his skullguard. The tendency in such
situation is to throw the object away. As such, private respondent prayed that petitioners be held liable for illegal dismissal, to
reinstate him to his former position without loss of seniority rights and benefits, and to pay his full backwages, damages and
attorney's fees.
For their defense, petitioners averred that SG Bulwayan saw private respondent standing on a muckpile and inserting a wrapped
object inside his right rubber boot. SG Bulwayan immediately ran towards private respondent, but the latter ran away to escape.
He tried to chase private respondent but failed to capture him. Thereafter, while SG Bulwayan was on his way to see his co-
guard SG Papsa-ao, he saw private respondent moving out of a stope. He then shouted at SG Papsa-ao to intercept him. When
private respondent was apprehended, SG Bulwayan ordered him to remove his skullguard for inspection and saw a wrapped
object placed inside the helmet. SG Bulwayan grabbed it, but the harness of the skullguard was also detached causing the object
to fall on the ground. Immediately, SG Bulwayan recovered and inspected the same which turned out to be pieces of stone ores.
Private respondent and the stone ores were later turned over to the Mankayan Philippine National Police where he was given a
written notice of the charge against him. On January 9, 2008, a hearing was held where private respondent, together with the
officers of his union as well as the apprehending guards appeared. On February 4, 2008, private respondent received a copy of
the resolution of the company informing him of his dismissal from employment due to breach of trust and confidence and the act
of highgrading.
On 30 September 2008, the labor arbiter rendered a Decision holding petitioner and its CEO liable for illegal dismissal and ordering
them to pay respondent Icao P345,879.45, representing his full backwages and separation pay. 3 The alleged highgrading attributed
by LCMC's security guards was found to have been fabricated; consequently, there was no just cause for the dismissal of respondent.
The labor arbiter concluded that the claim of the security guards that Icao had inserted ores in his boots while in a standing position
was not in accord with normal human physiological functioning. 4
The labor arbiter also noted that it was inconsistent with normal human behavior for a man, who knew that he was being chased for
allegedly placing wrapped ore inside his boots, to then transfer the ore to his skullguard, where it could be found once he was
apprehended. 5 To further support the improbability of the allegation of highgrading, the labor arbiter noted that throughout the 21
years of service of Icao to LCMC, he had never been accused of or penalized for highgrading or any other infraction involving moral
turpitude — until this alleged incident. 6
THE NLRC ORDER DISMISSING THE APPEALOF PETITIONER LCMC FOR FAILURE TO POST THE APPEAL BOND
On 8 December 2008, petitioner and its CEO filed an Appearance with Memorandum of Appeal 7 before the NLRC. Instead of posting
the required appeal bond in the form of a cash bond or a surety bond in an amount equivalent to the monetary award of P345,879.45
adjudged in favor of Icao, they filed a Consolidated Motion for Release of Cash Bond and to Apply Bond Subject for Release As
Payment for Appeal Bond (Consolidated Motion). 8 They requested therein that the NLRC release the cash bond of P401,610.84,
which they had posted in the separate case Dangiw Siggaao v. LCMC, 9 and apply that same cash bond to their present appeal bond
liability. They reasoned that since this Court had already decided Dangiw Siggaao in their favor, and that the ruling therein had
become final and executory, the cash bond posted therein could now be released. 10 They also cited financial difficulty as a reason for
resorting to this course of action and prayed that, in the interest of justice, the motion be granted.
In its Order dated 27 February 2009, the NLRC First Division dismissed the appeal of petitioner and the latter's CEO for non-
perfection. 11 It found that they had failed to post the required appeal bond equivalent to the monetary award of P345,879.45.
THE CA RULING AFFIRMING THE ORDER OF THE NLRC
On 27 September 2010, the CA issued its assailed Decision 15 affirming the Order of the NLRC First Division, which had dismissed the
appeal of petitioner and the latter's CEO. According to the CA, they failed to comply with the requirements of law and consequently
lost the right to appeal. 16
Issue:
whether or not petitioner complied with the appeal bond requirement under the Labor Code and the NLRC Rules by filing a
Consolidated Motion to release the cash bond it posted in another case, which had been decided with finality in its favor, with a view
to applying the same cash bond to the present case.
Held:
The Petition is meritorious. The Court finds that petitioner substantially complied with the appeal bond requirement.
Before discussing its ruling, however, the Court finds it necessary to emphasize the well-entrenched doctrine that an appeal is not a
matter of right, but is a mere statutory privilege. It may be availed of only in the manner provided by law and the rules. Thus, a party
who seeks to exercise the right to appeal must comply with the requirements of the rules; otherwise, the privilege is lost. 20
In appeals from any decision or order of the labor arbiter, the posting of an appeal bond is required under Article 223 of the Labor
Code, which reads:
Article 223. APPEAL. — Decisions, awards, or orders of the Labor Arbiter are final and executory unless
appealed to the Commission by any or both parties within ten (10) calendar days from receipt of such
decisions, awards, or orders. Such appeal may be entertained only on any of the following grounds:
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xxx xxx xxx

In case of a judgment involving a monetary award, an appeal by the employer may be perfected
only upon the posting of a cash or surety bond issued by a reputable bonding company duly
accredited by the Commission in the amount equivalent to the monetary award in the judgment
appealed from. (Emphasis and underlining supplied)
The 2011 NLRC Rules of Procedure (NLRC Rules) incorporates this requirement in Rule VI, Section 6, which provides:
SECTION 6. Bond. — In case the decision of the Labor Arbiter or the Regional Director involves
a monetary award, an appeal by the employer may be perfected only upon the posting of a
bond, which shall either be in the form of cash deposit or surety bond equivalent in amount to the
monetary award, exclusive of damages and attorney's fees. (Emphases and underlining supplied)
We now turn to the main question of whether petitioner's Consolidated Motion to release the cash bond it posted in a previous case,
for application to the present case, constitutes compliance with the appeal bond requirement. While it is true that the procedure
undertaken by petitioner is not provided under the Labor Code or in the NLRC Rules, we answer the question in the affirmative.
we rule that petitioner substantially complied with the mandatory requirement of posting an appeal bond for the reasons explained
below.
First, there is no question that the appeal was filed within the 10-day reglementary period. Except for the alleged failure to post
an appeal bond, the appeal to the NLRC was therefore in order.
Second, it is also undisputed that petitioner has an unencumbered amount of money in the form of cash in the custody of the NLRC.
To reiterate, petitioner had posted a cash bond of P401,610.84 in the separate case Dangiw Siggaao, which was earlier decided in its
favor.
Under the Rule VI, Section 6 of the 2005 NLRC Rules, "[a] cash or surety bond shall be valid and effective from the date of deposit or
posting, until the case is finally decided, resolved or terminated, or the award satisfied." Hence, it is clear that a bond is encumbered
and bound to a case only for as long as 1) the case has not been finally decided, resolved or terminated; or 2) the award has not been
satisfied. Therefore, once the appeal is finally decided and no award needs to be satisfied, the bond is automatically released. Since
the money is now unencumbered, the employer who posted it should now have unrestricted access to the cash which he may
now use as he pleases — as appeal bond in another case, for instance. This is what petitioner simply did.
Third, the cash bond in the amount of P401,610.84 posted in Dangiw Siggaao is more than enough to cover the appeal bond in the
amount of P345,879.45 required in the present case.
Fourth, this ruling remains faithful to the spirit behind the appeal bond requirement which is to ensure that workers will receive the
money awarded in their favor when the employer's appeal eventually fails. There was no showing at all of any attempt on the part of
petitioner to evade the posting of the appeal bond. On the contrary, petitioner's move showed a willingness to comply with the
requirement. Hence, the welfare of Icao is adequately protected.
Having complied with the appeal bond requirement, petitioner's appeal before the NLRC must therefore be reinstated.
The Court will liberally apply the rules only in very highly exceptional cases such as this, in keeping with the dictates of justice, reason
and equity.
Building Care Corp. vs. Macaraeg;

G.R. No. 198357; December 10, 2012
Facts:
Petitioners are in the business of providing security services to their clients. They hired respondent as a security guard beginning
August 25, 1996, assigning her at Genato Building in Caloocan City. However, on March 9, 2008, respondent was relieved of her post.
She was re-assigned to Bayview Park Hotel from March 9-13, 2008, but after said period, she was allegedly no longer given any
assignment. Thus, on September 9, 2008, respondent filed a complaint against petitioners for illegal dismissal, underpayment of
salaries, non-payment of separation pay and refund of cash bond. Conciliation and mediation proceedings failed, so the parties were
ordered to submit their respective position papers.
Respondent claimed that petitioners failed to give her an assignment for more than nine months, amounting to constructive dismissal,
and this compelled her to file the complaint for illegal dismissal.
On the other hand, petitioners alleged in their position paper that respondent was relieved from her post as requested by the client
because of her habitual tardiness, persistent borrowing of money from employees and tenants of the client, and sleeping on the job.
Petitioners allegedly directed respondent to explain why she committed such infractions, but respondent failed to heed such order.
Respondent was nevertheless temporarily assigned to Bayview Park Hotel from March 9-13, 2008, but she also failed to meet said
client's standards and her posting thereat was not extended.
Respondent then filed an administrative complaint for illegal dismissal with the PNP-Security Agencies and Guard Supervision
Division on June 18, 2008, but she did not attend the conference hearings for said case. Petitioners brought to the conference hearings
a new assignment order detailing respondent at the Ateneo de Manila University but, due to her absence, petitioners failed to
personally serve respondent said assignment order. Petitioners then sent respondent a letter ordering her to report to headquarters
for work assignment, but respondent did not comply with said order. Instead, respondent filed a complaint for illegal dismissal with
the Labor Arbiter.
LA dismissed for lack of merit. NLRC dismissed the appeal for having been filed out of time, thereby declaring that the Labor Arbiter's
Decision had become final and executor. CA the petition was granted.
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Issue:
Whether the CA erred in liberally applying the rules of procedure and ruling that respondent's appeal should be allowed and resolved
on the merits despite having been filed out of time.
Held:
GRANTED
While procedural rules may be relaxed in the interest of justice, it is well-settled that these are tools designed to facilitate the
adjudication of cases. The relaxation of procedural rules in the interest of justice was never intended to be a license for erring litigants
to violate the rules with impunity. Liberality in the interpretation and application of the rules can be invoked only in proper cases and
under justifiable causes and circumstances. While litigation is not a game of technicalities, every case must be prosecuted in
accordance with the prescribed procedure to ensure an orderly and speedy administration of justice.
In this case, the justifications given by the CA for its liberality by choosing to overlook the belated filing of the appeal are, the
importance of the issue raised, i.e., whether respondent was illegally dismissed; and the belief that respondent should be "afforded the
amplest opportunity for the proper and just determination of his cause, free from the constraints of technicalities," considering that
the belated filing of respondent's appeal before the NLRC was the fault of respondent's former counsel. Note, however, that neither
respondent nor her former counsel gave any explanation or reason citing extraordinary circumstances for her lawyer's failure to
abide by the rules for filing an appeal. Respondent merely insisted that she had not been remiss in following up her case with said
lawyer.
It is, however, an oft-repeated ruling that the negligence and mistakes of counsel bind the client. A departure from this rule would
bring about never-ending suits, so long as lawyers could allege their own fault or negligence to support the client's case and obtain
remedies and reliefs already lost by the operation of law. 15 The only exception would be, where the lawyer's gross negligence would
result in the grave injustice of depriving his client of the due process of law. 16 In this case, there was no such deprivation of due
process. Respondent was able to fully present and argue her case before the Labor Arbiter. She was accorded the opportunity to be
heard. Her failure to appeal the Labor Arbiter's Decision cannot, therefore, be deemed as a deprivation of her right to due process.
CO SAY COCO PRODUCTS PHILS INC. vs BALTAZAR;

GR No. 188828, March 5, 2014
Facts:
Petitioner Co Say is a domestic corporation duly organized and existing under Philippine laws and is the owner of a private port
located in Bigaa, Legazpi City. Tanawan Port on the other hand, is a single proprietorship owned and managed by Salazar.
On 18 March 2002, Co Say, thru its President, Efren Co Say, entered into a Contract for Cargo Handling Services with petitioner
Tanawan Port, wherein the latter was given the authority to manage and operate the arrastre and stevedoring services of its port.
CIAHaT
To jumpstart the operation of its cargo handling services, Tanawan Port employed respondents Benjamin Baltasar as Manager,
Marvin Baltasar as Computer Operator, Raymundo Botalon as Crane Operator, Nilo Bordeos, Jr. as Crane Helper, Cargo Botalon as
Crane Operator and Geronimo Bas as Fork Lift Operator.
Due to lack of clientele, the business venture of Tanawan Port failed to gain momentum causing serious alarm to the company. A
couple of months after respondents were hired, Tanawan Port decided to cease operation by sending letters to the City Treasurer of
Legaspi City and the Revenue District Officer of the Bureau of Internal Revenue informing them of its intention to close its business
and to surrender its business registration due to serious business losses. On 30 August 2002, the City Treasurer approved the
retirement from business of Tanawan Port. On the same day, Salazar convened respondents to formally inform them of her intention
to close Tanawan Port's operation, but she was prevailed upon by the latter to hold it up while Baltasar is looking for new clients that
could help boost the company's revenue. Efforts to revive the business, however, proved to be futile constraining the company to
finally discontinue its operation and close its business. As a result, respondents were terminated from employment but were
accordingly given their corresponding separation pay and 13th month pay
Barely a month after they received their separation pay, respondents filed complaints for illegal dismissal and non-payment of labor
standard benefits against petitioners Tanawan Port, Salazar, Co Say and Efren Co Say before the Labor Arbiter. In their Position
Papers, respondents alleged that Tanawan Port was merely feigning losses in order to ease out employees, pointing out the absence of
evidence to prove business reverses. Respondents also punctuated Tanawan Port's failure to comply with the procedural requirement
of sending notices to employees concerned and to the Department of Labor and Employment (DOLE) one month before the intended
date of closure as required by law.
Tanawan Port, for its part, asserted that respondents' severance from employment was brought about by closure or cessation of
business operation which is an authorized cause for termination of employment under the Labor Code. To dispute the allegation of
respondents that the closure was done in bad faith, Tanawan Port insisted that the lack of clientele caused serious financial drain to
the company leaving the management with no other option but to shutdown its operations.
On 7 August 2003, the Labor Arbiter rendered a Joint Decision in favor of respondents and held that petitioners are liable for illegal
dismissal for failure to comply with the procedural and substantive requirements of terminating employment due to closure of
business operations. It was found that while Tanawan Port claimed that it was suffering from serious business losses, it failed to
adduce its financial statements to prove that its withdrawal from operation was bona fide in character. A similar failure to comply with
the notice requirement was likewise observed by the labor officer resulting in the violation of respondents' right to due process of law.
Finally, the Labor Arbiter declared that Tanawan Port is engaged in labor-only contracting and is merely an extension of the business
personality of Co Say, which is thus, solidarily liable with the former, the labor-only contractor, for the rightful claims of the
employees.
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Contradicting the Labor Arbiter Decision, the NLRC in its Decision dated 31 May 2004, held that respondents' severance from
employment was not illegal, as the company where they were working closed due to business losses, and, the closure of business
or establishment is one of the authorized causes recognized by law in dismissing an employee. The NLRC further ruled that there
was sufficient compliance with the substantive requirement in terminating employment and held that proof of business losses is
not necessary since cessation of business operation is a management prerogative and should not be interfered with by courts or
labor tribunals.
In a Decision 14 dated 20 April 2009, the Court of Appeals reversed the NLRC Decision due to failure of petitioners to perfect their
appeal and proceeded to affirm the Labor Arbiter's Decision. Contrary to the ruling of the NLRC, the appellate court ruled that the
posting of the appeal bond after the period to perfect the appeal had expired, resulted in the non-perfection of the appeal.
Accordingly, the Court of Appeals ruled that the NLRC has no authority to alter, modify or reverse the Labor Arbiter decision after the
said decision became final and executory.
Issue:
THE COURT OF APPEALS ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION WHEN IT RULED
THAT THE RESPONDENTS FAILED TO PERFECT THEIR APPEAL ON TIME;
Held:
The NLRC ruled that petitioners were able to post the surety bond and timely perfect their appeal before the expiration of the 10-day
reglementary period, while the Court of Appeals oppositely ruled although both findings are based on the same pieces of evidence
available on record. According to the appellate court, the First Certification issued by the RAB-NLRC on 2 October 2003 is telling of the
petitioners' failure to perfect an appeal. It appeared in the said certification that the appeal bond, which is a mandatory requirement
for perfecting an appeal, has not been posted as of 2 October 2003
Three months after the said certification was issued, the RAB-NLRC issued a Second Certification on 19 January 2004, indicating that
petitioners posted a surety bond on 24 September 2003 although the said bond was received by the RAB-NLRC only on 28 October
2003.
It was on the basis of the Second Certification that the NLRC allowed the appeal. The divergence of the findings of the NLRC on the one
hand, and the Court of Appeals on the other, necessitates a review of the records of this case to ascertain which conclusion is
supported by substantial evidence and, enough to remove the conclusion away from the issue of grave abuse of discretion. Substantial
evidence is such amount of relevant evidence which a reasonable mind might accept as adequate to support a conclusion.
The crucial issue in the resolution of the instant petition concerns the timely posting of the appeal bond. The pertinent rule on the
matter is Article 223 of the Labor Code, as amended, which sets forth the rules on appeal from the Labor Arbiter's monetary award:
ART. 223.Appeal. — Decisions, awards, or orders of the Labor Arbiter are final and executory unless
appealed to the Commission by any or both parties within ten (10) calendar days from receipt of such
decisions, awards, or orders. . . . .
xxx xxx xxx
In case of a judgment involving a monetary award, an appeal by the employer may be perfected only
upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by
the Commission in the amount equivalent to the monetary award in the judgment appealed from.
(Emphasis ours).
Implementing the aforestated provisions of the Labor Code are the provisions of Rule VI of the 2011 NLRC Rules of Procedure on
perfection of appeals which read: aHSAIT
SECTION 1.PERIODS OF APPEAL. — Decisions, awards, or orders of the Labor Arbiter shall be final and
executory unless appealed to the Commission by any or both parties within ten (10) calendar days from
receipt thereof; and in case of decisions or resolutions of the Regional Director of the Department of
Labor and Employment pursuant to Article 129 of the Labor Code, within five (5) calendar days from
receipt thereof. If the 10th or 5th day, as the case may be, falls on a Saturday, Sunday or holiday, the last
day to perfect the appeal shall be the first working day following such Saturday, Sunday or holiday.
No motion or request for extension of the period within which to perfect an appeal shall be allowed.
SECTION 2.GROUNDS. — The appeal may be entertained only on any of the following grounds:
a)If there is prima facie evidence of abuse of discretion on the part of the Labor Arbiter or
Regional Director;
b)If the decision, award or order was secured through fraud or coercion, including graft
and corruption;
c)If made purely on questions of law; and/or
d)If serious errors in the findings of facts are raised which, if not corrected, would cause
grave or irreparable damage or injury to the appellant.
SECTION 3.WHERE FILED. — The appeal shall be filed with the Regional Arbitration Branch or Regional
Office where the case was heard and decided. cACTaI
SECTION 4.REQUISITES FOR PERFECTION OF APPEAL. — a) The appeal shall be:
(1)filed within the reglementary period provided in Section 1 of this Rule;
(2)verified by the appellant himself/herself in accordance with Section 4, Rule 7 of the
Rules of Court, as amended;
(3)in the form of a memorandum of appeal which shall state the grounds relied upon and
the arguments in support thereof, the relief prayed for, and with a statement
of the date the appellant received the appealed decision, award or order;
(4)in three (3) legibly typewritten or printed copies; and
(5)accompanied by: aEcTDI
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i)proof of payment of the required appeal fee and legal

research fee;
ii)posting of a cash or surety bond as provided in Section 6 of
this Rule; and
iii)proof of service upon the other parties.
b)A mere notice of appeal without complying with the other requisites aforestated shall not stop the
running of the period for perfecting an appeal.
c)The appellee may file with the Regional Arbitration Branch or Regional Office where the appeal
was filed, his/her answer or reply to appellant's memorandum of appeal, not later than ten (10)
calendar days from receipt thereof. Failure on the part of the appellee who was properly furnished
with a copy of the appeal to file his/her answer or reply within the said period may be construed as a
waiver on his/her part to file the same.
d)Subject to the provisions of Article 218 of the Labor Code, once the appeal is perfected in
accordance with these Rules, the Commission shall limit itself to reviewing and deciding only the
specific issues that were elevated on appeal.
SECTION 5.APPEAL FEE. — The appellant shall pay the prevailing appeal fee and legal research fee to
the Regional Arbitration Branch or Regional Office of origin, and the official receipt of such payment
shall form part of the records of the case.
SECTION 6.BOND. — In case the decision of the Labor Arbiter or the Regional Director involves a
monetary award, an appeal by the employer may be perfected only upon the posting of a bond, which
shall either be in the form of cash deposit or surety bond equivalent in amount to the monetary award,
exclusive of damages and attorney's fees.
In case of surety bond, the same shall be issued by a reputable bonding company duly accredited by the
Commission or the Supreme Court, and shall be accompanied by original or certified true copies of the
following:
a)a joint declaration under oath by the employer, his/her counsel, and the bonding
company, attesting that the bond posted is genuine, and shall be in effect until
final disposition of the case.
b)an indemnity agreement between the employer-appellant and bonding company;
c)proof of security deposit or collateral securing the bond: provided, that a check shall not
be considered as an acceptable security;
d)a certificate of authority from the Insurance Commission;
e)certificate of registration from the Securities and Exchange Commission; THcaDA
f)certificate of accreditation and authority from the Supreme Court; and
g)notarized board resolution or secretary's certificate from the bonding company showing
its authorized signatories and their specimen signatures.
The Commission through the Chairman may on justifiable grounds blacklist a bonding company,
notwithstanding its accreditation by the Supreme Court.
A cash or surety bond shall be valid and effective from the date of deposit or posting, until the case is
finally decided, resolved or terminated, or the award satisfied.
This condition shall be deemed incorporated in the terms and conditions of the surety bond, and shall
be binding on the appellants and the bonding company. cHESAD
The appellant shall furnish the appellee with a certified true copy of the said surety bond with all the
above-mentioned supporting documents. The appellee shall verify the regularity and genuineness
thereof and immediately report any irregularity to the Commission.
Upon verification by the Commission that the bond is irregular or not genuine, the Commission shall
cause the immediate dismissal of the appeal, and censure the responsible parties and their counsels, or
subject them to reasonable fine or penalty, and the bonding company may be blacklisted.
No motion to reduce bond shall be entertained except on meritorious grounds, and only upon the
posting of a bond in a AAAAA in relation to the monetary award. DIESaC
The mere filing of a motion to reduce bond without complying with the requisites in the preceding
paragraphs shall not stop the running of the period to perfect an appeal.
These statutory and regulatory provisions explicitly provide that an appeal from the Labor Arbiter to the NLRC must be perfected
within ten calendar days from receipt of such decisions, awards or orders of the Labor Arbiter . In a judgment involving a
monetary award, the appeal shall be perfected only upon; (1) proof of payment of the required appeal fee; (2) posting of a cash or
surety bond issued by a reputable bonding company; and (3) filing of a memorandum of appeal. 23
No appeal was perfected by the petitioners within the 10-day period under Article 223 of the Labor Code.
The petitioners received the 7 August 2003 Decision of the Labor Arbiter on 15 September 2003, hence, they had until 25 September
2003 to perfect their appeal. A perusal of the records reveals an apparent contrariety on the date of the posting of the appeal bond, a
material fact decisive of the instant controversy. While the First Certification indicated that no appeal bond has been posted as of 2
October 2003, the Second Certification and the Transmittal Letter stated that a surety bond was posted on 24 September 2003.
The Second Certificate is not a document of timeliness of petitioners' appeal bond. It is even confirmatory of the fact of tardiness that
the First Certification stated doubtlessly.
That the posting of the surety bond requires as necessary addition the seven enumerated documents is underscored by the provision
that the appellant shall furnish the appellee with a certified true copy of the said surety bond with all the above-mentioned supporting
documents. The appellee shall verify the regularity and genuineness thereof and immediately report any irregularity to the
Commission.
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The rule gives the appellee the authority and opportunity, even the duty, to verify the regularity and genuineness not only of the
surety bond but also of the seven attachments. To reiterate, even if the issuance of the surety bond on 24 September 2003 is
considered as the posting of the bond, the certification cannot furthermore be considered as the posting of the other seven required
documents.
Without a straight statement, the Second Certification seems to consider posting as mailing such that the date 24 September 2003
should be the reckoning date that determines timeliness and not the date 28 October 2003 which was the date of receipt of the surety
bond. Even such insinuation, strained and all, is unacceptable considering the absence of proof of mailing, it being the fact that there
was no mention at all in any of the pleadings below that the surety bond was mailed.
The Court of Appeals therefore, correctly ruled that petitioners failed to perfect their appeal on time. In holding so, the appellate court
only applied the appeal bond requirement as already well explained in our previous pronouncements that there is legislative and
administrative intent to strictly apply the appeal bond requirement, and the Court should give utmost regard to this intention. 27 The
clear intent of both statutory and procedural law is to require the employer to post a cash or surety bond securing the full amount of
the monetary award within the ten 10-day reglementary period. 28 Rules on perfection of an appeal, particularly in labor cases, must
be strictly construed because to extend the period of the appeal is to delay the case, a circumstance which would give the employer a
chance to wear out the efforts and meager resources of the worker to the point that the latter is constrained to give up for less than
what is due him. 29 This is to assure the workers that if they finally prevail in the case the monetary award will be given to them both
upon dismissal of the employer's appeal. It is further meant to discourage employers from using the appeal to delay or evade payment
of their obligations to the employees. 30 The appeal bond requirement precisely aims to prevent empty or inconsequential victories
secured by laborers in consonance with the protection of labor clause ensconced and zealously guarded by our Constitution.
It is entrenched in our jurisprudence that perfection of an appeal in a manner and within the period prescribed by law is not only
mandatory but jurisdictional, and failure to perfect an appeal has the effect of making judgment final and executory. 32 While
dismissal of an appeal on technical grounds is frowned upon, Article 223 of the Labor Code which prescribes the appeal bond
requirement, however, is a rule of jurisdiction and not of procedure. 33 Hence, there is a little leeway for condoning a liberal
interpretation thereof, and certainly none premised on the ground that its requirements are mere technicalities. 34 It is axiomatic
that an appeal is only a statutory privilege and it may only be exercised in the manner provided by law. 35 The timely perfection of an
appeal is a mandatory requirement, which cannot be trifled with a "mere technicality" to suit the interest of party. 36 We cannot
condone the practice of parties who, either by their own or their counsel's inadvertence, have allowed the judgment to become final
and executory and, after the same had reached finality, seeks the shield of substantial justice to assail it.
All considered then, the finding of the Labor Arbiter holding the petitioners liable for illegal dismissal is binding on them. Not having
been timely appealed, this issue is already beyond our jurisdiction to resolve, and the finding of the Labor Arbiter can no longer be
disturbed without violating the fundamental principle that final judgment is immutable and unalterable and may no longer be
modified in any respect, even if the modification is meant to correct erroneous conclusion of fact and law. 37
WHEREFORE, premises considered, the petition is DENIED. The assailed Decision and Resolution of the Court of Appeals, reversing
the NLRC Resolution and effectively reinstating the Labor Arbiter Decision, are hereby AFFIRMED.
OLORES vs MANILA DOCTORS COLLEGE;

GR NO. 201663, March 31, 2014
Facts:
Respondent is a private higher educational institution dedicated to providing academic degrees and certificate courses related to
Allied Medical Services and Liberal Arts and Sciences. [Petitioner] was hired as a part-time faculty of respondent on 07 November
2005. Thereafter, he signed fixed term employment contracts as part-time instructor. From 03 November 2008, [petitioner] signed
fixed term employment contracts, this time as a full-time instructor.
[Petitioner] submitted the final grades of his students to Mr. Jacinto Bernardo, Jr. (Bernardo), the chair of the Humanities Area. On
13 April 2010, Bernardo charged [petitioner] with gross misconduct and gross inefficiency in the performance of duty.
[Petitioner] was accused of employing a grading system not in accordance with the system because he: a) added 50 pts to the final
examination raw scores; b) added 50 pts to students who have not been attending classes; c) credited only 40% instead of 60% of
the final examination; d) did not credit the essay questions; and e) added further incentives (1-4 pts) aside from 50 pts. In so doing,
[petitioner] gave grades not based solely on scholastic records.
On 14 April 2010, [petitioner] submitted his answer stating that he: a) did not add 50 pts to the raw scores as verified by the dean
and academic coordinator; b) made certain adjustments to help students pass; c) did not credit the essay questions because these
have never been discussed in the meetings with Bernardo; and d) did have the judgment to give an incentive for a task well done.
Also on this date, [petitioner] wrote a letter to respondent's Human Resources Manager asking that he should now be granted a
permanent status.
Acting on the report of Bernardo, respondent created the Manila Doctors Tribunal (MDT) which was tasked to ascertain the truth.
The MDT sent notices of hearing to [petitioner]. During the administrative hearing, [petitioner] stood pat on his answer. He,
however, elucidated on his points by presenting slides.
On 31 May 2010, the MDT submitted its recommendation to the president of respondent. The culpability of [petitioner] was
established, hence, dismissal was recommended. On 07 June 2010, respondent terminated the services of [petitioner] for grave
misconduct and gross inefficiency and incompetence.
dated December 8, 2010, the Labor Arbiter found merit in petitioner's charge for illegal dismissal. However, it dismissed petitioner's
claim for regularization.
Respondent appealed from the aforesaid decision to the NLRC. However, the same was denied in a Resolution dated February 10,
2011. The NLRC reasoned that respondent's appeal was not accompanied by neither a cash nor surety bond, thus, no appeal was
perfected from the decision of the Labor Arbiter.
September 30, 2011, the NLRC granted respondent's appeal and reversed its earlier resolution.
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Resultantly, petitioner filed a certiorari petition with the CA. In a Resolution dated January 9, 2012, the CA held that since petitioner
failed to file a motion for reconsideration against the NLRC decision before seeking recourse to it via a certiorari petition, the CA
dismissed petitioner's special civil action for certiorari
Issue:
(1) whether respondent's appeal with the NLRC was perfected despite its failure to post a bond; and
(2) whether the CA erred in dismissing petitioner's Rule 65 petition.
Held:
There is merit in the petition.
At the outset, it must be emphasized that Article 223 of the Labor Code states that an appeal by the employer to the NLRC from a
judgment of a Labor Arbiter, which involves a monetary award, may be perfected only upon the posting of a cash or surety bond
issued by a reputable bonding company duly accredited by the NLRC, in an amount equivalent to the monetary award in the judgment
appealed from.
Sections 4 (a) and 6 of Rule VI of the New Rules of Procedure of the NLRC, as amended, reaffirm the explicit jurisdictional principle in
Article 223.
SECTION 4. REQUISITES FOR PERFECTION OF APPEAL. — (a) The appeal shall be:
1) filed within the reglementary period provided in Section 1 of this Rule;
2) verified by the appellant himself in accordance with Section 4, Rule 7 of the Rules of Court, as amended;
3) in the form of a memorandum of appeal which shall state the grounds relied upon and the arguments in support thereof, the
relief prayed for, and with a statement of the date the appellant received the appealed decision, resolution or order;
4) in three (3) legibly type written or printed copies; and
5) accompanied by:
i) proof of payment of the required appeal fee;
ii) posting of a cash or surety bond as provided in Section 6 of this Rule;
iii) a certificate of non-forum shopping; and iv) proof of service upon the other parties.
SECTION 6. BOND. — In case the decision of the Labor Arbiter or the Regional Director involves a monetary award, an appeal
by the employer may be perfected only upon the posting of a bond, which shall either be in the form of cash deposit or surety
bond equivalent in the amount to the monetary award, exclusive of damages and attorney's fees. 15
The posting of a bond is indispensable to the perfection of an appeal in cases involving monetary awards from the decisions of the
Labor Arbiter. Moreover, the filing of the bond is not only mandatory, but a jurisdictional requirement as well, that must be complied
with in order to confer jurisdiction upon the NLRC. Non-compliance therewith renders the decision of the Labor Arbiter final and
executory. This requirement is intended to assure the workers that if they prevail in the case, they will receive the money judgment in
their favor upon the dismissal of the employer's appeal. It is intended to discourage employers from using an appeal to delay or evade
their obligation to satisfy their employees' just and lawful claims.
Here, it is undisputed that respondent's appeal was not accompanied by any appeal bond despite the clear monetary obligation to pay
petitioner his separation pay in the amount of P100,000.00. Since the posting of a bond for the perfection of an appeal is both
mandatory and jurisdictional, the decision of the Labor Arbiter sought to be appealed before the NLRC had already become final and
executory. Therefore, the NLRC had no authority to entertain the appeal, much less to reverse the decision of the Labor Arbiter.
Nevertheless, assuming that the NLRC has jurisdiction to take cognizance of the instant case, this Court would still be inclined to favor
petitioner because the instant case falls under one of the recognized exceptions to the rule that a motion for reconsideration is
necessary prior to the filing of a certiorari petition.
The general rule is that a motion for reconsideration is indispensable before resort to the special civil action for certiorari to
afford the court or tribunal the opportunity to correct its error, if any. The rule is well settled that the filing of a motion for
reconsideration is an indispensable condition to the filing of a special civil action for certiorari.
However, said rule is subject to several recognized exceptions:
(a) Where the order is a patent nullity, as where the court a quo has no jurisdiction;
(b) Where the questions raised in the certiorari proceedings have been duly raised and passed upon by the lower
court, or are the same as those raised and passed upon in the lower court;
(c) Where there is an urgent necessity for the resolution of the question and any further delay would prejudice the interests of
the Government or of the petitioner or the subject matter of the action is perishable;
(d) Where, under the circumstances, a motion for reconsideration would be useless;
(e) Where petitioner was deprived of due process and there is extreme urgency for relief;
(f) Where, in a criminal case, relief from an order of arrest is urgent and the granting of such relief by the trial court is
improbable;
(g) Where the proceedings in the lower court are a nullity for lack of due process;
(h) Where the proceeding was ex parte or in which the petitioner had no opportunity to object; and
(i) Where the issue raised is one purely of law or where public interest is involved. 19
In the instant case, the NLRC had all the opportunity to review its ruling and correct itself.
The NLRC issued a ruling on February 10, 2011 in favor of petitioner dismissing respondent's appeal on the ground that the latter
failed to file an appeal bond. However, upon a motion for reconsideration filed by respondent, the NLRC completely reversed itself
and set aside its earlier resolution dismissing the appeal. The NLRC had more than enough opportunity to pass upon the issues raised
by both parties on appeal of the ruling of the Labor Arbiter and the subsequent motion for reconsideration of its resolution disposing
the appeal. Thus, another motion for reconsideration would have been useless under the circumstances since the questions raised in
the certiorari proceedings have already been duly raised and passed upon by the NLRC.
In a similar case, the Labor Arbiter rendered a decision dismissing petitioner's case for lack of merit. On appeal, the NLRC rendered a
decision reversing the decision of the Labor Arbiter and ordered the respondent therein to pay petitioner full backwages, separation
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pay, salary differentials, 13th month pay and allowances. Not satisfied, respondent therein moved for reconsideration of the aforesaid
NLRC resolution. The NLRC, thereafter, granted respondent's motion and reversed its previous ruling. In a like manner, the petitioner
therein filed a certiorari petition without first filing a motion for reconsideration with the NLRC.
All told, the petition is meritorious. However, since this Court is not a trier of facts, we cannot rule on the substantive issue of the case,
i.e., whether petitioner has attained regular status, inasmuch as the CA has not yet passed upon the factual issues raised by the parties.
WHEREFORE, premises considered, the instant petition is hereby GRANTED and the Resolutions dated January 9, 2012 and April 27,
2012, respectively, of the Court of Appeals in CA-G.R. SP No. 122596, are hereby REVERSED and SET ASIDE. The case is REMANDED
to the Court of Appeals for further proceedings.
BERGONIO VS SOUTH EAST ASIAN AIRLINES;

GR No. 195227,.April 21, 2014
Facts:
On April 30, 2004, the petitioners filed before the LA a complaint for illegal dismissal and illegal suspension with prayer for
reinstatement against respondents South East Asian Airlines (SEAIR) and Irene Dornier as SEAIR's President (collectively, the
respondents).
In a decision dated May 31, 2005, the LA found the petitioners illegally dismissed and ordered the respondents, among others, to
immediately reinstate the petitioners with full backwages. The respondents received their copy of this decision on July 8, 2005. 6
On August 20, 2005, the petitioners filed before the LA a Motion for issuance of Writ of Execution for their immediate reinstatement.
During the scheduled pre-execution conference held on September 14, 2005, the respondents manifested their option to reinstate the
petitioners in the payroll. The payroll reinstatement, however, did not materialize. Thus, on September 22, 2005, the petitioners filed
before the LA a manifestation for their immediate reinstatement.
On October 3, 2005, the respondents filed an opposition to the petitioners' motion for execution. 7 They claimed that the relationship
between them and the petitioners had already been strained because of the petitioners' threatening text messages, thus precluding
the latter's reinstatement. IAEcCT
On October 7, 2005, the LA granted the petitioners' motion and issued a writ of execution. 8
The respondents moved to quash the writ of execution with a prayer to hold in abeyance the implementation of the reinstatement
order. 9 They maintained that the relationship between them and the petitioners had been so strained that reinstatement was no
longer possible.
The October 7, 2005 writ of execution was returned unsatisfied. In response, the petitioners filed a motion for re-computation of
accrued wages, and, on January 25, 2006, a motion for execution of the re-computed amount. On February 16, 2006, the LA granted
this motion and issued an alias writ of execution. 10
On February 21, 2006, the respondents issued a Memorandum 11 directing the petitioners to report for work on February 24,
2006. The petitioners failed to report for work on the appointed date. On February 28, 2006, the respondents moved before the LA to
suspend the order for the petitioners' reinstatement. 12
Meanwhile, the respondents appealed with the NLRC the May 31, 2005 illegal dismissal ruling of the LA.
In an order dated August 15, 2006, 13 the NLRC dismissed the respondents' appeal for non-perfection. The NLRC likewise denied the
respondents' motion for reconsideration in its November 29, 2006 resolution, prompting the respondents to file before the CA a
petition for certiorari.
The NLRC issued an Entry of Judgment on February 6, 2007 declaring its November 29, 2006 resolution final and executory. The
petitioners forthwith filed with the LA another motion for the issuance of a writ of execution, which the LA granted on April 24, 2007.
The LA also issued another writ of execution. 14 A Notice of Garnishment was thereafter issued to the respondents' depositary bank
— Metrobank-San Lorenzo Village Branch, Makati City — in the amount of P1,900,000.00 on June 6, 2007.
On December 18, 2007, the CA rendered its decision (on the illegal dismissal ruling of the LA) partly granting the respondents'
petition. The CA declared the petitioners' dismissal valid and awarded them P30,000.00 as nominal damages for the respondents'
failure to observe due process.
The records show that the petitioners appealed the December 18, 2007 CA decision with this Court. In a resolution dated August 4,
2008, the Court denied the petition. The Court likewise denied the petitioners' subsequent motion for reconsideration, and thereafter
issued an Entry of Judgment certifying that its August 4, 2008 resolution had become final and executory on March 9, 2009.
On January 31, 2008, the petitioners filed with the LA an Urgent Ex-Parte Motion for the Immediate Release of the Garnished Amount.
In its March 13, 2008 order, 15 the LA granted the petitioners' motion; it directed Metrobank-San Lorenzo to release the
P1,900,000.00 garnished amount. The LA found valid and meritorious the respondents' claim for accrued wages in view of the
respondents' refusal to reinstate the petitioners despite the final and executory nature of the reinstatement aspect of its (LA's) May
31, 2005 decision. The LA noted that as of the December 18, 2007 CA decision (that reversed the illegal dismissal findings of the LA),
the petitioners' accrued wages amounted to P3,078,366.33.
Issues:
 The petitioners argue that, contrary to Article 223, paragraph 3 of the Labor Code, that the computation of their accrued
wages stopped when they failed to report for work on February 24, 2006.
 Additionally, the petitioners direct the Court's attention to the several pleadings that the respondents filed to prevent the
execution of the reinstatement aspect of the LA's May 31, 2005 decision, i.e., the Opposition to the Issuance of the Writ of
Execution, the Motion to Quash the Writ of Execution and the Motion to Suspend the Order of Reinstatement. They also
point out that in all these pleadings, the respondents claimed that strained relationship barred their (the petitioners')
reinstatement, evidently confirming the respondents' lack of intention to reinstate them.
 Finally, the petitioners point out that the February 21, 2006 Memorandum directed them to report for work at Clark Field,
Angeles, Pampanga instead of at the NAIA-Domestic Airport in Pasay City where they had been assigned. They argue that
this directive to report for work at Clark Field violates Article 223, paragraph 3 of the Labor Code that requires the
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employee's reinstatement to be under the same terms and conditions prevailing prior to the dismissal.
 Thus, the petitioners claim that the delay in their reinstatement was in fact due to the respondents' unjustified acts and that
the respondents never really complied with the LA's reinstatement order.
Held:
We GRANT the petition.
Preliminary considerations: jurisdictionallimitations of the Court's Rule 45 review ofthe CA's Rule 65 decision in labor
cases
In a Rule 45 petition for review on certiorari, what we review are the legal errors that the CA may have committed in the assailed
decision, in contrast with the review for jurisdictional errors that we undertake in an original certiorari action. In reviewing the legal
correctness of the CA decision in a labor case taken under Rule 65 of the Rules of Court, we examine the CA decision in the context
that it determined the presence or the absence of grave abuse of discretion in the NLRC decision before it and not on the basis of
whether the NLRC decision, on the merits of the case, was correct. Otherwise stated, we proceed from the premise that the CA
undertook a Rule 65 review, not a review on appeal, of the NLRC decision challenged before it. Within this narrow scope of our Rule
45 review, the question that we ask is: Did the CA correctly determine whether the NLRC committed grave abuse of discretion in
ruling on the case? 20
In addition, the Court's jurisdiction in a Rule 45 petition for review on certiorari is limited to resolving only questions of law.
The present petition essentially raises the question — whether the petitioners may recover the accrued wages prior to the CA's
reversal of the LA's May 31, 2005 decision. This is a question of law that falls well within the Court's power in a Rule 45 petition.
Resolution of this question of law, however, is inextricably linked with the largely factual issue of whether the accrued wages should
be computed until December 17, 2008 when the CA reversed the illegal dismissal findings of the LA or only until February 24, 2006
when the petitioners were supposed to report for work per the February 21, 2006 Memorandum. In either case, the determination of
this factual issue presupposes another factual issue, i.e., whether the delay in the execution of the reinstatement order was due to the
respondents' fault. As questions of fact, they are proscribed by our Rule 45 jurisdiction; we generally cannot address these factual
issues except to the extent necessary to determine whether the CA correctly found the NLRC in grave abuse of discretion in affirming the
release of the garnished amount despite the respondents' issuance of and the petitioners' failure to comply with the February 21, 2006
return-to-work Memorandum.
The jurisdictional limitations of our Rule 45 review of the CA's Rule 65 decision in labor cases, notwithstanding, we resolve this
petition's factual issues for we find legal errors in the CA's decision. Our consideration of the facts taken within this narrow scope of
our factual review power convinced us, as our subsequent discussion will show, that no grave abuse of discretion attended the NLRC
decision. DSHTaC
Nature of the reinstatement aspect of theLA's decision on a finding of illegaldismissal
Article 223 (now Article 229) 21 of the Labor Code governs appeals from, and the execution of, the LA's decision. Pertinently,
paragraph 3, Article 223 of the Labor Code provides:
Article 223. APPEAL. —
xxx xxx xxx
In any event, the decision of the Labor Arbiter reinstating a dismissed or separated employee, insofar
as the reinstatement aspect is concerned, shall immediately be executory, pending appeal . The
employee shall either be admitted back to work under the same terms and conditions prevailing prior to
his dismissal or separation or, at the option of the employer, merely reinstated in the payroll . The
posting of a bond by the employer shall not stay the execution for reinstatement provided herein.
[Emphasis and underscoring supplied]
Under paragraph 3, Article 223 of the Labor Code, the LA's order for the reinstatement of an employee found illegally dismissed is
immediately executory even during pendency of the employer's appeal from the decision. Under this provision, the employer must
reinstate the employee — either by physically admitting him under the conditions prevailing prior to his dismissal, and paying his
wages; or, at the employer's option, merely reinstating the employee in the payroll until the decision is reversed by the higher court.
22 Failure of the employer to comply with the reinstatement order, by exercising the options in the alternative, renders him liable to
pay the employee's salaries. 23
Otherwise stated, a dismissed employee whose case was favorably decided by the LA is entitled to receive wages pending appeal
upon reinstatement, which reinstatement is immediately executory. 24 Unless the appellate tribunal issues a restraining order,
the LA is duty bound to implement the order of reinstatement and the employer has no option but to comply with it. 25
Moreover, and equally worth emphasizing, is that an order of reinstatement issued by the LA is self-executory, i.e., the dismissed
employee need not even apply for and the LA need not even issue a writ of execution to trigger the employer's duty to reinstate the
dismissed employee. In Pioneer Texturizing Corp. v. NLRC, et al., 26 decided in 1997, the Court clarified once and for all this self-
executory nature of a reinstatement order. After tracing back the various Court rulings interpreting the amendments introduced by
Republic Act No. 6715 27 on the reinstatement aspect of a labor decision under Article 223 of the Labor Code, the Court concluded
that to otherwise "require the application for and issuance of a writ of execution as prerequisites for the execution of a reinstatement
award would certainly betray and run counter to the very object and intent of Article 223, i.e., the immediate execution of a reinstatement
order." 28
In short, therefore, with respect to decisions reinstating employees, the law itself has determined a sufficiently overwhelming reason
for its immediate and automatic execution even pending appeal. 29 The employer is duty-bound to reinstate the employee, failing
which, the employer is liable instead to pay the dismissed employee's salary. The Court's consistent and prevailing treatment and
interpretation of the reinstatement order as immediately enforceable, in fact, merely underscores the right to security of tenure of
employees that the Constitution 30 protects.
The employer is obliged to pay thedismissed employee's salary if herefuses to reinstate until actualreinstatement or
reversal by a highertribunal; circumstances that may bar anemployee from receiving the accrued wages
As we amply discussed above, an employer is obliged to immediately reinstate the employee upon the LA's finding of illegal dismissal;
if the employer fails, it is liable to pay the salary of the dismissed employee. Of course, it is not always the case that the LA's finding of
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illegal dismissal is, on appeal by the employer, upheld by the appellate court. After the LA's decision is reversed by a higher tribunal,
the employer's duty to reinstate the dismissed employee is effectively terminated. This means that an employer is no longer obliged to
keep the employee in the actual service or in the payroll. The employee, in turn, is not required to return the wages that he had
received prior to the reversal of the LA's decision. 31
The reversal by a higher tribunal of the LA's finding (of illegal dismissal), notwithstanding, an employer, who, despite the LA's order
of reinstatement, did not reinstate the employee during the pendency of the appeal up to the reversal by a higher tribunal may still be
held liable for the accrued wages of the employee, i.e., the unpaid salary accruing up to the time the higher tribunal reverses the
decision. 32 The rule, therefore, is that an employee may still recover the accrued wages up to and despite the reversal by the higher
tribunal. This entitlement of the employee to the accrued wages proceeds from the immediate and self-executory nature of the
reinstatement aspect of the LA's decision. TEHIaA
By way of exception to the above rule, an employee may be barred from collecting the accrued wages if shown that the delay in
enforcing the reinstatement pending appeal was without fault on the part of the employer. To determine whether an employee is thus
barred, two tests must be satisfied: (1) actual delay or the fact that the order of reinstatement pending appeal was not executed prior
to its reversal; and (2) the delay must not be due to the employer's unjustified act or omission. Note that under the second test,
the delay must be without the employer's fault. If the delay is due to the employer's unjustified refusal, the employer may still be
required to pay the salaries notwithstanding the reversal of the LA's decision. 33
Application of the two-fold test; thepetitioners are entitled to receive theiraccrued salaries until December 18, 2007
As we earlier pointed out, the core issue to be resolved is whether the petitioners may recover the accrued wages until the CA's
reversal of the LA's decision. An affirmative answer to this question will lead us to reverse the assailed CA decision for legal errors
and reinstate the NLRC's decision affirming the release of the garnished amount. Otherwise, we uphold the CA's decision to be legally
correct. To resolve this question, we apply the two-fold test.
First, the existence of delay — whether there was actual delay or whether the order of reinstatement pending appeal was not executed
prior to its reversal? We answer this test in the affirmative.
To recall, on May 31, 2005, the LA rendered the decision finding the petitioners illegally dismissed and ordering their immediate
reinstatement. Per the records, the respondents received copy of this decision on July 8, 2005. On August 20, 2005, the petitioners
filed before the LA a Motion for Issuance of Writ of Execution for their immediate reinstatement. The LA issued the Writ of Execution
on October 7, 2005. From the time the respondents received copy of the LA's decision, and the issuance of the writ of execution, until
the CA reversed this decision on December 17, 2008, the respondents had not reinstated the petitioners, either by actual
reinstatement or in the payroll. This continued non-execution of the reinstatement order in fact moved the LA to issue an alias writ of
execution on February 16, 2006 and another writ of execution on April 24, 2007.
From these facts and without doubt, there was actual delay in the execution of the reinstatement aspect of the LA's May 31, 2005
decision before it was reversed in the CA's decision.
Second, the cause of the delay — whether the delay was not due to the employer's unjustified act or omission . We answer this test in
the negative; we find that the delay in the execution of the reinstatement pending appeal was due to the respondents' unjustified acts.
In reversing, for grave abuse of discretion, the NLRC's order affirming the release of the garnished amount, the CA relied on the fact of
the issuance of the February 21, 2006 Memorandum and of the petitioners' failure to comply with its return-to-work directive. In
other words, with the issuance of this Memorandum, the CA considered the respondents as having sufficiently complied with their
obligation to reinstate the petitioners. And, the subsequent delay in or the non-execution of the reinstatement order was no longer the
respondents' fault, but rather of the petitioners who refused to report back to work despite the directive.
Our careful consideration of the facts and the circumstances that surrounded the case convinced us that the delay in the reinstatement
pending appeal was due to the respondents' fault. For one, the respondents filed several pleadings to suspend the execution of the
LA's reinstatement order, i.e., the opposition to the petitioners' motion for execution filed on October 3, 2005; the motion to quash the
October 7, 2005 writ of execution with prayer to hold in abeyance the implementation of the reinstatement order; and the motion to
suspend the order for the petitioners' reinstatement filed on February 28, 2006 after the LA issued the February 16, 2006 alias writ of
execution. These pleadings, to our mind, show a determined effort on the respondents' part to prevent or suspend the execution of the
reinstatement pending appeal. EaCSTc
Another reason is that the respondents, contrary to the CA's conclusion, did not sufficiently notify the petitioners of their intent to
actually reinstate them; neither did the respondents give them ample opportunity to comply with the return-to-work directive. We
note that the respondents delivered the February 21, 2006 Memorandum (requiring the petitioners to report for work on February
24, 2006) only in the afternoon of February 23, 2006. Worse, the respondents handed the notice to only one of the petitioners —
Pelaez — who did not act in representation of the others. Evidently, the petitioners could not reasonably be expected to comply with a
directive that they had no or insufficient notice of.
Lastly, the petitioners continuously and actively pursued the execution of the reinstatement aspect of the LA's decision, i.e., by filing
several motions for execution of the reinstatement order, and motion to cite the respondents in contempt and re-computation of the
accrued wages for the respondents' continued failure to reinstate them.
These facts altogether show that the respondents were not at all sincere in reinstating the petitioners. These facts — when taken
together with the fact of delay — reveal the respondents' obstinate resolve and willful disregard of the immediate and self-executory
nature of the reinstatement aspect of the LA's decision.
A further and final point that we considered in concluding that the delay was due to the respondents' fault is the fact that per the 2005
Revised Rules of Procedure of the NLRC (2005 NLRC Rules), 34 employers are required to submit a report of compliance within ten
(10) calendar days from receipt of the LA's decision, noncompliance with which signifies a clear refusal to reinstate. Arguably, the
2005 NLRC Rules took effect only on January 7, 2006; hence, the respondents could not have been reasonably expected to comply
with this duty that was not yet in effect when the LA rendered its decision (finding illegal dismissal) and issued the writ of execution
in 2005. Nevertheless, when the LA issued the February 16, 2006 alias writ of execution and the April 24, 2007 writ of execution, the
2005 NLRC Rules was already in place such that the respondents had become duty-bound to submit the required compliance report;
their noncompliance with this rule all the more showed a clear and determined refusal to reinstate.
All told, under the facts and the surrounding circumstances, the delay was due to the acts of the respondents that we find were
unjustified. We reiterate and emphasize, Article 223, paragraph 3, of the Labor Code mandates the employer to immediately
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LABOR RELATIONS LAW
reinstate the dismissed employee, either by actually reinstating him/her under the conditions prevailing prior to the dismissal or, at
the option of the employer, in the payroll. The respondents' failure in this case to exercise either option rendered them liable for the
petitioners' accrued salary until the LA decision was reversed by the CA on December 17, 2008. We, therefore, find that the NLRC, in
affirming the release of the garnished amount, merely implemented the mandate of Article 223; it simply recognized as immediate
and self-executory the reinstatement aspect of the LA's decision.
Accordingly, we reverse for legal errors the CA decision. We find no grave abuse of discretion attended the NLRC's July 16, 2008
resolution that affirmed the March 13, 2008 decision of the LA granting the release of the garnished amount.
Arabit vs Jardine Pacific Finance Inc.;

GR NO. 181719, April 21, 2014
Facts:
Petitioners were former regular employees of respondent Jardine Pacific Finance, Inc. (formerly MB Finance) (Jardine). The
petitioners were also officers and members of MB Finance Employees Association-FFW Chapter (the Union), a legitimate labor union
and the sole exclusive bargaining agent of the employees of Jardine. On the claim of financial losses, Jardine decided to reorganize and
implement a redundancy program among its employees. The petitioners were among those affected by the redundancy program.
Jardine thereafter hired contractual employees to undertake the functions these employees used to perform.
The Union filed a notice of strike with the National Conciliation and Mediation Board (NCMB), questioning the termination of
employment of the petitioners who were also union officers. The Union alleged unfair labor practice on the part of Jardine, as well as
discrimination in the dismissal of its officers and members.
They reached a settlement but In the settlement, the petitioners accepted their redundancy pay without prejudice to their right to
question the legality of their dismissal with the NLRC. Jardine paid the petitioners a separation package composed of their severance
pay, plus their grossed up transportation allowance.
Issue:
WON the petitioners was illegally dismissed because of the implementation of the redundancy program
Held:
Yes, We cannot accept Jardine’s shallow understanding of the concepts of redundancy and retrenchment in determining the validity of
the severance of an employer-employee relationship. These rulings appropriately clarify that redundancy does not need to be always
triggered by a decline in the business. Primarily, employers resort to redundancy when the functions of an employee have already
become superfluous or in excess of what the business requires. Thus, even if a business is doing well, an employer can still validly
dismiss an employee from the service due to redundancy if that employee’s position has already become in excess of what the
employer’s enterprise requires.
From this perspective, it is illogical for Jardine to terminate the petitioners’ employment and replace them with contractual
employees. The replacement effectively belies Jardine’s claim that the petitioners’ positions were abolished due to superfluity.
Redundancy could have been justified if the functions of the petitioners were transferred to other existing employees of the company.
To dismiss the petitioners and hire new contractual employees as replacements necessarily give rise to the sound conclusion that the
petitioners’ services have not really become in excess of what Jardine’s business requires.
Guidelines in implementing redundancy
this Court laid down the principle that the employer must use fair and reasonable criteria in the selection of employees who will be
dismissed from employment due to redundancy. Such fair and reasonable criteria may include the following, but are not limited to: (a)
less preferred status (e.g. temporary employee); (b) efficiency; and (c) seniority. The presence of these criteria used by the
employer shows good faith on its part and is evidence that the implementation of redundancy was painstakingly done by the
employer in order to properly justify the termination from the service of its employees (Golden Thread Knitting Industries vs
NLRC). For the implementation of a redundancy program to be valid, the employer must comply with the following requisites: ( 1)
written notice served on both the employees and the Department of Labor and Employment at least one month prior to the
intended date of retrenchment; (2) payment of separation pay equivalent to at least one month pay or at least one month pay
for every year of service, whichever is higher; (3) good faith in abolishing the redundant positions; and (4) fair and
reasonable criteria in ascertaining what positions are to be declared redundant and accordingly abolished (Asian Alcohol vs
NLRC).
The first level, based on Asian Alcohol, is broader as the case recognized distinctions on a per position basis. At this level, Jardine
failed to explain why among all of the existing positions in its organization, Jardine chose the petitioners’ posts as the ones which have
already become redundant and terminable.1âwphi1
The second level, derived from Golden Thread, is more specific. Here the distinction narrows down to the particular employees
occupying the same positions which were already declared to be redundant. At this level, Jardine’s lapse is shown by its failure to
explain why among all of its employees whose positions were determined to be redundant, the petitioners were the ones selected to
be dismissed from the service.
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LABOR RELATIONS LAW
Mirant vs Caro;
GR NO. 181490, April 23, 2014
Facts:
Respondent was hired by Mirant Pagbilao on January 3, 1994 as its Logistics Officer. In 2002, when Southern Company was sold to
Mirant, respondent was already a Supervisor of the Logistics and Purchasing Department of petitioner. At the time of the severance of
his employment, respondent was the Procurement Supervisor of Mirant Pagbilao assigned at petitioner corporation’s corporate office.
As Procurement Supervisor, his main task was to serve as the link between the Materials Management Department of petitioner
corporation and its staff, and the suppliers and service contractors in order to ensure that procurement is carried out in conformity
with set policies, procedures and practices. In addition, respondent was put incharge of ensuring the timely, economical, safe and
expeditious delivery of materials at the right quality and quantity to petitioner corporation’s plant. Respondent was also responsible
for guiding and overseeing the welfare and training needs of the staff of the Materials Management Department. Due to the nature of
respondent’s functions, petitioner corporation considers his position as confidential. On November 3, 2004, petitioner corporation
conducted a random drug test where respondent was randomly chosen among its employees who would be tested for illegal drug use.
Through an Intracompany Correspondence, 12 these employees were informed that they were selected for random drug testing to be
conducted on the same day that they received the correspondence. Respondent was duly notified that he was scheduled to be tested
after lunch on that day. His receipt of the notice was evidenced by his signature on the correspondence.
There was phone call from his wife. She said there was a bombing incident near her workplace in Tel Aviv. So he acted on and told the
secretary of his department that respondent that he will give preferential attention to the emergency phone call that he just received.
He also told Torres that he would be back at the office as soon as he has resolved his predicament.
respondent on December 14, 2004 to submit additional pieces of supporting documents.
He was found guilty by the petitioner’s corporation Investigating panel of “unjustified refusal of to submit random drug testing. and
recommended a penalty of four working weeks suspension without pay, instead of termination, due to the presence of mitigating
circumstances. petitioner corporation’s Asst. Vice President for Material Management Department, George K. Lamela, Jr. (Lamela),
recommended19 that respondent be terminated from employment instead of merely being suspended.
Issue:
WON respondent was validly terminated for his failure to take the mandatory drug test
Held:
No, We agree with the disposition of the appellate court that there was illegal dismissal in the case at bar. While the adoption and
enforcement by petitioner corporation of its Anti-Drugs Policy is recognized as a valid exercise of its management prerogative as an
employer, such exercise is not absolute and unbridled. Managerial prerogatives are subject to limitations provided by law, collective
bargaining agreements, and the general principles of fair play and justice.
Petitioner corporation’s subject Anti-Drugs Policy fell short of being fair and reasonable:
the term "unjustified refusal" could not possibly cover all forms of "refusal" as the employee’s resistance. The fact that petitioner
corporation’s own personnel had to dissect the intended meaning of "unjustified refusal" is further proof that it is not clear on what
context the term "unjustified refusal" applies to.
oppressive or contrary to law 50 – as in the case at bar. Recognizing the ambiguity in the subject policy, the CA was more inclined to
adopt the recommendation of petitioner corporation’s own Investigating Panel over that of Sliman and the NLRC. Thus, We find that
the recommended four (4) working weeks’ suspension without pay as the reasonable penalty to be imposed on [respondent] for his
disobedience but not the illegal termination of work.
Castro Jr. vs. Ateneo de Naga University et al.,

GR No. 175293, July 23, 2014
FACTS
Petitioner is a regular and full time faculty member of Ateneo de naga university. He received from respondent, the University
President, informing him that his would no longer be renewed. Thus, petitioner filed a complaint for illegal dismissal.
The University denied the allegation of illegal dismissal, and maintained that the petitioner was a participant and regular contributor
to the Ateneo de Naga Employees Retirement Plan (Plan); that upon reaching the age of 60 years on June 26, 1999, he was deemed
automatically retired under the Plan; and that he had been allowed to teach after his retirement only on contractual basis.
The Labor Arbiter ruled in favor of petitioner and ordered respondent to reinstate the petitioner and pay him back wages.
Respondents appealed to the NLRC. Simultaneously, they submitted a manifestation stating that neither actual nor payroll
reinstatement of the petitioner could be effected because he had meanwhile been employed as a Presidential Assistant for Southern
Luzon Affairs with the position of Undersecretary; and that his reinstatement would result in dual employment and double
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compensation which were prohibited by existing civil service rules and regulations. Petitioner filed a motion to order the respondents
to pay his salaries and benefits.
The LA explained that Article 223 of the Labor Code granted to the employer the option to implement either a physical or a payroll
reinstatement, and that, therefore, the respondents must first exercise the option regardless of the petitioner's employment with the
Government, denied the petitioner's motion, but ordered the respondents to exercise the option of either actual or payroll
reinstatement of the petitioner. NLRC reversed the decision of the LA.
HELD:
Claim for accrued benefits should be sustained despite dismissal of the petitioner's complaint. The employer is obliged to reinstate
and to pay the wages of the dismissed employee during the period of appeal until its reversal by the higher Court; and that because he
was not reinstated either actually or by payroll, he should be held entitled to the accrued salaries. Article 279 of the Labor Code, as
amended, entitles an illegally dismissed employee to reinstatement. Article 223 of the Labor Code requires the reinstatement to be
immediately executory even pending appeal. The unjustified refusal of the employer to reinstate the dismissed employee would
entitle the latter to the payment of his salaries effective from the time when the employer failed to reinstate him; thus, it becomes the
ministerial duty of the LA to implement the order of reinstatement. An order or award for reinstatement does not require a writ of
execution it is already selfexecutory. For as long as the employer continuously fails to actually implement the reinstatement aspect of
the decision of the LA, the employer's obligation to the employee for his accrued backwages and other benefits continues to
accumulate.
Phil. Touristers Inc et al., vs. Mas Transit Workers Union-ANGLO-KMU

GR No. 201237, Sept. 3, 2014
FACT:
A union files case of Unfair labor practice, illegal lockouts and illegal dismissal againts its employer. MTI sold its buses and
its franchise to PTI, thus leads to closure of its business. The union argued that the sale is a scheme to terminate their employment, for
they join a union which the company vehemently oppose. Thus, union files a case of Unfair labor practice, illegal lockouts and illegal
dismissal againts its employer (MTI) and the buyer (PTI). The Labor arbiter granted the petition and direct MTI and PTI solidarily
liable for the employee backwages, separation pay, and attorneys fees.
Dissatisfied, petitioners appealed before the NLRC by filing their Notice of Appeal31 and Appeal Memorandum,32
accompanied by a Manifestation with Motion for Reduction of Bond,33 praying that the required bond covering the monetary
judgment of ?12,833,210.00 (full judgment award) be reduced in view of PTI’s liquidity problems. Simultaneously, petitioners posted
South Sea Surety and Insurance Company, Inc. (SSSICI) Surety Bond No. G(21) 00271834 in the amount of ?5,000,000.00 (partial
bond), seeking that the same be considered as substantial compliance for purposes of perfecting their appeal.
However, the union vehemently opposed petitioners’ motion to reduce bond and moved for the dismissal of their appeal for
failure to perfect the same as the bond posted was not in an amount equivalent to the full judgment award as mandated by law.
ISSUE:
WON PTI substantially comply with the requirements to perfect an appeal despite its failure to post bond equivalent to the
full judgment award as mandated by law?
RULING:
YES, PTI substantially comply with the requirements of posting a bond to perfect an appeal.
or an appeal from the LA’s ruling to the NLRC to be perfected, Article 223 (now Article 229)61 of the Labor Code requires the posting
of a cash or surety bond in an amount equivalent to the monetary award in the judgment appealed from, viz.:
ART. 223. Appeal. – Decisions, awards, or orders of the Labor Arbiter are final and executory unless appealed to the Commission by
any or both parties within ten (10) calendar days from receipt of such decisions, awards, or orders. Such appeal may be entertained
only on any of the following grounds:
In case of a judgment involving a monetary award, an appeal by the employer may be perfected only upon the posting of a cash or
surety bond issued by a reputable bonding company duly accredited by the Commission in the amount equivalent to the monetary
award in the judgment appealed from.
No motion to reduce bond shall be entertained except on meritorious grounds and upon the posting of a bond in a reasonable amount
in relation to the monetary award.
The filing of the motion to reduce bond without compliance with the requisites in the preceding paragraph shall not stop the running
of the period to perfect an appeal.
Here, it is not disputed that petitioners filed an appeal memorandum and complied with the other requirements for perfecting an
appeal, save for the posting of the full amount equivalent to the monetary award of P12,833,210.00. Instead, petitioners filed a
motion to reduce bond claiming that they were suffering from liquidity problems and, in support of their claim, submitted PTI’s AFS
which showed a deficit in income.
The absence of grave abuse of discretion in this case is bolstered by the fact that petitioners’ motion to reduce bond was accompanied
by a P5,000,000.00 surety bond which was seasonably posted within the reglementary period to appeal. In McBurnie v. Ganzon,70 the
Court ruled that, “[f]or purposes of compliance with [the bond requirement under the 2011 NLRC Rules of Procedure], a motion shall
be accompanied by the posting of a provisional cash or surety bond equivalent to ten percent (10%) of the monetary award subject of
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LABOR RELATIONS LAW
the appeal, exclusive of damages, and attorney’s fees.” Seeing no cogent reason to deviate from the same, the Court deems that the
posting of the aforesaid partial bond, being evidently more than ten percent (10%) of the full judgment award of P12,833,000.00,
already constituted substantial compliance with the governing rules at the onset.
In this relation, it must be clarified that while the partial bond was initially tainted with defects, i.e., that it was initially issued in favor
of MTI and not PTI, and that the bonding company, SSSICI, had no authority to transact business in all courts of the Philippines at that
time, these defects had already been cured by the petitioners’ posting of Supersedeas Bond No. SS-B-10150, in the full amount of
P12,833,000.00, issued on November 8, 2004 by the Far Eastern Surety & Insurance Company, Inc.,71 in timely compliance with the
NLRC’s September 30, 2004 Order.
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LABOR RELATIONS LAW

Case Digest Compilation for Midterms

Mitsubishi Motors Phils. vs. Chrysler Phil Labor Union................................................................................32

Mendoza vs. Rural Bank of Lucban..............................................................................................................62

Garcia vs. PAL...............................................................................................................................................90

Omar Verdadero vs. Barney Autolines Group of Companies Transport, Inc..............................................126

Hormillosa vs. Coca-Cola Bottlers Phils......................................................................................................154

Pantranco North Express, Inc. vs. NLRC.....................................................................................................185

Easycall Communication Phils. vs. King;.....................................................................................................212

Loon et al. vs. Power Masters, Inc.;............................................................................................................249

I. THE APPLICABLE LAWS

II. GENERAL PRINCIPLES

Manila Golf Club vs. IAC

Encyclopedia Britanica vs. NLRC

Carungcong vs. Sunlife

Sonza vs. ABS-CBN

Lazaro vs. Social Security Commission

Phil. Global Comm. vs. De Vera

ABS-CBN vs. Nazareno

Francisco vs. NLRC

Nogales et. al. vs. Capitol Medical Center et. al.

Coca-Cola Bottlers Phils. vs. Dr. Climaco

Calamba Medical Center vs. NLRC et. al.

Escasinas et. al. vs. Shangri-la

Tongko vs. The Manufacturer’s Life Insurance Co., Inc. November 7, 2008

Atok Big Wedge Company vs. Gison

Semblante et al., vs. Court of Appeals, et al.

Cesar Lirio vs. Wilmer Genovia

Charlie Jao vs BBC Products Sales Inc.

Legend Hotel (Manila) vs. Realuyo

The New Philippine Skylanders, Inc. vs. Dakila

Tesoro et al. vs. Metro Manila Retreaders, Inc. et al.

III. RIGHT TO SECURITY OF TENURE

ALU-TUCP vs. NLRC

Cosmos Bottling Corp., vs NLRC

Pure Foods Corporation vs. NLRC

Phil. Fruit & Vegetable Industries vs. NLRC

Article 280 of the Labor Code provides:

Philips Semiconductor vs. Fardiquela

Alcira vs. NLRC

Mitsubishi Motors Phils. vs. Chrysler Phil Labor Union

Pangilinan vs. General Milling Co.

Hacienda Bino/Hortencia Stark vs. Cuenca

Issue: Whether or not the respondents are regular employee

Philippine Global Communications Inc. vs. De Vera

Issue: WON an employer-employee relationship exists between petitioner and respondent

Lacuesta vs. Ateneo de Manila

(2) A part-time teacher cannot acquire permanent status.

Posedion Fishing/Terry De Jesus vs. NLRC

Cebu Metal Corp., vs. Saliling

Issue: Whether or not the complainant respondents are regular employees.

Hermonias L. Liganza vs. RBL Shipyard Corporation

Fabeza vs. San Miguel Corporation

Soriano vs. NLRC

Caseres vs. Universal Robina Sugar Milling Corp.

Pier 8 Arrastre & Stevedoring Services, Inc. vs Boclot

Pacquing vs. Coca-Cola Bottlers Phils., Inc.;

Agusan Del Norte Electronic vs. Cagampang

Issue: WON the respondents were illegally dismissed.

William Uy Construction et. al vs. Trinidad

Petitioner company countered http://sc.judiciary.gov.ph/jurisprudence/2010/march2010/183250.htm - _ftn1 that it

Dacuital et al, Vs. L.M. Camus Engineering Corp.