LABOR LAW CASES

Toyota Pasig Inc. vs Vilma S. Peralta

FACTS:
-The instant case stemmed from a complaint[5] for illegal dismissal, illegal deduction, unpaid
commission, annual profit sharing, damages, and attorney's fees filed by respondent against petitioner
and/or Severino C. Lim, Jnalyn P. Lim, Jason Ian Yap, Jorge Tuason, Marissa Operaña, and Arturo P. Lopez
(Lim, et al.) before the NLRC.
-respondent alleged that petitioner - a corporation engaged in the business of car dealership, including
service and sales of parts and accessories of Toyota motor vehicles[7] initially hired her as a cashier in
March 1997
-she worked her way up to the position of Insurance Sales Executive (ISE) which she held from 2007 to
2012 and where she received various distinctions from petitioner, including "Best Insurance Sales
Executive" for the years 2007 and 2011
-petitioner started harassing her bec of the latter’s husband’s involment in collective bargaining
-petitioner was preventively suspended for accusations of several acts committed allegedly by the resp.
-resp was issued Notice of Termination hence this case.
-pet.argued that the resp was dismissed for just cause and with due process (falsification and
dishonesty)
-Labor Arbiter: dismissed the petition but ordered pet to award the salary of the resp for a particular
period
-in the Notice to Explain, respo admitted she indeed processed the insurance of units from petitioner's
own dealership, and as a result, received commissions which were rightly attributable to the
dealership's marketing department not being "outside transactions-constituted dishonesty which is
tantamount to serious misconduct, a just cause for dismissal
-NLRC: affirmed LA’s decision with modification as to award of monetary claims; both went to CA
-CA: CA correctly upheld petitioner's liability to respondent in the amount of P617,248.08 representing
the latter's unpaid commissions, tax rebate for achieved monthly targets, salary deductions, salary for
the month of January 2012, and success share/profit sharing.

HEIRS OF MANUEL H. v. GREGORIO ARANETA UNIVERSITY FOUNDATION

FACTS:
In 1984, the Reorganization, Retrenchment and Restructuring (RRR) Program was adopted by
respondent Gregorio Araneta University Foundation (GAUF). It was approved by then Minister of Labor
and Employment Blas F. Ople with a reminder that the implementation thereof shall be instituted
without prejudice to whatever benefits may have accrued in favor of the employees concerned.
The Court, in all its decisions in the GAUF cases, recognized the adoption of the RRR Program on the
ground of serious business losses and financial reverses suffered by GAUF.
Petitioners were former officers and employees of GAUF who were retrenched in view of the RRR
Program but were re-hired in January 1984. Consequently, GAUF set the reckoning period for the
computation of petitioners retirement benefits to January 1984. Section 374, Article CVI of GAUFs
Manual of Policies provided for a computation of the retirement benefits as follows:
Section 374. In addition to the above privileges and benefits, faculty members and non-academic
personnel of the University further enjoy the following:
Gratuity or Retirement - A gratuity or retirement is likewise extended by the University to all faculty
members and employees who retire or resign from the University in accordance with the following
schedule, the payment of which, shall be subject to availability of funds:
Length of Service Benefits
7-9 years: 50% of monthly salary per year of service
10-12 years: 60% of monthly salary per year of service
13-15 years: 70% of monthly salary per year of service
16-18 years: 80% of monthly salary per year of service
19-21 years: 90% of monthly salary per year of service
22-24 years: 95% of monthly salary per year of service
25 years and up: 100% of monthly salary per year of service5
Petitioners signed individual quitclaims upon receipt of their retirement pay.
Claiming that the computation of their retirement benefits should be reckoned from the date of their
original hiring, petitioners filed a Complaint before the Labor Arbiter. Petitioners alleged that they were
not paid separation benefits during the implementation of the RRR Program. They likewise sought the
inclusion of their monthly honorarium in the computation of their 13th month pay.
In its position paper, GAUF averred that pursuant to the RRR Program, petitioners were all separated
from employment in 1984 and paid their separation benefits in the form of off-setting of their
outstanding obligations to GAUF such as tuition fees and the value of the lots in the Gonzales Estate
area owned by GAUF and sold to petitioners. The said settlement was embodied in a compromise
agreement. GAUF added that petitioners were re-employed on 1 January 1984, hence this date should
be the reckoning point for the purpose of computing the separation pay.
The LA rendered judgment respondent GAUF to pay all complainants the balance of their
retirement/separation benefit.
The Labor Arbiters award of retirement pay pertained to the period when petitioners were originally
hired until 31 December 1983 because he found that the records were bereft of any proof that the
petitioners were paid their retirement benefits before 1 January 1984. The Labor Arbiter merely
confirmed the existence of GAUFs receivables from petitioner consisting of tuition fees of the latters
dependents and the value of the lots sold by GAUF to respondents and ruled that the receivables should
be offset against the retirement benefits due to each employee. The Labor Arbiter also held that the
honoraria received by petitioners are not considered as part of the basic salary for the computation of
the 13th month pay. With respect to the retirement benefits of petitioners from 1 January 1984 until the
effectivity of their retirement or separation, the Labor Arbiter approved the amount as computed and
submitted by GAUF.
Both parties filed their respective appeals. The NLRC ruled that GAUF failed to comply with the
compromise agreement which embodied the settlement of all monetary claims of GAUF employees,
including the sale of parcels of land owned by GAUF. Nevertheless, the NLRC affirmed the Decision of
the LA.
On GAUFs appeal, the CA granted the petition.
Hence, this petition for review.
ISSUE:
Whether or not the petitioners were paid separation benefits during the implementation of the RRR
Program?
HELD:
The petition is denied.
LABOR LAW
Well-settled is the rule that once the employee has set out with particularity in his complaint, position
paper, affidavits and other documents the labor standard benefits he is entitled to, and which he alleged
that the employer failed to pay him, it becomes the employers burden to prove that it has paid these
money claims. One who pleads payment has the burden of proving it, and even where the employees
must allege non-payment, the general rule is that the burden rests on the employer to prove payment,
rather than on the employees to prove non-payment. The reason for the rule is that the pertinent
personnel files, payrolls, records, remittances, and other similar documents which will show that
overtime, differentials, service incentive leave, and other claims of the worker have been paid are not in
the possession of the worker but in the custody and absolute control of the employer.
The actual amounts given by GAUF were clearly more than the amounts mandated by law. As to
whether these amounts were given to petitioners, GAUF insisted that they have in fact fully settled
these obligations through offsetting of receivables in accordance with the compromise agreement.
However, the receivables pertaining to tuition fees remain uncontested. Petitioners never questioned
these amounts and in fact, they argued before the Labor Arbiter that the tuition fees of their
dependents have been applied to their money claims, such as wage increases, but which were never
paid. Thus, these tuition fee receivables can be offset to the separation pay due to the employees.
It is therefore evident that GAUF had granted petitioners their separation pay in amounts more than
what they are entitled to receive under the law. Thus, there was full compliance with the RRR Program
for the payment of separation pay.
CA AFFIRMED.

National Semiconductor Dist. Vs NLRC

Facts:

Petitioner-foreign corp. engaged business in the Phil, manufactures and assembles electronic parts for
exports

NON-DIMINUTION OF WAGES:

Sevilla Trading vs Semana

A company practice favorable to the employees had indeed been established and the payments made
pursuant thereto, ripened into benefits enjoyed by them. And any benefit and supplement being
enjoyed by the employees cannot be reduced, diminished, discontinued or eliminated by the employer,
by virtue of Sec. 10 of the Rules and Regulations Implementing P.D. No. 851, and Art. 100 of the Labor
Code of the Philippines which prohibit the diminution or elimination by the employer of the employees’
existing benefits.

With regard to the length of time the company practice should have been exercised to constitute
voluntary employer practice which cannot be unilaterally withdrawn by the employer, we hold that
jurisprudence has not laid down any rule requiring a specific minimum number of years.

MERALCO VS QUISUMBING
However, a line must be drawn with respect to management prerogatives on business operations per se
and those which affect the rights of the workers. Employers must see to it that that employees are
properly informed of its decisions to attain harmonious labor relations and enlighten the worker as to
their rights.
The contracting out business or services is an exercise of business judgment if it is for the promotion of
efficiency and attainment of economy. Management must be motivated by good faith and contracting
out should not be done to circumvent the law. Provided there was no malice or that it was not done
arbitrarily, the courts will not interfere with the exercise of this judgment.

DAVAO FRUITS VS ALU

Whatever compensation an employee receives for an 8 hour work daily or the daily wage rate is the
basic salary. Any compensation or remuneration other than the daily wage rate is excluded. It follows
therefore, that payments for sick, vacation and maternity leaves, premiums for work done on rest days
and special holidays, as well as pay for regular holidays, are likewise excluded in computing the basic
salary for the purpose of determining the 13thmonth pay.

Basic salary does not merely exclude the benefits expressly mentioned but all payments which may be in
the form of fringe benefits or allowances.

GLOBE TELECOM VS J. FLORES

The unauthorized absence of respondent should not lead to the drastic conclusion that she had chosen
to abandon her work. To constitute abandonment, there must be: (a) failure to report for work or
absence without valid or justifiable reason; and, (b) a clear intention, as manifested by some overt act,
to sever the employer-employee relationship,23 requisites that are negated by the immediate filing by
respondent Florendo-Flores of a complaint for constructive dismissal against petitioners. A charge of
abandonment is totally inconsistent with the immediate filing of a complaint for illegal dismissal; more
so, when it includes a prayer for reinstatement.24
The reduction of respondent’s functions which were originally supervisory in nature to a mere house-to-
house sales agent or direct sales agent constitutes a demotion in rank. For this act of illegal dismissal,
she deserves no less than full back wages starting from the time she had been illegally dismissed until
her actual reinstatement to her former position without loss of seniority rights and other benefits—
earned, accrued and demandable. She shall continue to enjoy her benefits, privileges and incentives
including the use of the company car and “handyphone.”
The managerial prerogative to transfer personnel must be exercised without grave abuse of discretion. It
must always bear in mind the basic elements of justice and fair play. Having the right should not be
confused with the manner that right is exercised. Thus, it cannot be used as a subterfuge by the
employer to rid himself of an undesirable worker.25
In constructive dismissal, the employer has the burden of proving that the transfer and demotion of an
employee are for just and valid grounds such as genuine business necessity. The employer must be able
to show that the transfer is not unreasonable, inconvenient, or prejudicial to the employee. It must not
involve a demotion in rank or a diminution of salary and other benefits. If the employer cannot
overcome this burden of proof, the employee’s demotion shall be tantamount to unlawful constructive
dismissal.

ARCO METALS CASE

Any benefit and supplement being enjoyed by employees cannot be reduced, diminished, discontinued
or eliminated by the employer. The principle of non-diminution of benefits is founded on the
Constitutional mandate to “protect the rights of workers and promote their welfare,” and “to afford
labor full protection.” Said mandate in turn is the basis of Article 4 of the Labor Code which states that
“all doubts in the implementation and interpretation of this Code, including its implementing rules and
regulations shall be rendered in favor of labor.” Jurisprudence is replete with cases which recognize the
right of employees to benefits which were voluntarily given by the employer and which ripened into
company practice.

Thus in Davao Fruits Corporation v. Associated Labor Unions, et al. where an employer had freely and
continuously included in the computation of the 13th month pay those items that were expressly
excluded by the law, we held that the act which was favorable to the employees though not conforming
to law had thus ripened into a practice and could not be withdrawn, reduced, diminished, discontinued
or eliminated.

True, there were only a total of seven employees who benefited from such a practice, but it was an
established practice nonetheless. Jurisprudence has not laid down any rule specifying a minimum
number of years within which a company practice must be exercised in order to constitute voluntary
company practice. Thus, it can be 6 years, 3 years, or even as short as 2 years. Petitioner cannot shirk
away from its responsibility by merely claiming that it was a mistake or an error, supported only by an
affidavit of its manufacturing group head.

DAVAO INTEGRATED PORTS VS ABARQUEZ

The employer cannot unilaterally withdraw the existing privilege of commutation or conversion to
cash, given to the said workers and as also noted that the employer had in fact granted and paid said
cash equivalent of the unused portion of the sick leave benefits to some intermittent workers. Well-
settled is it that the said privilege of commutation or conversion to cash, being an existing benefit,
the petitioner may not diminish such benefits.Under the circumstances, these may be deemed to have
ripened into company practice or policy which cannot be peremptorily withdrawn.