ORO ENTERPRISES, INC., vs. NATIONAL LABOR RELATIONS COMMISSION and LORETO L.

CECILIO
G.R. No. 110861
November 14, 1994

FACTS:

For 41 years, since 1949, private respondent was an employee of Oro Enterprises. On 3 September 1990
she gave notice of her intention to retire from work by filing with petitioner a “Claim for Retirement Pay.”

Petitioner replied, informing her that there was no retirement benefit apart from the retirement pay from
the Social Security System (“SSS”). She was offered a house and lot located in San Jose, del Monte,
Bulacan, in accordance with a “plan” which did not materialize, nor any of the proposed company plan for
retirees.

On 26 September 1990, private respondent filed her complaint with the Office of the Labor Arbiter.

On 4 October 1990, petitioner Oro Enterprises filed its own position paper stating that private respondent
Was not dismissed but voluntarily stopped working on September 15 1990. It has no collective bargaining
agreement except that which is required by SSS that Oro has not agreed, whether expressly or impliedly
to pay any retirement benefits. It also relied from a ruling on Llora Motors vs Drilon denying payment of
retirement benefits in the absence of a CBA or other contractual basis

On 11 February 1991, Labor Arbiter Edilberto J. Pangan to whom the case was assigned, rendered a
decision for Oro Enterprises to pay half a month for every year of service in the amount of P63,000.00
plus 10 % for attorney;s fees. Petitioner appealed to the NLRC.

On January 7,1993, during the pendency of the appeal, the Philippine Retirement Pay Law, Republic Act
No. 7641 took effect, which provided the following:

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 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.

Unless the parties provide for broader inclusions, the term “one half (1/2) month salary” shall mean fifteen
(15) days plus one twelfth (1/12) of the 13th month pay and the cash equivalent of not more than five (5)
days of service incentive leaves.

Violation of this provision is hereby declared unlawful and subject to the penal provisions under Article
288 of this Code.

On 22 March 1993, NLRC rendered its decision awarding to private respondent a retirement pay on the
basis of Republic Act 7641, granting the retirement pay of P61,500 but disallowing the 10% attorney’s
fees.
Petitioner argues that the law, which became effective only on 07 January 1993, cannot be given any
such retroactive effect as to cover private respondent who, at the age of 65 years, retired from
employment with petitioner on 03 September 1990.

Art 287 of the Labor Code states:

An employee maybe retired upon reaching the retirement age established in the CBA or tp pther
emplyment contract.

In case or retirement, the employee shall be entitled to receive such benefits as he may have earned
under existing laws and any collective bargaining agreement or other agreement.

Rule 1, Book VI of the Implementing Rules of the Labor Code states:

In the absence of any collective bargaining agreement or other applicable agreement concerning terms
and conditions of employment which provides for retirement at an older age, an employee may be retired
upon reaching the age of sixty (60) years.

An employee who is retired pursuant to a bonafide retirement plan or in accordance with the applicable
individual or collective agreement or established employer policy shall be entitled to all the retirement
benefits provided therein or to termination pay equivalent at least to one-half month salary for every year
of service, whichever is higher, a fraction of at least sic (6) months being considered as one whole year.

ISSUE:

Whether or not R.A. 7641 can favorably apply to private respondent’s case.

RULING:

RA 7641 is definitely a social legislation. The law has been enacted as a labor protection measure and as
a curative statute that — absent a retirement plan devised by, an agreement with, or a voluntary grant
from, an employer — can respond, in part at least, to the financial security and well-being of workers after
their years of toil and sacrifice soon following their life of labor. The law can apply to labor contracts still
existing at the time the statute has taken effect, and that its benefits can be reckoned not only from the
date of the law’s enactment but retroactively to the time said employment contracts have started.

One can look back at the well-settled principle that police power legislation intended to promote public
welfare applies to existing contracts. Petitioner’s assumption that invoking RA 7641 should not be given a
retroactive effect is misplaced.

The contracts of employment were entered into at a time when there was no law granting the workers
said right. Such being the case, it was then contended that the application as to them of the subsequent
enactment would amount to an impairment of contractual obligations.

But the contention was made clear in the opinion that “constitutional guaranty of non-impairment . . . is
limited by the exercise of the police power of the State, in the interest of public health, safety, morals and
general welfare.”

PETITION for Certiorari is DISMISSED and the decision of the NLRC is AFFIRMED.
Gelos v. CA
G.R. No. 86186
May 8, 1992

FACTS:

Rafael Gelos was employed by Ernesto Alzona and his parents as their laborer on a 25,000-sq. m
farmland. They executed a written contract which stipulated that as hired laborer Gelos would receive a
daily wage of P5.00. Three years later, Gelos was informed of the termination of his services and was
asked to vacate the property. Gelos refused and continued working on the land. Alzona filed a complaint
for illegal detainer. The lower court found Gelos as tenant of the property and entitled to remain thereon
as such. The decision was reversed by the Court of Appeals.   

ISSUE:

Whether or not Gelos is a tenant.

RULING:

Gelos is not a tenant but a hired laborer. It was clear that the petitioner was not a tenant but a hired
laborer as shown in the contract they entered into. In tenancy relationship, it is the landowner who is the
lessor, and the tenant is the lessee of agricultural land. The agricultural worker works for the farm
employer and for his labor be receives a salary or wage regardless of whether the employer makes a
profit.

Here, the private respondent, instead of receiving payment of rentals or sharing in the produce of the
land, paid the petitioner lump sums for specific kinds of work on the subject lot or gave him vales, or
advance payment of his wages as laborer thereon.
Soriano v. Offshore Shipping
G.R. No. 78409
September 14, 1989

FACTS:

In search for better opportunities and higher income, petitioner Norberto Soriano, a licensed Second
Marine Engineer, sought employment and was hired by private respondent Knut Knutsen O.A.S. through
its authorized shipping agent in the Philippines, Offshore Shipping and Manning Corporation. As
evidenced by the Crew Agreement, petitioner was hired to work as Third Marine Engineer on board Knut
Provider" with a salary of US$800.00 a month on a conduction basis for a period of fifteen (15) days. He
admitted that the term of the contract was extended to six (6) months by mutual agreement on the
promise of the employer to the petitioner that he will be promoted to Second Engineer. Thus, while it
appears that petitioner joined the aforesaid vessel on July 23, 1985 he signed off on November 27, 1985
due to the alleged failure of private respondent-employer to fulfill its promise to promote petitioner to the
position of Second Engineer and for the unilateral decision to reduce petitioner's basic salary from
US$800.00 to US$560.00. Petitioner was made to shoulder his return airfare to Manila.

Soriano lodged a complaint against Offshore Shipping, and morevover contended that private respondent
unilaterally altered the employment contract by reducing his salary of US$800.00 per month to
US$560.00, causing him to request for his repatriation to the Philippines.

ISSUE:

Did the employer alter the contract?

HELD:

No.

The annotations in the contract are not alterations of the original employment contract but only a
clarification thereof which by no stretch of the imagination can be considered a violation of Article 34 of
the Labor Code. Under similar circumstances, this Court ruled that as a general proposition, exceptions
from the coverage of a statute are strictly construed. But such construction nevertheless must be at all
times reasonable, sensible and fair. Hence, to rule out from the exemption amendments set forth,
although they did not materially change the terms and conditions of the original letter of credit, was held to
be unreasonable and unjust, and not in accord with the declared purpose of the Margin Law. 

To reiterate, the alleged amendment served to clarify what was agreed upon by the parties and approved
by the Department of Labor. To rule otherwise would go beyond the bounds of reason and justice.
Central Azucarera de Bais vs Heirs of Zuelo Apostol
G.R. No.215314
March 14, 2018

FACTS:

On March 1, 1982, Zuelo Apostol was hired by CAB as Motor Pool Over-all Repairs Supervisor, who was
put in-charge of repairing company vehicles including responsibilities of assigning the personnel and
equipment for each and every repair job and taking custody of all equipment and materials owned by
CAB. As one of the perks of the job, he was given the privilege of living in the company house so long as
he remains a CAB employee.

On February 2, 2002, an inspection of one of the security guards showed that respondent was using the
company house and other company equipment to repair privately-owned vehicles, also witnessing that
one of the hired automotive mechanic was the one actually doing the repair work on a car. Thereafter, the
resident manager, Roberto Y. de la Rosa issued a memorandum stating Rule 9 of CAB’s Rules of
discipline as violated by respondent, requesting for an explanation in writing while putting him effective
immediately on suspension.

On February 9, 2002, respondent received a copy of a termination letter signed by the CAB’s president,
petitioner Antonio Steven L. Tan.

On February 12, 2002, respondent filed a Complaint before the Sub-Regional Arbitration Branch No. VII
of Dumaguete City for constructive dismissal, illegal suspension, unfair labor practice, underpayment of
overtime pay, premium pay for holiday, separation pay, service incentive leave vacation/sick leave,
recovery of actual, moral, and exemplary damages, and attorney's fees.

On May 30, 2002, the Labor Arbiter dismissed the respondent’s submissions on the following grounds:

(1) the allegations of unfair labor practice was not discussed in the respondent's position paper,
let alone substantiated;

(2) CAB was well within its rights to impose preventive suspension upon the respondent;

(3) on the substantive aspect, CAB has reasonably shown that the complainant violated
company rules for utilizing company-owned materials and equipment; and

(4) on the procedural aspect, CAB complied with the twin requirements of notice.

The Complaint dated February 12, 2002 was dismissed for lack of merit.

Respondent subsequently appealed the Labor Arbiter decision to the NLRC which ruled that:

(1) the respondent should have been given the opportunity to be heard and to defend himself
through a hearing;[14]

(2) the respondent did not commit serious misconduct because his "contrite and remorseful
explanation belies any willfulness and wrongful intent to violate the rules;" [15] and

(3) while the respondent did indeed violate the company rules, the ultimate penalty of dismissal
should not have been meted out to him,
setting aside the Labor Arbiter’s decision and ordering CAB the payment to repondent of backwages and
separation pay.

Petitioner elevated the case to the CA which claimed that respondent’s “violation cannot be considered as
so grave as to be characterized as either serious misconduct or could lead to a loss of trust and
confidence” and later denied the petition and affirmed the NLRC’s decision.

ISSUES:

(1) whether or not procedural and substantive due process was observed in the termination of the
respondent's employment with CAB;

(2) whether or not the penalty meted out was commensurate to the violation; and consequently,

(3) whether or not the respondent is entitled to the payment of backwages and separation pay

RULING:

As can be perused from the antecedent facts, the labor Arbiter, the NLRC and the CA came up with
conflicting findings of facts that the Court is justified or compelled to issue its own assessment.

On the matter of procedural due process, the Labor Arbiter and the CA were in unison in admitting that
CAB complied with the twin requirements of due process with a notice apprising the complainant of the
particular acts for which his dismissal is sought and a subsequent notice informing the complainant of the
decision to dismiss him. The confluence of these facts, in the Court’s opinion, sufficiently complies with
the repondent’s right to be accorded ample opportunity to be heard.

Formulated in Perez vs. PT&T, “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.

On the matter of substantive due process, Labor Arbiter, NLRC and the CA are in common posture that
the respondent did indeed violate company rules and regulations when he used company equipment and
materials to work on foreign-owned vehicles.

Art 297(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 to
him”.

This situation holds where a person, in the case of supervisors or personnel occupying positions of
responsibility and entrusted with confidence on delicate matters such as the custody, handling or care
and protection of the employer’s property. A review of the entirety of records would reveal that all the
requirements for the valid dismissal of the respondent existed.

The petitioner had therefore validly dismissed an erring employee who as such forfeited and is not
entitiled to both backwages and separation pay.

The decisions of NLRC and the CA are reversed and set-aside while that of the Labor Arbiter is
reinstated.
Marsman & Company, INC vs. Rodil C. Sta. Rita
G.R. No. 194765
April 23, 2018

FACTS:

Marsman is engaged in the business of distribution/sale of pharmaceutical and consumer products.

Marsman purchased Metro Drug Distribution, which is now named Consumer Products Distribution
Services Inc. (CPDSI). The transition from Marsman to CPDSI brought confusion as to who the employer
of Rodil at the time of his dismissal.

Marsman hired Rodil (under a contract) as a warehouse helper in 1993. After his contract expired in 1994,
Marsman rehired him on a probationary status, and he eventually became a regular employee. Rodil
joined Marsman Employees Union. In 1995, Marsman purchased Metro Drug Distribution, which is
engaged in the same business. This led to the integration of their employees as formalized in a
Memorandum of Agreement (MOA) dated June 1996. Marsman became the holding company while
Metro Drug became the operating company. In 1997, Metro Drug changed its corporate name to CPDSI.
CPDSI entered into a contract with EAC wherein the former would provide warehousemen to the latter in
its Libis Warehouse. Marsman appointed Rodil as one of the warehousemen for EAC-Libis Warehouse
stating that the transfer is part of its cross-training Program. EAC’s use of the Libis Warehouse is
dependent on its lease contract with Valiant Distribution (Valiant). When Valiant terminated EAC’s lease
contract, CPDSI likewise terminated the employees assigned at EAC-Libis Warehouse, including Rodil on
the ground of redundancy.
Rodil filed an illegal dismissal complaint against Marsman. The Labor Arbiter found Marsman guilty of
illegally dismissal. On appeal, Marsman argued that the Labor Arbiter has no jurisdiction over the
complaint alleging that there is no employer-employee relationship (E-ER) between it and Rodil. The
NLRC ruled that there is no E-ER between Marsman and Rodil. In a petition for certiorari, the Court of
Appeals reversed the NLRC Decision.

ISSUE:

Whether or not an employer-employee relationship existed between Marsman and Rodil at the time of his
dismissal.

RULING:

NO, Rodil was not able to prove that there is an E-ER between him and Marsman.

In an illegal dismissal case, the onus probandi rests on the employer to prove that its dismissal of an
employee was for a valid cause. However, before a case for illegal dismissal can prosper, an E-ER must
first be established. It is incumbent upon Rodil as the complainant to prove the E-ER by substantial
evidence, which he failed to do.

This is a case of a corporate spin-off, which brought about the integration and transfer of employees from
Marsman to CPDSI. Under the MOA, Marsman’s function was limited to a holding company and made
CPDSI as the main operating company. A corporate spin-off occurs when a department, division or
portions of the corporate business enterprise is sold-off or assigned to a new corporation that will arise by
the process which may constitute it into a subsidiary of the original corporation.
The spin-off and the attendant transfer of employees are legitimate business interests of Marsman. The
transfer of employees through the MOA was proper and did not violate any existing law or jurisprudence.
The Court has upheld the transfer/absorption of employees from one company to another, as successor
employer, as long as the transferor was not in bad faith and the employees absorbed by a successor-
employer enjoy the continuity of their employment status and rights and privileges with their former
employer.

To assert that Marsman remained as Rodil’s employer even after the corporate spin-off disregards the
separate personality of Marsman and CPDSI. A corporation has a personality that is separate and distinct
from that composing it as well as from any other legal entity to which it may be related.

Rodil failed to support his claim that Marsman and CPDSI were managed and operated by the same
persons or that Marsman had complete control over CPDSI’s operations. The existence of interlocking
directors, corporate officers and shareholders, without more, is not enough to pierce the veil of corporate
fiction. No bad faith can be imputed to Marsman since the MOA guaranteed the tenure of employees,
honored the CBA signed in 1995 and maintain the salaries and benefits of the affected employees.

Rodil also failed to satisfy the four-fold test which determines the existence of E-ER, the elements of
which are: 1) selection and engagement of employees; 2) payment of wages; 3) power of dismissal; and
4) power to control the employee’s conduct.

There is nothing in the MOA which negate CPDSI’s power to select its employees and when to engage
them. Rodil also failed to submit pay slips, salary vouchers, payrolls, certificate of withholding tax on
compensation income, SSS records (not just ID) or testimonies from witnesses to prove the element of
payment of wages. As to the power of dismissal, it was evident in the notice of termination that CPDSI,
and not Marsman terminated Rodil’s services by reason of redundancy. The power of control over his
employment at the time of his dismissal was also not proven.

Thus, there being no E-ER between Marsman and Rodil, the latter’s complaint must be dismissed for lack
of jurisdiction on the part of the Labor Arbiter.
Leonardo v. NLRC
G.R. No. 125303
June 16, 2000
Fuerte and Leonardo v. NLRC
G.R. No. 126937
June 16, 2000

FACTS: 

Petitioner was a mechanic employed by Reynaldo’s Marketing Corporation. He was transferred to another
plant of the company, and his supervisor’s allowance correspondingly withdrawn, allegedly due to his
failure to meet his sales quota. He then filed a complaint for illegal dismissal, alleging constructive
dismissal. Reynaldo’s denied the charge; it was simply carrying out a policy designed to encourage work
efficiency and competitiveness by giving out extra allowances and choice assignments to employees who
meet the required quota. Failure to maintain such quota simply means loss of the assignment and extra
allowances.

With regard to Leonardo, private respondent likewise insists that it never severed the former's
employment. On the contrary, the company claims that it was LEONARDO who abandoned his post
following an investigation wherein he was asked to explain an incident of alleged "sideline" work which
occurred on April 22, 1991. It would appear that late in the evening of the day in question, the driver of a
red Corolla arrived at the shop looking for LEONARDO. The driver said that, as prearranged, he was to
pick up LEONARDO who would perform a private service on the vehicle. When reports of the "sideline"
work reached management, it confronted LEONARDO and asked for an explanation. According to private
respondent, LEONARDO gave contradictory excuses, eventually claiming that the unauthorized service
was for an aunt. When pressed to present his aunt, it was then that LEONARDO stopped reporting for
work, filing his complaint for illegal dismissal some ten months after his alleged termination.

ISSUE: 

Whether or not petitioner was constructively dismissed.

RULING: 

Constructive dismissal is an involuntary resignation resorted to by an employee when his continued

employment becomes impossible, unreasonable, or unlikely or when there is demotion in rank or
diminution in pay, or when a clear determination, insensibility or disdain by the employer becomes
unbearable.

In the case at bar, there was a demotion and corresponding decrease in pay, but it was for cause (failure
to meet the required quota). The right to demote falls within the employer’s prerogative, since an
employer may set employment standards and appropriate sanctions for failure to meet the latter. On
Leonardo’s part, there was no illegal dismissal because Leonardo was not dismissed but instead, he
abandoned his employment.
Mega Magazine v. Defensor
G.R. No. 162021
June 16, 201

FACTS:

Contested here is only the schedule of the rates and the revenues of the Company that would entitle Yap
of commission and bonus. In her initial memorandum of February 25, 1999, the respondent had
suggested the following schedule, namely: (a) 0.05% outright commission on total revenue of P28-P29
million; (b) 0.075% on P30-P34 million; (c) 0.1% on P35-P38 million; (d) 0.1% on P39-P41 million pesos;
and (f) 0.1% on P41 million or higher, but Yap had countered by revising the schedule to start at 0.1% as
outright commissions on a total revenue of P35-P38 million, and the special incentive bonus to start at
revenues of P35-P38 million. Accordingly, should Mega Magazine’s revenue reach P35M, Yap would
then be entitled to commission and bonus as agreed.

ISSUE:

Is respondent entitled to her 0.05% outright commissions and to the special incentive bonus of P8,500.00
based on MMPI having reached the minimum target of P35 million in gross revenues?

HELD:

Yes.

The degree of proof required in labor cases is not as stringent as in other types of cases. This liberal
approach affords to the employee every opportunity to level the playing field in which her employer is
pitted against her.

Here, on the one hand, were Tabingo’s memorandum and affidavit indicating that MMPI’s revenues in
1999 totaled P36,216,624.07, and, on the other, the audit report showing MMPI’s gross revenues
amounting to only P31,947,677.00 in the same year. That the audit report was rendered by the auditing
firm of Punongbayan & Araullo did not make it weightier than Tabingo’s memorandum and affidavit, for
only substantial evidence – that amount of relevant evidence which a reasonable mind might accept as
adequate to justify a conclusion - was required in labor adjudication. Moreover, whenever the evidence
presented by the employer and that by the employee are in equipoise, the scales of justice must tilt in
favor of the latter. For purposes of determining whether or not the petitioners’ gross revenue reached the
minimum target of P35 million, therefore, Tabingo’s memorandum and affidavit sufficed to positively
establish that it did, particularly considering that Tabingo’s memorandum was made in the course of the
performance of her official tasks as a traffic clerk of MMPI. In her affidavit, too, Tabingo asserted that her
issuance of the memorandum was pursuant to MMPI’s year-end procedures, an assertion that the
petitioners did not refute. In any event, Tabingo’s categorical declaration in her affidavit that “[because] of
that achievement, as part of the Sales and Traffic Team of MMPI, in addition to my other bonuses that
year, I received P8,500.00 in gift certificates as my share in the Group Incentive for the Sales and Traffic
Team for gross advertising revenue of P35 to P38 million xxx,” aside from the petitioners not refuting it,
was corroborated by the 1999 Advertising Target sent by the respondent to Yap on December 2, 1999, in
which the respondent reported a gross revenue of P36,216,624.07 as of December 1, 1999.