DE CASTRO VS LIBERTY BROADCASTING

GR 165153 (2008) – Brion, J.

TICKER: building administrator; illegal dismissal

FACTS:
Carlos De Castro is the building administrator of Liberty Broadcasting. He started his
employment on August 7, 1995. Bernard Mandap (HRM Senior Manager) sent a notice to
Carlos requiring him to explain within 48 hours why he should not be made liable for violation of
the Company Code of Conduct for acts constituting serious misconduct, fraud and willful breach
of trust reposed in him as a managerial employee. De Castro denied the allegations against him
in the Affidavits of Liberty’s witnesses: Vicente Niguidula and Gil Balais. He says such
accusations are baseless and
sham, designed to protect Niguidula and Balais who were the favorite boys of Edgardo Quiogue
(EVP of Liberty Broadcasting). At De Castro’s request, a formal hearing was scheduled at 2pm
of May 28, 1996, but he thereafter sent a notice that he would not participate when he learned
from his wife that estafa and qualified theft had been filed against him. He felt that the formal
hearing would just be a more-more investigation. Liberty Broadcasting charged De Castro with
Violation of Company Code of Conduct based on the Affidavits of Balais, Cristino Samarita and
Jose Aying.

May 31, 1996 - Notice of Dismissal. Some grounds for De Castro’s Dismissal: 1. Soliciting
and/or receiving money for his own benefit from suppliers/dealers/traders Aying and Samarita,
representing commissions for job contracts involving the airconditioning units at the company,
and the installation of fire exits at Technology Centre; 2. Diversion of company funds by
soliciting and receiving commissions amounting to a 14k from Aying for a job contract; 3. Theft
of company property involving the unauthorized removal of 1 gallon of Delo Oil from the storage
room. De Castro then filed a Complaint for Illegal Dismissal. During the Arbitration, he denied
the offenses charged.

Labor Arbiter rendered a decision on April 30, 1999, holding the respondent liable for illegal
dismissal. He disbelieved the affidavits of the respondent’s witnesses in view of the
circumstances prior to the execution. NLRC reversed the LA’s decision and adopted the
findings of Labor Arbiter Tamayo who reviewed the Appeal on NLRC’s instructions. It ruled that
Arbiter Pati erred in disregarding the Affidavits of the witnesses. NLRC granted De Castro’s
Motion for Reconsideration in a Resolution dated September 20, 2002. NLRC held the charges
against De Castro were never substantiated other than by bare allegations of the company’s
employees whom he had altercations with prior to the execution of Affidavits. Certiorari at CA:
granted the Petition in its Decision on May 25, 2004, confirming the validity of De Castro’s
dismissal; NLRC abused its discretion when it disregarded the Affidavits of the witnesses

ISSUE:
Whether or not CA erred when it substituted its judgment for that of LA and NLRC who were the
triers of facts who had the opportunity to review the evidence extensively

RULING:
YES. CA erred in the appreciation of the evidence surrounding the petitioner’s
termination from employment. The cited grounds are at best doubtful under the proven
surrounding circumstances, and should have been interpreted in the petitioner’s favor
pursuant to Article 4 of the Labor Code.

1. The petitioner had not stayed long in the company and had not even passed his
probationary period when the acts charged allegedly took place. This fact carries several
significant implications. First, being new, his natural motivation was to make an early positive
impression on his employer. Thus, it is believable that as building administrator, he diligently,
zealously, and faithfully performed his tasks, working in excess of eight hours per day to
maintain the company buildings and facilities in excellent shape; he even lent the company his
personal tools and equipment to facilitate urgent repairs and maintenance work on company
properties. Second, because of his natural motivation as a new employee and his lack of
awareness of the dynamics of relationships within the company, he must have been telling the
truth when he said that he objected to the way the contract for the installation of fire escapes
was awarded to Samarita. Third, his being new somehow rendered doubtful the charge that he
had already encouraged solicitation of commission from suppliers, especially if considered with
the timing of the charges against him and the turnaround of witness Aying’s testimony.

2. The relationships within the company at the time the charges were filed showed that he was
a stranger who might not have known the dynamics of company interrelationships and might
have stepped on the wrong toes in the course of performing his duties. Respondent Quiogue
was the Executive Vice-President of the company, a very powerful official with a lot of say in
company operations. Since Samarita was doing the fabrication of steel balusters for Quiogue’s
home in New Manila, Quezon City, there is a lot of hidden dynamics in their relationship and it is
not surprising that Samarita testified against the petitioner. Both Samarita and Quioque have
motives to resent the petitioner’s comments about the irregular award of a contract to Samarita.

3. Mandap, as Personnel Manager, is a subordinate of Quiogue. The proposal to secure

commissions from company suppliers reportedly took place in a very public gathering—a
drinking session—in his house. Why Mandap did not take immediate action when he knew of
the alleged plan as early as December 1995 was never explained although the petitioner raised
the issue squarely. The time gap—from December 1995 to May 1996—is an incredibly long
time under the evidence available and can be accounted for only by the fact that there was no
intention to terminate the services of the petitioner in December; the motivation and the scheme
to do this came only sometime in April-May 1996.

4. The timing of the filing of charges was, as the petitioner pointed out, unusual. Indeed, if the
proposal to solicit commissions had transpired in December, the charges were quite late when
they came in May.

All these considerations render the cited causes for the petitioner’s dismissal tenuous as the
evidence supporting these grounds from suspect sources: they come either from people who
harbor resentment; those whose positions have inherent conflict points with that of De Castro,
or
from business dealings with the company.

Under the circumstances, we join the NLRC in concluding that the employer failed to prove a
just cause for the termination of the petitioner’s employment—a burden the company, as
employer, carries under the Labor Code—and the CA erred when it saw grave abuse of
discretion in the NLRC’s ruling.
The evidentiary situation, at the very least, brings to the fore the dictum we stated in Prangan v.
NLRC and in Nicario v. NLRC that “if doubts exist between the evidence presented by the
employer and the employee, the scales of justice must be tilted in favor of the latter. It is
a time-honored rule in controversies between a laborer and his master, doubts
reasonably arising from the evidence, or in the interpretation of agreements and writing
should be resolved in the former’s favor.

SOLAS VS POWER AND TELEPHONE SUPPLY, ET AL.

GR 162332 (2008) – Austria-Martinez, J.

TICKER: withholding of salary valid

FACTS:
Herbert Solas entered into a contract of employment with Power and Telephone/Supply
Philippines, Inc., to be the Assistant Sales Manager of the company with a monthly salary of
P21,600.00, excluding bonuses and commission. Private respondent company granted
petitioner Herbert Solas and Franklin D. Quiachon their sales commission from the month of
January to June of 1998. From that time up to the present, no other sales commission was ever
again given to them.

On 04 February 2000, petitioner requested for the release of his alleged commission which had
already accumulated since July of 1998 which was denied, and instead, petitioner was even
mandated to settle his outstanding obligation with the company.

On 07 February 2000, petitioner likewise received another memorandum requiring him to return
the issued cellular phone, car and key to his office, which he allegedly all complied. Petitioner
averred that these were all forms of harassment including the non-payment of his salary for the
month of February 2000, and onwards. Hence, on 15 February 2000, he instituted a case for
illegal constructive dismissal, recovery of 10% sales commission on gross sales, and attorney's
fees.

Private respondents maintained that there was no agreement, written or oral, which talked of the
grant of 10% commission on gross sales to sales agent, nor was there a CBA on the matter.
There was even no CBA to speak of, since the company had no union, with its employees
numbering only to less than 10, all being fixed-salaried employees. The company gave bonuses
when there was an income, but these were purely on the liberality of the company, subject to
the availability of funds and profits. Besides, petitioner has actually no client of his own from
whom he could close sales, thus the claim for commission was utterly baseless.

The parties submitted their position papers. On 31 August 2000, the Labor Arbiter rendered a
decision finding for the petitioner Herbert Solas. Respondents appealed to the National
Labor Relations Commission (NLRC), which reversed and set aside the decision of the
Labor Arbiter (LA). The NLRC ruled that that there was no constructive dismissal in this case,
because petitioner never resigned but merely filed an indefinite sick leave, even admitting
during the preliminary hearings that he was still an employee of respondents, and his principal
claim was for payment of his sales commission. Furthermore, the NLRC saw no badge of
constructive dismissal in respondents' action of applying petitioner's salary for the month of
February 2000 as payment for his debts to the company amounting to P95,000.00. It was also
held that petitioner failed to establish that there was an agreement between him and respondent
employer for a 10% sales commission, and that he failed to establish the origin and authenticity
of the specific amount of the commission being claimed by him.

Petitioner filed a motion for reconsideration of the NLRC Decision, but the same was denied.
From such adverse judgment, petitioner elevated his case to the CA via a petition for certiorari.
On September 12, 2003, the CA rendered a decision affirming the decision of the NLRC.
Hence, this petition.

ISSUE:
Whether or not the CA committed grave abuse of discretion amounting to lack or excess of
jurisdiction when it did not sustain the award of the Labor Arbiter

RULING:
NO. The NLRC and the CA were correct in not sustaining the award thereof by the LA. It
must be borne in mind that there is no law which requires employers to pay commissions; thus,
it is incumbent upon petitioner to prove that that there is indeed an agreement between him and
his employer for payment of the same. The only evidence presented by petitioner to prove that
he is entitled to sales commissions are the employment certificate, stating that he is an
employee of respondents receiving P21,600.00 per month as salary, exclusive of bonuses and
sales commissions, and the undisputed fact that private respondent company gave him and its
other employees the amount of P85,418.00 sometime in 1998. However, the CA was correct in
ruling that the employment certificate was insufficient to prove that petitioner was indeed entitled
to his claim for sales commissions, as said document does not give the details as to the
conditions for payment of the same or the agreed percentage, if any.

As to the amount of P85,418.00, respondents assert that said amount is actually a one-time
bonus, not a commission. Thus, even assuming arguendo that petitioner is entitled to sales
commissions, his evidence is inadequate to establish the amount to which he is entitled. In
Ropali Trading Corporation v. National Labor Relations Commission, the employee presented a
Memorandum from his employer stating that he would be receiving a 20% overriding
commission, including sales commission and interest income on all sales he had successfully
obtained. Yet, the Court still struck down petitioner's claim for unpaid commissions, stating that
the employee should present evidence, such as credible documents, to prove his claim.
Vague and doubtful sales documents, the origins of which have not been proven, are
considered insufficient to establish a claim for payment of commissions.

Here, the NLRC and the CA found that the computations for commissions were determined and
prepared unilaterally by petitioner. Thus, it was correctly ruled that said computation, with its
uncertain origin and authenticity, is self-serving and cannot prove petitioner's claim for
commissions in the amount of P892,780.37. In sum, the Court sees no justification whatsoever
to deviate from the ruling of the NLRC and the CA.
PEOPLE’S BROADCASTING VS SECRETARY OF DOLE, ET AL.
GR 179652 (2012) – Velasco, Jr., J.

TICKER: jurisdiction of DOLE’s Secretary vs NLRC

FACTS:
Private respondent Jandeleon Juezan filed a complaint against petitioner with the Department of
Labor and Employment (DOLE). for illegal deduction, nonpayment of service incentive leave,
13th month pay, premium pay for holiday and rest day and illegal diminution of benefits, delayed
payment of wages and noncoverage of SSS, PAG-IBIG and Philhealth.

The DOLE Regional Director found that private respondent was an employee of petitioner and
was entitled to his money claims. When the matter was brought before the CA, where petitioner
(Bombo Radyo) claimed that it had been denied due process, it was held that petitioner was
accorded due process as it had been given the opportunity to be heard, and that the DOLE
Secretary had jurisdiction over the matter.

In the Decision of this Court, the CA Decision was reversed and set aside, and the complaint
against petitioner was dismissed. The Court found that there was no employer-employee
relationship between petitioner and private respondent. It was held that while the DOLE may
make a determination of the existence of an employer-employee relationship, this function could
not be co-extensive with the visitorial and enforcement power provided in Art. 128(b) of the
Labor Code, as amended by RA 7730. The National Labor Relations Commission (NLRC) was
held to be the primary agency in determining the existence of an employer-employee
relationship. This was the interpretation of the Court of the clause "in cases where the
relationship of employer-employee still exists" in Art. 128(b).

From this Decision, the Public Attorney’s Office (PAO) filed a Motion for Clarification of Decision
(with Leave of Court). The PAO sought to clarify as to when the visitorial and enforcement
power of the DOLE be not considered as co-extensive with the power to determine the
existence of an employer-employee relationship.

ISSUE:
Whether or not the DOLE make a determination of whether or not an employer-employee
relationship exists, and if so, to what extent?

RULING:
The first portion of the question must be answered in the affirmative.

The prior decision of this Court in the present case accepts such answer, but places a limitation
upon the power of the DOLE, that is, the determination of the existence of an employer-
employee relationship cannot be co-extensive with the visitorial and enforcement power of the
DOLE. But even in conceding the power of the DOLE to determine the existence of an
employer-employee relationship, the Court held that the determination of the existence of an
employer-employee relationship is still primarily within the power of the NLRC, that any finding
by the DOLE is merely preliminary.
This conclusion must be revisited.

No limitation in the law was placed upon the power of the DOLE to determine the existence of
an employer-employee relationship. No procedure was laid down where the DOLE would only
make a preliminary finding, that the power was primarily held by the NLRC. The law did not say
that the DOLE would first seek the NLRC’s determination of the existence of an employer-
employee relationship, or that should the existence of the employer-employee relationship be
disputed, the DOLE would refer the matter to the NLRC. The DOLE must have the power to
determine whether or not an employer-employee relationship exists, and from there to decide
whether or not to issue compliance orders in accordance with Art. 128(b) of the Labor Code, as
amended by RA 7730.

The DOLE, in determining the existence of an employer-employee relationship, has a ready set
of guidelines to follow, the same guide the courts themselves use. The elements to determine
the existence of an employment relationship are: (1) the selection and engagement of the
employee; (2) the payment of wages; (3) the power of dismissal; (4) the employer’s power to
control the employee’s conduct.9 The use of this test is not solely limited to the NLRC. The
DOLE Secretary, or his or her representatives, can utilize the same test, even in the course of
inspection, making use of the same evidence that would have been presented before the NLRC.

The determination of the existence of an employer-employee relationship by the DOLE

must be respected. The expanded visitorial and enforcement power of the DOLE granted by
RA 7730 would be rendered nugatory if the alleged employer could, by the simple expedient of
disputing the employer-employee relationship, force the referral of the matter to the NLRC. The
Court issued the declaration that at least a prima facie showing of the absence of an employer-
employee relationship be made to oust the DOLE of jurisdiction. But it is precisely the DOLE
that will be faced with that evidence, and it is the DOLE that will weigh it, to see if the same
does successfully refute the existence of an employer-employee relationship.

If the DOLE makes a finding that there is an existing employer-employee relationship, it

takes cognizance of the matter, to the exclusion of the NLRC. The DOLE would have no
jurisdiction only if the employer-employee relationship has already been terminated, or it
appears, upon review, that no employer-employee relationship existed in the first place.

The Court, in limiting the power of the DOLE, gave the rationale that such limitation
would eliminate the prospect of competing conclusions between the DOLE and the
NLRC. The prospect of competing conclusions could just as well have been eliminated by
according respect to the DOLE findings, to the exclusion of the NLRC, and this We believe is
the more prudent course of action to take.

This is not to say that the determination by the DOLE is beyond question or review. Suffice it to
say, there are judicial remedies such as a petition for certiorari under Rule 65 that may be
availed of, should a party wish to dispute the findings of the DOLE.

It must also be remembered that the power of the DOLE to determine the existence of an
employer-employee relationship need not necessarily result in an affirmative finding. The DOLE
may well make the determination that no employer-employee relationship exists, thus divesting
itself of jurisdiction over the case. It must not be precluded from being able to reach its own
conclusions, not by the parties, and certainly not by this Court.
Under Art. 128(b) of the Labor Code, as amended by RA 7730, the DOLE is fully
empowered to make a determination as to the existence of an employer-employee
relationship in the exercise of its visitorial and enforcement power, subject to judicial
review, not review by the NLRC.

In the present case, the finding of the DOLE Regional Director that there was an employer-
employee relationship has been subjected to review by this Court, with the finding being that
there was no employer-employee relationship between petitioner and private respondent, based
on the evidence presented. Private respondent presented self-serving allegations as well as
self-defeating evidence.10 The findings of the Regional Director were not based on substantial
evidence, and private respondent failed to prove the existence of an employer-employee
relationship. The DOLE had no jurisdiction over the case, as there was no employer-employee
relationship present. Thus, the dismissal of the complaint against petitioner is proper.

PT&T VS NLRC AND DE GUZMAN

GR 118978 (1997) – Regalado, J.

TICKER: company’s policy of not accepting married women for employment

FACTS:
PT&T (Philippine Telegraph & Telephone Company) initially hired Grace de Guzman specifically
as “Supernumerary Project Worker”, for a fixed period from November 21, 1990 until April 20,
1991 as reliever for C.F. Tenorio who went on maternity leave. She was again invited for
employment as replacement of Erlina F. Dizon who went on leave on 2 periods, from June 10,
1991 to July 1, 1991 and July 19, 1991 to August 8, 1991.

On September 2, 1991, de Guzman was again asked to join PT&T as a probationary employee
where probationary period will cover 150 days. She indicated in the portion of the job
application form under civil status that she was single although she had contracted marriage a
few months earlier. When petitioner learned later about the marriage, its branch supervisor,
Delia M. Oficial, sent de Guzman a memorandum requiring her to explain the discrepancy.
Included in the memorandum, was a reminder about the company’s policy of not accepting
married women for employment. She was dismissed from the company effective January 29,
1992. Labor Arbiter handed down decision on November 23, 1993 declaring that petitioner
illegally dismissed De Guzman, who had already gained the status of a regular employee.
Furthermore, it was apparent that she had been discriminated on account of her having
contracted marriage in violation of company policies.

ISSUE:
Whether or not the company policy of not accepting married women for employment was
discriminatory

RULING:
YES. Article 136 of the Labor Code, one of the protective laws for women, explicitly
prohibits discrimination merely by reason of marriage of a female employee. It is
recognized that company is free to regulate manpower and employment from hiring to firing,
according to their discretion and best business judgment, except in those cases of unlawful
discrimination or those provided by law.
PT&T’s policy of not accepting or disqualifying from work any woman worker who
contracts marriage is afoul of the right against discrimination provided to all women
workers by our labor laws and by our Constitution. The record discloses clearly that de
Guzman’s ties with PT&T were dissolved principally because of the company’s policy that
married women are not qualified for employment in the company, and not merely because of
her supposed acts of dishonesty.

The government abhors any stipulation or policy in the nature adopted by PT&T. As stated in
the labor code:

“ART. 136. Stipulation against marriage. — It shall be unlawful for an employer to require as a
condition of employment or continuation of employment that a woman 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 marriage.”

The policy of PT&T is in derogation of the provisions stated in Art.136 of the Labor Code on the
right of a woman to be free from any kind of stipulation against marriage in connection with her
employment and it likewise is contrary to good morals and public policy, depriving a woman of
her freedom to choose her status, a privilege that is inherent in an individual as an intangible
and inalienable right. The kind of policy followed by PT&T strikes at the very essence, ideals
and purpose of marriage as an inviolable social institution and ultimately, family as the
foundation of the nation. Such policy must be prohibited in all its indirect, disguised or
dissembled forms as discriminatory conduct derogatory of the laws of the land not only for order
but also imperatively required.

As an employee who had therefore gained regular status, and as she had been dismissed
without just cause, she is entitled to reinstatement without loss of seniority rights and other
privileges and to full back wages, inclusive of allowances and other benefits or their monetary
equivalent.