CASE 308

SHOPPERS GAIN SUPERMART, vs. NLRC

G. R. No. 110731 July 26, 1996

FACTS:

From 1982 to 1990, private respondents had worked in the Shoppers Gain Supermarket in
various capacities as "merchandiser, cashier, bagger, check-out personnel, sales lady, printer/film
and warehouseman" for at least one year each. Private respondents were part of a pool of
workers supplied by three (3) manpower service companies under "labor-only" contracts. In
December of 1990, due to an unavoidable circumstance, petitioner constrained to stop its
business and consequently terminate its contract with the three (3) manpower service companies.
Petitioner was able to pay separation pays for its regular employees but not for private
respondents.

A complaint for illegal dismissal was filed for which the Labor Arbiter rendered a
decision finding Shoppers Gain Supermarket guilty of labor-only contracting and ordered it to
pay separation pay and backwages to respondents. Elevating the case to the Supreme Court,
petitioners raised the following grounds inter alia:

(a) That for employer-employee to exist, the following requirements must be satisfied,
namely: (1) selection and engagement of the employees; (2) the payment of wages; (3) the power
of dismissal; and (4) the power to control employees' conduct; and (b) Since the manpower
agencies themselves admitted per their respective position papers that they selected, hired, paid,
disciplined, dismissed and controlled the private respondents, it followed that the latter are not
the employees of the petitioner corporation but of the agencies only.

ISSUE:

Whether or not private respondents are considered employees in view of the fact that they
were merely furnished through labor-only contracts with three manpower agencies.

HELD:

The Supreme Court held that what was controlling in the issue is the provisions of Artcile
106 of the Labor Code and not that of Article 208. The former clearly defines what constitute
labor-only contractor as differentiated from a direct contractor, including the legal effects of
each, while the latter is merely for the purpose of determining whether or not an employee is
considered regular. Based on the provision of Article 106, the Supreme Court ruled that the
petitioner was indeed the direct employer of private respondents and was therefore 0bliged to
pay them separation pay. The Supreme Court reasoned that since it is undeniable that the private
respondents' work as merchandisers, cashiers, baggers, check-out personnel, sales ladies,
warehousemen and so forth were directly related, necessary and vital to the day-to-day
operations of the supermarket and that their jobs involved normal and regular functions in the
ordinary business of the petitioner corporation, the provision of Article 106 clearly applied thus
making the manpower agencies merely agents of petitioner corporation. Consequently, private
respondents are considered employees of petitioner Shoppers Gain Supermart.
CASE 309

REAHS CORPORATION VS NLRC

GR No. 117473, April 25, 1997

FACTS:

Private respondents sued Reahs Corp. for unfair labor practice and illegal dismissal. They
claim that they were unlawfully dismissed and were not awarded nor given any separation pay.
On the other hand, respondents allege that sometime in 1986, a certain Ms Soledad
Domingo,the sole proprietress and operator of Rainbow Sauna located at 316 Araneta
Avenue, Quezon City,offered to sell her business to respondent Reah's Corporation.

After the sale, all the assets of MsDomingo were turned over to respondent Reah's,
which put a sing-along coffee shop and massage clinic; that complainant Red started his
employment on the first week of December 1988 as a room boy at P50.00/day and was given
living quarters inside the premises as he requested; that sometime in March 1989, complainant
Red asked permission to go to Bicol for a period of ten (10) days, which was granted, and was
given an advance money of P1,200.00 to bring some girls from the province to work as
attendants at the respondent's massage clinic, that it was only on January 1, 1990 that
complainant Red returned and was re-hired under the same terms and conditions of his
previous employment with the understanding that he will have to refund the P1,200.00 cash
advance given to him; that due to poor business, increase in the rental cost and the failure of
Meralco to reconnect the electrical services in the establishment, it suffered losses leading to its
closure.

ISSUE:

Whether or not petitioners-officers can be held jointly and severally liable with the
corporation in the payment of separation pay to private respondents under article 283 of the labor
code.

HELD:

The rule, therefore, is that in all cases of business closure or cessation of operation or
undertaking of the employer, the affected employee is entitled to separation pay. This is
consistent with the state policy of treating labor as a primary social economic force, affording
full protection to its rights as well as its welfare. 6 The exception is when the closure of business
or cessation of operations is due to serious business losses or financial reverses; duly proved, in
which case, the right of affected employees to separation pay is lost for obvious reasons. In the
case at bar, the corporation’s alleged serious business losses and financial reverses were not
amply shown or proved.

We now proceed to rule on the corollary issue of whether or not individual petitioners
Castulo, Pascua and Valenzuela should be held liable in solidum with the corporation (REAH’s)
in the payment to private respondents of separation pay and labor standard benefits.chanroblesv
CASE 310

PHILIPPINE TOBACCO FLUE-CURING vs. NLRC

G.R. No. 127395, Dec 10, 1998

FACTS:

There are two groups of employees, namely, the Lubat group and the Luris group.  The
Lubat group is composed of petitioner’s seasonal employees who were not rehired for the 1994
tobacco season.  At the start of that season, they were merely informed that their employment
had been terminated at the end of the 1993 season.  They claimed that petitioner’s refusal to
allow them to report for work without mention of any just or authorized cause constituted illegal
dismissal.  In their Complaint, they prayed for separation pay, back wages, attorney’s fees and
moral damages.

On the other hand, the Luris group is made up of seasonal employees who worked during the
1994 season.  On August 3, 1994, they received a notice informing them that, due to serious
business losses, petitioner planned to close its Balintawak , Quezon City plant and transfer its
tobacco processing and redrying operations to Ilocos Sur.  Although the closure was to be
effective September 15, 1994, they were no longer allowed to work starting August 4, 1994.

ISSUE:

Did petitioner prove “serious business losses,” its justification for the nonpayment of
separation pay?

HELD:

The petition is not meritorious. Article 283 of the Labor Code prescribes the requisites
and the procedure for an employee’s dismissal arising from the closure or cessation of operation
of the establishment. The present case involves the closure of merely a unit or division, not the
whole business of an otherwise viable enterprise.  Although  Article 283 uses the phrase “closure
or cessation of operation of an establishment or undertaking,” , the said statutory provision
applies in cases of both complete and partial cessation of the business operation.

The ‘loss’ referred to in Article 283 cannot be just any kind or amount of loss; otherwise, a
company could easily feign excuses to suit its whims and prejudices or to rid itself of unwanted
employees.  To guard against this possibility of abuse, the Court laid down the following
standard which a company must meet to justify retrenchment: the losses expected should be
substantial and not merely de minimis in extent.  If the loss purportedly sought to be forestalled
by retrenchment is clearly shown to be insubstantial and inconsequential in character, the
bonafide nature of the retrenchment would appear to be seriously in question.
CASE 311

PULP AND PAPER, Inc. v. NLRC

G.R. No. 116593, September 24, 2997

FACTS:

Antonio was a piece-rate employee of Pulp and Paper as Wrapper. For unknown reasons,
she was advised verbally of her termination and was given a prepared form of Quitclaim and
Release which she refused to sign. Instead, she filed a complaint for illegal dismissal and
underpayment of wages. Pulp denied having terminated the complainant, and alleged that since
1989, the orders of customers have become fewer to the point that it is no longer practical to
maintain the same number of packer/wrappers.
Labor Arbiter ordered payment of separation pay and wage differentials using the minimum
wage rate as basis. NLRC affirmed in toto the LA decision.

ISSUE:

Whether wage rates of piece-rate workers must be based on the applicable daily minimum
wage?

HELD:

YES. In the absence of wage rates based on time and motion studies determined by the labor
secretary or submitted by the employer to the labor secretary for his approval, wage rates of
piece-rate workers must be based on the applicable daily minimum wage determined by the
Regional Tripartite Wages and Productivity Commission. To ensure the payment of fair and
reasonable wage rates, Art. 101 of the Labor Code provides that “the Secretary of Labor shall
regulate the payment of wages by results, including pakyao, piecework and other nontime work.”
The same statutory provision also states that the wage rates should be based, preferably, on time
and motion studies, or those arrived at in consultation with the representatives of workers’ and
employers’ organizations. In the absence of such prescribed wage rates for piece-rate workers,
the ordinary minimum wage rates should apply.
This is in compliance with Sec. 8 of the Rules Implementing Wage Order Nos. NCR-02 and
NCR-02-A. It is clear, therefore, that the applicable minimum wage for an 8-hr working day is
the basis for the computation of the separation pay of piece-rate workers like private respondent.
CASE 312

TAN vs. NLRC

G.R. No. 116807, April 14, 1997

FACTS:

Antonio Ibutnandi was employed by Tan as his driver and Romeo Garrido as his delivery
helper. Garrido alleged his right hand was injured while he was lifting heavy boxes of concrete
nails in the store of petitioner. As a consequence, he had to stop working. Despite his injury
however Emma Tan, General Manager and wife of petitioner, ordered him to continue lifting the
heavy boxes. When he refused because his injured finger made the task extremely difficult and
painful, besides being risky, Emma Tan promptly called up her lawyer. Atty. Roberto B. Arca
arrived and demonstrated how Garrido could continue lifting the heavy boxes by using only his
four (4) other fingers. When Garrido persistently refused as he wanted to have his injured finger
treated first, Atty. Arca then and there served him with a letter 4 directing him to explain why no
disciplinary action should be taken against him for failing to obey a valid order of his employer.
Upon his return three (3) working days later, after his finger was already treated, Emma Tan told
him to "go to hell." The remark notwithstanding, he loitered around the store premises for the
next four (4) days but was treated like a leper. He was eventually dismissed for alleged
abandonment of work. Antonio Ibutnandi, on the other hand, was dismissed because he failed to
present a medical certificate from a government doctor certifying that he was already cured of
pulmonary tuberculosis (PTB), hence, already fit to work.

ISSUE:

Whether or not the dismissal is valid.

HELD:

No. Garrido's absences which were at first due to his job-related injury and, subsequently,
the hostile treatment given him by petitioner's wife ever since the labor standards complaint was
filed could hardly amount to abandonment of his work. It would be the height of injustice to
allow an employer to claim as a ground for abandonment a situation which he himself had
brought about. In the case of respondent Antonio Ibutnandi, it cannot be denied that he became
afflicted with pulmonary tuberculosis (PTB) and that under Art. 284 of the Labor Code, an
employer may terminate the services of his 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 that
of his co-employees. However, the fact that an employee is suffering from such a disease does
not ipso facto make him a sure candidate for dismissal as what petitioner did with respondent
Ibutnandi.

Clearly, it is only where there is a prior certification from a competent public authority that
the disease afflicting the employee sought to be dismissed is of such nature or at such stage that
it cannot be cured within six (6) months even with proper medical treatment that the latter could
be validly terminated from his job. There is absolutely nothing on record to show that such a
certification was ever obtained by petitioner, much less that one was issued by a competent
public authority, before respondent Antonio Ibutnandi was dismissed.
CASE 313

SOLIS vs. NLRC

G.R. No. 116175 October 28, 1996

FACTS:

Pedro Solis was employed as an underground miner by Philex. Due to constant exposure
to the elements in the mining area, Solis became ill and was medically diagnosed to be afflicted
with "Koch's infection, exudative type, minimal (R)". The examining physicians 2
recommended that Solis be assigned to surface work to facilitate his speedy recovery from the
illness. This recommendation, including the intercession of petitioner's union, that Solis be
reassigned temporarily to surface work, were not heeded by Philex. The illness of Solis was
aggravated. In his medical check-up at the Baguio General Hospital and Medical Center, Solis
was diagnosed to be suffering from tuberculosis, bronchial asthma and athraglia and was
declared "unfit to continue working for underground mine". Solis was accordingly dismissed by
Philex from service. After his dismissal from service, Solis submitted himself for medical
examination in another hospital, the Baguio Filipino Chinese Hospital, which issued a medical
certificate declaring him physically fit. Armed with this new medical certificate, he went back to
Philex demanding reinstatement, but to no avail. Solis sued Philex for illegal dismissal.

ISSUE:

Whether or not Solis is illegally dismissed due to his illness?

HELD:

Yes. The implementing rule states: 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 above rule states several requirements before the dismissal of an employee due to
disease will be considered valid. Two of which are: (a) the employee is afflicted with a disease
that cannot be cured within six (6) months, and (b) a certification to that effect must be issued by
a competent public health authority. It found nothing in the medical certificate issued by the
Baguio General Hospital which states that Solis' ailment cannot be cured within six months. The
statement that Solis was "unfit to work underground" does not mean that his ailment cannot be
cured within six months. In fact, a subsequent medical examination from another hospital less
than six months from the first medical check-up showed that Solis was still physically fit.
CASE 314

TRIPLE EIGHT INTEGRATED SERVICES, Inc. vs. NLRC

G.R. No. 129584, December 3, 1998

FACTS:

Osdana, a Filipino citizen, was recruited by Triple Eight for employment with the latter’s
principal, Gulf Catering Company (GCC), a firm based in the Kingdom of Saudi Arabia. The
employment contract (originally as “food server” but later changed to “waitress”) was executed
in the Philippines but was to be performed in Riyadh. Once in Riyadh, however, Osdana was
made to perform strenuous tasks (washing dishes, janitorial work), which were not included in
her designation as a waitress. Because of the long hours and strenuous nature of her work, she
suffered from Carpal Tunnel Syndrome, for which she had to undergo surgery. But during her
weeks of confinement at the hospital for her recovery, she was not given any salary. And after
she was discharged from the hospital, GCC suddenly dismissed her from work, allegedly on the
ground of illness. She was not given any separation pay nor was she paid her salaries for the
periods when she was not allowed to work. Thus, upon her return to the Philippines, she filed a
complaint against Triple Eight, praying for unpaid and underpaid salaries, among others.

ISSUE:

Whether or not Osdana was illegally dismissed

HELD:

Yes. Under Article 284 of the Labor Code and the Omnibus Rules Implementing the
Labor Code, for disease to be a valid ground for termination, the following requisites must be
present:
1.The disease must be such that employee’s continued employment is prohibited by law or
prejudicial to his health as well as to the health of his co-employees
2.There must be a certification by competent public authority that the disease is of such nature or
at such a stage that it cannot be cured within a period of 6 months with proper medical treatment

In the first place, Osdana’s continued employment despite her illness was not
prohibited by law nor was it prejudicial to her health, as well as that of her co-employees. In
fact, the medical report issued after her second operation stated that “she had very good
improvement of the symptoms.” Besides, “Carpal Tunnel Syndrome” is not a contagious
disease.

On the medical certificate requirement, petitioner erroneously argues that “private

respondent was employed in Saudi Arabia and not here in the Philippines. Hence, there was a
physical impossibility to secure from a Philippine public health authority the alluded medical
certificate that public respondent’s illness will not be cured within a period of six months.”
Petitioner entirely misses the point, as counsel for private respondent states in the
Comment. The rule simply prescribes a “certification by a competent public health authority”
and not a “Philippine public health authority.”
CASE 315

CEBU ROYAL PLANT vs. DOLE

G.r. no. L-58639, August 12, 1987

FACTS:

Ramon Pilones, private respondent, was employed on February 16, 1978 on a

probationary period of employment for six (6) months with petitioner CRP. After said period, he
underwent medical examination for qualification as regular employee but the results showed that
he is suffering from PTB minimal. Consequently, he was informed of the termination of his
employment by respondent since his illness was not curable within 6 months.

ISSUE:

Whether or not Pilones was illegally terminated.

HELD:

No. The dismissal was not proper. The petitioner claims it could not have dismissed the
private respondent earlier because the x-ray examination was made only on August 17, 1978, and
the results were not immediately available. That excuse is untenable. Note that when the
petitioner had all of six months during which to conduct such examination, it chose to wait until
exactly the last day of the probation period.

The applicable rule on the ground for dismissal invoked against him is Section 8, Rule I,
Book VI, of the Rules and Regulations Implementing the Labor Code which states that “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.” The record does not contain the
certification required by the above rule. Hence, dismissal was illegal.

It is also worth noting that the petitioner’s application for clearance to terminate the
employment of the private respondent was filed with the Ministry of Labor only on August 28,
1978, or seven days after his dismissal. As the NLRC has repeatedly and correctly said, the prior
clearance rule (which was in force at that time) was not a “trivial technicality.” It required “not
just the mere filing of a petition or the mere attempt to procure a clearance” but that “the said
clearance be obtained prior to the operative act of termination.
CASE 316

DUTERTE vs. NLRC

G.R. No. 160325, October 4, 2007

FACTS:

Duterte was hired as truck/trailer driver by Kingswood Trading Company, Inc.

(KTC). petitioner had his first heart attack and was confined for two weeks at the Philippine
Heart Center (PHC). This was confirmed by respondent KTC which admitted that petitioner was
declared on sick leave with corresponding notification. 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. Peitioner suffered a second heart attack and was again confined at the PHC.
Upon release, he stayed home and spent time to recuperate. In June 1999, petitioner attempted to
report back to work but was told to look for another job because he was unfit. Respondents
refused to declare petitioner fit to work unless physically examined by the company physician.
Petitioner filed against his employer a complaint for illegal dismissal and damages.

ISSUE:

Whether or not Duterte was illegally dismissed.

HELD:

Yes. Book VI, Rule I, Section 8 of the Omnibus Implementing Rules of the Labor
Code requires that 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.

In a very real sense, both the NLRC and the appellate court placed on the petitioner the
burden of establishing, by a certification of a competent public authority, that his ailment is such
that it cannot be cured within a period of six months even with proper medical treatment. And
pursuing their logic, petitioner could not claim having been illegally dismissed due to disease,
failing, as he did, to present such certification.

To be sure, the NLRCs above posture is, to say the least, without basis in law and
jurisprudence. And when the CA affirmed the NLRC, the appellate court in effect placed on the
petitioner the onus of proving his entitlement to separation pay and thereby validated herein
respondents act of dismissing him from employment even without proof of existence of a legal
ground for dismissal.
CASE 317

NARIC V. WORKERS UNION

105 PHIL 891, MAY 29, 1959

FACTS:

Upon motion of the union, the industrial court issued an order directing its chief examiner
or any of his assistants, to compute the additional compensation for night work granted in the
decision covering the period from October 3, 1952 to February 16, 1953. The report submitted
by chief examiner shows that there are 163 workers and employees of the corporation who have
rendered night work from October 3, 1952 to February 16, 1953 and the 25 per cent additional
compensation of said workers and employees computed on the basis of their respective monthly
salaries amounted to P5,221.84. The report considered any and all work performed between
6:00 o’clock in the afternoon and 6:00 o’clock in the morning as "night work" and accordingly
has awarded each employee or worker and additional compensation of 25 per cent for "night
work." It further stated that if a particular employee worked from 8:00 o’clock in the morning to
5:00 o’clock in the afternoon and then rendered overtime service from 5:00 o’clock in the
afternoon of the same day to 7:00 o’clock in the evening of the same day, he considered the work
from 5:00 to 6:00 p.m. as overtime work and entitled to 25 per cent additional compensation as
overtime work, and the same work from 6:00 to 7:00 p.m. as both overtime work and night work
and therefore entitled to 25 per cent additional compensation as night work.

ISSUES:

Should the employee performing his regular eight hours work during the daytime be paid
for his services from 5:00 o’clock to 9:00 o’clock in the afternoon as ’overtime work’ and at the
same time be paid from 6:00 o’clock to 9:00 o’clock in the evening as night work?

HELD:

Yes. Night work is any and all work rendered between 6:00 o’clock in the afternoon and
6:00 o’clock in the morning, and consequently, if a certain employee performs his regular eight
hours up to 5:00 o’clock in the afternoon and renders overtime from 5:00 p.m. to 9:00 p. m. of
the same day, the said employee is entitled to an additional compensation for overtime services
from 5:00 p.m. to 9:00 p.m. and at the same time to additional compensation for "nightwork"
from 6:00 p.m. for the very same work. One who does night work can also be paid additional
compensation for the same work as overtime. One is paid because it is in excess of the regular
eight-hour work he may be legally required to do. One is done for reasons of health and the other
because of an express mandate of the law (Commonwealth Act No. 441).

Work done at night should be paid more than work done by the chief examiner.
Respondent court is there workers regular hour of duty, he should also be paid additional
compensation for overtime work. This is what was done by the chief examiner. Respondent court
is therefore justified in affirming his report.
CASE 318

DELA CRUZ VS NLRC

GR No. 145417, December 11, 2003

FACTS:

Dela Cruz was a senior sales manager for Shemberg Marketing Corporation. He was
terminated for loss of confidence for his performance, among which is an unauthorized
reimbursement of his family’s travel expenses. The Supreme Court held that this act amounted to
fraud or deceit resulting to loss of trust and confidence of his employer.

ISSUE:

Whether the submission of his family’s plane tickets for reimbursement was tantamount
to fraud and deceit which justified the employer’s loss of trust and confidence in him?

HELD:

Yes, petitioner was holding a managerial position in which he was tasked to perform key
functions in accordance with an exacting work ethic. His position required the full trust and
confidence of his employer. While petitioner could exercise some discretion, this obviously did
not cover acts for his own personal benefit. As found by the court a quo, he committed a
transgression that betrayed the trust and confidence of his employer – reimbursing his family’s
personal travel expenses out of company funds. Petitioner failed to present any persuasive
evidence or argument to prove otherwise. His act amounted to fraud or deceit which led to the
loss of trust and confidence oh his employer.
CASE 319

SAN PEDRO HOSPITAL vs SECRETARY OF LABOR

GR No. 104624, October 11, 1996

FACTS:

Petitioner had a three-year collective bargaining agreement (CBA) covering the period
December 15, 1987 until December 15, 1990, with herein private respondent, Nagkabiusang
Mamumuo sa San Pedro Hospital of Digos — National Federation of Labor (NAMASAP-NFL),
the exclusive bargaining agent of the hospital’s rank-and-file workers. After the parties failed to
reach agreement on the issues of raising wages, the union during the meeting of February 19,
1991 declared a deadlock.

On February 20, 1991, respondent union saturated petitioner’s premises with streamers and
picketed the hospital. The operations of the hospital having come to a grinding halt, the hospital
management considered the union actions as tantamount to a strike. On May 28, 1991,
respondent union struck. Despite the NCMB’s call for a conciliation conference, nurses and
nurse aides who were members of the union abandoned their respective department and joined
the picket line a week later. Doctors began leaving the hospital and the number of patients
dwindled. The last patient was discharged on June 10, 1991. On June 12, 1991, a “Notice of
Temporary Suspension of Operation” was issued by petitioner hospital and submitted to the local
office of the NCMB on June 14, 1991. Then Secretary of Labor Nieves Confessor assumed
jurisdiction over the labor dispute and issued an order directing all workers to return to work.
However, this order was received by petitioner only on June 20, 1991. In the meantime, it had
already notified the DOLE via its letter dated June 13, 1991, which was received by the DOLE
on June 14, 1991, that it would temporarily suspend operations for six (6) months effective June
15, 1991, or up to December 15, 1991. Petitioner thus refused the return of its striking workers
on account of such suspension of operations.

ISSUE:

WON the Secretary can validly compel the employer to enter into a new CBA even during
temporary suspension of operations (what if in permanent closure?)

HELD:

The order of the secretary in ordering the hospital to enter into a new CBA was valid.
Secretary was of the impression that petitioner would operate again after the lapse of the six-
month suspension of operations on December 16, 1991, and so ordered the parties to enter into
and formalize a new CBA to govern their relations upon resumption of operations. On the other
hand, the aforequoted portion of the Order must be understood in the context of the Secretary’s
finding that the temporary suspension was only for circumventing the return-to-work order, but
in spite of which he held that he could not order petitioner to continue operations as “this would
infringe on its inherent right to manage and conduct its own business affairs”; he thus ordered
instead the payment of backwages to the returning workers who were refused admittance by
petitioner on June 21, 1991.
CASE 320

McAdams Metal Engineering Workers Union v. McAdams Metal Engineering

414 SCRA 4X1

FACTS:

The present controversy stemmed from two separate complaints: the first complaint, filed on
November 9, 1993 by petitioner MAMEWU and its president, petitioner Mario A. Garcia, for
and in behalf of 29 other petitioners, charged private respondents MAME and GBS with unfair
labor practices (ULP) committed through union busting and illegal closure, and illegal dismissal.
The second complaint, filed on November 9, 1993 by the last eight petitioners led by Halim
Roldan, alleged that aside from ULP and illegal dismissal, private respondents were likewise
liable for non-payment of premium pay for holidays and rest days, night differential pay and 13th
month pay.

Insisting that the closure of MAME and GBS was illegal as it was calculated to bust their
union, petitioners claimed that MAME and GBS continued doing business under new business
names, i.e., MBS Machine and Industrial Supply (MBS) and MVS Heavy Equipment Rental and
Builders (MVS). Thus, MBS and MVS were impleaded as respondents in the complaint for
allegedly being run-away shops of MAME and GBS.

In both complaints, petitioners prayed for alternative reliefs for reinstatement with backwages
and/or separation pay.

ISSUE:

Whether or not the closure of private respondents business was done in good faith and for
legitimate business reasons.

HELD:

The closure of private respondents business was done in good faith and for legitimate business
reasons.

ART. 283. CLOSURE OF ESTABLISHMENT AND REDUCTION OF PERSONNEL. - The

employer may also terminate the employment of any employee due to the installation of labor-
saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of
operation of the establishment or undertaking unless the closing is for the purpose of
circumventing the provisions of this Title, by serving a written notice on the worker and the
Ministry of Labor and Employment at least one (1) month before the intended date thereof. In
case of termination due to the installation of labor saving devices or redundancy, the worker
affected thereby shall be entitled to a separation pay equivalent to at least his one (1) month pay
or to at least one (1) month pay for every year of service, whichever is higher. In case 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, the
separation pay shall be equivalent to one (1) month pay or at least onehalf (1/2) month pay for
every year of service, whichever is higher. A fraction of at least six (6) months shall be
considered as one (1) whole year.

Explicit from the above provision is that closure or cessation of business operations is allowed
even if the business is not undergoing economic losses. The owner, for any bona fide reason, can
CASE 321

lawfully close shop at anytime. Just as no law forces anyone to go into business, no law can
compel anybody to continue in it. It would indeed be stretching the intent and spirit of the law if
we were to unjustly interfere with the managements prerogative to close or cease its business
operations just because said business operation or undertaking is not suffering from any loss 5 or
simply to provide the workers continued employment.

Superstar Security Agency V NLRC

184 SCRA 74

FACTS:

Hermosa was hired by petitioner Superstar Security Agency as a Security Guard. She was
assigned to different detachments. The Agency placed Hermosa on a temporary "off-detail”.
Hermosa filed a complaint for illegal dismissal. She claimed that she was unceremoniously
dismissed on suspicion that she was the author of an anonymous report about the irregularities
committed by her fellow lady security guards; that it was this precise reason why she was called
to the headquarters by the Agency's Personnel Supervisor, Rafael Fermo; that, thereafter, Fermo
threatened and directed her to keep any information regarding the matter to herself; that she was
instructed not to report for duty at SMY effective February 1, 1985 as she would be given a new
assignment; that she did as she was told but no new assignment came despite repeated follow-
ups; and that instead, the Agency informed her that the cause of her temporary "off-detail" was
the cost-cutting program of the Rustan Group of Companies and the refusal of Agency's clients
to accept her allegedly due to poor performance, and lack of elementary courtesy and tact.
Finally, Hermosa averted that she was denied due process in that she was neither informed of the
alleged complaints against her nor afforded the opportunity to explain her side.

ISSUE:

Whether or not the petitioners are guilty of illegal dismissal.

HELD:

The petitioners are not guilty for illegal dismissal.

The charge of illegal dismissal was prematurely filed.1âwphi1 The records show that a
month after Hermosa was placed on a temporary "off-detail," she readily filed a complaint
against the petitioners on the presumption that her services were already terminated. Temporary
"off-detail" is not equivalent to dismissal. In security parlance, it means waiting to be posted. It is
a recognized fact that security guards employed in a security agency may be temporarily
sidelined as their assignments primarily depend on the contracts entered into by the agency with
third parties. However, it must be emphasized that such temporary inactivity should continue
only for six months. Otherwise the security agency concerned could be liable for constructive
dismissal under Article 287 (now Article 286) of the Labor Code. We note that Hermosa's "off-
detail" from SMY was due not to petitioners' machination but to a previous request of SMY
which was reiterated by the management on January 29, 1985. Moreover, the defenses raised by
the petitioners, namely, their clients' cost reduction program and their refusal to accept the
complainant's services do not appear to Us as a "scheme to camouflage (Hermosa's) illegal
dismissal . . ."

In the case at bar, We do not find it unusual for clients to resort to a cost-cutting program
in view of the prevailing economic condition and then to manifest their preferences of people
they want to work with in their establishments.
CASE 322

Premiere Development Bank V NLRC

293 SCRA 49

FACTS:

Petitioners claim that there was no illegal dismissal because the severance of employment
was brought about by respondent Labanda's own doing when she filed a civil action for damages
against them. They also contend that her preventive suspension was justified because she was
negligent in the performance of her duty in complete disregard of the Bank's Manual Systems
and Procedures which brought about the loss to the bank and that she could not blame
Bookkeeper Torio for her fault. They further insist that her preventive suspension lasted beyond
the 30-day period prescribed by law because of her refusal to cooperate with them in the
investigation.

Private respondent counters that she should not be blamed for the incident arguing that
her non-performance of the end-of-the-day balancing is justified. She presented the affidavit of
the former OIC-Manager of petitioner's Taytay Branch. 19 The affidavit stated that the procedure
of "On-Us" checks and reconciliation of the end-of-the-day balancing which differ substantially
from the authorized procedure were being implemented without petitioner bank's knowledge and
approval. Petitioner bank, however, said that the OIC-Manager was suspended because of some
irregularities.

ISSUE:

Whether or not the filing of a complaint for damages by respondent Labanda against the
petitioners amounts to abandonment.

HELD:

The filing of a complaint for damages by respondent Labanda against the petitioners do
not amount to abandonment.

Private respondent's preventive suspension is without valid cause since she was outrightly
suspended by petitioner. As of the date of her preventive suspension on March 13, 1986 until the
date when the last investigation was rescheduled on April 23, 1986, more than 30 days had
expired. The NLRC correctly observed that the preventive suspension beyond the maximum
period amounted to constructive dismissal.

Granting arguendo that there was abandonment in this case, it nonetheless cannot be

denied that notice still has to be served upon the employee sought to be dismissed, as the second
sentence of Section 2 of the pertinent implementing rules explicitly requires service thereof at the
employee's last known address. While it is conceded that it is the employer's prerogative to
terminate the services of an employee, especially when there is a just cause therefor, the
requirements of due process cannot be taken lightly. The law does not countenance the arbitrary
exercise of such a power or prerogative when it has the effect of undermining the fundamental
guarantee of security of tenure in favor of the employee.
CASE 323

Flexo Manufacturing V NLRC

135 SCRA 145

FACTS:

Private respondent failed to report for work having been stricken with influenza. Then,
private respondent received thru the mail, filed by petitioner, stating therein that private
respondent was terminated on the ground of abandonment, in that he was absent and reported for
work only on May 10, 1977.c Private respondent opposed petitioner's clearance application by
filing a complaint before DOL and appealed to NLRC. Respondent NLRC issued its decision
reversing the ruling of Labor Arbiter.

Hence, the instant petition for certiorari with preliminary injunction, petitioner
contending that respondent NLRC acted with grave abuse of discretion and/or without
jurisdiction. Petitioner alleged that, that it was never duly served with a copy of the notice of
appeal as required by Section 9, Rule XIII of Book V of the Rules and Regulations
Implementing the Labor Code 

Private respondent opposed petitioner's clearance application by filing a complaint.

ISSUE:

Whether or not the failure of appellant to serve a copy of his appeal upon the appelee will
result in the dismissal of appeal.

HELD:

The failure of appellant to serve a copy of his appeal upon the appelee will not result in
the dismissal of the appeal.

In the case of J.D. Magpayo Customs Brokerage vs. NLRC, 118 SCRA 645 where We
ruled that the appellant's failure to furnish a copy of his appeal is not a jurisdictional defect and
does not justify the dismissal of his appeal. Thus- 

The failure to give a copy of the appeal to the adverse party was a mere formal lapse, an
excusable neglect. Time and again We have acted on petitions to review the decision of the
Court of Appeals even in the absence of proof of service of a copy thereof to the Court of
Appeals, as required by Section I of Rule 45, Rules of Court. We act on the petition and simply
require the petitioner to comply with the Rules.chanroblesvi

In the case at bar, even if petitioner was not able to participate in the proceedings before
respondent NLRC, it could not have been unduly prejudiced because no additional arguments or
evidence were received. In deciding private respondent's appeal, the NLRC relied on the very
same evidence and arguments presented before the labor arbiter which included the position
paper, affidavits and other supporting documents submitted by the petitioner. Private
respondent's appeal did not raise new issues. It was anchored on practically the same grounds
and the issues raised and discussed were likewise the same as those in the proceedings before the
CASE 324

Labor Arbiter and which the petitioner had all the opportunity to refute. In fact, the Labor
Arbiter's findings of fact were adopted by respondent NLRC in its questioned decision, although
the latter drew therefrom a different legal conclusion.

It has been ruled that "there is no denial of due process if the decision is based on
evidence adduced at the hearing or at least contained in the records.

Premiere Development Bank V NLRC

293 SCRA 49

FACTS:

Petitioners claim that there was no illegal dismissal because the severance of employment
was brought about by respondent Labanda's own doing when she filed a civil action for damages
against them. They also contend that her preventive suspension was justified because she was
negligent in the performance of her duty in complete disregard of the Bank's Manual Systems
and Procedures which brought about the loss to the bank and that she could not blame
Bookkeeper Torio for her fault. They further insist that her preventive suspension lasted beyond
the 30-day period prescribed by law because of her refusal to cooperate with them in the
investigation.

Private respondent counters that she should not be blamed for the incident arguing that
her non-performance of the end-of-the-day balancing is justified. She presented the affidavit of
the former OIC-Manager of petitioner's Taytay Branch. 19 The affidavit stated that the procedure
of "On-Us" checks and reconciliation of the end-of-the-day balancing which differ substantially
from the authorized procedure were being implemented without petitioner bank's knowledge and
approval. Petitioner bank, however, said that the OIC-Manager was suspended because of some
irregularities.

ISSUE:

Whether or not the filing of a complaint for damages by respondent Labanda against the
petitioners amounts to abandonment.

HELD:

The filing of a complaint for damages by respondent Labanda against the petitioners do
not amount to abandonment.

Private respondent's preventive suspension is without valid cause since she was outrightly
suspended by petitioner. As of the date of her preventive suspension on March 13, 1986 until the
date when the last investigation was rescheduled on April 23, 1986, more than 30 days had
expired. The NLRC correctly observed that the preventive suspension beyond the maximum
period amounted to constructive dismissal.

Granting arguendo that there was abandonment in this case, it nonetheless cannot be

denied that notice still has to be served upon the employee sought to be dismissed, as the second
sentence of Section 2 of the pertinent implementing rules explicitly requires service thereof at the
employee's last known address. While it is conceded that it is the employer's prerogative to
terminate the services of an employee, especially when there is a just cause therefor, the
requirements of due process cannot be taken lightly. The law does not countenance the arbitrary
CASE 325

exercise of such a power or prerogative when it has the effect of undermining the fundamental
guarantee of security of tenure in favor of the employee.

Philippine Rabbit V NLRC

212 SCRA 578

FACTS:

This petition was filed by petitioner alleging that respondent NLRC in its decision of 20
July 1995 committed grave abuse of discretion in modifying and amending the final and
executory judgment of the Office of the President; and, in enforcing by mere motion the final
judgment of the Office of the President despite the lapse of seven (7) years. Petitioner also
assailed the 20 May 1978 decision of the Office of the President for having been issued with
grave abuse of discretion because it ordered the reinstatement of private respondent despite its
own finding that there was just cause in terminating his employment.

ISSUE:

Whether or not respondent NLRC committed grave abuse of discretion in modifying and
amending the final and executory judment of the Office of the President.

HELD:

The court cannot find any jurisdictional error committed by respondent NLRC.

The decision of 10 May 1978 of the Office of the President, which has long been final
and executory, declared that private respondent was illegally dismissed; hence, he was entitled to
reinstatement and six (6) months back wages. Although the monetary award to private
respondent had been fully satisfied by petitioner, respondent Evangelista had not been reinstated
despite the issuance of a writ of execution to enforce the decision.

Neither can we perceive any grave abuse of discretion in the issuance of the NLRC
decision of 20 July 1995 which ordered petitioner to pay separation pay plus back wages for its
refusal to reinstate the latter, for the period commencing 26 April 1986 when the second alias
writ of execution was issued directing reinstatement, to April 1989, the date when private
respondent manifested his preference for separation pay instead of reinstatement. It must be
emphasized that respondent NLRC, in the enforcement of the final decision of the Office of the
President, had the authority to look into the correctness of the execution of the decision and to
modify or make a recomputation of the monetary award to conform with the decision.

The award of separation pay in lieu of reinstatement is an equitable recourse that has
been sanctioned by this Court in a number of cases. Moreover, the order of reinstatement is
immediately executory. The unjustified refusal of the employer to reinstate an illegally dismissed
employee entitles him to payment of his salaries effective from the time the employer failed to
reinstate him despite the issuance of a writ of execution. Therefore, the payment of back wages
by petitioner to respondent Evangelista for the period he was not reinstated despite the alias writ
CASE 326

of execution up to the time he opted for separation pay in lieu of reinstatement is equitable and
justified under the law.ch

Ramo V Elefeno
106 SCRA 211

FACTS:

On August 2, 1976, after the Leyte Normal School had been converted into the Leyte
State College, Elefaño was asked by the Administrative Assistant of the College "to return to
duty immediately in accordance with the Civil Service Law and Rules" but Elefaño still failed to
return claiming that her leave was approved up to January 31, 1977, but there is no proof of such
approval. What appears on record is Exhibit E, supra, wherein Regional Director Esperat early in
April, 1976, merely recommended approval of Elefaño’s leave without pay for another year
while stating that, "Dr. Elefaño has been advised to return to duty on or before February 1, 1976,
in an indorsement of this office to the Superintendent of Leyte Normal School, dated February
23, 1976." In point of fact the recommendation could not have been approved because of the
unqualified prohibition contained in Sec. 33, Rule XVI of the Civil Service Rules, namely:
"Under no circumstances shall leave without pay be granted for more than one year." chanrobles
virtua

ISSUE:

Whether or not the petitioner is deemed to have abandoned her position by continuing to
work for the National Manpower and Youth Council after February 1, 1976, when her one-year
leave of absence expired.

HELD:

The petitioner is deemed to have abandoned her position.

Section 33, Rule XVI of the Civil Service Rules provides:

"Sec. 33. Under no circumstances shall leave without pay be granted for more than one year. If
an employee who is on leave without pay for any reason fails to return to duty at the expiration
of one year from the effective date of such leave, he shall be considered automatically separated
from the service; Provided, that he shall, within a reasonable time before the expiration of his
one year leave of absence without pay, be notified in writing of the expiration thereof and with a
warning that if he fails to report for duty on said date, he will be dropped from the
service."cralaw virtua1aw library

The one-year leave of absence without pay of Inocencia Elefaño expired on January 31,
1976, and there is no question that she did not return to her position within a reasonable time
thereafter.
CASE 327

In the light of the foregoing, We are not prepared to state that the Board of Trustees of
Leyte State College acted unreasonably and illegally in adopting Resolution No. 18, series of
1976, "dropping Dr. Inocencia Elefaño from the service of the Leyte State College for having
failed to return to duty after the expiration of her one year leave of absence." Much less can We
sustain the judgment of the lower court ordering the Board of Trustees of the Leyte State College
to nullify the appointment of Norma Ricafort and appoint instead Inocencia Elefaño; ordering
Norma Ricafort to vacate her position and relinquish it to Inocencia Elefaño; and ordering the
Board of Trustees to appropriate the back salaries of Inocencia Elefaño because Elefaño has not
shown a clear legal right so as to entitle her to such orders. Even if we assume for the sake of
argument that Elefaño had not abandoned her position she is not entitled to such orders because
she has neither been recommended by the President of the College nor reappointed to the
position of Dean of Graduate Studies by the Board of Trustees.

Sandoval Shipyards, Inc. V Clave

94 SCRA 472

FACTS:

Sergio Sinday alleges that he applied for leave for one month on May 4, 1976 which was
granted and that when he reported for work on June 7, 1976, he was no longer admitted by the
petitioner. The Regional Director and impliedly the Minister of Labor and the public respondent
Presidential Executive Assistant, Jacobo C. Clave, sustained this contention of Sergio Sinday.
However, the finding that Sergio Sinday was granted one month vacation leave on May 4, 1976
is not supported by substantial evidence except by the uncorroborated testimony of private
respondent Sergio Sinday On the contrary, an indubitable document appears of record that on
May 4, 1976, private respondent, Sergio Sinday requested for approval to incur absence from
May 6, 1976 to an indefinite date but this request was disapproved because the private
respondent Sinday could not give any justifiable reason for his application and that his services
were vitally needed. The shipyard manager of the petitioner, David Villono offered to grant the
private respondent Sinday a leave for fifteen (15) days but the latter arrogantly refused the offer.
ary chan

ISSUE:

Whether or not the petitioner may be compelled to reinstate the private respondent,
Sergio Sinday as carpenter. ary

HELD:

The petitioner may not be compelled to reinstate the private respondent, Sergio Sinday.

While as a rule the findings of fact in appeals by certiorari are binding on the Supreme
Court, a finding of fact that is not supported by competent evidence should be disregarded.

In the instant case, the finding that the private respondent, Sergio Sinday was granted a
vacation leave of one month from May 4, 1976 is not only not supported by substantial evidence
except the lone testimony of private respondent Sinday but is contradicted by indubitable
evidence consisting of the application of said private respondent Sergio Sinday for an indefinite
vacation leave of absence from May 6, 1976. The biased testimony of the private respondent
Sinday cannot prevail over his application for indefinite leave of absence which appears on its
face to have been disapproved.
CASE 328

Under the facts of record, the petitioner was fully justified in refusing to reinstate Sergio
Sinday after he had abandoned his work to look for a better job.

Icawat V NLRC
334 SCRA 75

FACTS:

Private respondent, after his vacation leave, immediately reported back for work but was
not allowed by the petitioners on the ground that he was already replaced by regular drivers.
After he was notified of his termination, private respondent lost no time in filing the case for
illegal dismissal against petitioners.

ISSUE:

Whether or not private respondent abandoned his work.

HELD:

The private respondent cannot be said to have abandoned his work or had no intention of
going back to work.

To constitute abandonment, two elements must concur: (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. Mere absence is not sufficient. To prove abandonment, the
employer must show that the employee deliberately and unjustifiably refused to resume his
employment without any intention of returning. Courts have consistently ruled that a charge of
abandonment is totally inconsistent with the immediate filing of a complaint for illegal dismissal.

But even assuming that private respondent abandoned his work, petitioners should have
served him with a notice of termination on the ground of abandonment. Section 2, Rule XVI
Book V, Rules and Regulation Implementing the Labor Code provides that any employer who
seeks to dismiss a worker shall furnish him a written notice stating the particular acts or
ormission constituting the grounds for his dismissal. In cases of abandonment of work, the notice
shall be served at the worker’s last known address.

Hence, before termination of employment can be legally effected, the employer must
furnish the worker with two (2) written notices, i.e. a notice which apprises the employee of the
particular acts or omissions for which his dismissal is sought, and the subsequent notice which
informs the employee of the employer’s decision to dismiss him.
CASE 329

Jo V NLRC
324 SCRA 437

FACTS:

Petitioners contend that public respondent gravely erred in declaring that private
respondent was their employee. They claim that private respondent was their "partner in trade"
whose compensation was based on a sharing arrangement per haircut or shaving job done. They
argue that private respondent's task as caretaker could be considered an employment because the
chores are very minimal.

ISSUE/S:

(1) Whether or not there exists an employee-employee relationship between petitioners

and private respondent.
(2) Whether or not private respondent was dismissed from or had abandoned his
employment.

HELD:

(1) There is an employee-employer relationship between petitioners and private

respondent.

In determining the existence of an employer-employee relationship, the following

elements are considered: (1) the selection and engagement of the workers; (2) power of
dismissal; (3) the payment of wages by whatever means; and (4) the power to control the
worker's conduct, with the latter assuming primacy in the overall consideration. The power of
control refers to the existence of the power and not necessarily to the actual exercise thereof. It is
not essential for the employer to actually supervise the performance of duties of the employee; it
is enough that the employer has the right to wield that power.

Absent a clear showing that petitioners and private respondent had intended to pursue a
relationship of industrial partnership, we entertain no doubt that private respondent was
employed by petitioners as caretaker-barber. Initially, petitioners, as new owners of the
barbershop, hired private respondent as barber by absorbing the latter in their employ.
Undoubtedly, the services performed by private respondent as barber is related to, and in the
pursuit of the principal business activity of petitioners

(2) The private respondent had abandoned his employment.

CASE 330

To constitute abandonment, there must be concurrence of the intention to abandon and

some overt acts from which it may be inferred that the employee concerned has no more interest
in working.8 In other words, there must be a clear, deliberate and unjustified refusal to resume
employment and a clear intention to sever the employer-employee relationship on the part of the
employee.

In the case at bar, the labor arbiter was convinced that private respondent was not
dismissed but left his work on his own volition because he could no longer bear the incessant
squabbles with his co-worker. Nevertheless, public respondent did not give credence to
petitioners' claim that private respondent abandoned his job. On this score, public respondent
gravely erred as hereunder discussed.

Labor V NLRC
248 SCRA 183

FACTS:

The petitioners were employees of Gold City at its Eye Ball Disco located at Tagum,
Davao. In a complaint dated 19 August 1991 filed with the Regional Office No. XI of the
Department of Labor and Employment (DOLE) in Davao City, the petitioners charged Gold City
with violations of labor standards laws, specifically for underpayment of the minimum wage
non-payment of 13th month pay for 1991, premiums for holidays and rest days, holiday pay
service incentive leave pay, night shift differential and allowance pursuant to RTWPB-XI-O2. 

On 26 August 1991, the petitioners also filed with the NLRC Regional Arbitration Branch No.
XI in Davao City a complaint against Gold City and its President, herein private respondent
Rudy Uy, for illegal dismissal and for the same violations of labor standards laws earlier
complained of

ISSUE:

Whether or not Gold City is guilty of labor standards violations.

HELD:

The Gold City is guilty of labor standards violations.

The Labor Arbiter adopted the findings of the Labor Examiner that Gold City committed
violations of the labor standards laws. Gold City did not contest nor protest the findings when it
was presented with a copy of the report made by the Labor Examiner. 27 It raised its defenses
only in the position paper it submitted to the Labor Arbiter. The unexplained delay in presenting
pertinent documents to support its defenses strengthens the assertion of the petitioners that the
pay slips presented by Gold City, which the latter claims show proper deductions that the
petitioners knew of, were falsified, and that the deductions were added only after these had
already been signed by them.

Recovery of the petitioners' money claims for the violations of labor standard laws are
not barred by the alleged compromise agreements signed by the petitioners. Contrary to the
NLRC's opinion, Veloso did not overturn the rule laid down in Fuentes The said cases are not
founded on similar or identical facts, thus accounting for the difference in the rulings made
therein
CASE 331

Furthermore, like in Pampanga, the "compromise settlements" with the petitioners were
not executed with the assistance of the Bureau of Labor Relations or the Regional Office of the
DOLE pursuant to Article 227 of the Labor Code. The records do not disclose that the assistance
of such office was ever solicited. What Gold City did was merely to file with the Regional Office
of the DOLE in Davao City the vouchers purporting to show payments of the alleged
considerations of the "compromise settlements." Such filing can by no stretch of the imagination
be considered as the requisite assistance in the execution of compromise settlements.

PNCC V NLRC
280 SCRA 109

FACTS:

The private respondent was employed by PNCC as an oiler from November 4, 1973 until
he was terminated on April 20, 1986, on the ground of completion of the project to which he was
assigned. 

The private respondent, in his complaint for illegal dismissal, alleged that he was
discharged not for cause, but because the newly designated supervisor, Reynaldo Bonifacio,
wanted to put in his own man.

ISSUE:

Whether or not the private respondent was a member of the work pool, therefore,
considered a regular employee (Art. 280, Labor Code), or a project employee, whose
employment was co-terminus with the projects to which he was assigned.

HELD:

The private respondent was a member of the work pool and that he was illegally
dismissed from his job.

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." (Sec. 280, Labor Code; Sandoval
Shipping Inc. vs. NLRC, 136 SCRA 674.) 

In finding that Porciuncula was a regular employee, the Labor Arbiter noted that it was
the petitioner's practice to rehire him after the completion of every project and this re-hiring
continued throughout Porciuncula's 13 years of employment in the company. 

The Labor Arbiter also observed that the petitioner never reported the completion of its
projects and the termination of the employees (like Porciuncula) in its finished projects, to the
nearest Public Employment Office as required by Policy Instruction No. 20 of the Secretary of
CASE 332

Labor. In the case of Ochoco vs. NLRC, 120 SCRA 774, the failure of the employer to report to
the nearest employment office the termination of the workers everytime it completed a project
was considered by this Court as proof that they were not project employees.

Philippine Wireless Inc. V. NLRC

Gr No. 112963, Jul 20, 1999

FACTS:
On 1976, petitioner Philippine Wireless Inc. hired respondent Doldwin Lucila as
operator/encoder. On 1979, he was promoted as Head Technical and Maintenance Department of
the Engineering Department. On 1987, he was promoted as Supervisor, Technical Services of the
same department. On 1990, he was again promoted as Superintendent, Project Management.
December 28, 1990, he tendered his resignation. On 1991, he filed with the Arbitration Branch,
National Labor Relations Commission, a complaint for illegal/constructive dismissal, alleging
that he was constructively dismissed inasmuch as his promotion from Supervisor, Technical
Services to Superintendent, Project Management is demeaning, illusory and humiliating. The
basis of his allegation was the fact that he was not given any secretary, assistant or subordinates.
The Labor Arbiter rendered a decision declaring that respondent actually resigned and dismissed
the complaint for lack of merit. The NLRC reversed the findings of the labor arbiter, and ordered
respondent’s reinstatement with back wages or separation.

ISSUE: Whether or not petitioner was constructively dismissed from the petitioner’s
employment.

HELD:
Petitioner was not constructively dismissed from employment.
Constructive dismissal is "an involuntary resignation resorted to when continued employment is
rendered impossible, unreasonable or unlikely; when there is a demotion in rank and/or a
diminution in pay; or when a clear discrimination, insensibility or disdain by an employer
becomes unbearable to the employee." In this particular case, respondent voluntarily resigned
from his employment. He was not pressured into resigning.
Voluntary resignation is the 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."
Respondent considered his transfer/promotion as a demotion due to the fact that he had no
support staff to assist him in his work and whom he could supervise. There is no demotion where
there is no reduction in position, rank or salary as a result of such transfer. In fact, respondent
CASE 333

Goldwin Lucila was promoted three (3) times from the time he was hired until his resignation
from work.

Azcor Manufacturing Inc. v. NLRC

G.R. No. 117963 February 11, 1999

FACTS:
Candido Capulso filed with the Labor Arbiter a complaint for constructive illegal dismissal and
illegal deduction of P50.00 per day for the period April to September 1989. Petitioners Azcor
Manufacturing, Inc. (AZCOR) and Arturo Zuluaga who were respondents before the Labor
Arbiter (Filipinas Paso was not yet a party then in that case) moved to dismiss the complaint on
the ground that there was no employer-employee relationship between AZCOR and herein
respondent Capulso; that the latter became an employee of Filipinas Paso effective 1 March 1990
but voluntarily resigned therefrom a year after. Capulso later amended his complaint by
impleading Filipinas Paso as additional respondent before the Labor Arbiter.
On 14 January 1992, Labor Arbiter Felipe T. Garduque II denied the motion to dismiss holding
that the allegation of lack of employer-employee relationship between Capulso and AZCOR was
not clearly established. Thereafter, the Labor Arbiter ordered that both parties conduct hearings
for the presentation of evidence.

ISSUE: Whether or not the NLRC committed grave abuse of discretion in declaring that private
respondent.

HELD:
As a rule, the original and exclusive jurisdiction to review a decision or resolution of respondent
NLRC in a petition for certiorari under Rule 65 of the Rules of Court does not include a
correction of its evaluation of the evidence but is confined to issues of jurisdiction or grave abuse
of discretion. However, considering that private respondent died during the pendency of the case
before this Court, reinstatement is no longer feasible. In lieu thereof, separation pay shall be
awarded. With respect to the amount of back wages, it shall be computed from the time of
private respondent’s illegal dismissal up to the time of his death.
CASE 334

John Clements Consultants, Inc. v. NLRC

157 SCRA 635

FACTS:
Three months after Flores’ resignation, he filed an illegal dismissal case. The Labor Arbiter
dismised it for lack of merit, however, declared a sum due to him representing his bonus. Fifteen
days after receiving the Labor Arbiter’s decision, he then appealed to the NLRC and by a
majority vote, promulgated judgment reversing the Labor Arbiter’s decision, ordering the
reinstatement of Flores to his former position and the payment to him of fixed back wages for
one (1) year without qualification or deduction from earnings elsewhere during the period of his
dismissal, and affiring the Arbiter’s award of PHP 6,671.24

ISSUE: Whether or not NLRC has jurisdiction to take cognizance of an appeal from the Labor
Arbiter’s decision considering the reglementary period of ten (10) calendar days has lapsed.

HELD:
No, Flores’ appeal was indeed filed out of time: and the facts clearly establish that Flores had not
been illegally dismissed but had in truth voluntarily resigned. In taking cognizance of Flores’
appeal, notwithstanding the recorded actuality that it was filed 15 days after notice of the
judgment sought to be appealed and therefore, beyond the 10-day period of appeal set by law, the
NLRC had acted without jurisdiction. No law provides for an appeal from decisions of the
National Labor Relations Commission; hence, there can be no review and reversal on appeal by
higher authority of its factual or legal conclusions. When, however, it decides a case without or
in excess of its jurisdiction, or with grave abuse of discretion, the party thereby adversely
affected may obtain a review and nullification of that decision by this Court through the
extraordinary writ of certiorari. Since, in this case, it appears that the Commission has indeed
acted without jurisdiction and with grave abuse of discretion in taking cognizance of a belated
appeal sought to be taken from a decision of a Labor Arbiter and thereafter reversing it, the writ
of certiorari will issue to undo those acts, and do justice to the aggrieved party.
CASE 335

Philippines Today v. NLRC

267 SCRA 202

FACTS:
Petitioner Philippines Today, Inc., is the owner of the Philippine Star. Respondent Felix R.
Alegre, Jr. was employed by PTI in July 1986 as a senior investigative reporter of the Philippine
Star. On October 20, 1988, Respondent Alegre filed a request for a thirty-day leave of absence
effective on the same date, citing the advice of his personal physician for him to undergo further
medical consultations abroad. October 24, 1988, he wrote a "Memorandum for File" addressed to
Petitioner which contained foul words which more or less he wanted to resign. December 6,
1988, Respondent Alegre received from Petitioner Belmonte a letter stating that his resignation
was allowed. The following day, Respondent Alegre wrote Petitioner Belmonte expressing
surprise over the acceptance of his "resignation” letter. He accused petitioners of illegal
dismissal as can be perceived allegedly from the discrimination against him in promotions,
benefits and the ploy to oust him by considering his memorandum as a resignation. The
acceptance of Alegre's resignation was a collective decision of the board of directors since
"nobody in his right mind would write a memorandum of the sort he wrote and still not resign.
To them, the memorandum was tantamount to a resignation even if Mr. Alegre did not say so in
so much word." LA dismissed said complaint in his decision because nothing therein mentions
about resigning from his position as Assistant to the Publisher. A perusal of the letter in whole
show that the intention of the complainant was to resign from his post. Complainant's subsequent
overt acts particularly his failure to report to his job after the expiration of his leave of absence,
his being gainfully employed with the Office of Senator Laurel and his act of clearing and
removing his personal files, things and belongings from his desk prior to his knowledge or
receipt of the letter accepting his resignation clearly indicates that complainant was not
terminated from his job but rather he resigned from his job.

ISSUE: Whether the Memorandum for File of Respondent Alegre addressed to Petitioner
Belmonte constitutes a letter of resignation.
CASE 336

HELD: Yes, contemporaneous and subsequent actions of private respondent, we hold that said
memorandum constituted a letter of resignation. Incendiary words and sarcastic remarks negate
alleged desire to improve relations. The incendiary words employed denote a clear intent to end
the writers association of trust and confidence with his superiors and employer. This intent
becomes even more manifest when viewed in light of attendant acts of Alegre: His prolonged
leave of absence, his clearing of his own desk of personal belongings, his failure to report back
to work after the expiration of his approved leave, his verbal expression of his intent to resign,
and most notably, his assumption of a higher paying job in a political office which was
incompatible with his work at the Star.

St. Michael Academy v. NLRC

292 SCRA 478

FACTS:
Petitioner St. Michael Academy is an educational institution located in Catarman, Northern
Samar. Petitioner Sister Patricia Aguilar is its principal. Private respondents, Hermie G.
Bolosiño, Josephine A. Delorino, Ceferina Daclag, Imelda P. Aleria, Bernardita S. Oserraos,
Ferliza B. Golo and Ederlinda M. Rebadulla, are former teachers of petitioner school.
The instant case started when a complaint for payment of terminal pay was filed by Bolosiño and
Delorino against the petitioners on July 9, 1992. On August 3, 1992, Bolosiño and Delorino filed
a new complaint for separation pay. The case was raffled off to Labor Arbiter Gabino A.
Velasquez, Jr. On August 21, 1992, petitioners submitted their position paper where they
disputed the right of the complainants to separation pay on the ground that they were not illegally
dismissed. They presented the resignation letters. On March 5, 1993, petitioners received an
Order, dated February 4, 1993, from Labor Arbiter Velasquez informing the parties that the case
was already submitted for decision pursuant to Section 5, Rule V of the NLRC Rules. On March
8, 1993, petitioners received the sworn statements/affidavits of Bolosiño, Delorino, Daclag,
Oserraos, Aleria, Rebadulla and Golo which specified their monetary claims. Some of the money
claims dated back to 1981. On March 31, 1993, petitioners filed a reply to the complainants'
specified claims by way of an affidavit executed by Sister Escolastica Batungbakal, treasurer of
petitioner school.

ISSUE: The NLRC gravely abused its discretion in finding and concluding that private
respondents were underpaid applicable wage orders.

HELD:
Lastly, petitioners contend that private respondents violated procedural rules when they
submitted ahead of their individual complaints and unverified position paper containing
CASE 337

monetary claims which were not previously included in their complaint. The Solicitor General,
in refutation, avers that technically should not be allowed to stand in the way of equitably and
completely resolving the rights and obligations of the parties. He asseverates that petitioners
have not clearly shown that they were deprived of due process of law.

Article 221 of the Labor Code provides that in any proceeding before the NLRC or any of the
Labor Arbiters, the rules of evidence prevailing in courts of law or equity shall not be controlling
and it is the spirit and intention of the Labor Code that the NLRC and the Labor Arbiters shall
use every and all reasonable means to ascertain the facts in each case speedily and objectively
and without regard to technicalities of law or procedure.

Domondon v. NLRC
471 SCRA 559

FACTS:
On November 20, 1998, petitioner Roberto T. Domondon filed a complaint before the NLRC
Quezon City against private respondent VMPI claiming illegal dismissal and prayed for
reinstatement, payment of full back wages inclusive of allowances, 14th month pay, sick and
vacation leaves, share in the profits, moral and exemplary damages and attorney’s fees.
Petitioner alleged that private respondent VMPI hired him as Materials Manager and that things
worked out well for him in the beginning until he was transferred to China and was replaced by
private respondent Have, a Dutch national. According to petitioner, private respondent requested
his courtesy resignation. Petitioner further alleged that private respondent Have offered financial
assistance if petitioner would leave peacefully but the offer must be accepted immediately or it
would be withdrawn. Thus, petitioner signed a "ready-made" resignation letter without
deliberation and evaluation of the consequences. On the other hand, private respondents stated
that petitioner informed them about his intention to resign and requested a "soft landing"
financial support. Private respondents granted the request. Subsequently, however, petitioner
proposed the transfer of ownership of the car assigned to him in lieu of the financial assistance
from the company. Since company policy prohibits disposition of assets without valuable
consideration, the parties agreed that petitioner shall pay for the car with "soft landing" financial
assistance from private respondent VMPI. The Labor Arbiter gave the petitioner the option to re-
convey to respondents the car sold to him and thus retain full credit of the "soft landing"
assistance, or retain ownership of the car by paying respondents the purchase price minus any
amount due him corresponding to his accrued benefits that has been applied by respondents as
partial payment for the car. Petitioner then questions the jurisdiction of the Labor Arbiter to
resolve the issue of the transfer of car-ownership by private respondents. He contends that it is
the regular courts that have jurisdiction.
CASE 338

ISSUE: Whether the Labor Arbiter has the jurisdiction to hear and decide the question on the tra
nsfer of ownership of the car assigned to petitioner.

HELD:
Yes. The jurisdiction of Labor Arbiters is provided under Article 217(a) of the Labor Code, as
amended, provides (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 … and cases arising from any violation of Article 264 of this Code, including
questions involving the legality of strikes and lockouts.

Willi Hahn Enterprises v. Maghuyop

447 SCRA 349

FACTS:
Sometime in 1982, respondent Lilia Maghuyop was hired by petitioner Willi Hahn as nanny of
one of his sons. In 1986, she was employed as salesclerk of Willi Hahn Enterprises (Ali Mall,
Cubao branch), an authorized dealer of sporting goods, guns and ammunitions. In 1996, she was
promoted as store manager of its branch in Shoe Mart (SM) Cebu, with a monthly salary of
P8,240.00. On February 25, 1998, petitioner conducted an Inventory Report and discovered that
its SM Cebu branch incurred stock shortages and non-remittances in the total amount of
P27,727.39. In the latter part of July 1998, petitioner decided to terminate the services of
respondent, however, before he could do so, the latter tendered her resignation. Believing the
good faith of respondent in resigning, petitioner decided not to file charges against her anymore.
On the other hand, respondent claimed that on July 22, 1998, while she was in SM Cebu branch,
she was approached by Tony Abu and Cesar Araneta who ordered her to close shop and to write
a letter to Mr. and Mrs. Hahn thanking them for the years she had been in their employ and for
all the benefits she received from them. She refused to obey the order, but Tony Abu typed the
letter of resignation and asked her to sign the same. Respondent admitted that she read and
affixed her signature on the letter. Thereafter, she was allegedly told to pack her belongings and
to vacate the housing unit provided by the company for her family.

ISSUE: Whether respondent voluntarily resigned as manager of the SM Cebu branch

HELD:
Yes, the resignation is voluntary in nature. The failure of petitioner to pursue the termination
proceedings against respondent and to make her pay for the shortage incurred did not cast doubt
on the voluntary nature of her resignation. A decision to give a graceful exit to an employee
rather than to file an action for redress is perfectly within the discretion of an employer. It is not
CASE 339

uncommon that an employee is permitted to resign to save face after the exposure of her
malfeasance. Under the circumstances, the failure of petitioner to file action against the
respondent should be considered as an act of compassion for one who used to be a trusted
employee and a close member of the household.

Intertrod Maritime Inc. and Troodos Shipping Co. v. NLRC

G.R. No. 81087 June 19, 1991

FACTS:
On 10 May 1982, private respondent Ernesto de la Cruz signed a shipboard employment contract
with petitioner Troodos Shipping Company as principal and petitioner Intertrod Maritime, Inc.,
as agent to serve as Third Engineer on board the M/T "BREEDEN" for a period of twelve (12)
months with a basic monthly salary of US$950.00.
Private respondent eventually boarded a sister vessel, M/T "AFAMIS" and proceeded to work as
the vessel's Third Engineer under the same terms and conditions of his employment contract
previously referred to. On 26 August 1982, while the ship (M/T "Afamis") was at Port Pylos,
Greece, private respondent requested for relief, due to "personal reason." The Master of the ship
approved his request but informed private respondent that repatriation expenses were for his
account and that he had to give thirty (30) days notice in view of the Clause 5 of the employment
contract so that a replacement for him (private respondent) could be arranged.

ISSUE: Whether or not complainant's termination is illegal.

HELD:
No. Resignation, once accepted and being the sole act of the employee, may not be withdrawn
without the consent of the employer. In the instant case, the Master had already accepted the
resignation and although, the private respondent was being required to serve the thirty (30) days
notice provided in the contract, his resignation was already approved. Private respondent cannot
claim that his resignation ceased to be effective because he was not immediately discharged in
Port Pylos, Greece, for he could no longer unilaterally withdraw such resignation. When he later
signified his intention of continuing his work, it was already up to the petitioners to accept his
withdrawal of his resignation. The mere fact that they did not accept such withdrawal did not
constitute illegal dismissal for acceptance of the withdrawal of the resignation was their
CASE 340

(petitioners') sole prerogative. 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, as
in this case, 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.

Phimco Industries v. NLRC

273 SCRA 286

FACTS:
The records show that during his years of service, Carpio had an excellent employment record.
He was a hardworking, efficient and effective worker. He was awarded various recognitions,
e.g., a certificate of recognition for perfect attendance in 1988 and service awards for dedicated
and valued services to the company from 1983 to 1988. Carpio still reported for work even after
tendering his letter of resignation up to the time the same was to take effect; in the meantime
however no action was taken by petitioner with respect to his letter of resignation. It was only on
4 September 1991, in a letter dated 3 September 1991 from Francis Ferdinand C. Cinco, Human
Resource Manager, that Carpio was required to explain within seven (7) days the reason for his
neglect to serve an advance written notice and his failure to seek approval from his department
head for a shorter notification period. At that time, he had already left for the United States. As
such, he petitioned through his wife for additional time to prepare his answer. In a letter dated 12
September 1991, which was received by PHIMCO on 26 October 1991, Carpio clarified the
reason for his resignation, stating that he had mentioned to Mr. Lut Lopez his plans of resigning
to seek better opportunities in the United States. He also requested that he be granted his
separation pay.

ISSUE: Whether or not Carpio is entitled to a Separation Pay.

HELD:
The claim of Carpio for separation pay, inasmuch as we find his dismissal unjustified,
necessarily some form of separation benefits is forthcoming. In affirming the award of separation
pay to Carpio, no doubt the NLRC invoked Art. 283 of the Labor Code which provides that
separation pay shall be equivalent to one (1) month pay, or at least one-half (1/2) month pay for
CASE 341

every year of service, whichever is higher, and a fraction of at least six (6) months considered as
one (1) whole year. But severance pay under Art. 283 only refers to termination of employment
due to retrenchment and cessation of operation not due to serious business losses or financial
reverses. It does not refer to separation by reason of voluntary resignation. 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
practice or policy of the employer.[14] Hence, in granting separation benefits to Carpio, we
follow the established company policy which provides for forty percent (40%) of one (1) month
basic compensation for every year of service.[15] Under the circumstances, the award of
separation pay to Carpio must be reduced.

Shie Jie Corp./Seastar Ex-im Corp. v. National Federation of Labor

G.R. NO. 153148 July 15, 2005

FACTS:
Respondents, in their complaint, alleged that they were employed as fish processors by
petitioners. On July 20, 1998, Sammy Yang and Michael Yang, petitioners, confronted them
about their union activities. Immediately, they were ordered to go home. The next day,
petitioners suspended them for one week effective July 22 to 28, 1998. Upon their return, they
were served with a notice of petitioners’ memorandum terminating their services for
abandonment of work.
Petitioners, in their answer, denied respondents’ allegations. They claimed that on July 20, 1998,
about 2:45 o’clock in the afternoon, 13 rank-and-file employees staged a walkout and abandoned
their work. Among them were respondents Wilfredo Toribio, Nida Toribio, Yolanda Lorenzo,
Sorraya Amping, Vivian Mendoza, Merylene Delos Reyes, Arnold Francisco, and Manuel
Francisco. As a consequence, petitioners’ business operations were interrupted and paralyzed,
prompting them to issue memorandum-suspending respondents for one week or from July 22 to
28, 1998. Instead, respondents Ernesto Etrata, Sorraya Amping, Yasher Taning, Yolanda
Lorenzo, Merylene Delos Reyes, and Wilfredo Toribio submitted their resignation letters and
quitclaims.

ISSUE: Whether or not the Court of Appeals erred in holding that petitioners failed to prove by
substantial evidence that respondents voluntarily resigned and/or abandoned their work.

HELD:
CASE 342

Voluntary resignation is defined as the act of an employee who finds himself in a situation in
which he believes that personal reasons cannot be sacrificed in favor of the exigency of the
service. Thus, he has no other choice but to disassociate himself from his employment.
Acceptance of a resignation tendered by an employee is necessary to make the resignation
effective. No such acceptance, however, was shown in the instant case.

Philippines Today v. NLRC

267 SCRA 202

FACTS:
Private Respondent Felix R. Alegre, Jr. was employed by PTI as a senior investigative reporter
of the Philippine Star. He later became chief investigative writer and then assistant to the
publisher. On October 20, 1988, Respondent Alegre filed a request for a thirty-day leave
of absence effective on the same date, citing the advice of his personal physician for him to
undergo further medical consultations abroad. Four days later, he wrote a "Memorandum for File
"addressed to Petitioner Betty Go-Belmonte with copies furnished to members of the board of
directors of PTI, December 6, 1988, Respondent Alegre received from Petitioner Belmonte a
letter, informing the former that the Board has accepted his resignation. The following day,
Respondent Alegre wrote Petitioner Belmonte expressing surprise over the acceptance of his
"resignation", since he did not resign. Unheeded, Respondent Alegre filed a complaint for illegal
dismissal and damages against herein petitioners.

ISSUE: Whether or not the Memorandum for file constitutes voluntary resignation.

HELD:
The SC held that said memorandum juridically constituted a letter of resignation. Alegre's choice
of words and way of expression betray his allegation that the memorandum was simply an
"opportunity to open the eyes of Belmonte to the work environment in petitioners' newspaper
with the end in view of persuading her to take a hand at improving said environment." Apprising
CASE 343

his employer of his frustrations in his job and differences with his immediate superior is certainly
not done in an abrasive, offensive and disrespectful manner. At the very least, civil attitude,
according due deference to one's superiors, is still observed, especially among high-ranking
management officers. The Court takes judicial notice of the Filipino values of “pakikisama” and
“paggalang” which are not only prevalent among members of a family and community but
within organizations as well, including work sites. No matter how the employee dislikes his
employer professionally, and even if he is in a confrontational disposition, he cannot afford to be
disrespectful and dare to talk with an unguarded tongue and/or with a baleful pen. Here,
respondent Alegre was anything but respectful and polite. His memorandum is too affront,
combative and confrontational. It certainly causes resentment, even when read by an objective
reader. Such strongly worded letter constituted an act of the officers of the company. Further, the
actions of respondent, such as clearing his work desk of personal belongings, not reporting back
to work after his leave, and his immediate employment with another employer, confirm his
intention to terminate his employment with petitioner.

Indophil Acrylic v. NLRC

226 SCRA 723

FACTS:
In private respondent's position paper, he alleged that he was employed as Cadet Engineer by
petitioner, a supervisory position, on February 14, 1989. On September 26, 1989, he was
prevented by the company guard from entering the premises, on the ground that he has resigned.
Thus, on October 4, 1989, he filed a complaint for illegal dismissal against petitioner and also for
non-payment of salary from September 10, 1989 up to September 25, 1989, underpayment of
salary from September 1, 1989 up to September 15, 1989, and award of moral and exemplary
damages. Petitioner, however, contradicts the allegations of private respondent with respect to
the circumstances which led to the severance of his employment. According to petitioner, private
respondent submitted his letter of resignation on September 14, 1989, which it accepted. On
September 15, 1989, private respondent, by means of false pretenses, retrieved his letter of
resignation from the office secretary and from then on, no longer reported for work. In view of
said failure by private respondent to report for work, the personnel manager of petitioner sent
him a letter dated October 2, 1989, requiring him to report and explain his unauthorized absences
within three (3) days upon receipt thereof. Instead of submitting a reply thereto, private
respondent filed the present complaint.

ISSUE: Was there a dismissal in this case?

HELD:
CASE 344

There was no dismissal. Clearly, petitioner had disregarded private respondent's previous
resignation and still considers him its employee. It follows, that at the time private respondent
filed his complaint for illegal dismissal before the Labor Arbiter, on October 4, 1989 petitioner
has not dismissed him. There being no dismissal of private respondent by petitioner to speak of,
the status quo between them should be maintained as a matter of course. But there is no denying
that their relationship must have been ruptured. Taking into account the misconception of private
respondent that he was dismissed and the October 2, 1989 letter of petitioner, the parties could
have easily settled their controversy at the inception of the proceedings before the Labor Arbiter.
This they failed to do. Thus, in lieu of reinstatement, petitioner is ordered to grant separation pay
to private respondent. The award of backwages is deleted because private respondent is not
entitled thereto. Backwages in general are granted on grounds of equity for earnings which a
worker or employee has lost due to his illegal dismissal.

HINATUAN MINING CORPORATION V. NLRC

268 SCRA 622

FACTS:

The private respondent was employed by petitioner on July 20, 1981. She rose from the
ranks to become the company’s chief chemist. On January 25, 1993, a year after her training,
private respondent tendered her resignation effective February 15, 1993.
On January 25, 1993, a year after her training, private respondent tendered her
resignation effective February 15, 1993. As reason therefor, she declared that "the need to be
with my family always compel me to take this action."
Petitioner reminded private respondent that she had to stay with the company for three (3)
more years in exchange for the expenses it incurred for her training in Japan. Private respondent
was unmoved. She proceeded with her resignation and asked for separation pay. Petitioner
denied her request and instead offered to give her financial assistance in the amount of
P20,000.00.
Private respondent thus filed a complaint with the labor arbiter claiming separation pay
and damages against petitioner. She alleged that pursuant to the existing collective bargaining
agreement (CBA) in the company, she could have availed of the optional retirement plan
considering her eleven and a half (11½) years of continuous service, but she chose to resign since
she would get a higher compensation in the form of separation pay. She cited the cases of her
former co-employees, Marcial P. Lor and Rizalino Alcantara, who were both given separation
pay by petitioner despite their voluntary resignation.

ISSUE: Whether or not the voluntary resigning employee is entitled to separation pay
under the Labor Code of the Philippines.
CASE 345

HELD:
It is well to note that there is no provision in the Labor Code which grants separation pay to
voluntarily resigning employees. Separation pay may be awarded only in cases when the
termination of employment is due to: (a) installation of labor saving devices, (b) redundancy, (c)
retrenchment, (d) closing or cessation of business operations, 5 (e) disease of an employee and
his continued employment is prejudicial to himself or his co-employees, 6 or (f) when an
employee is illegally dismissed but reinstatement is no longer feasible. 7 In fact, the rule is that
an employee who voluntarily resigns from employment is not entitled to separation pay, 8 except
when it is stipulated in the employment contract or CBA, or it is sanctioned by established
employer practice or policy.
In the case at bar, it has been shown beyond doubt that there is an established employer
practice of awarding separation pay to resigning employees. Private respondent is similarly
situated as Alcantara who was also a managerial employee of petitioner company and a non-
union member when he voluntarily resigned from the service. Alcantara was awarded separation
pay by the Labor Arbiter (which decision was affirmed by the NLRC) after finding that the
previous resigning officers of petitioner company (namely, Administrative Officer Colonel
Acuba, Asst. Mine Accountant Mr. Garrido, and Resident Mine Manager Engr. Rogelio Bayutas)
were given separation pay. As correctly ruled by the NLRC, to hold that private respondent is not
entitled to separation pay would unduly discriminate against her.

PANTRANCO NORTH EXPRESS V. NLRC

259 SCRA 161

FACTS:
Private respondent, Ayento, was an employee of petitioner from May 5, 1958. He started as a
filing clerk and promoted to Head Registration Section on April 1, 1982. Private respondents
position as Head of the Registration Section had a Salary Grade of 11-R-5 with a basic salary of
P1,320.00. Based on his Salary Grade of 11, private respondents ranking was that of a Technical
Assistant. With the company’s reorganization, positions were reclassified and
restructured. Private respondent’s position was abolished. Consequently, he was appointed as
Registration Assistant with a Salary Grade of 9-R-2. The basic salary was increased from
P1,320.00 to P1,855.00. As a Registration Assistant, he actually was relieved of his supervisory
function, no longer had any field work, nor entitled to overtime pay averaging from P700.00 to
P800.00. His representation expenses and discretionary funds of P1,000.00 were also
cancelled. He received instead a fixed amelioration allowance of P350.00.
On January 16, 1990, private respondent filed a Complaint against petitioner for unfair
labor practice. It specifically alleged demotion of position and diminution of salary and
benefits. Respondent company, on the other hand, argued that there was no demotion but a job-
reclassification where petitioner’s position was abolished due to the company’s financial
problems.
Petitioner further states that the Labor Arbiter found no evidence to show that there was
malice in abolishing private respondent’s old position. It also notes why the private respondent
only raised the question on the propriety of the reorganization in 1990 when the actual
reorganization was way back in April of 1987. Petitioner stresses that there was no demotion;
that reappointment of private respondent was in fact an accommodation from petitioner
inasmuch as with the abolition of private respondents position for manpower and cost-cutting
CASE 346

purposes, his services could have justifiably been terminated; and that in a reorganization,
retrenchments are allowed for all unnecessary positions. In fact, private respondent’s basic
monthly salary was even increased.

ISSUE:
Whether or not there is  right or prerogative of management to abolish a position no longer
necessary as a result of a valid reorganization.

HELD:

Yes, It is the employer’s prerogative, based on its assessment and perception of its employee’s
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.
Private respondent’s contentions that his previous benefits were stripped upon his
reappointment are without merit. Plainly, when an office or a position is abolished, all benefits
accompanying the position also are removed. Thus, private respondent cannot now complain that
he no longer receives the entitlements or allowances of the abolished position.
Upon review of the records we have come to the conclusion that the reorganization and the
abolition of private respondents position was not in bad faith. Further we find no merit regarding
private respondent’s contention that he was demoted because his Salary Grade went down 2
notches from 11 to 9. The elimination of 4 levels in the Salary Grade Scheme was in line with
the petitioners cost-cutting and reorganization.

PROGRESSIVE DEVELOPMENT CORPORATION V. NLRC

344 SCRA 512

FACTS:

Progressive Development Corporation (PDC) is a corporation organized and existing under the
laws of the Philippines and its co-petitioners Judy A. Roxas and Dante P. Verayo are its Senior
Vice President and former Manager of its Human Resources Division, respectively.

In 1980 PDC implemented its Employees' Non-Contributory Retirement Plan (The Plan)
which took effect on 1 April 1980. Thereafter, a number of employees was retired pursuant to the
optional retirement provision of The Plan -

On 28 November 1994 PDC notified its employees who had rendered more than twenty
(20) years of service in the Company of its decision to retire them effective 31 December 1994.
On 7 December 1994, Jose Riego and private respondent Rholanda Andres, two (2) of those who
were retired, filed a complaint for illegal retirement and unfair labor practices against petitioners.

Private respondent Rholanda Andres started in the employ of petitioner PDC on 22

October 1971 as a payroll clerk and was billing assistant with a monthly salary of ₱5,972.00
when petitioners decided to retire her from employment. She was then forty-five (45) years old
with twenty-three (23) years of service in the company.
CASE 347

ISSUE:
Whether or not the retirement of an employee effected pursuant to a retirement plan which forms
part of employment contract of his employer is valid.

HELD:

A careful examination of the records shows that the findings of the Labor Arbiter are more in
harmony with the evidence on record. The retirement plan under which private respondents were
retired is valid for it forms part of the employment contract of petitioner company. Director
Augusto G. Sanchez of the Bureau of Working Conditions of the DOLE recognized and affirmed
the validity of The Plan. Thus—Considering therefore the fact that your client’s retirement plan
now forms part of the employment contract since it is made known to the employees and
accepted by them, and such plan has an express provision that the company has the choice to
retire an employee regardless of age, with twenty (20) years of service, said policy is within the
bounds contemplated by the Labor Code. Moreover, the manner of computation of retirement
benefits depends on the stipulation provided in the company retirement plan.
The undisputed fact that a number of employees of the employer had availed of the
retirement plan since its effectivity only confirms that said retirement plan has already been part
of the employment contract of the company for a long time.—This pronouncement made by no
less than the DOLE must be given substantial weight, as what the Labor Arbiter did, in the
absence of any contrary evidence. Moreover, the undisputed fact that a number of employees of
petitioner company had availed of The Plan since its effectivity only confirms that The Plan has
already been part of the employment contract of petitioner company for a long time. Private
respondents, particularly Andres, may not now feign ignorance of The Plan considering that she
was the chairman of the union of rank-and-file employees of petitioner company and, as such,
was considered to be familiar with the policies of the company.

BRION V. SOUTH PHILIPPINES UNION MISSION OF SEVENTH DAY ADVENTIST

CHURCH
307 SCRA 497

FACTS:

In 1949, Delfin A. Brion became a member of South Philippine Union Mission of the Seventh
Day Adventist Church (SDA). He started as a literature evangelist, then a janitor or office helper,
and became an ordained minister and president of the Northeastern Mindanao Mission of the
SDA in Butuan City.
SDA claims that due to corruption charges, Brion was transferred to the Davao Mission
of the SDA. Then allegedly due to an act of indiscretion with a masseuse, he was demoted to the
position of Sabbath School Director at the Northern Mindanao Mission of the SDA in Cagayan
de Oro City. In 1983, Brion retired and he received a monthly retirement benefit pursuant to the
General Conference Working Policy of the SDA.
Thereafter, Brion got into an argument with another pastor of the SDA, which culminated
in the establishment by Brion of a rival religious group he called the “Home Church.” He even
succeeded in converting SDA members to join him.
On July 3, 1993, Brion was excommunicated by the SDA and his retirement benefit was
discontinued. Brion filed an action for mandamus asking that SDA restore his monthly
retirement benefit. RTC ruled in favor of Brion; ordered SDA to pay the retirement benefits. CA
reversed.

ISSUE: Whether or not Brion is still entitled to the monthly retirement benefit.
CASE 348

HELD:

Pursuant to Art. 287 of the Labor Code on retirement, the employer and employee are free to
stipulate on retirement benefits, as long as these do not fall below the floor limits provided by
law.
It has been held that before a right to retirement benefits or pension vests in an employee,
he must have met the stated conditions of eligibility with respect to the nature of employment,
age, and length of service. This is a condition precedent to his acquisition of rights thereunder.
SDA argues that an employee must "devote his life to the work of the Seventh-day
Adventist Church" even after retirement to continue enjoying retirement benefits.
To require Brion to continue "devoting his life to the work of the Seventh-day Adventist
Church" would mean that he never really withdraws from his office or occupation, that of
working for the church.
We rule that the conditions of eligibility for retirement must be met at the time of
retirement at which juncture the right to retirement benefits or pension, if the employee is
eligible, vests in him.
With the termination of employment, the right of the employer to control the employee's
conduct, the so- called "control test" also terminates. Hence, after retirement, the SDA may no
longer require Brion to devote his life to the work of the church, it having lost control over its
employee.
While paying retirement benefits to Brion may be odious and abhorrent to the SDA, in
the absence of any other stipulation for the termination of petitioner's retirement benefits, the
SDA must comply with its contractual obligations, the contract being the law between the
parties. Dura lex sed lex.

MALAYANG SAMAHAN V. RAMOS

326 SCRA 428

FACTS:

The petitioner, Malayang Samahan ng mga Manggagawa sa M. Greenfield, Inc., (B)

(MSMG), hereinafter referred to as the "local union", is an affiliate of the private respondent,
United Lumber and General Workers of the Philippines (ULGWP), referred to as the
"federation".

Under the pressure of a threatened strike, respondent company terminated the 30 union
officers from employment, serving them identical copies of the termination letter.

On March 10, 1989, the thirty (30) dismissed union officers filed an urgent petition,
docketed as Case No. NCMB-NCR-NS-03-216-89, with the Office of the Secretary of the
Department of Labor and Employment praying for the suspension of the effects of their
termination from employment. However, the petition was dismissed by then Secretary Franklin
Drilon which held that the dispute is purely an intra-union matter.

A total of 78 union shop stewards were placed under preventive suspension by

respondent company. This prompted the union members to again stage a walk-out and resulted in
the official declaration of strike at around 3:30 in the afternoon of March 14, 1989. The strike
CASE 349

was attended with violence, force and intimidation on both sides resulting to physical injuries to
several employees, both striking and non-striking, and damage to company properties.

The employees who participated in the strike and allegedly figured in the violent incident
were placed under preventive suspension by respondent company. The company also sent return-
to-work notices to the home addresses of the striking employees thrice successively, on March
27, April 8 and April 31, 1989, respectively. However, respondent company admitted that only
261 employees were eventually accepted back to work. Those who did not respond to the return-
to-work notice were sent termination letters.

ISSUE: Whether or not the dismissal of the union officers are valid.

HELD:

The Court is of the opinion, and so holds, that respondent company officials cannot be held
personally liable for damages on account of the employees' dismissal because the employer
corporation has a personality separate and distinct from its officers who merely acted as its
agents.
It has come to the attention of this Court that the 30-day prior notice requirement for the
dismissal of employees has been repeatedly violated and the sanction imposed for such violation
enunciated in Wenphil Corporation vs. NLRC has become an ineffective deterrent. Thus, the
Court recently promulgated a decision to reinforce and make more effective the requirement of
notice and hearing, a procedure that must be observed before termination of employment can be
legally effected.
In Ruben Serrano vs. NLRC and Isetann Department Store (G.R. No. 117040, January
27, 2000), the Court ruled that an employee who is dismissed, whether or not for just or
authorized cause but without prior notice of his termination, is entitled to full backwages from
the time he was terminated until the decision in his case becomes final, when the dismissal was
for cause; and in case the dismissal was without just or valid cause, the backwages shall be
computed from the time of his dismissal until his actual reinstatement. In the case at bar, where
the requirement of notice and hearing was not complied with, the aforecited doctrine laid down
in the Serrano case applies.

AFP MUTUAL BENEFIT ASSOCIATION V. NLRC

267 SCRA 47

FACTS:

Private respondent Eutiquio Bustamante had been an insurance underwriter of petitioner AFP
Mutual Benefit Association, Inc. Petitioner dismissed private respondent for misrepresentation
and for simultaneously selling insurance for another life insurance company in violation of said
agreement. Private respondent wrote petitioner seeking the release of his commissions for said
24 months. Petitioner, through Marketing Manager Juan Concepcion, replied that he was
entitled to only P75,000.00 to P100,000.00. Hence, believing Concepcion's computations,
private respondent signed a quitclaim in favor of petitioner.
Respondent in collecting his check, he discovered from a document (account summary)
attached to said check that his total commissions for the 24 months actually amounted to
P354,796.09.
Private respondent, however, was paid only the amount of P35,000.00. Private
respondent filed a complaint with the Office of the Insurance Commissioner praying for the
payment of the correct amount of his commission.
CASE 350

NLRC declaring the dismissal of the complainant as just and valid, and consequently, his
claim for separation pay is denied. All other claims of the complainant are dismissed for want of
merit.

ISSUE: Whether or not, there is an employer-employee relationship.

HELD:

The Court has applied the "four-fold" test in determining the existence of employer-employee
relationship. This test considers the following elements: (1) the power to hire; (2) the payment
of wages; (3) the power to dismiss; and (4) the power to control, the last being the most
important element.
However, in the present case the power to control is questionable because there is a
certain Memo Memo Circulars No.2-81 and 2-85 which stated that insurance agents are barred
from serving more than one insurance company, in order to protect the public and to enable
insurance companies to exercise exclusive supervision over their agents in their solicitation
work. Thus, the exclusivity restriction clearly springs from a regulation issued by the Insurance
Commission, and not from an intention by petitioner to establish control over the method and
manner by which private respondent shall accomplish his work. There is NO employer –
employee relationship

SAN MIGUEL CORPORATION V. NLRC

161 SCRA 719

FACTS:

Ernesto Ibias (respondent) was employed by petitioner SMC as a CRO operator in its Metal
Closure and Lithography Plant. He continuously worked therein until he advanced as Zamatic
operator. He was also an active and militant member of a labor organization called Ilak Buklod
Manggagawa (IBM)-SMC Chapter.
According to SMC’s Policy on Employee Conduct, absences without permission or
AWOPs, which are absences not covered either by a certification of the plant doctor that the
employee was absent due to sickness or by duly approved application foe leave of absence filed
atleast 6 days prior to the intended leave, are subject to disciplinary action. The same Policy on
Employee Conduct also punishes falsification of company records or documents with discharge
or termination for the first offense if the offender himself or somebody else benefits from
falsification or would have benefited if falsification is not found on time.
Respondent incurred absences. For his absences on 2, 4 and 11 January and 28 and 29
April, he was given a written warning that he had already incurred 5 AWOPs. For his absences
CASE 351

on 28 and 29 April and 7 and 8 May, he was alleged to have falsified his medical consultation
card by stating therein that he was granted sick leave by the plant clinic on said dates when in
truth he was not. Respondent was required to state in writing why he should not be subject to
disciplinary action, he then submitted handwritten explanation to the charges.
Not satisfied with the explanation, SMC conducted an administrative investigation. After
the completion of the investigation, SMC concluded that respondent committed the offenses of
excessive AWOP and falsification of company records or documents, and accordingly dismissed
him.

ISSUES: Whether or not Ibias was illegally dismissed.

HELD:

When SMC imposed the penalty of dismissal for the 12th and 13th AWOPs, it was acting well
within its rights as an employer. An employer has the prerogative to prescribe reasonable rules
and regulations necessary for the proper conduct of its business, to provide certain disciplinary
measures in order to implement said rules and to assure that the same would be complied with.
An employer enjoys a wide latitude of discretion in the promulgation of policies, rules and
regulations on work-related activities of the employees.
It is axiomatic that appropriate disciplinary sanction is within the purview of management
imposition. Thus, in the implementation of its rules and policies, the employer has the choice to
do so strictly or not, since this is inherent in its right to control and manage its business
effectively. Consequently, management has the prerogative to impose sanctions lighter than
those specifically prescribed by its rules, or to condone completely the violations of its erring
employees. Of course, this prerogative must be exercised free of grave abuse of discretion,
bearing in mind the requirements of justice and fair play.
All told, we find SMC acted well within its rights when it dismissed respondent for his
numerous absences. Respondent was afforded due process and was validly dismissed for cause.

MOLAVE MOTOR SALES V. LARON

129 SCRA 458

FACTS:
Petitioner is a corporation engaged in the sale and repair of motor vehicles. Private respondent is
the sales manager of PLAINTIFF. At the pre-trial conference, the DEFENDANT raised the
question of jurisdiction of the Court stating that PLAINTIFF's complaint arose out of employer-
employee relationship, and he subsequently moved for dismissal. Such complaint was dismissed
by the judge because it must be the juris of the LA and NLRC to decide cases on ER-EE
relationship. However, although a controversy is between an employer and an employee, the
Labor Arbiters have no jurisdiction if the Labor Code is not involved. In this case, PLAINTIFF
had sued for monies loaned to DEFENDANT, the cost of repair jobs made on his personal cars,
and for the purchase price of vehicles and parts sold to him. Those accounts have no relevance to
the Labor Code. Hence, the civil has the juris over the matter.

ISSUE: Whether or not there was still a relationship of employer and employee between
the parties.
CASE 352

HELD:

The dismissal of the case below on the ground that the sum of money and damages sued upon
arose from employer-employee relationship was erroneous. Claims arising from employer-
employee relations are now limited to those mentioned in paragraphs 2 and 3 of Article 217.
There is no difficulty in stating that those in the case below should not be faulted for not being
aware of the last amendment to the frequently changing Labor Code.

The claim of DEFENDANT that he should still be considered an employee of

PLAINTIFF, because the latter has not sought clearance for his separation from the service, will
not affect the jurisdiction of respondent Judge to resolve the complaint of PLAINTIFF.
DEFENDANT could still be liable to PLAINTIFF for payment of the accounts sued for even if
he remains an employee of PLAINTIFF.

SMART COMMUNICATIONS V. ASTORGA

542 SCRA 434

FACTS:

Astorga was employed by respondent SMART on May 8, 1997 as District Sales Manager of
Corporate Sales Marketing Group (CSMG). One of her incentives is a car plan in the amount of
455,000.00.
In February 1998, SMART launched an organizational realignment to achieve more
efficient operations. Thus, SMART entered a joint venture agreement with NTT of Japan, and
formed SMARTNTT Multimedia, Incorporated (SNMI). Since SNMI was formed to do the sales
and marketing work, SMART abolished the CSMG.
Astorga was offered a supervisory position in the Customer Case Department, but she
refused the offer. Despite the abolition of her office, she continued reporting for work.
SMART issued a memorandum advising Astorga of the termination of her employment on
ground of redundancy. Thus, Astorga filed a complaint for illegal dismissal against SMART.
CASE 353

While there is a pending litigation, SMART sent a letter demanding Astorga to Pay the
current market value of the Honda Civic Sedan or to surrender the same to the company. Astorga
did not comply. Thus, SMART filed a suit for replevin with the RTC.
Astorga moved to dismiss the complaint on grounds of lack of jurisdiction; she posited
that the regular courts have no jurisdiction over the complaint because the subject thereof
pertains to a benefit arising from an employment contract; hence, jurisdiction over the same is
vested in the labor tribunal and not in regular courts.

ISSUE: Whether or not the recovery of a car benefit via replevin suit is a labor dispute.

HELD:

RTC rightfully assumed jurisdiction over the suit and acted well within its discretion in denying
Astorga’s motion to dismiss. SMART’s demand for payment of the market value of the car or, in
the alternative, the surrender of the car, is not a labor, but a civil, dispute. It involves the
relationship of debtor and creditor rather than employeeemployer relations. As such, the dispute
falls within the jurisdiction of the regular courts.
In Basaya, Jr. v. Militante, the court held that the labor dispute involved is not
intertwined with the issue in the Replevin Case. The respective issues raised in each forum can
be resolved independently on the other.

PHILIPPINE AIRLINES V. NLRC

263 SCRA 638

FACTS:

Philippine Airlines (PAL) as owner, and Synergy Services Corporation (Synergy) as Contractor,
entered into an agreement whereby the latter undertook to “provide loading, unloading, delivery
of baggage and cargo and other related services to and from PAL's aircraft at the Mactan
Station."
And it expressly provided that Synergy was "an independent contractor and that there would be
no employer-employee relationship between CONTRACTOR and/or its employees on the one
hand, and OWNER, on the other."
[March 3, 1992] respondents, who appear to have been assigned by Synergy to petitioner
following the execution of the July 15, 1991 Agreement, filed complaints before the NLRC
Regional Office VII at Cebu City against petitioner, Synergy and their respective officials for
underpayment, non-payment of premium pay for holidays, premium pay for rest days, service
CASE 354

incentive leave pay, 13th month pay and allowances, and for regularization of employment status
with petitioner, they claiming to be "performing duties for the benefit of PAL since their job is
directly connected with its business . . . ."
On the other hand, respondent Auxtero had initially filed a complaint against petitioner and
Synergy and their respective officials for regularization of his employment status. Later alleging
that he was, without valid ground, verbally dismissed, he filed a complaint against petitioner and
Synergy and their respective officials for illegal dismissal and reinstatement with full back
wages. The Labor Arbiter dismissed the complaints of respondents and found Synergy as an
independent contractor. The LA likewise dismissed respondents’ claims of regularization, but
granted their money claims.

ISSUE: Whether or not there is an Employer-Employee relationship between PAL and

Respondents

HELD:
The express provision in the Agreement that Synergy was an independent contractor and there
would be "no employer-employee relationship between Synergy and/or its employees on one
hand, and PAL on the other hand" is not legally binding and conclusive as contractual provisions
are not valid determinants of the existence of such relationship. For it is the totality of the facts
and surrounding circumstances of the case which is determinative of the parties' relationship. It is
clear from the facts that petitioner's managers and supervisors approved respondents' weekly
work assignments and respondents and other regular PAL employees were all referred to as
"station attendants" of the cargo operation and airfreight services of petitioner. More
significantly, however, is that respondents worked alongside petitioner's regular employees who
were performing identical work. Respondents having performed tasks which are usually
necessary and desirable in the air transportation business of petitioner, they should be deemed its
regular employees and Synergy as a labor-only contractor.

JAGUAR SECURITY V. SALES

552 SCRA 295

FACTS:
Jaguar Security and Investigation Agency (“Jaguar”), the petitioner is a private corporation
engaged in the business of providing security services to its clients. One of its clients is Delta
Milling Industries, Inc. Private respondents Sales, Tamayo, Caranyagan, Silva, Moron and
Fetalvero were security guards employed by Jaguar.

On September 18, 1998, the respondents filed a labor case before the labor arbiter.
Caranyagan and Tamayo claimed they were dismissed arbitrarily and illegally, and were entitled
to separation pay and back wages; while the other respondents who remained with Jaguar
claimed for monetary benefits. Furthermore, all respondents claimed for moral and exemplary
damages.
CASE 355

The local arbiter rendered judgement in favor of the respondents wherein Jaguar and
Delta Milling Industries, Inc. were to jointly and severally pay the complainants their monetary
claims. Such claims amounted from benefit privileges for their services rendered: April 24, 1995
– April 24, 1998.
The NLRC dismissed the appeal reasoning that Jaguar is the direct employer of the
security guard hence is the principal of the liability. Jaguar filed a separate civil action for
recovery of the amount to prove the liability of Delta.
Jaguar filed a petition for certiorari with the Court of Appeals.

ISSUE:

Whether or not petitioner may claim reimbursement from Delta Milling through a cross-claim
filed with the labor court

HELD:

The petition was denied. Since there exists no employee-employer relationship between the
petitioner and Delta Milling, and it was established that the cross-claim involves a civil dispute
regarding the reimbursement of monetary benefit claims, the jurisdiction then belongs to the
regular courts and not to labor courts. The petitioner does not seek any relief under the Labor
Code, but appeals for reimbursement from Delta Milling.
Indubitably, both the petitioner and Delta Milling are liable to the security guard
employees. The petitioner as contractor is made liable by its status as the direct employer while
Delta Milling is made liable by its status as indirect employer for purposes of compensation
should the contractor be unable to pay them.
It was affirmed by the NLRC and CA that the petitioner has right of reimbursement from
Delta Milling under Article 1217 of the Civil Code. However, payment is deemed as the
operative fact which entitles reimbursement to solidary debtors, hence payment by Jaguar has to
be fulfilled and completed before it can seek reimbursement from Delta. In this case, the security
guard employees are yet to be paid by either Jaguar or Delta Milling.

VIVERO V. CA
344 SCRA 268

FACTS:

Petitioner Vivero, a licensed seaman, is a member of the Associated Marine Officers and
Seamen's Union of the Philippines (AMOSUP).  
On grounds of very poor performance and conduct, refusal to perform his job, refusal to
report to the Captain or the vessel’s Engineers or cooperate with other ship officers about the
problem in cleaning the cargo holds or of the shipping pump and his dismal relations with the
Captain of the vessel, complainant was repatriated on 15 July 1994.
CASE 356

On 01 August 1994, complainant filed a complaint for illegal dismissal at AMOSUP of

which complainant was a member. Pursuant to Article XII of the Collective Bargaining
Agreement, grievance proceedings were conducted; however, parties failed to reach and settle
the dispute amicably, thus, on 28 November 1994, complainant filed the complaint with the
POEA. While the case was pending before the POEA, private respondents filed a  Motion to
Dismiss on the ground that the POEA had  no  jurisdiction  over  the case considering petitioner
Vivero's failure to refer it to a Voluntary Arbitration Committee in accordance with the CBA
between the parties.  Upon the enactment of RA 8042, the Migrant Workers and Overseas
Filipinos Act of 1995, the case was transferred to the Adjudication Branch of the National Labor
Relations Commission.
Labor Arbiter, on the basis of the pleadings and documents available on record, rendered
a decision dismissing the complaint for want of jurisdiction. NLRC set aside the decision of the
Labor Arbiter on the ground that the record was clear that petitioner had exhausted his remedy
by submitting his case to the Grievance Committee of AMOSUP. NLRC then remanded the case
to the Labor Arbiter for further proceedings. On 3 July 1998 the MR of the private respondent
was denied, thus it raised the case to the CA. Court of Appeals ruled in favor of private
respondents holding that the CBA is the law between the parties and compliance therewith is
mandated by the express policy of the law.
Hence petition for review was filed by the herein petitioner.

ISSUE:
Whether the NLRC is deprived of jurisdiction over illegal dismissal cases whenever a CBA
provides for grievance machinery and voluntary arbitration proceedings.

HELD:
No. The instant case is a termination dispute falling under the original and exclusive jurisdiction
of the Labor Arbiter, and does not specifically involve the application, implementation or
enforcement of company personnel policies contemplated in Policy Instruction No. 56.
Consequently, Policy Instruction No. 56 does not apply in the case at bar.
It is clear from the claim/assistance request form submitted by petitioner to AMOSUP
that he was challenging the legality of his dismissal for lack of cause and lack of due process.
The issue of whether there was proper interpretation and implementation of the CBA provisions
comes into play only because the grievance procedure provided for in the CBA was not observed
after he sought his Union’s assistance in contesting his termination. Thus, the question to be
resolved necessarily springs from the primary issue of whether there was a valid termination;
without this, then there would be no reason to invoke the need to interpret and implement the
CBA provisions properly.
Under Article 262, the Voluntary Arbitrator may assume jurisdiction only when agreed upon by
the parties. Policy Instructions No. 56 issued by DOLE Secretary Confesor clarifying the
jurisdiction of Labor Arbiters and Voluntary Arbitrations does not apply. It reiterated the ruling
that dismissal is not a grievable issue.

MEYCAUAYAN COLLEGE vs HONORABLE FRANKLIN M. DRILON

G.R. No. 81144 May 7, 1990

FACTS:

Petitioner is a private educational institution duly organized and existing under Philippine laws,
and operating in Meycauayan, Bulacan. its board of trustees recognized the Meycauayan College
Faculty and Personnel Association as the employees' union in the Meycauayan College.
petitioner and the union, then headed by Mrs. Teresita V. Lim, entered into a collective
bargaining agreement. When the collective bargaining agreement was entered into, the following
presidential decrees were in effect: (a) P.D No. 1389 adjusting the existing statutory minimum
CASE 357

wages (b) P.D. No. 1713 1980 providing for an increase in the minimum daily wage rates and for
additional mandatory living allowances, and (c) P.D. No. 1751 1980 increasing the statutory
daily minimum wage at all levels by P4.00 after integrating the mandatory emergency living
allowance under P.D. Nos. 525 and 1123 into the basic pay of all covered workers. Wage Order
No. 2 increasing the mandatory basic minimum wage and living allowance was also issued just
before the collective bargaining agreement herein involved was entered into.During the lifetime
of the collective bargaining agreement, the following were issued: (a) Wage Order No. 3
increasing the minimum daily living allowance in the private sector; (b) Wage Order No. 4
integrating as of said date the emergency cost of living allowances under P.D. Nos. 1614, 1634
and 1713 into the basic pay of covered workers in the private sector; (c) Wage Order No.
increasing the cost of living allowance of workers in the private sector whose basic salary or
wage is not more than P1,800 a month; and (d) Wage Order No. 6 increasing the daily living
allowances. The union admits herein that its members were paid all these increases in pay
mandated by law.

ISSUE:

Whether increases in employees' salaries resulting from the implementation of presidential

decrees and wage orders preclude the employees from claiming the difference between their old
salaries and those provided for under said salary scale.

HELD:

Non-compliance with the mandate of a standards law or decree may give rise to an ordinary
action for recovery while violation of a collective bargaining agreement may even give rise to a
criminal action for unfair labor practice. And while the relief sought for violation of a standard
law or decree is primarily for restitution of unpaid benefits, the relief sought for violating a CBA
is ordinarily for compliance and desistance. Moreover, there is no provision in the aforecited
Presidential Decrees providing that compliance thereto is sufficient compliance with a provision
of a collective bargaining agreement and vice-versa. As correctly ruled by public respondent, a
collective bargaining agreement is a contractual obligation. It is distinct from an obligation
imposed by law. The terms and conditions of a collective bargaining contract constitute the law
between the parties. Beneficiaries thereof are therefore, by right, entitled to the fulfillment of the
obligation prescribed therein. Consequently, to deny binding force to the collective bargaining
agreement would place a premium on a refusal by a party thereto to comply with the terms of the
agreement. Such refusal would constitute an unfair labor practice
CASE 358

ST. SCHOLASTICA'S COLLEGE vs. HON. RUBEN TORRES

G.R. No. 100158 June 2, 1992

FACTS:

Petitioner St. Scholastica's College (COLLEGE, for brevity) and private respondent Samahan ng
Manggagawang Pang-Edukasyon sa Sta. Eskolastika-NAFTEU (UNION, for brevity) initiated
negotiations for a first-ever collective bargaining agreement. A deadlock in the negotiations
prompted the union to file a Notice of Strike with the Department of Labor and Employment The
union declared a strike. Public respondent secretary immediately assumed jurisdiction over the
labor dispute and issued on the same day a return-to-work order. The union filed a motion for
reconsideration of the return-to-work order questioning inter alia the assumption of jurisdiction
by the secretary over the labor dispute which was denied. The college sent individual letters to
the striking employees enjoining them to return to work, the union presented a list of (6)
demands to the college. The most important of these demands was the unconditional acceptance
back to work of the striking employees. But these were flatly rejected. The college mailed
individual notices of termination to the striking employees. The union officers and members then
tried to return to work but were no longer accepted by the college. The union moved for the
enforcement of the return-to-work order before respondent secretary, citing "selective acceptance
of returning strikers" by the college. Respondent secretary required the parties to submit their
respective position papers. The college prayed that respondent secretary uphold the dismissal of
the employees who defied his return-to-work order. Respondent secretary issued the assailed
Order which, inter alia, directed the reinstatement of striking union members. Nevertheless, the
aforesaid Order held union officers responsible for the violation of the return-to-work and,
correspondingly, sustained their termination. Petitioner questions the assumption by respondent
secretary of jurisdiction to decide on termination disputes, maintaining that such jurisdiction is
vested instead in the Labor Arbiter pursuant to Art. 217 of the Labor Code.

ISSUE:

Whether respondent SECRETARY has the power to assume jurisdiction over a labor dispute and
its incidental controversies, causing or likely to cause a strike or lockout in an industry
indispensable to the national interest

HELD:

YES. [T]he Secretary was explicitly granted by Article 263 (g) of the Labor Code the authority
to assume jurisdiction over a labor dispute causing or likely to cause a strike or lockout in an
industry indispensable to the national interest, and decide the same accordingly. Necessarily, this
authority to assume jurisdiction over the said labor dispute must include and extend to all
questions and include and extend to all questions and controversies arising therefrom, including
cases over which the Labor Arbiter has exclusive jurisdiction. Article 217 of the Labor Code did
contemplate of exceptions thereto where the SECRETARY is authorized to assume jurisdiction
over a labor dispute otherwise belonging exclusively to the Labor Arbiter. This is readily evident
from its opening proviso reading "(e)xcept as otherwise provided under this Code . . . Previously,
We held that Article 263 (g) of the Labor Code was broad enough to give the Secretary of Labor
and Employment the power to take jurisdiction over an issue involving unfair labor practice. 7
The submission of an incidental issue of a labor dispute, in assumption and/or certification cases,
to the Secretary of Labor and Employment for his resolution is thus one of the instances referred
to whereby the latter may exercise concurrent jurisdiction together with the Labor Arbiters
CASE 359

INTERNATIONAL PHARMACEUTICALS, INC.vs. HON. SECRETARY OF LABOR

and ASSOCIATED LABOR UNION
G.R. Nos. 92981-83 January 9, 1992

FACTS:
On January 1, 1989 of the collective bargaining agreement between petitioner International
Pharmaceuticals, Inc. (hereafter, Company) and the Associated Labor Union (Union, for
brevity), the latter submitted to the Company its economic and political demands. These were not
met by the Company, hence a deadlock ensued. , the Union filed a notice of strike with Regional
Office No. VII of the NCMB, Department of Labor and Employment.

After all conciliation efforts had failed, the Union went on strike and the Company's operations
were completely paralyzed. Considering that the Company belongs to an industry indispensable
to national interest, it being engaged in the manufacture of drugs and pharmaceuticals and
employing around 600 workers, then Acting Secretary of Lab invoking Article 263 (g) of the
Labor Code, assuming jurisdiction over the aforesaid case and directing the parties to return to
the status quo before the work stoppage. The Union filed a motion in NCMB seeking the
consolidation of the three NLRC cases Secretary Torres granted the motion and ordered the
consolidation of the three NLRC cases The Company's motion for reconsideration was denied by
the Secretary. Respondents, assert that the authority to assume jurisdiction over labor disputes,
vested in the Secretary by Article 263 (g) of the Labor Code, extends to all questions and
incidents arising therein causing or likely to cause strikes or lockouts in industries indispensable
to national interesticle 217 of the Labor Code.

ISSUE:

Whether or not the Secretary of the Department of Labor and Employment has the power to
assume jurisdiction over a labor dispute and its incidental controversies, including unfair labor
practice cases, causing or likely to cause a strike or lockout in an industry indispensable to the
national interest

HELD:

YES. the fundamental normative rule that jurisdiction is the authority to bear and determine a
cause — the right to act in a case. However, this should be distinguished from the exercise of
jurisdiction. The authority to decide a case at all and not the decision rendered therein is what
makes up jurisdiction. Where there is jurisdiction over the person and the subject matter, the
decision of all other questions arising in the case is but an exercise of that jurisdiction. In the
present case, the Secretary was explicitly granted by Article 263 (g) of the Labor Code the
authority to assume jurisdiction over a labor dispute causing or likely to cause a strike or lockout
in an industry indispensable to the national interest, and decide the same accordingly.
Necessarily, this authority to assume jurisdiction over the said labor dispute must include and
extend to all questions and controversies arising therefrom, including cases over which the labor
arbiter has exclusive jurisdiction.

In the present case, however, by virtue of Article 263 (g) of the Labor Code, the Secretary has
been conferred jurisdiction over cases which would otherwise be under the original and
exclusive jurisdiction of labor arbiters. There was an existing labor dispute as a result of a
deadlock in the negotiation for a collective bargaining agreement and the consequent strike, over
which the Secretary assumed jurisdiction pursuant to Article 263 (g) of the Labor Code. The
three NLRC cases were just offshoots of the stalemate in the negotiations and the strike. We,
therefore, uphold the Secretary's order to consolidate the NLRC cases with the labor dispute
pending before him and his subsequent assumption of jurisdiction over the said NLRC cases for
him to be able to competently and efficiently dispose of the dispute in its totality.
CASE 360

NATIONAL UNION OF BANK EMPLOYEES vs. THE HON. JUDGE ALFREDO M.

LAZARO
G.R. No. L-56431 January 19, 1988

FACTS:

On July 1, 1977, the Commercial Bank and Trust Company, a Philippine banking institution,
entered into a collective bargaining agreement with the Commercial Bank and Trust Company
Union, representing the rank and file of the bank with a membership of over one thousand
employees, and an affiliated local of the National Union of Bank Employees, a national labor
organization.The agreement was effective until June 30, 1980, with an automatic renewal clause
until the parties execute a new agreement. the union, together with the National Union of Bank
Employees, submitted to the bank management proposals for the renegotiation of a new
collective bargaining agreement. The following day, however, the bank suspended negotiations
with the union. The bank had meanwhile entered into a merger with the Bank of the Philippine
Islands, another Philippine banking institution, which assumed all assets and liabilities thereof.
the union went to the then Court of First Instance of Manila, presided over by the respondent
Judge, on a complaint for specific performance, damages, and preliminary injunction against the
private respondents.The private respondents moved for the dismissal of the case on the ground of
lack of jurisdiction of the court. The respondent Judge issued an order, dismissing the case for
lack of jurisdiction. According to the court, the complaint partook of an unfair labor practice
dispute notwithstanding the incidental claim for damages, jurisdiction over which is vested in the
labor arbiter.

ISSUE:

Whether or not the courts may take cognizance of claims for damages arising from a labor
controversy.

HELD:

No. An unfair labor practice controversy within the original and exclusive jurisdiction of the
labor arbiters and the exclusive appellate jurisdiction of the National Labor Relations
Commission. The claim against the Bank of Philippine Islands — the principal respondent
according to the petitioners — for allegedly inducing the Commercial Bank and Trust Company
to violate the existing collective bargaining agreement in the process of re-negotiation, consists
mainly of the civil aspect of the unfair labor practice charge referred to under Article 247 2 of the
Labor Code. The act complained of is broad enough to embrace either provision. Since it
involves collective bargaining — whether or not it involved an accompanying violation of the
Civil Code — it may rightly be categorized as an unfair labor practice. The civil implications
thereof do not defeat its nature as a fundamental labor offense. , the damages (allegedly) suffered
by the petitioners only form part of the civil component of the injury arising from the unfair
labor practice. Under Article 247 of the Code, "the civil aspects of all cases involving unfair
labor practices, which may include claims for damages and other affirmative relief, shall be
under the jurisdiction of the labor arbiters. Jurisdiction over unfair labor practice cases,
moreover, belongs generally to the labor department of the government, never the courts. The
fact that the Bank of the Philippine Islands is not a party to the collective bargaining agreement,
for which it "cannot be sued for unfair labor practice at the time of the action," 8 cannot bestow
on the respondent court the jurisdiction it does not have
CASE 361

ROSARIO MANEJA vs. NLRC

G.R. 124013 June 5, 1998

FACTS:
Maneja (employee) worked for Manila Midtown Hotel (MMH) (employer) as a telephone
operator. Maneja was dismissed by Manila Midtown Hotel due to violation of their company
policy on culpable negligence –negligence or failure to follow specific instruction(s) or
established procedure(s). Maneja filed a complaint for illegal dismissal against MMH. Labor
Arbiter Oswald Lorenzo ruled in favor of Maneja. Lorenzo noted that on the face of the
complaint, the issue revolves around the implementation and interpretation of existing company
policies, and as such it is within the jurisdiction of the grievance procedure under the CBA
between MMH and NUWRAIN (the Union in which Maneja is a Member), but he still assumed
jurisdiction over the case since termination cases is within his jurisdiction.

ISSUE:
Whether or not the Labor Arbiter have jurisdiction over the case?

HELD:

Yes. Since there has been an actual termination, the matter falls within the jurisdiction of the
Labor Arbiter. The dismissal of Maneja does not call for the interpretation or enforcement of
company personnel policies but is a termination dispute which comes under the jurisdiction of
the Labor Arbiter. It should be explained that “company personnel policies” are guiding
principles stated in broad, long-range terms express the philosophy or beliefs of an
organization’s top authority regarding personnel matters. They deal with matters affecting
efficiency and well-being of employees and include, among others, the procedure in the
administration of wages, benefits, promotions, transfer and other personnel movements which
are usually not spelled out in the collective agreement. The usual source of grievances, however,
are the rules and regulations governing disciplinary actions.
CASE 362

PURIFICACION G. TABANG vs. NATIONAL LABOR RELATIONS

G.R. No. 121143 January 21, 1997

FACTS:

Petitioner Purificacion Tabang was a founding member, a member of the Board of Trustees, and
the corporate secretary of private respondent Pamana Golden Care Medical Center Foundation,
Inc., a non-stock corporation engaged in extending medical and surgical services.

The Board of Trustees issued a memorandum appointing petitioner as Medical Director and
Hospital Administrator of private respondent's Pamana Golden Care Medical Center .Although
the memorandum was silent as to the amount of remuneration for the position, petitioner claims
that she received a monthly retainer fee of five thousand pesos (P5,000.00) from private
respondent, but the payment thereof was allegedly stopped in November, 1991. petitioner was
allegedly informed personally by Dr. Ernesto Naval. the Board of Trustees passed a resolution
relieving her of her position as Medical Director and Hospital Administrator. petitioner filled a
complaint for illegal dismissal and non-payment of wages, allowances and 13th month pay
before the labor arbiter .Respondent corporation moved for the dismissal of the complaint on the
ground of lack of jurisdiction over the subject matter, Petitioner opposed the motion to dismiss
.the labor arbiter issued an order dismissing the complaint for lack of jurisdiction. He ruled that
the case falls within the jurisdiction of the SEC. On appeal, respondent NLRC affirmed the
dismissal of the case on the additional ground that "the position of a Medical Director and
Hospital Administrator is akin to that of an executive position in a corporate ladder structure.

ISSUE:
Whether or not petitioner's removal from the said position was an intra-corporate controversy
within the original and exclusive jurisdiction of the SEC. 

HELD:

Yes. We agree with the findings of the NLRC that it is the SEC which has jurisdiction over the
case at bar. The charges against herein private respondent partake of the nature of an intra-
corporate controversy. Similarly, the determination of the rights of petitioner and the
concomitant liability of private respondent arising from her ouster as a medical director and/or
hospital administrator, which are corporate offices, is an intra-corporate controversy subject to
the jurisdiction of the SEC. a medical director and a hospital administrator are considered as
corporate officers under the by-laws of respondent corporation. Section 2(i), Article I thereof
states that one of the powers of the Board of Trustees is "(t)o appoint a Medical Director,
Comptroller/Administrator, Chiefs of Services and such other officers as it may deem necessary
and prescribe their powers and duties."4 In the case at bar, considering that herein petitioner,
unlike an ordinary employee, was appointed by Respondent Corporation’s Board of Trustees in
its memorandum of October 30, 1990, 9 she is deemed an officer of the corporation. Perforce,
Section 5(c) of Presidential Decree No. 902-A, which provides that the SEC exercises exclusive
jurisdiction over controversies in the election appointment of directors, trustees, officers or
managers of corporations, partnerships or associations, applies in the present dispute.
Accordingly, jurisdiction over the same is vested in the SEC, and not in the Labor Arbiter or the
NLRC.
CASE 363

FORTUNE CEMENT CORPORATION vs. NATIONAL LABOR RELATIONS

COMMISSION
G.R. No. 79762             January 24, 1991

FACTS:
Lagdameo is a registered stockholder of FCC. at the FCC Board of Directors' regular monthly
meeting, he was elected Executive Vice-President of FCC. Some eight (8) years later, during a
regular meeting, the FCC Board resolved that all of its incumbent corporate officers, including
Lagdameo, would be "deemed" retained in their respective positions without necessity of yearly
reappointments, unless they resigned or were terminated by the Board. the FCC Board approved
and adopted a resolution dismissing Lagdameo as Executive Vice-President of the company.
Lagdameo filed with the National Labor Relations Commission (NLRC), National Capital
Region, a complaint for illegal dismissal against FCC. FCC moved to dismiss Lagdameo's
complaint on the ground that his dismiss as a corporate officer is a purely intra-corporate
controversy over which the Securities and Exchange Commission (SEC) has original and
exclusive jurisdiction. The Labor Arbiter granted the motion to dismiss. On appeal, however, the
NLRC set aside the Labor Arbiter's order and remanded the case to the Arbitration Branch "for
appropriate proceedings". The NLRC denied FCC's motion for reconsideration. Dissatisfied,
FCC filed this petition for certiorari.

ISSUE:
Whether or not the NLRC has jurisdiction over a complaint filed by a corporate executive vice-
president for illegal dismissal, resulting from a board resolution dismissing him as such officer

HELD:
No. The Solicitor General pointed out that "a corporate officer's dismissal is always a corporate
act and/or intra-corporate controversy and that nature is not altered by the reason or wisdom
which the Board of Directors may have in taking such action." The dispute between petitioner
and Lagdameo is of the class described in Section 5, par. (c) of Presidential Decree No. 902-A,
hence, within the original and exclusive jurisdiction of the SEC. The Solicitor General
recommended that the petition be granted and NLRC-NCR Case No. 1-228-85 be dismissed by
respondent NLRC for lack of jurisdiction.
Lagdameo claims that his dismissal was wrongful, illegal, and arbitrary, because the
"irregularities" charged against him were not investigated ; that the case of PSBA vs.
Leaño (supra) cited by the Labor Arbiter finds no application to his case because it is not a
matter of corporate office having been declared vacant but one where a corporate officer was
dismissed without legal and factual basis and without due process; that the power of dismissal
should not be confused with the manner of exercising the same; that even a corporate officer
enjoys security of tenure regardless of his rank; and that the SEC is without power to grant the
reliefs prayed for in his complaint
CASE 364

ILOCOS SUR ELECTRIC COOPERATIVE, INC vs NATIONAL LABOR RELATIONS

COMMISSION
G.R. No. 106161 February 1, 1995

FACTS:
Petitioner Engr. Egdon Sabio was employed as Manager of the Engineering Department of
Ilocos Sur Electric Cooperative (ISECO), He was relieved of his duties on June 10, 1989 and
was dismissed on July 1, 1989 pursuant to ISECO's Board Resolution No. 63 s. 1989 dated July
19, 1989. on June 8, 1989, Sabio wrote to the ISECO Board of Directors, thru its President, Atty.
Manuel Agpalo, about the expenses incurred by Acting General Manager, Atty. Efren Bautista.
Sabio revealed that in one year, Bautista was away for two hundred twenty (220) days, while, in
contrast, the previous Acting General Manager, Genaro Cada, who stayed out of the cooperative
for not more than thirty (30) days for the same length of time spent not more than ten thousand
pesos (P10,000.00). Bautista summoned Sabio to his office and asked him to file a letter of
irrevocable resignation with the assurance that separation benefits will be granted to him.
Bautista also offered Sabio a one-month vacation leave with pay, but Sabio refused the offer.
Instead of filing either, Sabio sent a letter of apology 2 to Bautista with copies furnished to the
Board of Directors, Department Managers and Sub-Area Managers, but maintaining that he had
not violated any of the cooperative's rules and regulations. On that same day Sabio received
Memo No. 47-80 from Bautista, relieving him from his position as Engineering Manager without
giving any reason.

ISSUE:
Whether or not the NLRC has jurisdiction over the case of Engr. Egdon A. Sabio.

HELD:
YES. It is clear from the provision of P.D. 269, as amended by P.D. 1645 that only the power of
supervision and control over electric cooperatives and other borrowers, supervised or controlled,
is given to the NEA. There is nothing said law which provides that the NEA administration has
the power to hear and decide termination cases of employees in electric cooperatives. That
authority is vested in the Labor Arbiter. In the present case, there is no dispute that Sabio is an
employee of ISECO whose services as manager of the Engineering Department of ISECO were
terminated. The dismissal arose from a purely labor dispute which falls within the original and
exclusive jurisdiction of the Labor Arbiters and the NLRC. Thus, Section. 217 of the Labor Code
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: 1. Unfair labor
practice cases; 2. Termination of disputes; Moreover, the NLRC’s jurisdiction was only raised
for the first time in this petition. Petitioners did not question the jurisdiction of the Labor Arbiter
either in a motion to dismiss or in their answer. In fact, petitioners participated in the proceedings
before the Labor Arbiter, as well as in the NLRC to which they appealed the Labor Arbiter's
decision. It has been consistently held by this Court that while jurisdiction may be assailed at any
stage, a party's active participation in the proceedings before a court without jurisdiction will
estop such party from assailing such lack of it. It is an undesirable practice of a party
participating in the proceedings and submitting his case for decision and then accepting the
judgment only if favorable, and attacking it for lack of jurisdiction, when adverse.
CASE 365

CAGAYAN DE ORO COLISEUM, INC vs OFFICE OF THE MINISTER OF LABOR

AND EMPLOYMENT
G.R. No. 71589 December 17, 1990

FACTS:
Cagayan de Oro Coliseum, Inc. is a corporation duly organized and existing under Philippine
laws having been issued a certificate of registration by the Securities and Exchange Commission
(SEC. Angel Chaves, or the other hand, is an incorporator and major stockholder of the
corporation who, for some time, served as its director and officer. the compensation of the
corporation’s directors, as provided by Section 5 of Article IV of its By-laws, was from time to
time fixed by its Board of Directors.Chaves was elected member of the Board of Directors.
Shortly after Chaves assumed the presidency, the Board of Directors passed a resolution fixing
the monthly compensation of the president at P500.00 and his monthly allowance at P100.00.
The Board also provided a P100.00 per diem for the president’s attendance in board meetings.
Claiming that he had not been paid for services rendered, Chaves filed a letter complaint with the
Field Services Division of the then Department of Labor, Regional Office. Another complaint
was filed by Angel Chaves with the same division. The labor arbiter rendered a decision in
favour of Chaves. The corporation appealed to the Ministry of Labor and Employment. Affirmed
the decision of the labor arbiter.

ISSUE:
Whether or not the Ministry of Labor and Employment (now DOLE) has jurisdiction over FSD
Case filed by private respondent Angel Chaves for unpaid salaries, per diems and allowances.

HELD:
No. An intracorporate controversy would call for the jurisdiction of the SEC while a labor
dispute that of the NLRC or the MOLE as the case may be. But when a case is between a
stockholder and the corporation of which he holds stocks, the controversy is intracorporate and
well within the jurisdiction of the SEC.

Although the reliefs sought by Chaves appear to fall under the jurisdiction of the labor arbiter as
they are claims for unpaid salaries and other remunerations for services rendered, a close
scrutiny thereof shows that said claims are actually part of the perquisites of his position in, and
therefore interlinked with his relations with the corporation. In Dy v. NLRC, 14 the Court said:"
(t) he question of remuneration involving as it does, a person who is not a mere employee but a
stockholder and officer, an integral part, it might be said, of the corporation, is not a simple labor
problem but a matter that comes within the area of corporate affairs and management, and is in
fact a corporate controversy in contemplation of the Corporation Code.
CASE 366

MAINLAND CONSTRUCTION, CO., INC vs. MILA MOVILLA

G.R. No. 118088 November 23, 1995

FACTS:
Ernest Movilla, who was a CPA during his lifetime, was hired by Mainland in
1977.Thereafter, he was promoted to the position of Administrative Officer. He has a monthly
salary of P4, 700.00/month and he was registered with SSS as an employee of petitioner
corporation. In 1991, The DOLE conducted a routine inspection on Petitioner
Corporation and found thatit committed some irregularities in the conduct of its business. On the
basis of its findings, DOLE ordered Petitioner Corporation to pay its 13 employees, which
included Movilla, an amount representing their salaries, holiday pay, service incentive leave pay
differentials, unpaid wages and 13th month pay. All the employees listed in the DOLE’s
order were paid by petitioner except Movilla. Movilla filed a case against petitioner with the
DOLE in Davao City. However, in 1992, Movilla died while the case was being tried. Hence, he
was substituted by his heirs, private respondents herein. The Labor Arbiter dismissed the
complaint on the ground that the controversy is intra-corporate in nature hence it is the SEC who
has jurisdiction over and not the Labor Arbiter. On appeal, the NLRC reversed the Labor
Arbiter and ruled that the case was one which involved a labor dispute, thus the NLRC
has jurisdiction to resolve the case.

ISSUE:
Whether or not the NLRC has jurisdiction over the controversy.
HELD:
YES. The NLRC has jurisdiction over the case. The fact that the parties involved in the
controversy are all stockholders and the corporation does not necessarily place the dispute
within the jurisdiction of SEC. In order that the SEC can take cognizance of a case, the
controversy must pertain to factors such as the status or relationship of the parties or the
nature of the question that is the subject of their controversy.
Furthermore, it does not necessarily follow that every conflict between corporation and its
stockholders can only be resolve by the SEC. In the CAB, the claim for unpaid wages and
separation pay involves a labor dispute. It does not involve an intra-corporate matter, even
when it is between a stockholder and a corporation. It relates to an Employer-Employee
relationship which is distinct from the corporate relationship of one with the other.
Therefore, since the complaint of Movilla involves a labor dispute, it is the NLRC which has
jurisdiction over the CAB.
CASE 367

BEBIANO M. BAÑEZ vs HON. DOWNEY C. VALDEVILLA and ORO MARKETING,

INC.
G.R. No. 128024 May 9, 2000

FACTS:
Baez was the sales operations manager of Oro Marketing Inc. In 1993, Oro Marketing
indefinitely suspended Baez, prompting Baez to file for illegal dismissal. Labor Arbiter ruled in
favor of Baez. Since Oro Marketing failed to timely file the appeal, both NLRC and SC
dismissed the same. Oro Marketing filed a complaint for damages before the RTC for loss of
profit, cost of supplies, litigation expenses, and attorney’s fees. It alleged that due to Baez’
modus operandi, its sales decreased and reduced its profits. Baez filed a motion to dismiss,
interposing that the action for damages, having arisen from employer-employee relationship, was
squarely under the exclusive original jurisdiction of NLRC under Art. 217(a) par. 4 of Labor
Code, and is barred by reason of the final judgment in labor case. As such, he accused Oro
Marketing of splitting causes of action, and that the latter should have included the claim in its
counterclaim before the Labor Arbiter.
The respondent RTC Judge Valdevilla ruled that it had jurisdiction over the subject matter, since
the complaint did not ask for any relief under the Labor Code, but rather to recover damages as
redress for Baez’s nefarious activities, causing damage and prejudice to Oro Marketing. Since
this there was a breach of contractual obligation, which is within the realm of civil law, the
jurisdiction belongs to the regular courts.

ISSUE:
Whether or not RTC has jurisdiction over the claim for damages filed by Oro Marketing against
Baez

HELD:
No. RTC had no jurisdiction over Oro Marketing’s complaint for damages.
RTC was incorrect in saying that the resolution of the issues presented by the complaint did not
entail application of the Labor Code or other labor laws; the dispute was intrinsically civil.
Article 217(a) of the Labor Code, as amended, clearly bestows upon the Labor Arbiter original
and exclusive jurisdiction over claims for damages arising from employer-employee relations —
in other words, the Labor Arbiter has jurisdiction to award not only the reliefs provided by labor
laws, but also damages governed by the Civil Code.

By the designating clause “arising from the employer-employee relations”, Art. 217 should also
apply with equal force to the claim of an employer for actual damages against its dismissed
employee, where the basis for the claim arises from or is necessarily connected with the fact of
termination, and should be entered as a counterclaim in the illegal dismissal case.
CASE 368

DAI-CHI ELECTRONICS MANUFACTURING CORPORATION vs.HON. MARTIN S.

VILLARAMA
G.R. No. 112940 November 21, 199

FACTS:
On July 29, 1993, the petitioner Daichi electronics filed a complaint for damages with RTC
branch 156 for an employee’s (Limjuco) violation of their contract in 1990 which stipulated that
the termination of service of an employee restricted him from working in a company which has a
similar set of products or ventures for a span of 2 years following the termination of service.The
petitioner claimed that respondent became an employee of such a company called Angel Sound
with the same position as head of material management control before the 2 years was up.The
petitioner sought to claim 100k in damages and prevent the former employee from working in
the rival business within the 1 year timespan.
The respondent court under villarama claimed that it had no jurisdiction because the complaint
was for damages from labor-employee relations and should be adjudicated under the
Labor Arbiter under Art 217 s 4 of the LC. The petitioner asked for reversal because the case
was recognizable under the regular courts and that the cause of action didn’t arise from
employee-employer relationships even if the claim was in the employee’s contract.

ISSUE:
Whether or not the petitioner’s claim for damages one arising from employee-
employer relations?

HELD:
No. Art 217 section 4 of the Labor Code stipulated that Labor Arbiters have exclusive
jurisdiction to hear and decide cases for workers with claims for actual, moral, exemplary and
other forms of damages arising from employer-employee relations. The court held that the cuase
of action was under Civil Law, not the labor code.  The petitioner sought to
recover damages agreed upon in the contract as redress for respondent’s breach of his contractual
obligation to its damage and prejudice. He also didn’t ask for relief under the Labor Code. The
applicable case law was Singapore airlines v Pano where the employer’s claim for damages was
based 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 contract. The employee
didn’t report for duty as a course of convention training- quasi-delict.

There must be a causal connection for claims provided in the article 217 section 4 of labor Code.
Only when there is such a connection with other claims can damages be considered as arising
from employer-employee relations. In SMC v NLRC, the interpretation of Art 217 then was
focused on in the phrase “all money claims of workers” in par 3. There was no phrase “arising
from employer-employee relations at that time” (art 217 amended by bp blg 227, not yet the
present labor code)
CASE 369

NESTLÉ PHILIPPINES, INC. vs. THE NATIONAL LABOR RELATIONS

COMMISSION and UNION OF FILIPRO EMPLOYEES
G.R. No. 91231             February 4, 1991

FACTS:
Four (4) collective bargaining agreements separately covering the petitioner's employees all
expires on June 30, 1987. Thereafter, UFE was certified as the sole and exclusive bargaining
agent for all regular rank-and-file employees at the petitioner's Cagayan de Oro factory, as well
as its Cebu/Davao Sales Office. In August, 1987, while the parties, were negotiating, the
employees at Cabuyao resorted to a "slowdown" and walk-outs prompting the petitioner to shut
down the factory.

On January 26, 1988, UFE filed a notice of strike on the same ground of CBA deadlock and
unfair labor practices. However, on March 30, 1988, the company was able to conclude a CBA
with the union at the Cebu/Davao Sales Office, and on August 5, 1988, with the Cagayan de Oro
factory workers. The union assailed the validity of those agreements and filed a case of unfair
labor practice against the company on November 16, 1988.

After conciliation efforts of the National Conciliation and Mediation Board (NCMB) yielded
negative results, the dispute was certified to the NLRC by the Secretary of Labor on October 28,
1988.

After the parties had filed their pleadings, the NLRC issued a resolution on June 5, 1989, whose
pertinent disposition regarding the union's demand for liberalization of the company's retirement
plan for its workers. On December 14, 1989, the petitioner filed this petition for certiorari,
alleging that since its retirement plan is non-contributory, it (Nestlé) has the sole and exclusive
prerogative to define the terms of the plan "because the workers have no vested and demandable
rights thereunder, the grant thereof being not a contractual obligation but merely gratuitous. At
most the company can only be directed to maintain the same but not to change its terms. It
should be left to the discretion of the company on how to improve or mollify the same"

ISSUE:
Whether or not the employees have no vested and demandable right to a non-contributory
retirement plan.

HELD:
No, the employees have vested and demandable right to a non-contributory retirement plan. The
Retirement Plan was "a collective bargaining issue right from the start for the improvement of
the existing Retirement Plan was one of the original CBA proposals submitted by the UFE on
May 8, 1987 to Arthur Gilmour, president of Nestlé Philippines.

The fact that the retirement plan is non-contributory, i.e., that the employees contribute nothing
to the operation of the plan, does not make it a non-issue in the CBA negotiations. As a matter of
fact, almost all of the benefits that the petitioner has granted to its employees under the CBA —
salary increases, rice allowances, mid-year bonuses, 13th and 14th month pay, seniority pay,
medical and hospitalization plans, health and dental services, vacation, sick & other leaves with
pay — are non-contributory benefits. Since the retirement plan has been an integral part of the
CBA since 1972, the Union's demand to increase the benefits due the employees under said plan,
is a valid CBA issue. The deadlock between the company and the union on this issue was
resolvable by the Secretary of Labor, or the NLRC, after the Secretary had assumed jurisdiction
over the labor dispute (Art. 263, subparagraph [i] of the Labor Code).

The petitioner's contention, that employees have no vested or demandable right to a non-
contributory retirement plan, has no merit for employees do have a vested and demandable right
CASE 370

over existing benefits voluntarily granted to them by their employer. The latter may not
unilaterally withdraw, eliminate or diminish such benefits. 

Smart Communications v. Astorga

542 SCRA 434

FACTS:
Respondent Astorga was employed by petitioner Smart Communications, Incorporated
(SMART) on May 8, 1997 as District Sales Manager of the Corporate Sales Marketing Group/
Fixed Services Division (CSMG/FSD).

In February 1998, SMART launched an organizational realignment to achieve more efficient

operations. 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.

To soften the blow of the realignment, SNMI agreed to absorb the CSMG personnel who would
be recommended by SMART. SMART then conducted a performance evaluation of CSMG
personnel and those who garnered the highest ratings were favorably recommended to SNMI.
Astorga landed last in the performance evaluation, thus, she was not recommended by SMART.
SMART, nonetheless, offered her a supervisory position in the Customer Care Department, but
she refused the offer because the position carried lower salary rank and rate.

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.

The termination of her employment prompted Astorga to file a Complaint 8 for illegal dismissal,
non-payment of salaries and other benefits with prayer for moral and exemplary damages against
SMART and Ann Margaret V. Santiago (Santiago).

ISSUE:
Whether or not Astroga was properly notified of the termination.

HELD:
No, 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 39 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.

Article 283 of the Labor Code clearly provides: Closure of establishment and reduction of
personnel. — The employer may also terminate the employment of any employee due to the
installation of labor saving devices, redundancy, retrenchment to prevent losses or the closing or
cessation of operation of the establishment or undertaking unless the closing is for the purpose of
circumventing the provisions of this Title, by serving a written notice on the workers and the
Ministry of Labor and Employment at least one (1) month before the intended date thereof x x x.

SMART’s assertion that Astorga cannot complain of lack of notice because the organizational
realignment was made known to all the employees as early as February 1998 fails to persuade.
Astorga’s actual knowledge of the reorganization cannot replace the formal and written notice
required by the law. In the written notice, the employees are informed of the specific date of the
termination, at least a month prior to the effectivity of such termination, to give them sufficient
time to find other suitable employment or to make whatever arrangements are needed to cushion
the impact of termination. In this case, notwithstanding Astorga’s knowledge of the
reorganization, she remained uncertain about the status of her employment until SMART gave
CASE 371

her formal notice of termination. But such notice was received by Astorga barely two (2) weeks
before the effective date of termination, a period very much shorter than that required by law.

DAI-CHI ELECTRONICS MANUFACTURING CORPORATION vs. VILLARAMA, JR.

G.R. No. 112940 November 21, 199

FACTS:
On July 29, 1993, petitioner filed a complaint for damages with the RTC against private
respondent, a former employee.

Petitioner alleged that private respondent violated paragraph five of their Contract of
Employment dated August 27, 1990.

Petitioner claimed that private respondent became an employee of Angel Sound Philippines
Corporation, a corporation engaged in the same line of business as that of petitioner, within two
years from January 30, 1992, the date of private respondent's resignation from petitioner's
employ. Petitioner further alleged that private respondent is holding the position of Head of the
Material Management Control Department, the same position he held while in the employ of
petitioner.

Respondent court, in its Order dated September 20, 1993, ruled that it had no jurisdiction over
the subject matter of the controversy because the complaint was for damages arising from
employer-employee relations. Citing Article 217(4) of the Labor Code of the Philippines, as
amended by R.A. No. 6715, respondent court stated that it is the Labor Arbiter which had
original and exclusive jurisdiction over the subject matter of the case.

ISSUE:
Is petitioner's claim for damages one arising from employer-employee relations?

HELD:
No, petitioner's claim for damages is one not arising from employer-employee relations.

Here, petitioner 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. The Court held that jurisdiction over the controversy belongs to the civil courts
and that the action was for breach of a contractual obligation, which is intrinsically a civil
dispute. Furthermore, 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.
CASE 372

DOROTEO OCHEDA vs. CA and THE HEIRS OF EDUARDO SANTOS

G.R. No. 85517 October 16, 1992

FACTS:
The late Eduardo Santos was, at the time of his death, employed as a painter by the petitioner
who was a sub-contractor for the painting job on M.J.. The C.E. Construction Corporation, Inc.
(CECCI) was the principal contractor thereof by virtue of a contract it entered into with M.J.
Development Corporation, the owner of the building. Another corporation, Fujitec Philippines
Industrial Company, Inc. (FUJITEC), was contracted by M.J. Development Corporation to install
two (2) standard scenic elevator units in the building. When the painting job was almost
complete, i.e., all that remained to be painted was the wall of the shaft for the second elevator,
the petitioner trimmed his work forces to two (2) employees, Hernani Gozun and Eduardo
Santos; these employees were tasked to finish the painting. On 5 February 1981, they started
work on the inner wall of the elevator shaft; to paint the same, they had to stand on top of the
elevator which was then on the second floor of the building. After they finished, they called on
the boy operating the elevator to ask him to bring the same down to the first floor. Instead of
lowering the elevator, however, the boy brought it up to the sixth floor. The sudden upward
movement caused the elevator to jerk and the two (2) painters to lose their balance. Hernani was
able to cling to the cable but Eduardo fell off the top, found himself pinned between the shaft and
the elevator as the latter was moving upward and then fell to the ground when the elevator finally
stopped on the sixth floor. Hernani rushed to Eduardo's aid upon hearing the latter's cry for help.
The former lifted Eduardo in his arms and, with the help of another man, brought him to the
Makati Medical Center where he later died. While the elevator boy was never identified, it is
alleged that he worked for CECCI.

ISSUE:
Whether or not trial court has jurisdiction over the complaint.

HELD:
Yes, the trial court has jurisdiction over the complaint. 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: 1. Unfair labor practice cases; 2. Termination of disputes; 3. If accompanied with a
claim for reinstatement, those cases that workers may file involving wages, rates of pay, hours of
work and other terms and conditions of employment; 4. Claims for actual, moral, exemplary and
other forms of damages arising from the employer-employee relations; 5. Cases arising from any
violation of Article 264 of this Code, including questions involving the legality of strike and
lockouts; and 6. Except claims for Employees Compensation, Social Security, Medicare and
maternity benefits, all other claims, arising from employer-employee relations, including those of
persons in domestic or household service, involving an amount exceeding five thousand pesos
(P5,000.00) regardless of whether accompanied with a claim for reinstatement. (b) The
Commission shall have exclusive appellate jurisdiction over all cases decided by Labor Arbiters.
(c) Cases involving from the interpretation or implementation of collective bargaining agreement
and those arising from the interpretation or enforcement of company personnel policies shall be
disposed of by the Labor Arbiter by referring the same to the grievance machinery and voluntary
arbitration as may be provided in said agreements.

In the instant case, the source of the obligation upon which the private respondents' cause of
action is based is a quasi-delict or tort which has no reasonable connection with any of the claims
CASE 373

provided for in the aforesaid Article 217 of the Labor Code. It would have been entirely different
if the claim for damages arose out of, for instance, the illegal dismissal of Eduardo, in which case
the Labor Arbiter would have exclusive jurisdiction thereon.

CALIFORNIA MANUFACTURING CORPORATION vs. LAGUESMA

G.R. No. 97020 June 8, 1992 (209 SCRA 606)

FACTS:
On May 24, 1990, a petition for certification election among the supervisors of California
Manufacturing Corporation (CMC for brevity) was filed by the Federation of Free Workers
(FFW) — California Manufacturing Corporation Supervisors Union Chapter (CALMASUCO),
alleging inter alia, that it is a duly registered federation with registry certificate no. 1952-TTT-
IP, while FFW-CALMASUCO Chapter is a duly registered chapter with registry certificate no.
1-AFBI-038 issued on May 21, 1990; that the employer CMC employs one hundred fifty (150)
supervisors; that there is no recognized supervisors union existing in the company; that the
petition is filed in accordance with Article 257 of the Labor Code, as amended by Republic Act
No. 6715; and that the petition is nevertheless supported by a substantial member of signatures of
the employees concerned. In its answer, CMC, now petitioner herein, alleged among others, that
the petition for the holding of a certification election should be denied as it is not supported by
the required twenty-five percent (25%) of all its supervisors and that a big number of the
supposed signatories to the petition are not actually supervisors as they have no subordinates to
supervise, nor do they have the powers and functions which under the law would classify them
as supervisors.

FFW—CALMASUCO filed its reply maintaining that under the law, when there is no existing
unit yet in a  particular bargaining unit at the time a petition for certification election is filed, the
25% rule on the signatories does not apply; that the "organized establishment" contemplated by
law does not refer to a "company" per se but rather refers to a "bargaining unit" which may be of
different classifications in a single company; that CMC has at least two (2) different bargaining
units, namely, the supervisory (unorganized) and the rank-and-file (organized); that the
signatories to the petition have been performing supervisory functions; that since it is CMC
which promoted them to the positions, of supervisors. it is already estopped from claiming that
they are not supervisors; that the said supervisors were excluded from the coverage of the
collective bargaining agreement of its rank-and-file employees; and that the contested signatories
are indeed supervisors as shown in the "CMC Master List of Employees" of January 2, 1990 and
the CMS Publication.

ISSUES: Whether or not the term "unorganized establishment' in Article 257 of the tabor Code
refers to a bargaining unit or a business establishment; b) whether or not non-supervisors can
participate in a supervisor's certification election;

HELD:
Article 257 of the Labor code is applicable to unorganized labor organizations and not to
establishments where there exists a certified bargaining agent which had previously entered into
a collective bargaining agreement with the management. Otherwise stated, the establishment
concerned must have no certified bargaining agent.

In the instant case, the supervisors of CMC which constitute a bargaining unit separate and
distinct from that of the rank-and-file, have no such agent. thus they correctly filed a petition for
certification election thru union FFW-CALMASUCO, likewise indubitably a legitimate labor
organization. CMC's insistence on the 25% subscription requirement, is clearly immaterial. The
same has been expressly deleted by Section 24 of Republic Act No. 6715 and is presently
prescribed only in organized establishments, that is, those with existing bargaining agents.
Compliance with the said requirement need not even be established with absolute certainty. The
CASE 374

Court has consistently ruled that "even conceding that the statutory requirement of 30% (now
25%) of the labor force asking for a certification election had not been strictly compiled with, the
Director (now the Med-Arbiter) is still empowered to order that it be held precisely for the
purpose of ascertaining which of the contending labor organizations shall be the exclusive
collective bargaining agent. The requirement then is relevant only when it becomes mandatory to
conduct a certification election. In all other instances, the discretion, according to the rulings of
this Tribunal, ought to be ordinarily exercised in favor of a petition for certification.

INTERNATIONAL CATHOLIC IMMIGRATION COMMISSION vs CALLEJA

G.R. No. 85750 September 28, 1990

FACTS:
ICMC was one of those accredited by the Philippine Government to operate the refugee
processing center in Morong, Bataan. It was incorporated in New York, USA, at the request of
the Holy See, as a non-profit agency involved in international humanitarian and voluntary work.
It is duly registered with the United Nations Economic and Social Council (ECOSOC) and
enjoys Consultative Status, Category II. As an international organization rendering voluntary and
humanitarian services in the Philippines, its activities are parallel to those of the International
Committee for Migration (ICM) and the International Committee of the Red Cross.

Trade Unions of the Philippines and Allied Services (TUPAS) filed with the then Ministry of
Labor and Employment a Petition for Certification Election among the rank and file members
employed by ICMC. The latter opposed the petition on the ground that it is an international
organization registered with the United Nations and, hence, enjoys diplomatic immunity.

Meanwhile, the Philippine Government and the Ford and Rockefeller Foundations signed a
Memorandum of Understanding establishing the International Rice Research Institute (IRRI) at
Los Baños, Laguna. It was intended to be an autonomous, philanthropic, tax-free, non-profit,
non-stock organization designed to carry out the principal objective of conducting "basic
research on the rice plant, on all phases of rice production, management, distribution and
utilization with a view to attaining nutritive and economic advantage or benefit for the people of
Asia and other major rice-growing areas through improvement in quality and quantity of rice."

Both of these labor organizations filed a petition for certificate of election but were opposed by
their respective employers.

ISSUE:
Whether or not the grant of diplomatic privileges and immunities to ICMC/IRRI extends to
immunity from the application of Philippine labor laws.

HELD:
Yes, the grant of diplomatic privileges and immunities to ICMC/IRRI extends to immunity from
the application of Philippine labor laws.

Article II of the Memorandum of Agreement between the Philippine Government and ICMC
provides that ICMC shall have a status "similar to that of a specialized agency." Article III,
Sections 4 and 5 of the Convention on the Privileges and Immunities of Specialized Agencies,
adopted by the UN General Assembly on 21 November 1947 and concurred in by the Philippine
Senate through Resolution No. 19 on 17 May 1949.

IRRI is similarly situated, Pres. Decree No. 1620, Article 3, is explicit in its grant of immunity,

The immunity granted being "from every form of legal process except in so far as in any
particular case they have expressly waived their immunity," it is inaccurate to state that a
certification election is beyond the scope of that immunity for the reason that it is not a suit
against ICMC. A certification election cannot be viewed as an independent or isolated process. It
CASE 375

could tugger off a series of events in the collective bargaining process together with related
incidents and/or concerted activities, which could inevitably involve ICMC in the "legal
process," which includes "any penal, civil and administrative proceedings." The eventuality of
Court litigation is neither remote and from which international organizations are precisely
shielded to safeguard them from the disruption of their functions. Clauses on jurisdictional
immunity are said to be standard provisions in the constitutions of international Organizations.
"The immunity covers the organization concerned, its property and its assets. It is equally
applicable to proceedings in personam and proceedings in rem."

Ebro V. NLRC, 261 SCRA 399.

G.R. No. 110187. September 4, 1996.

FACTS:
Private respondent International Catholic Migration Commission (ICMC) is a non-profit agency
engaged in international humanitarian and voluntary work. It is duly registered with the United
Nations Economic and Social Council (ECOSOC) and enjoys Consultative Status, Category II. It
was one of the agencies accredited by the Philippine government to operate the refugee
processing center.

Private respondent ICMC employed petitioner Jose G. Ebro III to teach "English as a Second
Language and Cultural Orientation Training Program" at the refugee processing center. After six
months, ICMC notified petitioner that effective December 21, 1985, the latter’s services were
terminated for his failure to meet the requirements.

Petitioner filed a complaint for illegal dismissal, unfair labor practice, underpayment of wages,
accrued leave pay, 14th month pay, damages, attorney’s fees, and expenses of litigation. The
complaint was filed against private respondents ICMC.

ISSUE:
Whether the Memorandum of Agreement executed on July 15, 1988 gave ICMC immunity from
suit. 

HELD:
Yes, the Memorandum of Agreement executed on July 15, 1988 gave ICMC immunity from suit.

The grant of immunity to ICMC is in virtue of the Convention on the Privileges and Immunities
of Specialized Agencies of the United Nations, adopted by the UN General Assembly on
November 21, 1947, and concurred in by the Philippine Senate on May 17, 1949. This
Convention has the force and effect of law, considering that under the Constitution, the
Philippines adopts the generally accepted principles of international law as part of the law of the
land. The Memorandum of Agreement in question merely carries out the Philippine
government’s obligation under the Convention.

The scope of immunity of the ICMC contained in the Convention on the Privileges and
Immunities of the Specialized Agencies of the United Nations is instructive. Art. III, §4 of the
Convention provides for immunity from "every form of legal process." Thus, even if private
respondents had been served summons and subpoenas prior to the execution of the
Memorandum, they, as officers of ICMC, can claim immunity under the same in order to prevent
enforcement of an adverse judgment, since a writ of execution is "a legal process" within the
meaning of Article III.
CASE 376

SEAFDEC v. NLRC
206 SCRA 283

FACTS:
SEAFDEC-AQD is a department of an international organization, the Southeast Asian
Fisheries Development Center, organized through an agreement in 1967 by the governments of
Malaysia, Singapore, Thailand, Vietnam, Indonesia and the Philippines with Japan as the
sponsoring country.

Juvenal Lazaga was employed as a Research Associate on a probationary basis by SEAFDEC-

AQD. Lacanilao in his capacity as Chief of SEAFDEC-AQD sent a notice of termination to
informing him that due to the financial constraints being experienced by the department, his
services shall be terminated. SEAFDEC-AQD's failure to pay Lazaga his separation pay forced
him to file a case with the NLRC. The Labor Arbiter and NLRC ruled in favor of Lazaga. Thus
SEAFDEC-AQD appealed, claiming that the NLRC has no jurisdiction over the case since it is
immune from suit owing to its international character and the complaint is in effect a suit against
the State which cannot be maintained without its consent.

ISSUES:

Whether NLRC have jurisdiction over SEAFDEC-AQD?

HELD:

SEAFDEC-AQD is an international agency beyond the jurisdiction of public respondent

NLRC. Being an intergovernmental organization, SEAFDEC including its Departments (AQD),
enjoys functional independence and freedom from control of the state in whose territory its office
is located.

Permanent international commissions and administrative bodies have been created by the
agreement of a considerable number of States for a variety of international purposes, economic
or social and mainly non-political. In so far as they are autonomous and beyond the control of
any one State, they have a distinct juridical personality independent of the municipal law of the
State where they are situated. As such, according to one leading authority "they must be deemed
to possess a species of international personality of their own.

One of the basic immunities of an international organization is immunity from local jurisdiction,
i.e., that it is immune from the legal writs and processes issued by the tribunals of the country
where it is found. The obvious reason for this is that the subjection of such an organization to the
authority of the local courts would afford a convenient medium thru which the host government
may interfere in there operations or even influence or control its policies and decisions of the
organization; besides, such subjection to local jurisdiction would impair the capacity of such
body to discharge its responsibilities impartially on behalf of its member-states.
CASE 377

SEAFDEC v. Acosta
226 SCRA 49.

FACTS:

Two labor cases were filed by the herein private respondents against petitioner, Southeast
Asian Fisheries Development Center (SEAFDEC), before the NLRC of Iloilo City. In these
cases, the private respondents Canto, Baliao, Supetran, Ferrer, Contrador and Veloso claim that
they have been wrongfully terminated from their employment by the petitioner.

Petitioner contends to be an international inter-government organization composed of

various Southeast Asian countries. They filed a motion to dismiss challenging the jurisdiction of
the public respondent in taking cognizance of the above cases. Labor arbiter Acosta, herein
private respondent, issued an order denying the motion to dismiss. A motion for reconsideration
was subsequently filed but it was likewise denied. The court then issued a temporary restraining
order which sets aside the order of respondent Labor arbiter.

Private respondents allege that petitioner is not immune from suit and assuming that it is indeed
an international organization, it has impliedly waived its immunity by belatedly raising the issue
of jurisdiction. The instant petition was dismissed along with the lifting of the issued TRO.

ISSUE:

Whether or not the Labor Arbiter lacks jurisdiction over the dispute.

HELD:

SEAFDEC is an international agency enjoying diplomatic immunity and beyond the

jurisdiction of the NLRC. It was established to contribute to the promotion of the fisheries
development in Southeast Asia by mutual cooperation among the member governments of the
Center. Being an intergovernmental organization, SEAFDEC enjoys functional independence
and freedom from control of the state in whose territory its office is located. Insofar as
international commissions are concerned, they are autonomous and beyond the control of any
one State. They have a juridical personality independent of the municipal law of the State they
are situated.

One of the basic immunities of an international organization is immunity from local

jurisdiction. The reason for this is that the subjection of such an organization to the authority of
the local courts would afford a convenient medium thru which the host government may interfere
in their operations or even influence or control its policies and decisions of the organization.
Besides, such objection to local jurisdiction would impair the capacity of such body to discharge
its responsibilities impartially on behalf of its member-states.

Anent the issue of waiver of immunity, the petitioner has timely raised the issue of
jurisdiction since it has done so before it rested its case and before the proceedings had been
terminated. Hence, the petition is granted due course. The order denying the motion to dismiss is
set aside.
CASE 378

TERESITA MONTOYA vs. ESCAYO 171 SCRA 442.

G.R. No. 82211-12 March 21, 1989

FACTS:
The private respondents were all formerly employed as salesgirls in the petitioner's store. On
different dates, they separately filed complaints for the collection of sums of money against the
petitioner for alleged unpaid overtime pay, holiday pay, 13th month pay, ECOLA, and service
leave pay: for violation of the minimum wage law, illegal dismissal, and attorney's fees. The
complaints, which were originally treated as separate cases, were subsequently consolidated on
account of the similarity in their nature. On August 1, 1984, the petitioner-employer moved for
the dismissal of the complaints, claiming that among others, the private respondents failed to
refer the dispute to the Lupong Tagapayapa for possible settlement and to secure the certification
required from the Lupon Chairman prior to the filing of the cases with the Labor Arbiter. These
actions were allegedly violative of the provisions of P.D. No. 1508, which apply to the parties.

Labor Arbiter Ovejera ordered the dismissal of the complaints. The private respondents sought
the reversal of the Labor Arbiter's order before the respondent NLRC. The public respondent
rendered the assailed resolution reversing the order of Ovejera, and remanded the case to the
Labor Arbiter for further proceedings. A motion for reconsideration was filed by the petitioner
but this was denied for lack of merit. Hence, this petition.

ISSUE:
Whether the provisions of the Katarungang Pambarangay Law (PD No. 1508) requiring the
submission of disputes before the barangay Lupong Tagapayapa prior to their filing with the
court or other government offices are applicable to labor cases.

HELD:
No, the provisions of P.D. No. 1508 requiring the submission of disputes before the barangay
Lupong Tagapayapa prior to their filing with the court or other government offices are not
applicable to labor cases.

The three "WHEREAS" clauses of P.D. No. 1508 can be gleaned clearly the decree's intended
applicability only to courts of justice, and not to labor relations commissions or labor arbitrators'
offices. The express reference to "judicial resources", to "courts of justice", "court dockets", or
simply to "courts" are significant. On the other band, there is no mention at all of labor relations
or controversies and labor arbiters or commissions in the clauses involved.

In addition, Letter of Instructions No. 956 and Letter of Implementation No. 105, both issued on
November 12, 1979 by the former President in connection with the implementation of the
Katarungang Pambarangay Law, affirm this conclusion. These Letters were addressed only to the
following officials: all judges of the Courts of first Instance, Circuit Criminal Courts, Juvenile
and Domestic Relations Courts, Courts of Agrarian Relations, City Courts and Municipal
Courts, and all Fiscals and other Prosecuting Officers. These presidential issuances make clear
that the only official directed to oversee the implementation of the provisions of the Katarungang
Pambarangay Law (P.D. No. 1508) are the then Minister of Justice, the then Minister of Local
Governments and Community Development, and the Chief Justice of the Supreme Court. If the
CASE 379

contention of the petitioner were correct, the then Minister (now Secretary) of Labor and
Employment would have been included in the list, and the two presidential issuances also would
have been addressed to the labor relations officers, labor arbiters, and the members of the
National Labor Relations Commission. Expressio unius est exclusio alterius.

MONTE DE PIEDAD & SAVINGS BANK v. THE MINISTER OF LABOR AND

EMPLOYMENT and MONTE DE PIEDAD AND SAVINGS BANK EMPLOYEES
ASSOCIATION
G.R. No. L-69372. July 11, 1985.

FACTS:
In March of 1979, petitioner Monte de Piedad and Savings Bank was giving its employees, aside
from their regular wages, a living allowance of P230.00 a month for single employees and
P260.00 for married ones plus P110.00 for emergency cost of living allowance (ECOLA)
provided in P.D. Nos. 525 (P50.00) and 1123 (P60.00). P.D. No. 1614 was promulgated on
March 14, 1979. It increased the minimum wage from P11.00 to P13.00 a day and the ECOLA
by P60.00, effective April 1, 1979. Monte de Piedad complied with the minimum wage
provisions of P.D. No. 1614 but it did not grant the P60.00 increase for ECOLA. Its reason was
that it was already paying its employees a living allowance of P230.00 plus ECOLA in the
amount of P110.00 for a total of P340.00 which is more than the ECOLAs provided in P.D. Nos.
525, 1123 and 1614 for a total only of P170.00.

On April 20, 1979, Monte de Piedad and the private respondent entered into a collective
bargaining agreement (CBA) providing for increases in basic pay and allowances retroactive to
May 1, 1978. The CBA increased the monthly living allowance by P20.00, namely: P250.00 for
single employees and P280.00 for married ones. This was in addition to the ECOLA of P110.00.
More than two years after the effectivity of the CBA, the union filed a complaint with the
Ministry of Labor and Employment (MOLE) alleging non-payment of the P60.00 ECOLA
provided in P.D. No. 1614. The parties, through the mediation of the MOLE, entered into a new
CBA retroactive to May 1, 1981. Contrary to the agreement, the union did not withdraw its
complaint with MOLE for alleged non-payment of the P60.00 ECOLA provided in P.D. No.
1614.

ISSUE:
Whether or not the union is bound by its promise contained in the CBA to withdraw its claim for
alleged non-payment of the ECOLA provided in P.D. No. 1614.

HELD:

Yes, the union is bound by its promise contained in the CBA to withdraw its claim for alleged
non-payment of the ECOLA provided in P.D. No. 1614.

The provision on withdrawal of the complaint is encouraged by law for it is a compromise to put
an end to litigation already commenced. And the Labor Code itself directs:

"ART. 227. Compromise agreements. — Any compromise agreement, including those involving
labor standard laws, voluntarily agreed upon by the parties with the assistance of the Bureau or
the regional office of the Department of Labor, shall be final and binding upon the parties. The
National Labor Relations Commission or any court shall not assume jurisdiction over issues
involved therein except in case of non-compliance thereof or if there is prima facie evidence that
the settlement was obtained through fraud, misrepresentation, or coercion."
CASE 380

Here, the CBA which includes a withdrawal of the union’s complaint in respect of P.D. No. 1614
is valid. There is nothing in it which contravenes the law, morals, good customs, public order, or
public policy. The terms and conditions of a collective bargaining contract constitutes the law
between the parties and an employer, such as the herein petitioner, who bargains in good faith
has a right to rely on the agreement.

FILEMON DIONELA et al v. CIR (8 SCRA 832)

G.R. No. L-18334             August 31, 1963

FACTS:
The Union — including petitioners herein, who were members thereof — declared a strike again
the aforementioned Corporation. Soon thereafter, the Union and the Corporation reached an
agreement for the "amicable settlement of all differences, disputes and/or controversies between
them, "subject to the condition, among others, that the Corporation "should pay the sum
equivalent to three months separation pay to each striking Squibb employee."

Not satisfied with the terms of this agreement, on December 28, 1955, Filomeno Dionela, vice-
president of the Union, and twenty-seven (27) other employees of the company and members of
the Union — hereinafter referred to as "Dionela, et al." — filed a "Motion to Disauthorize" its
counsel of record and the Union to act, represent and/or prosecute the case, insofar as said
movants were concerned, on account of alleged loss of faith and confidence in both. However, a
motion to withdraw the complaints in said case, signed by the president of the Union and the
three employees against whom the acts of unfair labor practice charged in the aforementioned
complaints had allegedly been committed (Mariano Argasuma, Bienvenido Jose and Benigno
Sabas), as well as by their common counsel, was filed on January 17, 1956. Moreover, the
Acting Prosecutor who had subscribed said complaints expressed his conformity to this motion.
Accordingly, by an order dated February 13, 1956, the Court dismissed said complaints.
"Dionela, et al." moved for a reconsideration of this order, but the motion was dismissed on
account of the movants' failure to file their arguments in support thereof. Dionela and 23 of
former 27 co-movants in the aforementioned Motion to Withdraw — hereafter referred to as
petitioners — instituted the present proceedings, for unfair labor practice of the Corporation and
its general manager, Carleton Ashley both of whom are hereafter referred to as respondents.
Acting Prosecutor of the Court of Industrial Relations filed the corresponding complaint for
unfair labor practices allegedly committed by respondents. It is alleged in the complaint, that
petitioners and other members of the Union went on strike because of discriminatory acts
committed by respondents against the aforementioned Mariano Argasuma, Bienvenido Jose and
Benigno Sabas due to their union activities; that when the members of the Union were advised of
the compromise agreement proposed by respondents, herein petitioners objected thereto and
moved to disauthorize their counsel of record and the Union from representing them in Case No
598-ULP; that said objection and motion were overrule by the Union; that after the dismissal of
said case No. 598-ULP, owing to the withdrawal of the complaints therein, petitioners herein
requested the corporation to reinstate them, but the corporation refused and still refuses to do so
despite repeated demands; and that such refusal to reinstate the petitioners constitutes an unfair
labor practice.

ISSUE:
Whether the compromise agreement pursuant to which the complaint in Case No. 598-ULP
had, inter alia, been withdrawn and then dismissed is binding upon petitioners herein.

HELD:
Yes, the compromise agreement is binding upon petitioners. The lower court ruled on the ground
that "it is an accepted rule under our laws that the will of the majority should prevail over the
CASE 381

minority" citing  Betting Ushers Union (PLUM) vs. Jai-Alai, L-933O, June 29, 1957 and Jesalva,
et al. vs. Bautista, L-11928 to L-11930, March 24, 1959 — and that the action taken by
petitioners herein as minority members of the Union "is contrary to the policy of the Magna
Carta of Labor, which promotes the settlement of differences between management and labor by
mutual agreement," and that if said action were tolerated, "no employer would ever enter into
any compromise agreement for the minority members of the Union will always dishonor the
terms of the agreement and demand for better terms." The view thus taken by the lower court is
correct. Indeed, otherwise, even collective bargaining agreements would cease to promote
industrial peace and the purpose of Republic Act No. 875 would thus be defeated.

NATIONAL POWER CORPORATION vs. NATIONAL POWER CORPORATION

EMPLOYEES AND WORKERS ASSOCIATION

FACTS:
On January 11, 1966, NPCEWA staged a strike against NPC for alleged refusal by the
latter to honor its commitment in their collective bargaining contract that should NPC increase
the salaries of its employees (it was claimed that some employees' salaries were increased) other
than the adjustment allowed in the contract, the "Corporation agrees to the reopening by
Association of negotiations for salary adjustments of NPC personnel.

The dispute was certified by the President of the Philippines to the Court of Industrial Relations,
where it was docketed as Case No. 65-IPA, as one involving an industry indispensable to the
national interest. In the Industrial Relations Court, the union pursued its demand for pay
increases while NPC questioned the legality of the strike.

ISSUE:
Whether or not an unfair labor practice chrage may be the subject of a compromise agreement.

HELD:
Yes, the compromise agreement is valid.  It is an accepted rule under our laws that the
will of the majority should prevail over the minority,' citing Betting Ushers Union (PLUM) vs.
Jai-Alai L-9330, June 29, 1957, and Jesalva, et al. vs. Bautista, L-11928 to L11930, March 24,
1959 - and that the action taken by petitioners herein as minority members of the Union is
contrary to the policy of the Magna Carta of Labor, which promotes the settlement of differences
between management and labor by mutual agreement,' and that if said action were tolerated, 'no
employer would ever enter into any compromise agreement for the minority members of the
Union will always dishonor the terms of the agreement and demand for better terms.' The view
thus taken by the lower court is correct. Indeed, otherwise, even collective bargaining
agreements would cease to promote industrial peace and the purpose of Republic Act No. 875
would thus be defeated."
CASE 382

Reformist Union v. National Labor Relations Commission

266 SCRA 713

FACTS:

Reformist Union, a labor union staged a strike against R.B. Liner in 1989. R.B. Liner
petitioned the Secretary of Labor to assume jurisdiction over the dispute or certify it to the
NLRC. The Secretary certified the case to the NLRC for compulsory arbitration. The certified
case was dismissed after the union and the company reached an agreement providing, among
others, for the holding of a certification election. Later, when the union filed a complaint for
unfair labor practice against the company, i.e. illegal lockout that allegedly took place after the
strike and the election, R.B. Liner countered with another case that sought to declare the 1989
strike illegal.

ISSUE:
Whether or not the company still contest the legality of the 1989 strike.

HELD:
No, the company can no longer contest the legality of the strike. The company itself sought
compulsory arbitration in order to resolve that very issue. The dispute or strike was settled
when the company and the union entered into an agreement. By acceding to the peaceful
settlement brokered by the NLRC, the company waived the issue of the illegality of the strike.
The very nature of compulsory arbitration makes the settlement binding upon the company.
Compulsory arbitration has been defined both as “the process of settlement of labor disputes by a
government agency which has the authority to investigate and to make an award which is
binding on all the parties,” and as a mode of arbitration where the parties are “compelled to
accept the resolution of their dispute through arbitration by a third party.” Clearly, the legality
of the strike can no longer be reviewed.
CASE 383

Jesalva vs. Bautista

105 Phil. 384

FACTS:
Respondent Premier Productions, Inc., executed by and between the said Corporation and the
Philippine Movie Pictures Association, whereby the parties agreed: (1) that the Corporation shall
pay to the Union or its employees may have against the Premier Productions, Inc.; (2) that the
Corporation leases to the Union its equipment and facilities to enable the Union to produce and
process two moving pictures; and (3) that in consideration of the above, all pending petitions and
cases filed by the Union in the Court of Industrial Relations against the Corporation and its
officers arising out of a labor dispute as well as all their pending incidents, be withdrawn and
dismissed, including pending executions, levy, attachment, and garnishment of the properties and
equipment of the Corporation, etc.

It is claimed by petitioners in these three cases (1) that the Union which took part in the
compromise agreement had lost its personality; (2) that the agreement deprives a worker
claiming for unpaid overtime work performed of the payment of the same against his will; (3)
that the agreement is illegal insofar as it reduced the fees of their attorneys previously
determined by the same court upon a final judgment, against the attorneys’ will.

ISSUE:
Whether or not the Union had already lost its personality for failure to comply with the
requirements of R.A No. 557

HELD:
No., the union did not lost its personality because the filing of cases by the union when it still
had legal existence.

Petitioners have not shown any reason or ground for their contention that the Union has ceased to
have a legal personality because it failed to comply with the provisions of Republic Act No. 875.
There is no evidence in the record of any act or fact which may have operated to deprive the
Union of the legal personality that it had at the time it instituted the action. Besides, if the Union
had a personality at the time when it brought the cases in court, it is presumed to have continued
to have that personality, there being no evidence to the contrary. Furthermore, it would be unjust
and unfair to declare the compromise null and void simply because a new law has taken effect
which has changed the legal requirements for labor unions to exist. If the Union had a
personality at the time it brought the action and during the pendency of the action, the change in
the law which may have required the Union to comply with other regulations in order to establish
a personality under the new law would not render the acts of the said Union in the pending cases
in which it is a party null and void.
CASE 384

Olaybar vs. NLRC

237 SCRA 819

FACTS:

Petitioners were regular employees of private respondents Orient Marine and Fishing Resources,
Inc., when they were dismissed on the ground of retrenchment. Contesting the legality of their
retrenchment, petitioners lodged separate complaints for illegal dismissal and unfair labor
practice with prayer for reinstatement and back wages before the Regional Arbitration Branch
No. 6 in Bacolod City. Private respondent Orient Marine and Fishing Resources, Inc., was
ordered to reinstate petitioners and to pay their full back wages which should in no case exceed
three (3) years.

ISSUE:
Whether or not compromises and settlements are conclusive upon the parties.

HELD:
Yes, compromise and settlememnts are conclusive upon the parties. Under the Labor Code it
recognizes the conclusiveness of compromise settlements as a means to end labor dispute. Art.
227 provides that "any compromise settlement, including those involving labor standards laws,
voluntarily agreed upon by the parties with the assistance of the Bureau or the regional office of
the Department of Labor, shall be final and binding upon the parties. The National Labor
Relations Commission or any court shall not assume jurisdiction over issues involved therein
except in case of non-compliance thereof or if there is prima facie evidence that the settlement
was obtained through fraud, misrepresentation or coercion.

When the NLRC rendered its decision ordering the reinstatement and back wages for petitioners,
it unknowingly adjudicated a case which, for all intents and purposes, had already been closed
and terminated by the parties themselves when they agreed on a settlement. This is the clear
import of the rule that compromises and settlements have the effect and conclusiveness of res
judicata upon the parties.
CASE 385

Eurotech Hair Systems, Inc. vs. Go

500 SCRA 611

FACTS:
Petitioner Eurotech Hair Systems, Inc. is a domestic corporation engaged in the manufacture and
export of wigs and toupees. Petitioners Lutz Kunack and Jose E. Barin are the company’s
presidentand general manager, respectively. Respondent Antonio S. Go served as Eurotech’s
operationsmanager from September 2, 1996 until he was dismissed on September 27, 1999. As
operations manager, he drafted and implemented the plans for the production of wigs and
toupees. Respondent’s responsibilities included manpower planning to meet the monthly
production targets. In 1999, the company suffered production shortfalls. Thus, on September 2,
1999, petitioner Barin issued respondent a memorandum, strongly advising him to improve his
performance. He was also admonished because of the late shipment of 80 units of hairpieces to
one of petitioners’ clients, Bergmann Company.

On September 7, 1999, Eurotech issued another memorandum reiterating the previous reminder
for respondent to improve his performance. Again, on September 21, 1999, Eurotech issued two
memoranda, reminding respondent of his continued failure to improve his performance. He was
given 24 hours to explain in writing why the company should not terminate his services on the
ground of loss of trust and confidence. On September 24, 1999, Eurotech issued yet another
memorandum reminding respondent of his failure to submit his written explanation and granting
him another 24 hours to submit such explanation. The second 24-hour period lapsed without
respondent’s explanation. On September 27, 1999, petitioner Kunack finally issued respondent a
termination letter citing loss of trust and confidence.

ISSUE:

Whether or not the respondent’s dismissal is in accordance with the law.

HELD:

The respondent’s dismissal is illegal. In the instant case, petitioners failed to prove that
respondent was terminated for a valid cause. Evidence adduced was utterly wanting as to
respondent’ss allegd inefficiency constituting a willful breach of trust and confidence reposed in
him by petitioners.

Loss of trust and confidence to be a valid ground for an employee’s dismissal must be
based on a willful breach and founded on clearly established facts. A breach is willful if it is
done intenitionall, knowingly and purposely, witout justifiable excuse, as distinguished from an
act done carelessly, thoughtlessly, heedlessly or inadvertently.
CASE 386

PNOC-EDC vs. Abella

448 SCRA 549

FACTS:
On 01 June 1989, Frederick V. Abella started working with PNOC-EDC as a probationary
Security Assistant at its SNGP in Ticala, Valencia, Negros Oriental. Subsequently, he became a
regular employee. On 20 April 1990, Abella was informed that his employment with PNOC-
EDC would be terminated effective 21 May 1990, allegedly due to a company-
wide reorganization pursuant to its Manpower Reduction Program, wherein the position
of Security Assistant at PNOC-EDC SNGP had been abolished. 

Aggrieved, Abella filed a case of illegal dismissal, and for actual, moral, and exemplary damages
with the NLRC at Dumaguete City. NLRC held that Abella was illegally dismissed as the
company and its officers failed to show a clear scheme and convincing proof of reorganization.
All other claims are dismissed. An appeal was timely filed with the NLRC.

Meanwhile, with said appeal still pending in the NLRC, the labor arbiter issued an order dated 20
November 1991, directing the company to "admit back to work or reinstate the complainant
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.

ISSUE:
Whether or not the reinstatement of respondent was a faithful compliance of the
provisions of Paragraph 3, Article 223 of the Labor Code.

HELD:
Yes, the reinstatement of respondent was a faithful compliance of the provions of the law.
The order of the labor arbiter reinstating the private respondent to his former position in SNGP
had already been superseded by the agreement of both parties to waive "[a]ll other claims,
damages and causes of action arising out of the instant case ." Consequently, the writ issued by
the labor arbiter executing the order of reinstatement had no leg to stand on. Secondly, the law
does not preclude the reinstatement of an employee, who has been separated from work without
just cause, to a substantially equivalent position in the same establishment without loss of
seniority rights, and with the same rank, salary and privileges, 47 if the former position is no
longer available. Therefore, the claim of lack of insubordination due to lack of valid
reinstatement must fail.
CASE 387

GOLDEN DONUTS, INC. and LEOPOLDO PRIETO vs. NATIONAL LABOR

RELATIONS COMMISSION

FACTS:
Atty. Pontenciano Flores, the counsel of the union and strikers, sensing the gravity of the
penalties attendant to the strike resorted to, including the financial award that may be due the
Golden Donuts, Inc. and civil liabilities that may be awarded thereafter, said counsel pleaded for
a compromise. A compromise agreement was entered into by the KMDD-CFW and Golden
Donuts, Inc. Withdrawing/dismissing with prejudice any and all cases, whether criminal, civil or
labor filed against each other and agree to execute affidavit of desistance and/or Motion to
Dismiss to ensure the dismissal of these cases. And upon execution of this Agreement, the
parties undertake not to file any other charges/complaints against each other as this act
constitutes a general waiver or release/quitclaim. Out of the said 262 striking force, only the five
(5) complainants disagreed and did not receive the amount due, arguing that the compromise
agreement was entered into by their counsel and the President of the Union without their
individual consent and/or authority and that the same was not approved nor ratified by the
majority of the union membership.
ISSUE:
Whether or not a union may compromise or waive the rights to security of tenure and money
claims of its minority members, without the latter’s consent.
HELD:
No. First, even if a clear majority of the union members agreed to a settlement with the
employer, the union has no authority to compromise the individual claims of members who did
not consent to such settlement. In the case at bar, minority union members did not authorize the
union to compromise their individual claims. Absent a showing of the union’s special authority
to compromise the individual claims of private respondents for reinstatement and back wages,
there is no valid waiver of the aforesaid rights. As private respondents did not authorize the
union to represent them not bound by the terms thereof. Second, whether minority union
members who did not consent to a compromise agreement are bound by the majority decision
approving a compromise settlement has been resolved in the negative.
CASE 388

GALICIA VS NLRC
GR No. 119649

FACTS:

The disputed Compromise Agreement was executed by James Yu, the Manager and Vice
President of Globe Paper Mills and Teofilo Rafols, the National President of the National
Organization of Workingmen (NOWM) representing the complainants. The agreement settled
the case for and in consideration of the total sum of P300,000.00. The next day, each of the
complainants signed a Quitclaim and Release which confirmed the compromise agreement as
well as receipt of their individual share amounting to P12,000.00 each. Private respondents
submitted the Compromise Agreement and Joint Motion to Dismiss before the respondent
Commission which was then considering the case on appeal from the decision of the Labor
Arbiter. Herein petitioners later filed an Opposition to the Motion to dismiss where they
demanded the difference of what they actually received and the judgment award in their favor.
The Commission approved the Compromise Agreement, setting aside the decision of the Labor
Arbiter and dismissing the instant case. Motion for reconsideration was denied.

ISSUE:

Whether or not a compromise agreement is valid and binding considering the amount accepted
was considerably low compared to the award of the Labor Arbiter and it was under the
compulsion of “dire necessity”.

HELD:
No. A compromise agreement is executed by parties who adjust their difficulties by mutual
consent in order to prevent or to put an end to a lawsuit. Additionally, each of the parties is
motivated by “the hope of gaining, balanced by the danger of losing.” Under the Labor Code,
any compromise settlement voluntarily agreed upon by the parties with the assistance of the
Bureau of Labor Relations or the regional office of the Department of Labor and Employment
shall be final and binding upon the parties. Even if contracted without the assistance of labor
officials, compromise agreements between workers and their employers have been upheld and
considered as valid, accepted and even desirable means of settling disputes.
CASE 389

Sicangco vs. NLRC

235 SCRA 96

FACTS:

Rey Pablo D. Sicangco was appointed Senior Attorney in the Metro Drug Corporation (MDC).
In 1986, he was promoted to the position of Assistant Vice-President for Legal Affairs. Later that
same year, MDC was acquired by another company and subsequently renamed Metro Drug Inc.
(MDI). Sicangco retained his position in MDI. As Assistant Vice-President for Legal Affairs, he
was in charge of labor relations, personnel administration, and all other corporate concerns of
MDI.
In 1989, Sicangco was assigned to the legal staff of the mother company, First Pacific Metro
Corporation, under the supervision of its general counsel. In a letter dated June 2, 1989, the
company informed him that his position would be declared redundant effective July 2, 1989. He
was assured of benefits due him under the law.
Sicangco did not protest and instead successfully negotiated for higher separation benefits. 
February 26, 1990, Sicangco filed an action against the company for unfair labor practice and
illegal dismissal. On April 5, 1990, he amended the complaint to include a prayer for damages.
The Labor Arbiter declared Sicangco's dismissal as illegal and ordered his reinstatement with
back wages, moral and exemplary damages, and attorney's fees. However, the National Labor
Relations Commission took the opposite view when the decision was appealed to it.

ISSUE:
Whether or not Sicangco’s dismissal is illegal.

HELD:
Sicangco’s dismissal was legal.
There is no indication in the record that he was coerced into resigning from the company. It
should be noted that the petitioner is a lawyer and specializes in labor relations at that. There is
every reason to suppose that he knows his basic rights as an employee and, no less importantly,
knows how to protect these rights as a lawyer. In fact, he used this knowledge to his advantage
when he negotiated successfully for higher separation benefits.

It would appear that when he was informed that his position had become redundant, he decided
to resign and was allowed to do so before his redundancy took effect. There is nothing illegal
with the practice of allowing an employee to resign instead of being separated for just cause, so
as not to smear his employment record.
CASE 390

Veloso vs. DOLE

200 SCRA 201

FACTS:

The petitioners claim that they were forced to sign their respective releases in favor of their
employer, the herein private respondent, by reason of their dire necessity. The latter, for its part,
insists that the petitioner entered into the compromise agreement freely and with open eyes and
should not now be permitted to reject their solemn commitments. The controversy began when
the petitioners, along with several co-employees, filed a complaint against the private respondent
for unfair labor practices, underpayment, and non-payment of overtime, holiday, and other
benefits.

ISSUE:
Whether or not dire necessity is an acceptable ground for annulling the releases.

HELD:
Dire necessity is not an acceptable ground for annulling the releases, especially since it has not
been shown that the employees had been forced to execute them. It has not even been proven that
the considerations for the quitclaims were unconscionably low and that the petitioners had been
tricked into accepting them. While it is true that the writ of execution dated November 24, 1987,
called for the collection of the amount of P46,267.92 each for the petitioners, that amount was
still subject to recomputation and modification as the private respondent's motion for
reconsideration was still pending before the DOLE. The fact that the petitioners accepted the
lower amounts would suggest that the original award was exorbitant and they were apprehensive
that it would be adjusted and reduced. In any event, no deception has been established on the part
of the private respondent that would justify the annulment of the petitioner’s quitclaims.

The questioned quitclaims were voluntarily and knowingly executed and that the petitioners
should not be relieved of their waivers on the ground that they now feel they were improvident in
agreeing to the compromise. What they call their "dire necessity" then is no warrant to nullify
their solemn undertaking, which cannot be any less binding on them simply because they are
laborers and deserve the protection of the Constitution. The Constitution protects the just, and it
is not the petitioners in this case
CASE 391

SMI Fish Industries vs. NLRC

213 SCAR 444

FACTS:
On March 30, 1987, private respondents filed separate but identical complaints for unfair
labor practice, illegal dismissal, illegal suspension, illegal lay-off, underpayment, non-payment
of overtime pay, premium pay for holiday and rest days, night-shift differential, 13th month pay,
(ECOLA), service incentive leave pay, and damages. Petitioners denied all the foregoing charges
and claims.

On December 22, 1988, petitioners appealed the joint decision to the NLRC, disputing the
findings of the labor arbiter that they violated the security of tenure of private respondents. As
already stated, a resolution was promulgated by the NLRC affirming that joint decision of the
labor arbiter, but with a modification setting aside the payment of separation pay and ordering
petitioners to reinstate private respondents to their former or equivalent positions with back
wages, including ECOLA, 13th month pay and service incentive leave pay, equivalent to three
(3) years, without loss of privileges, seniority rights and other benefits

ISSUE:
Whether or not the labor arbiter and the NLRC committed grave abuse of discretion
amounting to lack of jurisdiction when they failed to and thus set aside the compromise
agreement.

HELD:
No., the Labor Arbiter and the NLRC did not commit grave abuse of discretion. It cannot
uphold the theory of petitioners that private respondents are already barred from filing the
present complaint by reason of the amicable settlement which terminated NLRC Cases Nos.
0216-86 and 0338-86 theretofore filed by herein private respondents De la Trinidad, Arroyo and
Parro, together with Orlando Gratil and Teresita Borromeo, for unfair labor Practice, illegal
dismissal, violation of labor standards, and damages.

The alleged compromise agreement, dated January 15, 1987, has only the effect of putting an end
to those previous cases but will not and cannot bar the signatories therein from filing complaints
against petitioners for subsequent or future violations of the Labor Code
CASE 392

Kaisahan ng mga Manggagawa sa La Campana vs. Sarmiento

133 SCRA 220

FACTS:
On June 19, 1951, petitioner Union submitted to the respondent company a petition demanding
for better working conditions and other benefits including the reinstatement of nine (9) dismissed
workers. Upon refusal of the company to grant said demands, the case was elevated to the
Department (now Ministry) of Labor for conciliation. When no agreement was reached, the case
was certified to the defunct Court of Industrial Relations (CIR) on July 19, 1951, where it was
docketed as Case No. 584-V. On July 21, 1951, the CIR issued a return-to-work order and
enjoined the company from further laying off or dismissing laborers as well as hiring new
employees without express authority from the court.

The union, through its Secretary, Clarita de la Cruz, assisted by counsel, entered into a
Compromise Agreement with Ricardo S. Tantongco, assisted by his counsel, on October 10,
1975 waiving all claims and counterclaims of whatever nature arising out of or in connection
with the present case.

ISSUE:
Whether or not the Compromise Agreeement is valid.

HELD:
The Compromise Agreement is invalid, because being no ratification by the
individual members of the union and that the presence of complainants during the proceedings
before the Labor Arbiter and the presentation of evidence relative to the prosecution of their case
are eloquent indication of their interest in pursuing their claims which negate the assertion that
they have consented to the withdrawal thereof. We find no cogent reason to disturb the findings
of the Secretary of Labor absent any showing of abuse of discretion, it appearing that such
findings are supported by substantial evidence. Generally, a judgment on a compromise
agreement puts an end to a litigation and is immediately executory. However, the Rules require a
special authority before an attorney can compromise the litigation of their clients. The authority
to compromise cannot lightly be presumed and should be duly established by evidence
CASE 393

Jesalva vs. Bautista

105 Phil. 348

FACTS:

The petitioners secured a judgment for reinstatement and for the payment of back wages, which
judgment was already in the process of execution; for claims amounting to P100,000 pending
trial and resolution. It is claimed by petitioners (1) that the Union which took part in the
compromise agreement had lost its personality; (2) that the agreement deprives a worker
claiming for unpaid overtime work performed of the payment of the same against his will.

ISSUE:

Whether or not the Union took part in compromise agreement had lost its personality following
failure to comply with RA No. 557 requirements?

HELD:

No. In answer it must be stated that the cases were filed by the Union at a time when it still had
legal existence. Petitioners have not shown any reason or ground for their contention that the
Union has ceased to have a legal personality because it failed to comply with the provisions of
Republic Act No. 875. There is no evidence in the record of any act or fact which may have
operated to deprive the Union of the legal personality that it had at the time it instituted the
action. Besides, if the Union had a personality at the time when it brought the cases in court, it is
presumed to have continued to have that personality, there being no evidence to the contrary.

Furthermore, it would be unjust and unfair to declare the compromise null and void simply
because a new law has taken effect which has changed the legal requirements for labor unions to
exist. If the Union had a personality at the time it brought the action and during the pendency of
the action, the change in the law which may have required the Union to comply with other
regulations in order to establish a personality under the new law would not render the acts of the
said Union in the pending cases in which it is a party null and void.
CASE 394

Morales vs. NLRC

241 SCRA 103

FACTS:

Complainants are salesmen and relief salesman of the respondent company. They were
investigated on irregularities and/or anomalies allegedly committed from the period January to
February 1985, wherein the respondent company was reportedly to have lost millions of pesos.
The company noted certain abnormalities in the selling operations in that from January 25 to 30,
1985, very minimal empties returned were reported, and from January 31 to February 7, 1985,
empties returned were more than the reported sales. An audit conducted revealed that from
January 31 to February 6, 1985, many salesmen returned empties exceeding the empties actually
retrieved from their outlets. Complainants were among those investigated and required to present
their side. After, the investigation, the company terminated the services of the complainant on
October 3, 1985. 1

The Labor Arbiter adjudged that complainants are illegally dismissed, and respondent
corporation is hereby ordered to reinstate complainants without loss of seniority rights and with
full back wages and benefits.

ISSUE:

Whether the complainants are illegally dismissed by the employer?

HELD:

Yes. The findings of both the Labor Arbiter and the NLRC on the illegal dismissal of the
complainants concerned are not bereft of substantial basis. This Court has repeatedly adhered to
the time-honored doctrine that such findings should not only be entitled to great respect but also
given the stamp of finality absent any arbitrariness in the process of their deduction from the
evidence adduced.
CASE 395

Samaniego vs. NLRC

198 SCRA 111

FACTS:

Sometime in 1987, the management was of the view that a serious financial crisis was
confronting the company. For this reason, the management resolved to reorganize the company
by streamlining its operations and eliminating middle management positions, including those of
the petitioners. The petitioners signed company-prepared resignation letters. They acknowledged
therein that they have received the benefits agreed upon and that they have no legal claim against
the company or its officers and representatives. However, the petitioners sent a letter to the
company, informing the latter that they received their benefits under protest. Later on, the
petitioners deposited their checks in their respective bank accounts

Later, the petitioners filed a complaint for illegal dismissal, discrimination and damage against
the private respondents before NLRC. The private respondents maintained that this case is one of
voluntary resignation.

ISSUE:

Whether the complainants voluntarily resigned from the company?

HELD:

Yes. There is no dispute that notwithstanding the announced reorganization plan of the
company, the respondents offered the complainants an alternative avenue for exit which is
voluntary resignation. We see nothing illegal with this applicable approach. Indeed, the practice
of allowing an employee to resign instead of being terminated for just cause so as not to smear
his employment record is commonly practiced in some companies.

In the present case, the propriety of the choice given to the complainants by the company is even
reinforced by the fact that the separation benefits due to resignation offered to them were much
higher than what they would receive under termination due to the reorganization. A more
attractive scheme, therefore, was merely tendered to the complainants. It was not imposed upon
them. In fact, two of the complainants, admitted in their testimonies that they were made to
choose between the two (2) options and if they eventually chose the alternative of resigning from
the company with greater benefits, as in this case, the complainants cannot subsequently
repudiate their choice nor be heard to say later on that they were terminated without just cause. It
is inconsistent with dismissal (where the concerned employee is left with no option). In
CASE 396

termination cases, the employer decides for the employee and not the other way around. In the
instant case, the complainants decided to resign.

Wyeth-Suaco vs. NLRC

219 SCRA 356

FACTS:

Santos was hired by ALPI in April 1974 as a medical representative. On 1987, the management
committee of ALPI announced to the company employees the contents of a telex it had received
regarding the decision "to merge the international divisions of Wyeth and Ayerst into a single
operating unit”. Thereafter, Santos executed an affidavit of release and quitclaim discharging the
company and its representatives and warranting that he would not institute any action against the
same company. The company, in turn, gave him financial assistance amounting to P65,400.50
which is the equivalent of 2-1/2 months' pay for every year of his 14-year service with the
company or roughly one (1) month pay for every five (5) years of service. Later on, the
management revealed that the deal between ALPI and Wyeth-Suaco was a buy-out of the
former's assets by the latter and not a merger of the two companies as earlier announced.

Later, Santos filed a complaint against Leber, Wyeth-Suaco, and ALPI before the NLRC for
unfair labor practice, underpayment, separation pay and/or retirement/resignation benefits and
illegal constructive dismissal. NLRC ruled in favor of Santos.

ISSUE:

Whether an employee who had resigned three months prior to the purchase of his
employer's assets by another company may still be entitled to the separation pay subsequently
awarded to the other employees of the same company who had not resigned even if at the time of
such award he had been employed and lucratively compensated by a third company?

HELD:

Yes. A quitclaim executed in favor of a company by an employee amounts to a valid and

binding compromise agreement between them. Article 227 of the Labor Code provides that any
compromise settlement voluntarily agreed upon with the assistance of the Bureau of Labor
Relations or the regional office of the DOLE, shall be final and binding upon the parties and the
NLRC or any court "shall not assume jurisdiction over issues involved therein except in case of
non-compliance thereof or if there is prima facie evidence that the settlement was obtained
through fraud, misrepresentation, or coercion. While Santos was not an ordinary employee and,
therefore, the assistance of any DOLE official was not entirely necessary when he executed the
release and quitclaim affidavit, the circumstances of this case call for a holding that he should
still be given the difference between what he had received and that which he would have
CASE 397

received through the retrenchment package, a privilege granted and extended to all employees of
ALPI.

Mercer vs. NLRC

244 SCRA 376

FACTS:

This case, triggered by a complaint filed with this Office on May 30, 1989 by Eugenia Credo
Mercer charging respondents National Service Corporation of unfair labor practice, under
payment and claim for damages relates to the implementation of a Supreme Court decision dated
November 29, 1988 in G.R. Nos. 69870 and 70295. Implementation of the same has been made
by respondents on May 2, 1989 when complainant was appointed to the position of Lady
Attendant in respondent's office and paid her back wages, unclaimed salaries and commutation
of leave credits and damages in the amount of P115,428.12 as embodied in a Quitclaim and
Release dated 11 May 1989. This implementation, according to complainant, is matched by bad
faith and circumvention of the decision.

ISSUE:

Whether private respondent complied with the order of reinstatement held in G.R. Nos.
69870 and 70295?

HELD:

Yes. The record shows that after private respondents received a copy of this Court's
decision in January 1989, the company informed petitioner that it was not possible for her to be
reinstated to her old position for the same had been abolished under the company reorganization
which took effect on November 1, 1987. Neither could she be reinstated to a substantially
equivalent position because there were no such vacancies. Said positions belong to Job Levels 13
to 18 under private respondent company's Plantilla Positions.

When petitioner's old position was abolished, two new positions of equivalent rank were created,
namely: Records Custodian and Property Custodian. However, these positions were occupied,
and the remaining vacancy was that of Management Analyst, a highly technical position, for
which petitioner lacked the proper qualifications. Thus, at a conference conducted by Labor
Arbiter, private respondents manifested that they would just pay petitioner separation pay in
accordance with Court’s decision. Finally, there is no proof that she was forced to accept the
position of Lady Attendant on pain of not receiving the monetary award. The evidence on record
shows that it was petitioner who asked that she be appointed to the position of Lady Attendant in
CASE 398

order to have a regular source of monthly income and that she would be given a basic salary
equivalent to that which she used to receive before her dismissal.

Talla vs. NLRC

175 SCRA 479

FACTS:

Petitioner was employed as a salesman of private. On August 1984 he submitted his letter of
resignation and a quitclaim releasing the private respondent from any money claims he may
have. After some time, petitioner filed a complaint in the Ministry of Labor and Employment
against private respondent for non-payment of commission, sick and vacation leaves and 13th
month pay. The matter was referred to a labor arbiter who, after requiring the parties to submit
their position papers, rendered a decision dated March 18, 1986 awarding the petitioner the
amount of P35,273.92 for unpaid commissions/overprice. Private respondent appealed to the
NLRC, wherein in due course a decision dated June 30, 1987 was rendered reversing the
appealed decision and dismissing the complaint for lack of merit.

ISSUE:

Whether employee is precluded from filing any claim against the employer after his resignation
and the execution of a quitclaim accompanying the same?

HELD:

No. The general rule is that once an employee resigns and executes a quitclaim in favor of the
employer, he is thereby estopped from filing any further money claims against the employer
arising from his employment. It is only when the voluntariness of the execution of the quitclaim
or release is put into issue or when it is established that there is an unwritten agreement between
the employer and employee upon resignation entitling the employee to other remuneration or
benefits when such a money claim of the employee may be given due course.

In this case, it is not denied that after the resignation of the petitioner he nevertheless received
three checks from the private respondent dated October 10, 1984, October 16, 1984 and October
26, 1984. He was able to encash one (1) check in the amount of P2,080.00 but the payment of the
other two was stopped by private respondent. Private respondent admitted that during the
employment of petitioner he was paid a salary of P1,300.00 monthly and he was also entitled to a
3% commission but not to overprice.
CASE 399

Suffice it to state that petitioner cannot ask for relief not alleged and prayed for in his complaint.
Since he was only claiming his commission, he cannot claim other alleged amounts due him.

Periquet vs. NLRC

186 SCRA 724

FACTS:

The petitioner was dismissed as toll collector by the CDCP for willful breach of trust and
unauthorized possession of accountable toll tickets. Claiming she had been "framed," she filed a
complaint for illegal dismissal and was sustained by the labor arbiter, who ordered her
reinstatement within ten days "without loss of seniority rights and other privileges and with full
back wages to be computed from the date of her actual dismissal up to the date of her actual
reinstatement.” On March 11, 1989, the petitioner filed a motion for the issuance of a writ of
execution of the decision. The motion was granted. On September 11, 1989, however, the NLRC
sustained the appeal of the CDCP and set aside the order dated June 20, 1989, the corresponding
writ of execution of June 26, 1989, and the notice of garnishment.

In its decision, the public respondent held that the motion for execution was time-barred, having
been filed beyond the five-year period prescribed by both the Rules of Court and the Labor
Code. It also rejected the petitioner's claim that she had not been reinstated on time and ruled as
valid the two quitclaims she had signed waiving her right to reinstatement and acknowledging
settlement in full of her back wages and other benefits.

ISSUE:

Whether quitclaims signed by the petitioner should be sustained?

HELD:

Yes. If the agreement was voluntarily entered into and represents a reasonable settlement, it is
binding on the parties and may not later be disowned simply because of a change of mind. It is
only where there is clear proof that the waiver was wangled from an unsuspecting or gullible
person, or the terms of settlement are unconscionable on its face, that the law will step in to
annul the questionable transaction. But where it is shown that the person making the waiver did
so voluntarily, with full understanding of what he was doing, and the consideration for the
quitclaim is credible and reasonable, the transaction must be recognized as a valid and binding
undertaking.
CASE 400

The back pay due the petitioner need not detain us. The Court held that this should be limited to
three years from the date of the illegal dismissal, during which period (but not beyond) the
dismissed employee is deemed unemployed without the necessity of proof. Hence, the
petitioner's contention that she should be paid from 1978 to 1987 must be rejected, and even
without regard to the fact that she was actually employed during most of that period.

Mendoza vs. SMC

458 SCRA 664

FACTS:

Petitioner was a regular employee of private respondent SMC. On June 2, 1988, petitioner
submitted to private respondent an accident report. When private respondent Yumang made his
own inquiries, he found out that the police traffic report shows that the date and time of the
accident was on June 1, 1988 at 1:00 o'clock in the early morning thereof not at 7:00 o'clock in
the evening of May 31, 1988 as per petitioner's report. Hence, respondent Yumang conducted a
formal investigation. In a memorandum dated July 5, 1988, petitioner was relieved by private
respondent SMC of his work. On August 15, 1988, petitioner was served a letter of termination.

ISSUE:

Whether due process was observed by the employer prior to termination?

HELD:

Yes. During the investigation, it appears that he knew all the time that the investigation involves
his administrative responsibility to his superior. In no uncertain terms he admitted the gravity of
his offense and asked that a heavy penalty should be imposed on him.

The rules laid down by the company for the investigation of an employee before his termination
need not be observed to the letter. It is enough that there was due notice and a hearing before a
judgment or resolution thereof is made. Due process contemplates freedom from arbitrariness.
What it requires is fairness or justice; the substance' rather than the form being paramount. When
a party has been given the opportunity to be heard, then he was afforded due process.

Petitioner also assails the severity of the penalty imposed upon him alleging that he should have
merited a suspension only considering his past performance.

Unfortunately, petitioner does not appear to be a first offender. Aside from the infractions he was
found to have committed, it appears that petitioner falsified the truth when he made a false report
about the incident to private respondent SMC to cover up for his misdeeds. Moreover, on
CASE 401

previous occasions, petitioner committed violations of company rules and regulations concerning
pricing as a salesman of the company in a way that is detrimental to his employer. On one
occasion, he failed to remit collections, so that in 1986, he was suspended for thirty days. Thus,
the totality of the infractions that petitioner has committed justifies the penalty of dismissal.

More Maritime Agencies vs. NLRC

307 SCRA 189

FACTS:

On 17 January 1994 private respondent Sergio Homicillada entered into an overseas employment
contract with petitioner More Maritime Agencies, Inc. On 18 March 1994, while the MV Rhine
was anchored at a port in Brazil, respondent Homicillada was directed to open and clean the
main engine as well as the first and second cylinders of the air trunk. After working for four (4)
consecutive days, Homicillada started experiencing pain on his left leg transcending upward to
his waist and lower back. His left foot swelled. Due to the excruciating pain, he decided to
inform his Chief Engineer who insisted however that he continue with his work. He was given
only a "salonpas" plaster to relieve his pain. Upon his return to France Homicillada had himself
medically examined again. The POEA ordered that Homicillada and ordered petitioners jointly
and severally to pay the former US$1,642.30 or 14.93% of US$11,000.00.

ISSUE:

Whether the NLRC acted with grave abuse of discretion when it completely ignored a "Receipt
and Release" purportedly signed by Homicillada in favor of More Maritime Agencies while the
case was pending in POEA?

HELD:

No. Granting the existence of the said quitclaim, it cannot effectively free the respondents from
liability as the fact remains that complainant was not afforded the proper medical treatment per
physician's advice. The law does not consider as valid any agreement to receive less
compensation than what a worker is entitled to recover nor prevent him from demanding benefits
to which he is entitled. Quitclaims executed by the employees are thus commonly frowned upon
as contrary to public policy and ineffective to bar claims for the full measure of the worker's
legal rights, considering the economic disadvantage of the employee and the inevitable pressure
upon him by financial necessity.
CASE 402

The moment it has chosen an applicant it is deemed to have subjected its applicant to the
required pre-qualification standard. Thus, the respondent cannot now claim that complainant's
sickness was pre-existing and concealed from it.
The injury sustained by Homicillada is compensable the same having resulted from the rigors of
carrying heavy canisters in a crouching position which logically strained his lower back that lead
to his slipped-disc.

Danza’s Intercontinental, Inc vs. Daguman

456 SCRA 382

FACTS:

Danzas Intercontinental, Inc., a corporation registered under Philippine laws, is engaged in the
business of forwarding. The position of the complainants is that in a letter dated August 14,
1999, they were notified by the respondents that due to losses the brokerage department of the
respondent company to which the complainants belonged shall be closed on September 14, 1999
for which they will be given a separation pay equal to one month or one-half month for every
year of service whichever is higher. It is also the position of the complainants that they should be
paid holiday pay for the holidays they have actually worked, service incentive leave pay, 13th
month pay and other bonuses for the year 1999 or a retirement pay in lieu of reinstatement in the
amount of P100,000.00 for each complainant.

ISSUE:

Whether the dismissal of the complainants is illegal?

HELD:

Yes. Petitioners aver that they were compelled to close the company's brokerage department, to
which losses were allegedly traceable due to incorrect handling of sales, in order to prevent
further losses which threatened the company's viability. Essentially, petitioners invoke a blend of
retrenchment to prevent losses and closure of a section of the company's business to justify the
termination of private respondents. It is neither the function of the law nor its intent to supplant
the prerogative of management in running its business, such as, to compel the latter to operate at
a continuing loss simply because it has to maintain its workers in employment. Such an act
would be tantamount to a taking of property without due process of law. However, the burden of
proving that the termination was for a valid or authorized cause rests on the employer who must
comply with certain substantive and procedural requirements. The condition of business losses
justifying retrenchment is normally shown by audited financial documents like yearly balance
CASE 403

sheets and profit and loss statements as well as annual income tax returns. Financial statements
must be prepared and signed by independent auditors.

Consequently, the financial documents presented by petitioners are insufficient to prove their
claim of business losses. As they have the burden of proving the existence of an authorized
cause, petitioners should have presented the company's audited financial statements before the
labor arbiter who is in the position to evaluate evidence.

Ortiz cs. San Miguel Corporation

560 vs. 654

FACTS:

Petitioner is a member of the Philippine Bar who represented the complainants in NLRC private
respondent San Miguel Corporation sometime in 1992 and 1993. Private respondent, on the other
hand, is a corporation duly organized and existing under and by virtue of the laws of the
Republic of the Philippines. It is primarily engaged in the manufacture and sale of food and
beverage particularly beer products. In line with its business, it operates breweries and sales
offices throughout the Philippines. The complainants in were employees at private respondent's
Sales Offices in the provinces. In 1992, several employees from the Bacolod, Cadiz, and
Himamaylan Beer Sales Offices filed with the Labor Arbiter separate complaints against private
respondent for illegal dismissal with prayer for reinstatement with back wages; elevation of
employment status from casual- temporary to regular-permanent reckoned after six months from
the start of complainants' employment; underpayment of salaries; non-payment of holiday pay,
service incentive leave pay, allowances and sick leaves; non-payment of benefits under the
existing Collective Bargaining Agreements (CBA); attorney's fees; moral, exemplary and other
damages; and interest. The foregoing complaints were consolidated.

ISSUE:

Whether there is a question of law?

HELD:

Yes. The Court concedes that the instant Petition for Review raises a question of law, it denies
the Petition for lack of merit and lack of petitioner's standing to file the same. This Court has
consistently ruled that a question of law exists when there is a doubt or controversy as to what
the law is on a certain state of facts. On the other hand, there is a question of fact when the doubt
or difference arises as to the alleged truth or falsehood of the alleged facts. For a question to be
one of law, it must involve no examination of the probative value of the evidence presented by
CASE 404

the litigants or any of them. The test of whether a question is one of law or of fact is not the
appellation given to such question by the party raising the same; rather, it is whether the
appellate court can determine the issue raised without reviewing or evaluating the evidence, in
which case, it is a question of law; otherwise, it is a question of fact.

Philippine Airlines, Inc. vs. NLRC

180 SCRA 555

FACTS:

Private respondent Dr. Fabros was employed as flight surgeon at petitioner company. On Feb.17,
1994, at around 7:00 in the evening, Dr. Fabros left the clinic to have his dinner at his residence,
which was about 5-minute drive away. A few minutes later, the clinic received an emergency
call from the PAL Cargo Services. One of its employees had suffered a heart attack. Upon
learning about the incident, PAL Medical Director ordered the Chief Flight Surgeon to conduct
an investigation. In his explanation, Dr. Fabros asserted that he was entitled to a thirty-minute
meal break; that he immediately left his residence upon being informed by Mr. Eusebio about the
emergency and he arrived at the clinic a few minutes later; that Mr. Eusebio panicked and
brought the patient to the hospital without waiting for him. Finding private respondent’s
explanation unacceptable, the management charged private respondent with abandonment of post
while on duty. After evaluating the charge as well as the answer of private respondent, he was
given a suspension for three months effective December 16, 1994. Private respondent filed a
complaint for illegal suspension against petitioner.

ISSUE:

Whether the nullifying of the 3-month suspension by the NLRC is erroneous?

HELD:

No. The legality of private respondent’s suspension: Dr. Fabros left the clinic that night only to
have his dinner at his house, which was only a few minutes’ drive away from the clinic. His
whereabouts were known to the nurse on duty so that he could be easily reached in case of
emergency. Upon being informed of Mr. Acosta’s condition, private respondent immediately left
his home and returned to the clinic. These facts belie petitioner’s claim of abandonment.
Petitioner argues that being a full-time employee, private respondent is obliged to stay in the
company premises for not less than eight (8) hours. Hence, he may not leave the company
CASE 405

premises during such time, even to take his meals. The Court disagrees. Under the law, the
normal hours of work of any employee shall not exceed eight (8) hours a day. Art. 85. Of Labor
Code, Meal periods. — Subject to such regulations as the Secretary of Labor may prescribe, it
shall be the duty of every employer to give his employees not less than sixty (60) minutes time-
off for their regular meals. Sec. 7, Rule I, Book III of the Omnibus Rules Implementing the
Labor Code further states: Sec. 7. Meal and Rest Periods. — Every employer shall give his
employees, regardless of sex, not less than one (1) hour time-off for regular meals.

Antonio Habana vs. NLRC

G.R. No. 121486. November 16, 1998

FACTS:

Rodrigo Habana was hired by OMANFIL to work for its foreign principal, HYUNDAI,
in Kuwait, for 2 years based on the employment contract. However, after 1year, HYUNDAI
issued a Resignation Notice terminating his employment. Habana was forced to return to the
Philippines. Together with another dismissed employee. They filed a complaint for illegal
dismissal against OMANFIL and HYUNDAI (private respondents).Summons was issued to
OMANFIL and HYUNDAI to file their answer within 10 daysfrom receipt thereof. After 2 days
beyond the period set, the two filed a Motion for Bill of Particulars instead, alleging that the
complaint sheet filed by Habana and De Guzman lacked the required narration of facts
constituting causes of action. Without waiting for the resolution, complainants filed their Bill of
Particulars. Thereafter, the LA rendered decision in favor of complainants holding that due to
failure of private respondents to file their answers, the case is resolved on the basis of
complainants position paper and other supporting documents.

ISSUE:
Were OMANFIL and HYUNDAI denied due process?

HELD:
Yes. First, there was only one conciliatory conference held wherein the parties did not
discuss at all the possibility of amicable settlement due to complainants insistence of default on
private respondents. Second, the parties agreed to submit their respective motions for
consideration of the LA. Third, since the conference, no order or notice was sent by the LA to
the private respondents as to what happened on their motions and they were not also declared in
default by the LA. Fourth, neither there was any order or notice requiring private respondents to
file their position paper, nor an order informing the parties that the case was already submitted
for decision.
Based on the foregoing, there was utter absence of opportunity to be heard at the arbitration
level, as the procedure adopted by the LA virtually prevented private respondents from
CASE 406

explaining matters fully and presenting their side. The essence of due process is that a party be
afforded a reasonable opportunity to be heard and to submit evidence he may have in support of
his defense. In the instant case, what should have been done by the Labor Arbiter was to rule on
the pending motions, or at least notify private respondents that he would no longer resolve their
motions, and to direct them forthwith to submit within a reasonable time their position paper as
well as all the evidence they might want to introduce before the case would be resolved.

De Guzman vs. Albanias

G.R. No. 57395. April 17, 1989

FACTS:

Miguel Pascual unable to farm his tenanted landholding assigned the two lands to his son
Ricardo Pascual and to his son-in-law, herein petitioner, Alfredo de Guzman. The bigger land
went to Ricardo Pascual while the smaller parcel which consists of 5,000 sq. meters went to
Alfredo de Guzman. In the year 1974, the private respondents commenced the recovery of the
possession of the land tilled by the petitioner on the ground that the former did not recognize the
latter as their lawful tenant despite the fact that petitioner had been working on the land for more
than seven years at that time.

ISSUE:
Whether respondent judge committed a grave abuse of discretion in denying petitioner’s
motion for postponement in violation of the due process clause of the Constitution.

HELD:

The Court has consistently maintained that although a speedy determination of an action
implies a speedy trial, speed is not the chief objective of a trial. Careful and deliberate
consideration for the administration of justice, a genuine respect for the rights of all parties and
the requirements of procedural due process and an adherance to the Court’s standing admonition
that the discretion given judges in the granting or denial of motions for postponement and the
setting aside or denial of orders previously issued "should always be predicated on the
consideration that more than the mere convenience of the courts or of the parties in the case, the
ends of justice and fairness would be served thereby." These are more important than a race to
end the trial. In the case at bar there are circumstances that justify postponement. It is noted that
the petitioner has to present his case and adduce evidence. While it is true that motions for
postponement are addressed to the sound discretion of the courts, discretion must be exercised
wisely.
CASE 407

Kanlaon Construction vs. NLRC

G.R. No. 126625 | September

FACTS:

Petitioner Kanlaon Construction Enterprises Co., Inc. is a domestic corporation engaged

on construction business nationwide. In 1988, petitioner was contracted by the National Steel
Corporation to construct residential houses for its plant employees in Iligan City. Private
respondents were hired as laborers for the project. They worked under Engineers Paulino Estacio
and Mario Dulatre. In 1989, petitioner statrted terminating the services of the respondents as the
project neared its completion. In 1990, the private respondents filed separate complaints against
the petitioner before the Sub-Regional Arbitration Branch XII, Iligan City. Numbering 41 in all,
they claimed the petitioner paid them wages below the minimum and sought payment of their
salary differentials and thirteenth-month pay. Engineers Estacio and Dulatre were named co
respondents. At the conference of June 1990, Engineer Estacio admitted petitioner’s liability to
private respondents and agreed to pay their wage differential

ISSUE:
Whether Engineers Estacio and Dulatre and Atty. Abudiente had authority to represent petitioner
in the hearings before the arbiters and on appeal to the Commision?

HELD:

NO, they did not have the authority to represent petitioner. A non-lawyer may appear before the
labor arbiters and the NLRC only if: (a) he represents himself as a party to the case; (b) he
represents an organization or its members, with written authorization from them: or (c) he is a
duly-accredited member of any legal aid office duly recognized by the Department of Justice or
the Integrated Bar of the Philippines in cases referred to by the latter. Engineers Estacio and
Dulatre were not lawyers nor were they members of a legal aid office. Their appearance on
behalf of petitioner also required written proof of organization. Absent this authority, whatever
CASE 408

statements said by declarations Engineer Estacio made me before the arbiters could not bind
petitioner.
As a general rule, only lawyers are allowed to appear before the labor arbiter pursuant to NLRC
Rules of Procedure Sec. 6. Thus, respondent Commission gravely abused its discretion in
affirming the decisions of the labor arbiters which were not only based on unauthorized
representations, but were also made in violation of petitioner's right to due process.
CASE 409

Edwards vs. Mccoy

G.R. No. L-7474 March 25, 1912

FACTS:

Henry Atholl Edwards, is a British subject and seeking entrance to the Philippine Islands
at the port of Manila. He is the issue of the legal marriage of a Chinese woman of the full blood
to a Eurasian. The petitioner was born in the British concession of Amoy and resided there at the
time of his emigration. The board of special inquiry denied him the right to enter on the ground
that he was a person of Chinese race and descent by reason of the fact that his mother was a
Chinese woman of the full blood. The attorney for the respondent objected to the jurisdiction of
this court, under the facts and circumstances presented, to inquire into the correctness of the
decision of the board of special inquiry. This court has already many times held that the decision
of the administrative officers upon the question of the right of an alien to enter the Philippine
Islands is final where no abuse of authority if any kind of shown.

ISSUE:
Whether there was abuse of authority or discretion by the board.

HELD:

No. The facts in this case are conceded. The board has presented them as hereinabove
detailed as the basis of its decision. Upon those facts the finding is made that the petitioner
herein is a Chinese person, or a person of a Chinese descent, within the meaning of the laws of
Congress prohibiting the entrance of such person into the territory of the United States. We are
of the opinion that finding must stand. The phrase "Chinese person or person of Chinese
descent," as used in the act of Congress, is very broad; and, under the rules pertaining to the
finality of its decisions of the immigration authorities on such questions as laid down by the
Federal courts, we do not feel that we are warranted in disturbing the conclusions reached in this
case. The conclusion that the petitioner is a person of Chinese descent is not devoid of
foundation.
We have read with the interest and care the ably expressed contention of counsel for petitioner
that the quantity of blood which one has in his veins, if he is less than the full blood, has nothing
to do with the determination of his race; that the race to which one belongs depends upon the
race of the father and that of the mother has no influence in that determination. There the
question was one of personal rights. Here it is one of international rights. There the question was
purely judicial. Here it is executive and administrative. The principles and rules applicable in one
case may be applicable only in small part to the other. The application for the writ is denied.
CASE 410

Manalo v. Roldan-Confessor
G.R. No. 102358, November 19, 1992

FACTS:

Petitioners Vicente and Gloria Manalo responded to a newspaper advertisement looking for a
couple to work as a driver and tutor/babysitter and went to Career Planners Specialists
International, Inc. (CPSI) to do so. CPSI was owned by herein private respondents spouses
Fernandez. Petitioners were hired to work for a family in Saudi Arabia and allegedly had to pay a
placement fee of P40,000.00 as a precondition for the processing of their papers. They managed
to pay P30,000.00 upfront and executed a promissory note for the balance. They were not issued
a receipt despite their demand. It was subsequently found by the petitioners that their positions
had been misrepresented. Both of the spouses Manalo were forced to return home after finding
that their employment was unbearable. Spouses Manalo sued private respondents, charging them
with illegal exaction, false advertisement, and other violations. They demanded the refund of the
amount exacted from them plus moral damages.

ISSUE:
Whether herein public respondents gravely abused their discretion when they required clear and
convincing evidence to establish the charge of illegal exaction.

HELD:
Yes, there was grave abuse of discretion. In the administrative proceedings for cancellation,
revocation or suspension of Authority or License, no rule requires that testimonies of
complainants be corroborated by documentary evidence, if the charge of unlawful exaction is
substantially proven. All administrative determinations require only substantial proof and not
clear and convincing evidence. Clear and convincing proof is more than mere preponderance but
not to extent of such certainly as is required beyond reasonable doubt as in criminal cases.
Substantia evidence consists of more than a scintilla of evidence but may be somewhat less than
preponderance. Thus, petition was granted.
CASE 411

JARCIA MACHINE SHOP and AUTO SUPPLY, INC., vs. NLRC

G.R. No. 118045 January 2, 1997

FACTS:

Private respondent had been employed by petitioner Jarcia Machine Shop & Auto Supply
Inc. as machinist for sixteen (16) years. On 14 January 1993, Tolentino claimed to have been
illegally dismissed from work by Crispulo Jarcia, president and general manager of the machine
shop. Thus, Tolentino filed an illegal dismissal complaint against Jarcia with prayer for
backwages, separation pay in lieu of reinstatement, damages and attorney's fees. Conciliation
efforts were made but no compromise or settlement was reached. Respondent alleged that he was
assigned by Mr. Jarcia to do the servile job of transporting filling materials to the shop premises.
He reasoned out that it was not his job to do construction works. But again, he was in the
receiving end of invectives and humiliating words from Mr. Jarcia. He was told that his
employment is terminated. Uncontroverted as they were, the labor arbiter had no alternative but
to grant Tolentino's claims. Aggrieved, petitioner Jarcia filed this special civil action for
certiorari.

ISSUE:
Whether private respondent could not be entitled to backwages since he was not illegally
dismissed.

HELD:

In the case at bar, petitioner failed to show substantial evidence to justify Tolentino's
transfer and demotion from the position of a regular machine shop operator to that of
transporting filling materials in petitioner's construction business. Petitioner insists that
Tolentino's record of absenteeism, habitual tardiness and undertime work as evidenced by his
DTRs for the year 1992 gives it more than sufficient ground to impose some form of disciplinary
action against private respondent. 30 However, as discussed above, these DTRs have scant
evidentiary weight. Hence, petitioner's claim that it was merely exercising a legitimate
management prerogative in transferring Tolentino has no leg to stand on. From the foregoing, it
is not difficult to see that the labor arbiter and public respondent did not commit any abuse of
discretion, much less a grave one, in declaring Tolentino's transfer from the position of a
machine shop operator to a job involving construction works as a constructive dismissal. private
respondent was compelled to quit his job with petitioner since he had been demoted without just
cause. WHEREFORE, finding no grave abuse of discretion committed by public respondent
NLRC, the present Petition is hereby DISMISSED.
CASE 412

ANG TIBAY vs. Court of Industrial Relations (CIR)

69 PHIL 635, February 27, 1940

FACTS:
Teodoro Toribio owns and operates Ang Tibay, a leather company which supplies the Philippine
Army. Due to an alleged shortage of leather, Toribio caused the layoff of a number of his
employees. However, the National Labor Union, Inc. (NLU) questioned the validity of said lay
off as it averred that the said employees laid off were members of NLU while no members of the
rival labor union (National Worker’s Brotherhood) were laid off. NLU claims that NWB is a
company dominated union and Toribio was merely busting NLU.
The case reached the Court of Industrial Relations (CIR) where Toribio and NWB won.
Eventually, NLU went to the Supreme Court invoking its right to a new trial on the ground of
newly discovered evidence. The Court granted a new trial. Thus, the Solicitor General, arguing
for the CIR, filed a motion for reconsideration. The petitioner has filed an opposition both to the
motion for reconsideration of the respondent National Labor Union, Inc.

ISSUE:
Whether or not the National Labor Union (respondent) is entitled to a new trial.

HELD:

YES. The records show that the newly discovered evidence or documents obtained by NLU,
which they attached to their petition with the Supreme Court, were evidence so inaccessible to
them at the time of the trial that even with the exercise of due diligence they could not be
expected to have obtained them and offered as evidence in the Court of Industrial Relations.
Further, the attached documents and exhibits are of such far-reaching importance and effect that
their admission would necessarily mean the modification and reversal of the judgment rendered
(said newly obtained records include books of business/inventory accounts by Ang Tibay which
were not previously accessible but already existing). The Supreme Court also outlined that
administrative bodies, like the CIR, although not strictly bound by the Rules of Court must also
make sure that they comply with the requirements of due process.
Therefore, the motion for a new is hereby granted, and the entire record of this case shall be
remanded to the Court of Industrial Relations, with instruction that it reopen the case, receive all
such evidence as may be relevant and otherwise proceed in accordance with the requirements set
forth hereinabove.
CASE 413

Cruzvale, Inc. vs. Laguesma

GR No. 107610, November 25, 1994

FACTS:

Union of Filipino Workers (UFW) filed a petition for certification election (CE) among the rank-
and-file workers of Cruzvale. Cruzvale sought for the denial of such petition, alleging among
other things, that the Regional Office No. IV of the Department of Labor and Employment has
no jurisdiction over the petition since Cruzvale's place of business is at Cubao, Quezon City,
which is under the National Capital Region-DOLE's jurisdiction. Petitioner's basis is Section 1,
Rule V, book V of the Omnibus Rules Implementing the Labor Code, which states:
“Where to file. A petition for certification election shall be filed with the Regional Office which
has jurisdiction over the principal office of the Employer. The petition shall be in writing and
under oath.”

ISSUE:
Whether the venue of the petition for CE must be where it would be convenient for the worker

HELD:
Yes, it must. The word "jurisdiction" as used in said provision refers to the venue where the
petition for certification must be filed. Unlike jurisdiction, which implies the power of the court
to decide a case, venue merely refers to the place where the action shall be brought. Venue
touches more the convenience of the parties rather than the substance of the case. The mentioned
provision refers only to cases where the place of work of the employees and the place of the
principal office of the employer are within the same territorial jurisdiction of the Regional Office
where the petition for certification election is filed. It does not apply where the place of work of
the employees and the place of principal office of the employer are located within the territorial
jurisdictions of different regional offices. The Court assumes that in the drafting of the Omnibus
Rules, the Secretary of Labor and Employment took into consideration the fact that there are
many companies with factories located in places different from places where the corporate
offices are located.
The worker, being the economically-disadvantaged party, the nearest governmental machinery to
settle a labor dispute must be placed at his immediate disposal. Unlike in the Rules governing the
procedure before Regional Offices, the New Rules of Procedure of the National Labor Relations
Commission prescribes that all cases in which labor arbiters have jurisdiction should be filed in
the branch office which has territorial jurisdiction over the "workplace of the
complainant/petitioner" (Rule IV, Sec. 1[a]). The NLRC Rules defines the workplace as follows:
“For purposes of venue, workplace shall be understood as the place or locality where the
employee is regularly assigned when the cause of action arose. It shall include the place where
the employee is supposed to report back after a temporary detail, assignment or travel.”
CASE 414

PAFLU vs. BISCOM

G.R. No. L-23959 November 29, 1971

FACTS:
Court of Industrial Relations rendered a decision, on 29 March 1961, ordering the
reinstatement with backwages of complainants Enrique Entila and Victorino Tenazas. The
records of Case No. 72-ULP-Iloilo show that the charge was filed by Cipriano Cid & Associates
through Atty. Atanacio Pacis. The award of 10% to Quintin Muning who is not a lawyer
according to the order, is sought to be voided in the present petition.

ISSUE:
Whether a union may appeal an award of attorney's fees which are deductible from the
backpay of some of its members.

HELD:
The supreme court rules that a union or legitimate labor organization may appeal an
award of attorney's fees which are deductible from the backpay of its members because such
union or labor organization is permitted to institute an action in the industrial court, 12 on behalf
of its members; and the union was organized "for the promotion of the emloyees' moral, social
and economic well-being"; 13 hence, if an award is disadvantageous to its members, the union
may prosecute an appeal as an aggrieved party, under Section 6, Republic Act 875, which
provides:
“Sec. 6. Unfair Labor Practice cases — Appeals. — Any person aggrieved by any order of the
Court may appeal to the Supreme Court of the Philippines ...,”
since more often than not the individual unionist is not in a position to bear the financial burden
of litigations.
Petitioners allege that respondent Muning is engaged in the habitual practice of law before the
Court of Industrial Relations, and many of them like him who are not licensed to practice,
registering their appearances as "representatives" and appearing daily before the said court. If
true, this is a serious situation demanding corrective action that respondent court should actively
pursue and enforce by positive action to that purpose. But since this matter was not brought in
issue before the court a quo, it may not be taken up in the present case. Petitioners, however, may
file proper action against the persons alleged to be illegally engaged in the practice of law.
CASE 415

Coca Cola Bottlers vs. NLRC

G.R. No. 120466. May 17, 1999

FACTS:
The Registration of Labor Organization (Registrar) rendered a decision cancelling the
SSSEA’s Registration Certificate No. 1-IP169 for failure to furnish the Bureau of Labor
Relations with copies of the reports on the finances of that union and failure to submit to this
office the names, postal addresses and non-subversive affidavits of the officers of that union
within sixty days of their election. On the following day, Manuel Villagracia, Assistant Secretary
of the SSSEA filed with the Office of the Registrar, a letter enclosing documents that supposed
to comply with the abovementioned requirements, but the Registrar found out some were still not
complied with. Alfredo Fajardo, president of the SSSEA moved for a reconsideration of said
decision and prayed for time, up to November 15, within which to submit the requisite papers
and data.

ISSUE:
Whether the effect of Section 23 of Republic Act No. 875 unduly curtails the freedom of
assembly and association guaranteed in the Bill of Rights.

HELD:

There is no incompatibility between Republic Act No. 875 and the Universal Declaration of
Human Rights. Upon the other hand, the cancellation of the SSSEA’s registration certificate
would not entail dissolution of said association or its suspension. The existence of the SSSEA
would not be affected by said cancellation, although its juridical personality and its statutory
rights and privileges — as distinguished from those conferred by the Constitution — would be
suspended thereby. To be registered, pursuant to Section 23(b) of Republic Act No. 875, a labor
organization, association or union of workers must file with the Department of Labor the
following documents:
(1) A copy of the constitution and by-laws of the organization together with a list of all officers
of the association, their addresses and the address of the principal office of the organization;
(2) A sworn statement of all the officers of the said organization, association or union to the
effect that they are not members of the Communist Party and that they are not members of any
organization which teaches the overthrow of the Government by force or by any illegal or
unconstitutional method; and
(3) If the applicant organization has been in existence for one or more years, a copy of its last
annual financial report.
The registration and permit of a legitimate labor organization shall be cancelled by the
Department of Labor, if the Department has reason to believe that the labor organization no
longer meets one of the requirements or fails to file with the Department Labor either its
financial report or the names of its new officers along with their non-subversive affidavits;
however, the Department of Labor shall not order the cancellation of the registration and permit
without due notice and hearing.
CASE 416

Bantolino vs. Coca-Cola Bottlers

G.R. No. 153660; June 10, 2003

FACTS:

62 employees of the Coca-Cola (the company) filed a complaint for unfair labor practice.
Allegedly, the employees, in the performance of their duties as route helpers, bottle segregators,
and others, where replaced and prevented from entering the company premises. Such act by the
employer is deemed an illegal dismissal. The company averred that there was no employer-
employee relationship thus the Labor Arbiter has no jurisdiction.
The Labor Arbiter then rendered a decision in favor of the employees and ordering the company
to reinstate the complainants to their former positins with all the rights, privileges and benefits
due regular employees, and to pay their full back wages.
Coca-Cola then appealed the decision. According to the CA, the affidavits of the 7 employees
should not have been given probative value for their failure to affirm the contents thereof and to
undergo cross-examination. Only those 3 employees where declared regular employees since
they were the only ones subjected to cross-examination.

ISSUE:
Whether the affidavits should be given probative value despite the failure of the affiants to affirm
their contents and undergo test of cross-examination.

HELD:
The Rules of Evidence are not strictly observed in proceedings before administrative bodies like
the NLRC where decisions may be reached on the basis of position papers only. Citing Rase v.
NLRC, tt was not necessary for the affiants to appear and testify and be cross-examined as it
would negate the rationale and purpose of the summary nature of the proceedings mandated by
the Rules and to make mandatory the application of the technical rules of evidence.
CASE 417

PLDT vs. Antonio Tiamson

474 SCRA 761

FACTS:
Antonio Tiamson was a radio technician at PLDT (Philippine Long Distance Telephone
Company, Inc.). In 1994, PLDT discovered that there were some illegal long distance calls being
made by employees. Tiamson and his workmates were summoned. One employee named
Vidal Busa admitted to the wrongdoings but he implicated his other workmates including
Tiamson. PLDT then made the investigation formal and Busa was made to submit an affidavit
containing his earlier story; notices were sent to the employees to explain; an investigation
was done; and later termination notices were sent. Among those terminated was
Tiamson.Tiamson later sued PLDT for illegal dismissal as he claimed the twin notice rule was
not fully complied with.

ISSUE:
Whether or not Tiamson was denied due process

HELD:
Yes. 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.
In this case, it appears that although Tiamson was sent a first notice (asking him to
explain his side) and then a second notice (termination notice) and he was also invited in a
confrontation with the management, still, the win notice rule was not fully complied with. The
records show that Busa was made to submit a second affidavit which now implicated Tiamson –
which is quite irregular and inconsistent –this would already create doubt in a reasonable mind as
to whether or not Tiamson really committed the wrongdoing. Records further show that PLDT
based its termination of Tiamson’s services on the ground that Busa witnessed Tiamson after the
latter allegedly just finished making illegal long distance calls. Procedural due process requires
that the employer serve the employees to be dismissed two (2) written notices before the
termination of their employment is effected: (a) the first, to apprise them of the particular acts
or omission for which their dismissal is sought; and (b) second, to inform them of the
decision of the employer that they are being dismissed. Again, in this case, the first notice was
not fully complied with hence, Tiamson was illegally dismissed by PLDT.
CASE 418

Ang Tibay v. CIR

69 Phil. 635

FACTS:
Private respondent, National Labor Union, Inc., prays for the vacation of the judgement and
demand for a new trial. It avers that National Worker's Brotherhood of ANG TIBAY is a
company or employer union dominated by Toribio Teodoro, the existence and functions of
which are illegal. Further, it claims that Toribio Teodoro was guilty of unfair labor practice for
discriminating against the National Labor Union, Inc., and unjustly favoring the National
Workers' Brotherhood. In their motion, respondent attached documents and exhibits which are of
such far-reaching importance and effect that their admission would necessarily mean the
modification and reversal of the judgment rendered.

ISSUE:
Whether or not new trial should be granted.

HELD:
Yes. The interest of justice would be better served if the movant is given opportunity to present
at the hearing the documents referred to in his motion and such other evidence as may be
relevant to the main issue involved. The Court also considered the oath attached to the petition to
prove their substantial avernments which are so inaccessible to the respondents that even within
the exercise of due diligence they could not be expected to have obtained them and offered as
evidence in the Court of Industrial Relations", and that the documents attached to the petition
"are of such far reaching importance and effect that their admission would necessarily mean the
modification and reversal of the judgment rendered herein."
Section 20, Commonwealth Act No. 103 provides for “act according to justice and equity and
substantial merits of the case, without regard to technicalities or legal forms and shall not be
bound by any technicalities or legal forms and shall not be bound by any technical rules of legal
evidence but may inform its mind in such manner as it may deem just and equitable."
The fact that CIR may be free from rigidity of procedural requirements, it must not ignore the
primary rights of the parties in procedural cases such as the ff: the right to a hearing; be given
opportunity to present his case and to adduce evidence and tribunal must consider the evidence
presented; the evidence must be substantial; the decision must be rendered on the evidence
presented at the hearing; the Court of Industrial Relations or any of its judges, therefore, must act
on its or his own independent consideration of the law and facts of the controversy and the Court
of Industrial Relations should render its decision in such a manner that the parties to the
proceeding can know the various issues involved.
CASE 419

Del Rosario & Sons v. NLRC

136 SCRA 669

FACTS:
Petitioner Del Rosario & Sons Logging Enterprises, Inc. entered into a "Contract of Services"
with private respondent Calinar Security Agency (Security Agency, for short) whereby the latter
undertook to supply the former with security guards at the rate of P300.00 per month for each
guard.n Private respondents filed a complaint against the Security Agency and petitioner, for
underpayment of salary, non-payment of living allowance, and 13th month pay.
Labor Arbiter rendered a Decision dismissing the complaint against petitioner for want of
employer-employee relationship but ordering the Security Agency to pay complainants the
amounts sought by private respondents.NLRC modified the Decision of Labor Arboter. It ruled
that petitioner is liable to pay complainants, jointly and severally, with the Security Agency on
the ground that petitioner is an indirect employer pursuant to Articles 106 and 107 of the Labor
Code, as amended.
ISSUE:
Whether or not petitioner is jointly and severally liable to private respondents.

HELD:
Yes, petitioner is liable being an indirect employer pursuant to Articles 106 and 107 of the Labor
Code.
When petitioner entered into a Contract of Services with the Security Agency and the latter hired
complainants to work as guards for the former, petitioner became an indirect employer of
respondents-complainants pursuant to the unequivocal terms of Articles 106 and 107 of the
Labor Code, as amended:
Art. 106. Contractor or subcontractor. — ...
In the event that the contractor or subcontractor fails to pay the wages of his employees in
accordance with this Code, the employer shag be jointly and severally liable with his contractor
or subcontractor to such employees to the extent of the work performed under the contract, in the
same manner and extent that he is liable to employees directly employed by him.
Art. 107. Indirect employer. —The provisions of the immediately preceding Article shall
likewise apply to any person, partnership, association or corporation which, not being an
employer, contracts with an independent contractor for the performance of any work, task, job or
project.
The joint and several liability imposed on petitioner and affirmed herein, however, is without
prejudice to a claim for reimbursement by petitioner against the Security Agency for such
amounts as petitioner may have to pay to complainants.
CASE 420

U. E. Automotive Employees vs. Noriel

74 SCRA 72

FACTS:
On August 15, 1974, a petition for certification election with the National Labor Relations
Commission filed by petitioner. Three conferences between such labor organizations resulted in
an agreement to hold a consent election actually conducted on September 19, 1974 among the
rank and file workers of respondent management firm. Petitioner obtained fifty-nine votes, with
respondent union having only fifty-two votes in such consent election. There was, on September
19, 1974, a motion by petitioner to issue an order of certification duly granted on January 2, 1975
by respondent Director who did certify petitioner as the sole land exclusive collective bargaining
representative of such rank and file employees of respondent firm. There was, however, a motion
for reconsideration which was granted notwithstanding opposition by the union on January 22,
1975, setting aside the previous order certifying petitioner as the sole bargaining representative.

ISSUE:
Whether or not order, setting aside such certification and ordering the holding of a new election,
did amount to a grave abuse of discretion.

HELD:

Yes, the order amounts to a grave abuse of discretion. Employees shall have the right to self-
organization and to form, join or assist labor organizations of their own choosing for the purpose
of collective bargaining through representatives of their own choosing and to engage in
concerted activities for the purpose of collective bargaining and other mutual aid or protection.
The new Labor Code is equally explicit on the matter. Thus: 'The State shall assure the rights of
workers of self-organization, collective bargaining, security of tenure and just and humane
conditions of work.'"
Further, The excuse offered for the action taken lacks any persuasive force. Petition for
certification election was filed before the expiration of the period of thirty (30) days. Section
23(b) of Republic Act Number 875 explicitly provides, thus: 'Any labor organization, association
or union of workers duly organized for the material, intellectual and moral well-being of the
members shall acquire legal personality and be entitled to all the rights and privileges within
thirty days of filing with the Office of the Secretary of Labor notice of its due application
xxxxx….
CASE 421

McDonalds v. Alba
574 SCRA

FACTS:
Private respondent was terminated from her post on the reason that she ate a piece of fried
chicken without authorization or payment and in violation of employee meal policy. The herein
petitioner found private respondent guilty of flouting company regulations and immediately
terminated her services.
Labor Arbiter Pablo Espiritu Jr., by Decision10 of August 22, 1997, held that while respondent
violated the meal policy of McDonald’s, dismissal was too harsh a penalty, and suspension
without pay would have sufficed. Thus, petitioner is liable for illegal dismissal. Both the NLRC
and appellate court affirmed the decision of Labor Arbiter. Hence, this present petition.

ISSUE:
Whether the violation committed by private respondent amounts to or borders on "serious or
willful" misconduct or willful disobedience, as petitioners posit, to call for respondent’s
dismissal?
Whether there is denial of their constitutional right to due process, the Arbiter having failed to
set the case for hearing?

HELD:
No, under Article 282 (a) of the Labor Code, willful disobedience to the employer’s lawful
orders as a just cause for termination of employment needs the concurrence of at least two
requisites, viz: (1) the employee's assailed conduct must have been willful or intentional, the
willfulness being 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 one has been engaged to discharge.
In the instant case, petitioner failed to prove that respondent’s misconduct was induced by a
perverse and wrongful intent, they having merely anchored their claim that she was on her
knowledge of the meal policy.
On the second issue raised by petitioner, the NLRC Rules allow the Labor Arbiter to motu
proprio determine whether there is a need for a hearing or clarificatory conference. In this case,
the Labor Arbiter prudently saw it best to dispense with a hearing since the position and
responsive pleadings, together with the attached documentary evidence, provided more than
sufficient bases to resolve the case. Petitioner’s right to due process was thus not violated.
CASE 422

Commando Security v. NLRC

211 SCRA 645

FACTS:
Petitioner entered into a contract to provide guarding services to the Alsons Development and
Inv Corporation (ALSONS).
Maria Mila D. Samonte, Properties Administration Head of ALSONS, requested the petitioner
for a "periodic reshuffling" of guards. Thus, a recall order together with new detail order was
served to private respondent, Decierdo. However, Decierdo refused to accept assignment and he
is going to rest for a while.
Decierdo then filed a complaint for dismissal, unfair labor practice, underpayment of wages,
overtime pay, night premium, 13th month pay, holiday rest day pay and incentive leave pay.
Executive Labor Arbiter ordered petitioner to pay Decierdo salary, holiday and rest day pay
differentials, 13th month pay differentials and incentive leave pay; and dismissed the complaint
for illegal dismissal, unfair labor practice, overtime pay and night p for lack of merit. On appeal,
petitioner alleged that it was denied due process when Labor Arbiter proceeded to decide t based
on the parties' position papers, the records submitted by petitioner, and the report and the comp
made by the Corporate Auditing Examiner.

ISSUE:
Whether or not petitioner was denied on due process of law?

HELD:

No because procedural due process merely requires notice and opportunity to be heard, which
the petitioner was given then it filed its position paper. The petitioner was properly notified and
even took part in the conciliation conference for the amicable settlement of the case. It was made
aware of the nature and specifics of the charges against it but failed to refute them expecting that
a hearing would be called

The NLRC correctly held that the Executive Labor Arbiter did not err when she dispensed with a
full blown hearing there being no necessity for one. Under Section 3 of the Revised Rule of
NLRC, the Labor Arbiter may, in his sound discretion, dispense with a hearing and require,
instead, the parties to file their respective position papers together with all the supporting proofs.
CASE 423

Lavador v. J Marketing Corporation

461 SCRA 497

FACTS:
Claiming that respondent failed to remit the ₱1,000.00 payment and issue official receipt for the
₱1,259.00 check payment from its customer, respondent issued a memoranda charging petitioner
with misappropriation and later issued a notice terminating petitioner’s services for loss of trust
and confidence.
Immediately after, petitioner filed with the Office of the Labor Arbiter a complaint for illegal
dismissal. Labor Arbiter rendered a Decision finding that petitioner was not illegally dismissed
from the service.
National Labor Relations Commission (NLRC) affirmed with modification the decision of Labor
Arbeter, deleting the award of salary differential and atty.’s fee.
On appeal, appellate court rendered a Decision affirming with modification the assailed NLRC
Decision. While the said court upheld the termination of petitioner’s employment, however, it
ordered respondents to pay her ₱10,000.00 as damages for violating her right to due process
hence, this instant petition.
ISSUE:
Whether petitioner’s right to due process was violated?
HELD:
Yes. The records disclosed that petitioner twice requested that a formal administrative
investigation be conducted in order for her to properly defend herself from the accusations
leveled against her. Despite her pleas and that of her counsel, private respondents refused to
conduct a formal administrative investigation, proceeding instead to hastily dismiss petitioner on
the basis of its own probe, including the letter-explanation of petitioner.
For termination of employment based on just causes as defined in Article 282 (b) of the Code
provides:
(a) Xxxxxx
(b) A hearing or conference during which the employee concerned, with the assistance of
counsel if the employee so desires, is given opportunity to respond to the charge, present his
evidence or rebut the evidence presented against him;
The violation of the petitioners’ right to statutory due process by the private respondent warrants
the payment of indemnity in the form of nominal damages.
CASE 424

PAFLU v. Secretary of Labor

27 SCRA 40; Sec. 10, Migrant Workers

FACTS:
Philippine Association of Free Labor Unions (PAFLU), is a duly registered labor federation,
instituted an action for a declaratory relief in the Court of First Instance of Manila, to overrule
certain views entertained by respondent, Secretary of Labor. Petitioner averred the ff:
1. That a proviso in Section 23 (e) of Republic Act No. 875, as amended by Republic Act
No. 1941, be declared unconstitutional and violative of Conventions 87 and 98 of the
International Labor Organization;
2. That the 10% minimum requirement in Section 17 of Republic Act No. 875 is a condition
sine qua non for the exercise of the visitorial power of the respondent under Republic No.
1941;
It is argued by petitioner herein that the above cited provisions are inconsistent with Articles 3, 4,
7 and 8 of Convention 87 and 98 of the International Labor Organization, to which the
Philippines is a party.

ISSUE:
Whether the concern provision of R.A 875, as amended by Republic Act No. 1941 contravenes
the international agreement to which the Philippines is a party.

HELD:
No. There was no conflict between Republic No. 1941, on the one hand, and any of the
provisions of said Conventions.
Respondent's authority under said Act, R.A 1941, is limited to an inquiry into the financial
activities of any legitimate labor organization and to the examination of "its books of accounts
and other financial records to determine compliance with the laws and to aid in the prosecution
for any violations thereof". Certainly, none of the provisions of Conventions 87 and 98 seek to
protect or shield labor organizations which violate said laws.
With respect to the second point raised by herein petitioner, republic Act No. 1941 is concerned
with the authority of the Department of Labor to inquire into the financial activities of said
organization in order "to determine compliance or non-compliance with the laws and to aid in the
prosecution for any violation thereof". This authority is not dependent upon the request of said
members. Much less does it require a request backed up by 10% of the members of the
organization.
CASE 425

Pioneer Texturizing Corporation v. NLRC

280 SCRA 806 (1997

FACTS:
Private respondent was terminated her from employment on the ground of dishonesty and
tampering of official records and documents with the intention of cheating.
Labor Arbiter held petitioners guilty of illegal dismissal. Petitioners were accordingly ordered to
reinstate private respondent to her previous position without loss of seniority rights and with full
backwages from the time of her suspension.
The NLRC ruled that private respondent was negligent in presuming that the ribs of P.O. No.
3853 should likewise be trimmed for having the same style and design as P.O. No. 3824, thus
petitioners cannot be entirely faulted for dismissing private respondent. NLRC affirmed the
Labor Arbiter's order of reinstatement, but without backwages.
In its appeal, petitioners' theory is that an order for reinstatement is not self-executory. They
stress that there must be a writ of execution which may be issued by the NLRC or by the Labor
Arbiter motu proprio or on motion of an interested party as ruled by the court in Maranaw Hotel
Resort Corporation v. NLRC.
ISSUE: (1) whether or not de Jesus was illegally dismissed, and (2) whether or not an order for
reinstatement needs a writ of execution.
HELD:
1. Yes, private respondent was illegal dismissed. Petitioners' accusation of dishonesty and
tampering of official records and documents with intention of cheating against de Jesus
was not substantiated by clear and convincing evidence. Also, the imposition of the
extreme penalty of dismissal against de Jesus as certainly harsh and grossly
disproportionate to the negligence committed, especially where said employee holds a
faithful and an untarnished twelve-year service record.

2. No, writ of execution is not needed in this instant case. The necessity for a writ of
execution under Article 224 applies only to final and executory decisions which are not
within the coverage of Article 223.
Article 224 states that the need for a writ of execution applies only within five (5) years from the
date a decision, an order or award becomes final and executory. It can not relate to an award or
order of reinstatement still to be appealed or pending appeal which Article 223 contemplates.
The provision of Article 223 is clear that an award 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.
The court ruled that an award or order for reinstatement is self- executory.
CASE 426

Maranaw Hotel Resort v. NLRC

238 SCRA 190

FACTS:
Private respondent was hired on a probationary basis for six months and later dismissed on the
ground of failure to meet the standards set forth in her probationary employment contract. She
then filed a complaint for illegal dismissal with reinstatement, back wages, and damages. Labor
Arbiter ordered the reinstatement of
respondent to its former position. Both the Omnibus Motion For Extension Of Time To File
Surety Bond And To Reduce Amount Of Bond
filed by petitioner and motion for the execution of the decision filed by respondent were not
resolved by Labor Arbiter.

In its resolution, NLRC dismissed the complaint for lack of merit. It held that there was no
illegal dismissal but rather a failure of the private respondent to comply with the petitioner's
standards for permanent employment, And complainant should be considered on payroll
reinstatement, as of the date of the filing of the Motion For Execution up to the date of the
promulgation of this Resolution and thus pay [sic] her salaries corresponding to that period based
on P4,800.00 a month which was her salary at the time of her dismissal.

ISSUE:
Whether or not the NLRC acted with grave abuse of discretion in holding that the private
respondent should be considered as reinstated in the payroll from the filing of the motion for
execution on 13 March 1992 until the promulgation of its resolution

HELD:
Yes. In the absence then of an order for the issuance of a writ of execution on the reinstatement
aspect of the decision of the Labor Arbiter, the petitioner was under no legal obligation to admit
back to work the private respondent under the terms and conditions prevailing prior to her
dismissal or, at the petitioner's option, to merely reinstate her in the payroll. An option is a right
of election to exercise a privilege, and the option in Article 223 of the Labor Code is exclusively
granted to the employer.

The event that gives rise for its exercise is not the reinstatement decree of a Labor Arbiter, but
the writ for its execution commanding the employer to reinstate the employee. Since in the
instant case no occasion arose for the petitioner to exercise its option under Article 223 of the
Labor Code with respect to the reinstatement aspect of the decision of the Labor Arbiter, the
NLRC acted with grave abuse of discretion when it ordered that the private respondent should be
considered reinstated in the payroll from the filing of her motion for execution until the
promulgation of its resolution
CASE 427

Aris Philippines v. NLRC

200 SCRA 246.

FACTS:
Employees of the herein respondent demonstrate a protest on management long silence and
inaction on their complaints concerning their working surroundings which had become
detrimental and hazard. Private respondents were dismissed for violation of company rules and
regulations more specifically of the provisions on security and public order on inciting or
participating in illegal strikes or concerted actions.
Labor arbiter ordered to reinstate the dismissed private respondents and granted the Writ of
Execution to which petitioner opposed alleging that Sec. 12 of R.A 6715 on execution pending
appeal cannot be applied retroactively to cases pending at the time of its effectivity because it
does not expressly provide that it shall be given retroactive effect, and effecting otherwise
violates the due process law hence unconstitutional.

ISSUE:
Whether or not mandatory and automatic reinstatement of dismissed employees even pending
appeal is unconstitutional?

HELD:
No because such specific provision of the law is a valid exercise police power of the state and
laws are presumed constitutional. To justify nullification of a law, there must be a clear breach of
the Constitution, not doubtful and argumentative implication.
Social Justice and Human Rights of the Constitution mandated the State, among others, to afford
full protection to labor, local and overseas, organized and unorganized, and promote full
employment and equality of employment opportunities for all. Also, the state recognized Labor
as indispensable partner for the nation's progress and stability.
Moreover, ordinary civil actions execution of judgment pending appeal is authorized for reasons
the determination is merely left to the discretion of the judge. Withholding judgement on
reinstatement cases of dismissed or separated employees deprives poor employees of the source
of livelihood, their only means of support for their family their very lifeblood. It is the duty of
the State to afford protection of its labor as recognized by the Constitution.
CASE 428

Vir-Jen Shipping v. NLRC

115 SCRA 361

FACTS:
The Seamen entered into separate contracts of employment with the Company. The crew
received a cable from its Company informing them their respective special compensation
received when their vessel called at the port of Kwinana Australia, an ITF-controlled port, and
that the officers and crew members had been enrolled as members of the ITF in Sidney,
Australia. The officers and crew members filed a complaint informing the Company that they
were not contented with their present salaries 'based on the volume of works, type of ship with
hazardous cargo and registered in a world wide trade. After negotiation, the complainants ceded
to the proposal of the Company. However, subsequently, the Company sought authority from the
NSB to cancel the contracts of employment of the Seamen, claiming that its principals had
terminated their manning agreement because of the actuations of the Seamen.
NSB rendered a decision declaring that the seamen breached their employment contracts and
their dismissal was declared legal. On appeal, NLRC reversed the decision of the latter and ruled
that the termination of the contract by the petitioner was without valid cause.

ISSUE:
Whether or not the seamen violated their contracts of employment justifying their dismissal.

HELD:
No because Contracts of Employment are not collective bargaining agreements or immutable
contracts which the parties cannot improve upon or modify in the course of the agreed period of
time. To state, therefore, that the affected seamen cannot petition their employer for higher
salaries during the 12 months duration of the contract runs counter to established principles of
labor legislation.
The cable of the seamen proposing an increase in their wage rates was not and could not have
been intended as a threat to compel the Company to accede to their proposals. As reiterated by
the Court in Wallem case “even if there had been such a threat, respondents' behavior should
not be censured because it is but natural for them to employ some means of pressing their
demands for petitioner, the refusal to abide with the terms of the Special Agreement, to honor
and respect the same, They were only acting in the exercise of their rights, and to deprive them
of their freedom of expression is contrary to law and public policy.” Same must also applied in
the instant case.
CASE 429

Southtech Development Corp. v. NLRC

448 SCRA 64

FACTS:
Respondents were employed as machine operators of petitioner SDC. Respondents were directed
to submit their explanation why they should not be disciplinarily dealt with for insubordination.
They did submit their respective explanations which the management found to be unsatisfactory,
drawing it to suspend them for one month. Respondents were thus advised by the SDC president,
petitioner Ricardo Lu, to report to his house but they paid him no heed. Instead, they filed a
complaint for illegal dismissal against petitioners.1awph On its decision, Labor Arbiter
dismissed the complaint.
Respondents’ counsel, CABELLERO AUMENTADO MONTES LAW OFFICE, does not deny
that a copy of the decision of the labor arbiter was received at its office at 840 Extremadura St.,
España, Manila on July 14, 2000. Atty. Amado Auditor Caballero who appeared for respondents
on behalf of the law office avers, however, that he was at the time "attending to his cases in the
province of Bohol, his home province, and he was able to receive the said Decision of the Labor
Arbiter only on September 8, 2000.
By Resolution of September 29, 2000, the NLRC dismissed petitioners’ appeal as it was filed
beyond the 10- calendar day period to file one.

ISSUE:
Whether or not the NLRC erred in denying the motion for reconsideration by not applying the
Doctrines of Liberality.

HELD:
Yes. This Court has given imprimatur to the NLRC’s disregard of procedural lapse in filing a
belated appeal where there is an "acceptable reason" to excuse the tardiness. Among the reasons
which have been recognized as acceptable are:
...(a) counsel’s reliance on the footnote of the notice of the decision of the Labor Arbiter that "the
aggrieved party may appeal ...within ten (10) working days;" (b) fundamental consideration of
substantial justice; (c) prevention of miscarriage of justice or of unjust enrichment, as where the
tardy appeal is from a decision granting separation pay which was already granted in an earlier
final decision; and (d) special circumstances of the case combined with its legal merits or the
amount and the issue involved.
While the rule that negligence of counsel binds the client may be relaxed where adherence
thereto would result in outright deprivation of the client’s liberty or property or where the
interests of justice so require, respondents have not shown, nay alleged, why a relaxation of the
rule is called for. On the contrary, the uncontroverted facts of the case incline against
respondents.
CASE 430

Rizal Empire Insurance Group v. NLRC

150 SCRA 565.

FACTS: Rogelio R. Coria was hired by herein petitioner as a casual employee and later
promoted as regular employee. Rogelio R. Coria was dismissed from work, allegedly, on the
ground of tardiness and unexcused absences. On petition, Labor Arbiter Teodorico L. Ruiz
reinstate him to his position with back wages to which the petitioner appeal. Such appeal was
dismissed on the ground that the same had been filed out of time. Hence, this instant petition

ISSUE: Whether or not the Commission committed a grave abuse of discretion amounting to
lack of jurisdiction in arbitrarily dismissing petitioners' appeal on a technicality.

HELD: No grave abuse of discretion amounting to lack of jurisdiction was committed by the
Commission because the petition was filed out of time and the decision of the Commission is
final and executory and can no longer be subject to appeal.
Rule VIII of the Revised Rules of the National Labor Relations Commission on appeal, provides:
SECTION 1. (a) Appeal. — Decision or orders of a labor Arbiter shall be final and executory
appealed to the Commission by any or both of the parties within ten (10) calendar days from re
notice thereof.
xxx xxx xxx
SECTION 6. No extension of period. — No motion or request for extension of the period within
perfect an appeal shall be entertained.
Pursuant to the "no extension policy" of the National Labor R Commission, aforesaid motion for
extension of time was denied and the appeal was dismissed for having been filed out of time.
CASE 431

Volkschel Labor Union v. NLRC

98 SCRA 31

FACTS:
Complaint for unfair labor practice was filed by petitioner against respondent. Respondent
decide to transfer or assign private respondents to the Cebu District and Magna Services and that
they are suspended indefinitely for their refusal to comply with the management's order, which
suspension will eventually lead to termination from the service. Petitioner union alleged that the
company failed to assist the Union to collect and hereby guarantees collection of Agency Fees as
embodied in Art. III, Section 3 of CBA.
Voluntary arbitrator rendered an award directing the company to reinstate its dismissed
employees with full back wages and to transmit all agency fees due to union. On appeal, NLRC
modified the arbitrator’s award ordering the employees to comply with the directive of the
company and set aside the full back wages.
Petitioners appealed to the Secretary of labor questioning the jurisdiction of NLRC contending
that such petition of respondent company was filed beyond reglementary period hence NLRC do
not acquire jurisdiction over the case. Consequently, the award of NLRC is null and void.

ISSUE:
Whether or not the NLRC has the power to alter or modify the award by a voluntary arbitrator
whose decision is final and executory pursuant to the CBA.

Whether or not the NLRC could still inverse or modify the voluntary arbitrator's award despite
the appeal of the private respondent company was filed beyond the reglementary period or in
other words the right to appeal has prescribe

HELD:
No, NLRC did not acquire jurisdiction over the case for the same had been filed beyond the
reglementary period, consequently the decision rendered is null and void.
The records show that the appeal was filed out of time; hence, the award attained finality. It is a
well-settled rule that an award or judgment becomes final and executory upon the expiration of
the period to appeal and no appeal was made within the reglementary period. The lapse of the
appeal period deprives courts of jurisdiction to alter a final judgment. In the instant case, the
decision of the Commission modifying the award of the arbitrator is null and void for having
been issued without jurisdiction and authority, the appeal taken thereto not having been filed on
time. The perfection of an appeal within the reglementary period is not only mandatory but
jurisdictional.
The award having attained finality, becomes the law of the case, and must be complied with, no
matter how erroneous it may be. The award of voluntary Arbitrators acting within the scope of
their authority determines the rights of the parties, and their decisions have the same legal effects
as a judgment of the Court. Such decisions on matters of fact and law are conclusive, and all
matters in the award are thenceforth res judicata, on the theory that the matter has been adjudged
by the tribunal which the parties have agreed to make final as tribunal of last resort.
CASE 432

American Home Assurance v. NLRC

252 SCRA 202; 24 January 1996
Regalado, J.

FACTS:
Private respondents filed a Complaint for regularization, sick leave pay, vacation leave pay and
night shift differential pay against petitioners before the National Capital Region Arbitration
Branch of public respondent National Labor Relations Commission (NLRC) to which petitioners
filed a Motion to Dismiss thereafter insofar as private respondents Malinao and Gacusan were
concerned since they alleged that the latter have settled their case by way of compromise
agreement. before Labor Arbiter Manuel R. Caday could act on the aforementioned motion to
dismiss, private respondents Malinao and Loriaga filed an Amended Complaint for illegal
dismissal and service incentive leave. private respondents Malinao and Gacusan filed an
Opposition to the Motion to Dismiss. They averred that petitioners, using "undue influence and
trickery considering their educational backgrounds," deluded them into signing the compromise
agreement. A Supplemental Opposition was subsequently filed by said private respondents. On
July 28, 1993, petitioners filed a Motion for Reconsideration of the aforesaid resolution. On
August 30, 1993, public respondent NLRC issued an Order denying said motion for lack of
merit. 4

In the present special civil action, petitioners argue that respondent NLRC committed a grave
abuse of discretion, amounting to lack or excess of jurisdiction, in giving due course to the
Motion to Admit Motion for Reconsideration which was already filed out of time, and in
ordering the hearing on the merits of the case despite the presence of supervening events, both in
violation of the constitutional rights of herein petitioners

ISSUE:
Whether or not NLRC committed grave abuse of discretion in giving due course to the
Motion to Admit Motion for Reconsideration.

HELD:
Yes. Respondent NLRC gravely erred in reinstating the case below with respect to the claims of
respondent Gacusan despite the fact that the latter never filed either a motion for reconsideration
or an appeal from the order dismissing his complaint. There is nothing to indicate that he sought
relief from the order of dismissal. It was, an error for respondent NLRC to order for respondent
NLRC to order the labor arbiter to continue with the hearing of respondent Gacusan’s complaint.
In addition, petitioner had already paid Gacusan the amount P50,000.00 as financial assistance
by reason of which the latter executed a General Release and Settlement Agreement. However,
Gacusan did not amend his complaint for unpaid wages and other benefits, the receipt of
payment and execution of quitclaim by respondent Gacusan effectively extinguished petitioners’
liability to him and this necessarily barred the latter from foreteller pursuing his case which is
limited to money claims against the former Gacusan’s indifference in the prosecution of his case
before the labor arbiter is made evident by his failure to file an opposition to the first Motion to
CASE 433

Dismiss filed by petitioners. The opposition he filed to the second Urgent Motion to Dismiss
could, at most, be considered as a mere afterthought, the reinstatement of the case with respect to
the claim of respondent Loriaga is totally baseless and completely irregular. On his own
initiative and upon his own motion, respondent Loriaga’s complaint against herein petitioners
was dismissed by the labor arbiter without prejudice to the refiling of the same. Respondent
Loriaga never made an appeal either from the Order dismissing the case with prejudice or from
the Order which dismissed his claim without prejudice, upon motion of said respondent himself.

Respondent NLRC, in blatant insourciance for the rule mandating strict compliance with the
reglementary period for appeals, decided to take cognizance of the motion for reconsideration
belatedly filed by respondent Malinao on the basis of "substantial justice," which does not exist
in this case. The supposed extreme poverty of the client is not a justifiable excuse for the failure
of his counsel to file the motion for reconsideration on time under the circumstances.

Abbott v. NLRC
145 SCRA 206; 12 October 1987
Gutierrez, Jr., J.

FACTS:
Complainant Bobadilla started his employment with respondent company and after undergoing
training, was designated professional medical representative (PMR). He averred that in his
application for employment, he agreed that (1) if employed he win accept assignment in the
provinces and/or cities anywhere in the Philippines; 2) he is willing and can move into and live
in the territory assigned to him; and (3) that should any answer or statement in his application for
employment be found false or incorrect, he will be subject to immediate dismissal, if then
employed.

Respondent Victa informed complainant that he was being transferred to the newly opened
Cagayan territory. Among the reasons given for the selection were: the territory required a
veteran and seasoned PMR who can operate immediately with minimum training and supervision
and a PMR who can immediately exploit the vast business potential of the area. In a letter which
was received by Abbott, Bobadilla, thru his lawyer, objected to the transfer on the ground that it
was not only a demotion but also personal and punitive in nature without basis legally and
factually.

On 8 August 1983, Victa issued another inter-office correspondence to competent, giving the
latter up to 15 August 1983 within which to comply with the transfer order, otherwise his would
be dropped from the payroll for having abandoned his job. When Bobadilla failed to report to his
new assignment, Abbott assigned thereat Fausto Tibi who was priorly covering the provinces of
Nueva Ecija and Tarlac.

Meanwhile, complainant filed applications for vacation leave from 2 to 9 August 1983, and then
from 10 to 13 August 1983. On 18 August 1983, he filed the present complaint. After due
consideration of the evidence adduced by the parties, the Arbiter ruled for the respondent on the
ground that the complainant is guilty of gross insubordination. On appeal NLRC reversed that
Arbiter’s decision and held that petitioners had no valid reason to dismiss the complaint and
ordered that latter’s reinstatement with backwages.

ISSUE:
Whether or not Bobadilla could be validly dismissed from his employment on the ground of
insubordination for refusing to accept his new assignment.

HELD:
Yes. Jurisprudence provides that The hiring, firing, transfer, demotion, and promotion of
employees has been traditionally Identified as a management prerogative subject to limitations
found in law, a collective bargaining agreement, or general principles of fair play and justice. As
CASE 434

a general rule, the right to transfer or reassign an employee is recognized as an employer's

exclusive right and the prerogative of management. In this case, complainant was precisely hired
because he manifested at the outset as a job applicant his willingness to follow the conditions of
his employment. Therefore, Bobadilla had no valid reason to disobey the order of transfer. He
had tacitly given his consent thereto when he acceded to the petitioners' policy of hiring sales
staff who are willing to be assigned anywhere in the Philippines which is demanded by the
petitioners' business.
By the very nature of his employment, a drug salesman or medical representative is expected to
travel. He should anticipate reassignment according to the demands of their business. It would be
a poor drug corporation which cannot even assign its representatives or detail men to new
markets calling for opening or expansion or to areas where the need for pushing its products is
great. More so if such reassignments are part of the employment contract.

Rizal Empire Insurance Group v. NLRC

150 SCRA 565; 29 May 1987
Paras, J.

FACTS:
Private respondent Coria was hired by petitioner as a casual employee. On 1 January 1978, he
was made a regular employee as clerk-typist. As a permanent employee he was furnished a copy
of "General Information, Office Behavior and Other Rules and Regulations." Without change in
his position-designation, he was transferred to the Claims Department then he was transferred to
the Underwriting Department. After which, he was transferred to the Fire Department as filing
clerk and later on he was made an inspector of the Fire Division. On 1983, Coria was dismissed
from work, allegedly, on the grounds of tardiness and unexcused absences.

Accordingly, he filed a complaint with MOLE and in a Decision, Labor Arbiter Ruiz reinstated
him to his position with back wages. Petitioner filed an appeal with the NLRC but such was
dismissed on the ground that the same had been filed out of time.

ISSUE:
Whether or not the case is still within the jurisdiction of the Court to review.

HELD:
No. Under the Revised Rules of the NLRC on appeal, decision or orders of a Labor Arbiter shall
be final and executory unless appealed to the Commission by any or both of the parties within
ten (10) calendar days from receipt of notice thereof. No motion or request for extension of the
period within which to perfect an appeal shall be entertained.
In this case, the record shows that the employer (petitioner herein) received a copy of the
decision of the Labor Arbiter on April 1, 1985. It filed a Motion for Extension of Time to File
Memorandum of Appeal on April 11, 1985 and filed the Memorandum of Appeal on April 22,
1985. Pursuant to the "no extension policy" of the National Labor Relations Commission,
aforesaid motion for extension of time was denied in its resolution dated November 15, 1985 and
the appeal was dismissed for having been filed out of time. Under the above-quoted provisions of
the Revised NLRC Rules, the decision appealed from in this case has become final and
executory and can no longer be subject to appeal.
Even on the merits, the ruling of the Labor Arbiter appears to be correct; the consistent
promotions in rank and salary of the private respondent indicate he must have been a highly
efficient worker, who should be retained despite occasional lapses in punctuality and attendance.
CASE 435
CASE 436

Del Rosario v. NLRC

136 SCRA 669; 31 May 1985
Melencio-Herrera, J.

FACTS:
Petitioner Del Rosario and Sons Logging Enterprises, Inc. entered into a “Contract of
Services with Calmar Security Agency on February 1, 1978 whereby the latter undertook to
supply the former with security guards at the rate of P300 per month for each guard. Mabuti,
Borata and Tudio filed a complaint against Calmar and petitioner for underpayment of salary,
non-payment of living allowance and 13th month pay. Thereafter, five other guards filed their
complaint for the same causes of action. Petitioner contended that there was no employer-
employee relationship between them and denied liability alleging that due to the inadequacy of
the amounts paid to it under the Contract, it could not possible comply with the payments
required by labor laws.

The Labor Arbiter dismissed the complaint for want of employer-employee relationship.
On appeal, NLRC modified the decision by holding that petition is liable to pay complainants,
jointly and severally, with Calmar averring that the petitioner is an indirect employer pursuant to
Articles 106 and 107 of the Labor Code.

ISSUE:
Whether or not the complainants are entitled to benefits claimed from the company.

HELD:
Under the Labor Code, in the event that the contractor or subcontractor fails to pay wages
of his employees in accordance with the code, the employer shall be jointly and severally liable
with his contractor or subcontractor to such employees to the extent of the work performed under
the contract, in the same manner and extent that he is liable to employees directly employed by
him. In the case at hand, petitioner became and indirect employer of respondent-complainants
when petitioner entered into a Contract of Services with the Security Agency and the latter hired
that complainants to work as guards for the former. However, petitioner’s liability should be
without prejudice to a claim for reimbursement against the Security Agency for such amounts as
petitioner may have to pay the complainants. Calmar may not seek exculpation by claiming that
petitioner’s payments to it were inadequate. As an employer, it is charged with knowledge of
labor laws and the adequacy of the compensation that it demands for contractual services is its
principal concern and not any other’s.
CASE 437

Gaerlan v. NLRC
132 SCRA 402; 28 September 1984
Abad Santos, J.

FACTS:
Gaerlan, plaintiff-appellant, filed a complaint with the National Seamen’s Board against
Oriental Shipmanagement Co., Inc. for breach of contract and damages which was dismissed for
lack of merit but ordered Oriental to return Gaerlan’s passport, Seaman’s Continuous Discharge
Book and Seaman Registration Certificate without charging any fee. Thereafter, Gaerlan
appealed to NLRC averring that the case for damages is biased and gross injustice tantamount to
insult to moral injuries for failure to employ him and not the principal despite an approved
contract for one year by the NSB. He prays to correct and review and made a favorable decision
reversing the Decision of Director Juridico thus granting me at least minimum Damages award
of $300. monthly x 12-months of Unearned Income due to the failure of Oriental
Shipmanagement Corporation.

In a Resolution promulgated on August 29, 1982, the NLRC dismissed the appeal "for
failure to satisfy the requirements of a valid appeal. The subject motion is not verified under oath
and there is no showing whatsoever that a copy thereof was served on the adverse party.
Moreover, said motion does not invoke any of the valid grounds for appeal, hence pro forma."

ISSUE:
Whether or not the NLRC validly dismissed the appeal.

HELD:

No. The formal defects in the appeal which the petitioner filed with the NLRC were not fatal
defects. The lack of verification can be easily corrected by requiring an oath. And the non-
service of the appeal to the adverse party is likewise not a fatal defect for it can also be easily
corrected

As to the dismissal of the appeal because it was pro forma, the Solicitor General suggests "that
this Honorable Court require petitioner's present counsel (CLAO) to redraft the Appeal
Memorandum setting forth in clear and concise language the position of petitioner in order to
enable public respondent to evaluate properly the merits of petitioner's appeal." (Rollo, p. 46.)
This suggestion is well-taken and here it will not be amiss to state that obviously most of Mr.
Gaerlan's difficulties are due to the fact that although he is not a lawyer but an engineer, he acts
as his own counsel. He persists in doing so even after the CLAO had entered its appearance for
him. The rollo of this case is replete with hand and typewritten motions filed by Mr. Gaerlan
who is well-advised to leave the lawyering of his case to lawyers. The petition is granted; the
Resolution of the NLRC is hereby set aside and said entity is directed to give due course to the
petitioner's appeal. In lieu of the petitioner's Motion to Appeal, the CLAO is directed to file for
the petitioner an appeal memorandum sufficient in form and substance
CASE 438

Philex Miners Union v. NAMAWU

6 SCRA 992; 29 December 1962
Paredes, J.

FACTS:
A Petition for Certification Election was filed before the Court of Industrial Relations by
NMAWU alleging that the employer Philex Mining Corporation, engaged in Mining in Mt.
Province. Philex Miners Union filed a Motion for Reconsideration. The respondents now argue
that the motion for reconsideration should be filed within 5 days from receipt of copy of the
decision or order, and said motion should be verified under oath, with respect to the correctness
of the allegations of fact; that the motion for reconsideration contained no such verification either
by the union president or counsel; that it is merely an oath allegedly “subscribed and sworn to
before” the municipal clerk, not below the signature of petitioner’s counsel, Atty. Pablo C.
Sanidad, but below the names of the attorneys to whom copies were to be furnished, showing
that the supposed oath was placed in the motion merely as an after-thought; that the usual form
of verification which should be familiar to legal practitioners, is that the affiant, after having
been duly sworn on oath, deposes and says that he is the president of legal counsel or
representative of the party filing the pleading; and that he thereby certifies that the facts and
allegations contained in the motion, petition or pleading are true and correct, which will be
followed by the oath signed before the administering officer, and that all these are wanting in the
present case. Respondents further argue that when a pleading is required to be verified under
oath, the requirement should be enforced, because verification is the exemption, not the rule.

ISSUE:
Whether or not the dismissal of the motion for consideration and non-suspension of the
certification election is erroneous.

HELD:
While a ruling on the procedural issue may not altogether be necessary, in view of our
conclusions with respect to the merits of the case, this Court holds, nevertheless, the dismissal of
the motion for reconsideration to be erroneous. The respondent court dwelt on unwarranted
technicalities. The motion for reconsideration was signed by the counsel for the movant. The
signature of counsel amounted to a certification “that he has read the pleading; that to the best of
his knowledge, information and belief, there is ground to support it; and that it is not interposed
for delay. The acknowledgment having been couched in the usual form, the same is a substantial
conformance to the rule that the motion for reconsideration be “duly verified under oath”‘, as
provided for by the CIR rules. A cursory reading of the said motion will show that it does not
contain an allegation of fact which needs verification; it impugns merely conclusions of law. A
verification under the circumstances obtaining would be both useless and superfluous.

If the principle enunciated in the Arambulo vs. Perez holds true to a pleading like a complaint, it
should likewise be true to motions for reconsideration. The above error, notwithstanding, will not
justify the granting of the present petition. For, it is to be noted that the Department of Labor
should conduct the certification election thirty (30) days after receipt of the court’s order. The
Department of Labor scheduled the certification election for January 20, 1961. In the absence of
any restraining order, issued by a competent court, the filing of the motion for reconsideration
with the CIR en banc, did not have the effect of suspending ipso facto, the scheduled election.
Petitioner knew that this is the rule, otherwise its counsel would not have presented an urgent
motion to suspend the election. The motion for reconsideration was finally dismissed and the
motion to suspend was denied, and the petitioner had not done anything on the matter, except to
appeal to this Court. Even this appeal, without more, did not suspend the effect of the
certification election; otherwise a party could arrest, without the necessary adequate court action,
the movement of the bargaining processes, by the interposition of frivolous and useless appeal.
CASE 439

Condo Suite Club v. NLRC

323 SCRA 679, 687; 28 January 2000
Quisumbing, J.

FACTS:
Private respondent was employed as “housekeeper” with monthly compensation of Php 8,000.
After two months, he signed a new employment contract with petitioner Condo Suite Club
Travel, Inc. under the same terms of employment. Both firms belong to the ARCON group of
companies. His salary was reduced. He also owned a car-for-hire which he rented to Joselito
Landrigan who operated the car as a taxi with himself as driver. Landrigan approached the front
desk clerk at petitioner’s hotel requesting a collectible of Php 2000 be added to a certain Korean
guests, Mr. Hu’s bill. Mr. Hu later complained that he was over billed. Private respondent
explained his side being the front desk supervisor and owner of the car. Eventually, petitioner’s
staff confirmed the error and refunded the amount to the Korean. Petitioner terminated the
services of private respondent on the ground of loss of confidence for the latter’s
malicious intent to defraud a guest of the hotel.

ISSUE:
Whether or not private respondent was illegally dismissed.

HELD:
Yes. Petitioner failed to prove by ample evidence that private respondent intended to defraud Mr.
Hu. The front desk clerk admitted being the one responsible for entering the Php 2000 in Mr.
Hu’s statement of account. Also, Landrigan admitted approaching the front desk clerk to demand
payment of the transportation fee as he was hired by Mr. Hu’s group for two days believing
in good faith that Mr. Hu owed him Php 2000. Also, there is no indication that petitioner was
afforded due process as, in fact, it was only upon service of termination that private respondent
realized that the complaint of Mr. Hu was directed at him. As there is no valid and just cause, he
is entitled to reinstatement without loss of seniority rights plus full backwages and other benefits
withheld from him up to the time of his actual reinstatement.
CASE 440

Mercury Drug v. Libunao

434 SCRA 404, 413; 14 July 2004
Callejo, Sr., J.

FACTS:
  Atty. Rodrigo Libunao filed a complaint for damages with the RTC of Quezon City
against the Mercury Drug Corporation for the alleged illegal and harmful acts committed by
Remigio Sido while assigned as a security guard at Petitioner’s Robinson’s Galleria store.  
 
During trial, Atty. Libunao’s counsel of record stipulated that Sido was not employed by
Petitioner. Moreover, Sido and the store manager, Vilma Santos, testified that Sido was an
employee of Black Shield Security Services Corporation, and not of Petitioner. That security
guards are employees of BSSSC, and not of Petitioner, was likewise expressly indicated in the
contract between Petitioner and BSSSC. Aggrieved, Petitioner filed a petition for review
under Rule 45 of the Rules of Court before the Supreme Court raising not only questions of law
but factual questions as well.

As defined by the SC,the issues for resolution are (a) whether the certification against forum

shopping embedded in the petition is sufficient compliance with Section 4, Rule 45 of the Rules
of Court; (b)whether the remedy of Petitioner is proper; and, (c) whether Petitioner is liable for
damages to therespondent for the tortious and delictual acts of Sido

ISSUE:
Whether or not petitioner is liable for damages to the respondent for the tortious and delictual
acts of Sido.

HELD:
It is thus evident that the respondent had no cause of action against the petitioner for
damages for Sido's illegal and harmful acts. The respondent should have sued Sido and the
BSSC for damages, conformably to Article 2180 of the New Civil Code.
In Soliman, Jr. v. Tuazon, the court held that where the security agency recruits, hires and
assigns the works of its watchmen or security guards to a client, the employer of such guards or
watchmen is such agency, and not the client, since the latter has no hand in selecting the security
guards. Thus, the duty to observe the diligence of a good father of a family cannot be demanded
from the said client. It is settled in our jurisdiction that where the security agency, as here,
recruits, hires and assigns the work of its watchmen or security guards, the agency is the
employer of such guards or watchmen. Liability for illegal or harmful acts committed by the
security guards attaches to the employer agency, and not to the clients or customers of such
agency. As a general rule, a client or customer of a security agency has no hand in selecting who
among the pool of security guards or watchmen employed by the agency shall be assigned to it;
the duty to observe the diligence of a good father of a family in the selection of the guards
cannot, in the ordinary course of events, be demanded from the client whose premises or
property are protected by the security guards.
Indeed, the petitioner had assigned Sido to help the management open and close the door of the
drug store; inspect the bags of customers as they enter the store; and, check the receipts issued by
the cashier to said customers for their purchases. However, such circumstances do not
automatically make the security guard the employee of the petitioner, and, as such, liable for the
guard's tortious acts. The fact that a client company may give instructions or directions to the
security guards assigned to it, does not, by itself, render the client responsible as an employer of
the security guards concerned and liable for their wrongful acts or omissions.
CASE 441

Biogenerics v. NLRC
313 SCRA 748; 08 September 1999
Bellosillo, J.

FACTS:
Petitioner Biogenerics, a domestic corporation, through petitioner Wolfgang Roehr, Chairman of
its Board of Directors, employed private respondent Serafin G. Panganiban as its President and
General Manager. Acting on an information that respondent Panganiban was allegedly trying to
form a corporation in competition with Biogenerics, petitioner Roehr dismissed Panganiban from
employment without prior notice.  Panganiban filed a complaint for illegal dismissal, back
wages, separation pay, moral and exemplary damages, and attorney's fees. Biogenerics averred
that Panganiban was not dismissed but he voluntarily resigned after being confronted with his
alleged disloyal act of planning to set up a corporation in competition with the business of his
employer. The Labor Arbiter ruled that the dismissal was illegal having been effected without
just cause and due process. Biogenerics then filed before the NLRC a “Memorandum of Appeal”
and “Motion to Reduce Appeal Bond”. NLRC, finding that Biogenerics had no justification for a
susbstantial reduction of the bond other than its limited authorized capital stock, ordered
petitioners to post an additional cash or surety bond. Petitioners argued that considering the
authorized capital stock of the corporation was only P2, 000,000.00, an award of P1, 870,000.00
as backwages alone was excessive and initially posted only a P50,000.00 cash bond. The NLRC
denied the Motion to Reduce the Appeal Bond. The NLRC gave the company three extensions
(totaling 30 days) for them to comply with the appeal bond requirement. A certain R, wife of the
company’s chairman, posted the required bond. Yet when R learned that she was not under any
obligation to post the bond on behalf of her husband, she withdrew the bond.

ISSUE:
Whether or not the petitioners should still be made to post another bond.

HELD:
Yes. Since effectively, no appeal bond was posted by petitioners, no appeal was perfected from
the decision of the Labor Arbiter, for which reason the decision sought to be appealed to the
NLRC became final and executory and immutable. The requirement of cash or surety bond to
perfect an appeal from the Labor Arbiter’s monetary award is jurisdictional; non-compliance is
fatal and renders the award final and executory. It is not an excuse that the bond of P2 million is
too much for a small business enterprise. The law does not require outright payment but only the
posting of a bond to ensure that the award will eventually be paid should the appeal fail.
CASE 442

Navarro v. NLRC
327 SCRA 22; 01 March 2000
Quisumbing J.

FACTS:
Petitioners were jeepney driver of private respondent Comejo on the boundary system. Due to a
change in schedule, they did not report to work as protest. They were then replaced. Petitioners
filed a complaint for illegal dismissal asking for separation pay and other benefits. On November
26, 1991, the labor arbiter rendered judgment in favor of petitioners. Private respondents were
served a cop of the decision on April 3, 1992. They filed their memorandum on appeal on April
13, 1992; however the appeal bond was only filed on April 30, 1992. Also, such bond was found
to be spurious. It was only on July 20, 1993 that a substitute bond was issued by another
company.

ISSUE:
Whether or not NLRC committed grave abuse of discretion in acting on the appeal of private
respondents when the decision has become final for non-filing of a supersedeas bond within the
reglementary period to appeal.

HELD:
The perfection of an appeal within the reglementary period and in the manner prescribed by law
is jurisdictional, and noncompliance with such legal requirement is fatal and has the effect of
rendering the judgment final and executory. Such requirement cannot be trifled with. The records
indicate that private respondents received the copy of labor arbiter's decision on April 3, 1992,
hence, they had only until April 13, 1992 to perfect their appeal. While private respondents filed
their memorandum of appeal on time, they posted surety bond only on April 30, 1992, which is
beyond the ten-day reglementary period, a procedural lapse admitted by private respondents.
Private respondents' failure to post the required appeal bond within the prescribed period is
inexcusable. As the appeal filed by private respondents was not perfected within the
reglementary period, the running of the prescriptive period for perfecting an appeal was not
tolled.9 Consequently, the decision of the labor arbiter became final and executory upon the lapse
of ten calendar days from receipt of the decision. Hence, the decision became immutable and it
can no longer be amended nor altered by the labor tribunal. 
CASE 443

Aquino V. NLRC
226 SCRA 76 ; 11 February 1992
Cruz, J.

FACTS:
The petitioners' services were terminated on the ground of retrenchment, and they received
separation pay double that required by the Labor Code. Thereafter, they demanded retirement
benefits, invoking the Retirement Plan of the respondent company which they said was
contractual rather than statutory. The question eventually submitted to the labor authorities was,
having received the separation pay, were the petitioners still entitled to the retirement benefits.
The Labor Arbiter ruled in favor of petitioners mainly on the ground that the company was
estopped from withholding retirement benefits from them after having granted similar benefits to
the employees earlier mentioned. NLRC reversed the decision and declared that the case cited by
the petitioners was exceptional and could not be considered a precedent. 

ISSUE:
Whether or not the petitioners are still entitled to retirement benefits.

HELD:
Yes. The petitioners are covered by the Retirement Plan because they have contributed to the
retirement fund, have been separated by reason of the retrenchment, and have served the
company for more than the prescribed minimum period of ten years. Regular employees who are
separated from the service of the company for any reason other than misconduct or voluntary
resignation shall be entitled to either 100% of the benefits provided in Section 2, Article VIII of
the Labor Agreement regardless of their length of service in the company or to the severance pay
provided by law, whichever is the greater amount." Thus, in said case the employee was entitled
to either the amount prescribed in the plan or the severance pay provided by law whichever is the
greater amount.

In the present case, there is nothing in the labor agreement entered into by the petitioner with
Batangas Transportation Employees Association of which private respondent is a
member barring the latter from recovering whatever benefits he is entitled to under the law in
addition to the gratuity benefits under the labor agreement between him and his employer.
Neither is there any provision in the Termination Pay Law (Republic Act No. 1052, as amended
by Republic Act No. 1787) that an employee who receives his termination pay upon separation
from the service without cause is precluded from recovering any other benefits agreed upon by
him and his employer. In the absence of any such prohibition, both in the aforesaid Labor
Agreement and the Termination Pay Law the private respondent has the right to recover from the
petitioner whatever benefits he is entitled to under the Termination Pay Law in addition to the
other benefits conferred upon him by the aforesaid labor agreement.

The court said that the retirement benefits of the petitioners come up to a substantial figure,
considering their respective lengths of service with the company. These benefits, added to the
separation pay they have already received, make up a tidy sum indeed. The point, however, is
that the petitioners are entitled to this amount under the provisions of the CBA and the
Retirement Plan freely entered into by the parties. These instruments are binding agreements, not
being contrary to law, morals, good customs, public order or public policy, and must therefore be
upheld.
CASE 444

Quiambao v. NLRC
254 SCRA 211; 04 March 1996
Mendoza, J.

FACTS:
Quiambao was hired as officer-in-charge of private respondent Central Cement Corporation’s
Tuguegarao Branch on December 1, 1982. Six months later, he was made permanent Branch.
Among other things, petitioner, together with William Kho, the Branch Cashier, was in charge of
credit collections. He submitted monthly reports to the Central Office on the operations of the
branch and the outstanding balances of its customers. He was also required to attend regular
monthly meetings in the Central Office, together with the Vice President for Marketing and the
Marketing Manager. In April 1984, a financial and performance audit made by the Central Office
showed the Tuguegarao Branch of which he was the Manager to be in “a state of disarray and
chaos.”

On May 25, 1984, petitioner was suspended for an indefinite period for poor performance in
extending credit to customers, violation of company rules and regulations and gross negligence.
He was informed that a committee would be created to investigate him and that afterward he
would be informed of the management’s decision. As a result of further investigation petitioner
was charged with estafa before the Provincial Fiscal of Tuguegarao, while a civil case for
collection was brought against him in the Regional Trial Court of Makati. The criminal
complaint was dismissed by Acting Provincial Fiscal Alejandro de Guzman. Although on appeal
to the Ministry of Justice the then Deputy Minister of Justice, now Associate Justice of this
Court, Reynato S. Puno reversed the provincial fiscal. The civil suit filed by Central Cement was
likewise dismissed by Branch 60 of the Regional Trial Court of Makati for failure of Central
Cement to prove its case against petitioner Quiambao. Meanwhile, on March 15, 1985 petitioner
demanded reinstatement with backwages. But Central Cement ignored his demand and instead
served him with a notice of termination on the ground of loss of confidence. Petitioner filed a
complaint for illegal dismissal. On November 23, 1990 he filed a supplemental petition, alleging
that the NLRC acted without jurisdiction and contrary to law in taking cognizance of the appeal
of Central Cement from the decision of the Labor Arbiter despite the fact that Central Cement
had not posted a supersedeas bond.

ISSUE:
Whether or not NLRC acted without jurisdiction and contrary to law in taking cognizance
of the appeal of Central Cement from the decision of the Labor Arbiter.

HELD:
Yes. Petitioner is right that the filing of a supersedeas bond is indispensable to the
perfection of an appeal in cases which, like the present one, involve monetary awards and that
because Central Cement failed to comply with this requirement, the decision of the Labor
Arbiter, finding Central Cement guilty of the illegal dismissal of petitioner, became final and
executory. Art. 223 expressly provides that “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.”

As held in Viron Transit vs. NLRC: The intention of the lawmakers to make the bond an
indispensable requisite for the perfection of an appeal is clearly limned in the provision that the
appeal by the employer may be perfected only upon the posting of a cash or surety bond. The
word “only” makes it perfectly clear that the lawmakers intended the posting of a cash or surety
bond by the employer to be the exclusive means by which an employer’s appeal may be
perfected.
CASE 445
CASE 446

Erectors Inc. v. NLRC

202 SCRA 597; 10 October 1991
Narvasa, J.

FACTS:
Federico Alconcel was employed by Erectors Inc. in January, 1980 as Staff Engineer in the
Technical Services Department of its Engineering Division. On October 1, 1981, he was
appointed Acting Research and Development Manager with a corresponding increase in salary.
On November 5, 1981, Alconcel was hired by Society Auxiliaire D’ Enterprises (SAD), the
foreign principal of Erectors, Inc., as Site Personnel Manager in a project in Taif, Saudi Arabia,
with basic monthly salary of $2,000.00. Upon the expiration of his contract with SAD, Alconcel
returned to the Philippines on April 9, 1985.

On April 22, 1985 SAD sent a telex message to Erectors Inc. advising that it was debiting against
its account the sum of $856.62. This sum allegedly represented Alconcel’s unsettled personal
obligation with SNAS Worldwide Courier (in connection with shipment of his luggage), which
the latter had charged to SAD. On June 10, 1985 Erectors Inc. informed Alconcel in writing of
the termination of his services, effective on July 10, 1985, avowedly on account of retrenchment.
From the aggregate separation pay due to Alconcel, Erectors deducted the sum of $856.62 above
mentioned. It thereafter tendered the balance to Alconcel. Alconcel refused to agree to the
deduction, or accept the validity of the termination of his employment. Instead, he filed a
complaint with the Labor Arbiter’s Office of the National Labor Relations Commission, which
was docketed as NLRC-NCR Case No. 05-02209- 88.

After due proceedings, the Labor Arbiter pronounced Alconcel’s dismissal illegal and directed
Erectors Inc. to reinstate him to his former position with full back wages, without loss of
seniority rights or benefits accruing after his dismissal, and to pay him P300,000.00 as moral
damages, P100,000.00 as exemplary damages and 10% of all said sums, as attorney’s fees. On
January 30, 1990, Erectors filed with the Commission a “Motion to Reduce Required Appeal
Bond and for Admission of Attached Appeal Bond.” It prayed that the bond required by the
Commission be reduced from P1,567,224.00 to just P151,220.00. This motion and bond
notwithstanding, the National Labor Relations Commission, by Resolution dated February 1,
1990, dismissed the appeal of Erectors Inc. for failure of perfection, no proper bond having been
filed within the time appointed therefor.

ISSUE:
Whether or not there is no necessity for petitioner to file an appeal bond.

HELD:

Article 223 of the Labor Code (as amended by Republic Act No. 6715), as well as Section 7 of
the NLRC’s Interim Rules already referred to, are so worded as to give a would-be appellant
every reason to assume that no bond is required if his appeal raised no questions other than as to
an award of moral and/or exemplary damages. Under such, for purposes of the bond required
under Article 223 of the Labor Code as amended, the monetary award computed as of the date of
the promulgation of the decision appealed from shall be the basis of the bond. For this purpose,
moral and exemplary damages shall not be included in fixing the amount of the bond.

There is little doubt it was with these considerations in mind that petitioner filed its “Appeal”
with the NLRC, specifically waiving contention with the ordered reinstatement, with full back
wages, of private respondent and, in effect, with all dispositions of the decision save only the
awards for moral and exemplary damages; and did so without filing an appeal bond which it
perceived as unnecessary.

In this case, the circumstances of the non-filing of the bond are understandable and could be
attributed to excusable oversight. The Court holds that petitioners should be given the
opportunity to file the required bond and avail of the remedy of appeal.
CASE 447

Manila Mandarin v. NLRC

264 SCRA 320; 19 November 1996
Narvasa, C.J.

FACTS:
On October 30, 1986, the Manila Mandarin Employees Union as exclusive bargaining
agent of the rank-and-file employees of the Manila Mandarin Hotel, Inc. filed with the NLRC
Arbitration Branch a complaint in its members’ behalf to compel Mandarin to pay the salary
differentials of the individual employees concerned because of wage distortions in their salary
structure allegedly created by the upward revisions of the minimum wage pursuant to various
Presidential Decrees and Wage Orders, and the failure of Mandarin to implement the
corresponding increases in the basic salary rate of newly-hired employees.

The Labor Arbiter eventually ruled in favor of the Union, holding that there were in fact wage
distortions entitling its members to salary adjustments totaling P26,173,601.25 — for 541
employees — as well as underpayments amounting to Pl,978.296.18 — for 182 employees. On
appeal, the Second Division of respondent Commission rendered the dispositions already
referred to and now assailed — setting aside the Labor Arbiter’s judgment and dismissing the
Union’s complaint. and later denying the Union’s motion for reconsideration.

ISSUE:
Whether or not the NLRC had jurisdiction to take cognizance of Mandarin’s appeal from the
Labor Arbiter’s decision.

HELD:
The issue of jurisdiction is grounded on the posited tardiness of private respondents’ appeal from
the Labor Arbiter’s judgment to the NLRC, and fatal defect in their supersedeas bond. The Court
rules that respondent Commission acted correctly in accepting and acting on Mandarin’s appeal.
The circumstances attendant upon the filing of the appeal and supersedeas bond are clearly set
forth in the Certification of Deputy Executive Clerk Demaisip, Jr. Mandarin cannot be faulted for
paying the appeal fee only on February 4, 1991. The fact is that on February 1, 1991, its lawyer
was in the NLRC premises, ready to pay said fee. but was unable to do so because the NLRC
Cashier or any other employee authorized to receive payment in his stead, was no longer around.

The contention concerning Mandarin’s ostensibly defective appeal bond, issued by Plaridel
Surety and Insurance Company, deserves short shrift, too. The issuance of the bond antedated
this Court’s resolution of January 15, 1992 — to which the attention of respondent NLRC had
been invited by the Union — declaring said surety company to be of doubtful solvency. More
important, the issue was mooted when Mandarin posted a new surety bond, through
Commonwealth Insurance Company, in compliance with the Order of the respondent
Commission dated December 10, 1991. The Union’s contention that this new bond was equally
defective because the bonding company had an authorized maximum net retention level lower
than the sum of P30,967,087.17 involved in this dispute, is inconsequential, the new bonding
company being duly accredited by this Court and licensed by the Insurance Commission.

At any rate, this Court has invariably ruled that Article 223 of the Labor Code, requiring a bond
in appeals involving monetary awards, must be liberally construed, in line with the desired
objective of resolving controversies on their merits. The circumstances under which the bond
was filed in this case adequately justify such liberal application of the provision.
CASE 448

Mount Carmel College Employees Union (MCCEU) vs Mount Carmel College,

Incorporated
G.R. No. 187621 September 24, 2014

FACTS:
The petitioners were elementary and high school academic and non-academic personnel
employed by respondent, the petitioners were informed of their retrenchment by the respondent
due to the closure of the elementary and HS dept. of the school. The petitioners contend that such
closure was merely a subterfuge of their termination due to their union activities. According to
the petitioners, they organized a union in 1997 -[MCCEU], and were in the process of
negotiating with the respondent as regards their CBA when the respondent decided to close the
two departments in June 1999. The petitioners alleged that such closure was motivated by ill-will
just to get rid of the petitioners who were all union members because in June 2001, the school re-
opened its elementary and high school departments with newly-hired teachers. They claimed for
the remaining separation pay differentials since what they received was only computed at 15
days for every year of service when they were retrenched. The respondent, denied committing
any act of ULP and alleged that their retrenchment was valid as it was due to the financial losses
it suffered as result of a decline in its enrollment. The LA declared the petitioners to have been
illegally dismissed. The NLRC reversed the LA decision. Upon appeal to CA, the CA did not
find any grave abuse of discretion committed by the NLRC and thus, affirmed its decision. The
petitioners sought reconsideration of the assailed decision, which was denied by denied by the
CA hence, this petition.

ISSUES:
Whether the closure and their retrenchment amounted to ULP

HELD:
The finding of unfair labor practice is REVERSED. The burden of proving that the termination
of services is for a valid or authorized cause rests upon the employer. In termination by
retrenchment, 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. In this case, while the respondent
may have presented its Financial Statements, the respondent, nevertheless, failed to establish
with reasonable certainty that the proportion of its revenues are largely expended for its
elementary and high school personnel salaries, wages and other benefits. Aside from this, the
respondent failed to present any proof establishing how the continued operations of the
elementary and high school departments have become impracticable. Note that the Financial
Statements show that the respondent was not operating at a loss but actually had surplus, albeit at
a minimum.
CASE 449

Navarro vs NLRC
G.R No. 116464 March 1, 2000

FACTS:
On April 3, 1992, private respondents were served a copy of the decision of the labor arbiter.
Aggrieved, they filed on April 13, 1992 with NLRC their memorandum on appeal. Nevertheless,
it was only on April 30, 1992, that private respondents filed the appeal bond. Unfortunately, the
aforesaid bond was later discovered to be spurious because the person who signed it was no
longer connected with the insurance company for more than ten already.

ISSUE:
Whether or not the appeal is perfected?

HELD:  
No. Art. 223 of the Labor Co No. Art. 223 of the Labor Code provides:
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.
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.
Perfection of an appeal includes the filing, within the prescribed period, of the memorandum of
appeal containing, among others, the assignment of error/s, arguments in support thereof, the
relief sought and, in appropriate cases, posting of the appeal bond. In case where the judgment
involves a monetary award, as in this case, the appeal may be perfected only upon posting of a
cash or surety bond issued by a reputable bonding company duly accredited by the NLRC. The
amount of the bond must be equivalent to the monetary award, exclusive of moral and exemplary
damages and attorney's fees. The records indicate that private respondents received the copy of
labor arbiter's decision on April 3,1992, hence, they had only until April 13, 1992 to perfect their
appeal. While private respondents filed their memorandum of appeal on time, they posted surety
bond only on April 30, 1992, which is beyond the beyond the ten(10) day reglementary period, a
procedural lapse admitted by private respondents. Private respondents' failure to post the
required appeal bond within the prescribed period is inexcusable. Worse, the appeal bond was
bogus having been issued by an officer no officer no longer connected for a long time with the
bonding the bonding company.
However, we find no cogent reason to apply this same liberal interpretation herein when the
bond posted was not genuine. In this case, there is really no bond posted since a fake or expired
bond is in legal contemplation merely a scrap of paper. The word "only" makes it perfectly clear
that the that the lawmakers intended the posting of a cash or surety bond by the employer to be
the exclusive means by which an employer's appeal may be perfected.
CASE 450

Philippine Transmarine Carriers vs NLRC

G.R No.146094 November 12, 2003

FACTS:
Felipe D. Cortina, respondent, was employed by Philippine Transmarine Carriers, Inc.,
petitioner, as a Third Officer assigned at the Blue Tank Lancer, a vessel owned by Blue Flag
Navigation. Pursuant to their contract, respondent’s monthly salary is US$800.00 and his
employment is for a period of one (1) year from September 9, 1993. However, on January 20,
1994 or only after four (4) months, petitioner forced respondent to disembark in Singapore
because of the alleged sale of the Blue Tank Lancer vessel. As a consequence, he was discharged
purportedly to be transferred to another vessel. But such transfer did not materialize. On April 7,
1997, respondent filed with the Labor Arbiter a complaint against petitioner and Blue Flag
Navigation for illegal dismissal, nonpayment of salaries and separation pay, damages and
attorney’s fees. On September 24, 1997, the Labor Arbiter rendered a Decision declaring as
illegal respondent’s termination from employment. Thus, this petition for certiorari.

ISSUE:
Whether or not there is illegal dismissal in this case?

HELD:
Yes. There is illegal dismissal in this case. It is petitioners’ contention that Cortina was
not illegally dismissed, rather his contract of employment has been terminated due to the sale of
the vessel on which Cortina was embarked. We do not acquiesce in the contention of petitioners.
The dismissal of Cortina constitutes discharge without cause. As correctly ruled by the regional
arbiter, ‘the agency has not introduced any evidence showing that ‘transfer’ of ownership of the
vessel where complainant was assigned is a justifiable reason for the termination of his contract
of employment.
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 and authorized cause. Petitioner did not present even
an iota of evidence to prove that the vessel on which Cortina was embarked, was indeed sold.
Neither did petitioner establish that the vessel was laid-up or the voyage was discontinued.
CASE 451

Cosico vs NLRC
GR No. 118432, May 23, 1997 

FACTS:
Petitioner Conrado Cosico, Jr. was hired by respondent Eva Airways Corporation (Eva
Air) through its General Sales Agent, Don Tim Air Service, Inc., on April 4, 1992 as Assistant
Station Manager for the Manila office for a mutually agreed monthly salary of P30,000.00. As
Assistant Station Manager, petitioner was tasked, among others, to supervise the construction of
respondent Eva Air's office in a space reserved for the purpose at the Ninoy Aquino International
Airport (NAIA) and to see to it that respondent Eva Air's target of flying at least sixty (60)
passengers per flight be realized in order to maintain the company's overhead operations. After
five (5) months of operation, a performance audit of respondent Eva Air's Manila office was
undertaken and the same yielded the finding that the airline had only an average of twenty-five
(25) passengers per flight, way below its targeted passenger load. After evaluating the situation
further, respondent Eva Air decided to implement measures to make the Manila office cost-
efficient. It was decided that the position of Assistant Station Manager be abolished.
Respondent Eva Air, likewise, offered to pay the petitioner separation pay equivalent to one (1)
month salary and proportionate 13th month pay for his six (6) months and eleven (11) days
service to the company. Petitioner rejected the offer and instead filed a complaint for illegal
dismissal, underpayment of wages and moral and exemplary damages against respondents Eva
Air and its officers, Lewis Chang and Allen Soong. Respondents Eva Air and Lewis Chang
elevated their case to respondent NLRC where they filed their appeal memorandum and posted a
surety bond in the amount of Two Hundred Seventy Thousand Pesos (P270,000.00). Petitioner
filed a motion to dismiss the appeal on the ground that the supersedeas bond posted by private
respondents was insufficient as it did not cover the award of moral and exemplary damages as
well as attorney's fees. The NLRC rejected the said motion to dismiss. Thus, this petition for
certiorari regarding grave abuse of discretion of NLRC.
ISSUE:
Whether there is grave abuse of discretion in this case?

HELD:
The court ruled that the petition is devoid of merit. Inceptively, petitioner asseverates that
respondent NLRC gravely abused its discretion in giving due course to the appeal of private
respondents albeit the latter's failure to post the correct supersedeas bond which is supposed to be
equivalent to the monetary award in the judgment.
Given the preceding factual and legal milieu, petitioner's claim for moral and exemplary
damages falls to naught. Moral and exemplary damages are recoverable only where the dismissal
of an employee was attended by bad faith or fraud, or constituted an act oppressive to labor, or
was done in a manner contrary to morals, good customs or public policy. [14] Since none of the
circumstances warranting the grant of moral and exemplary damages obtains here, the same
cannot be awarded.

WHEREFORE, the petition for certiorari is hereby DISMISSED, and the challenged resolutions
of respondent National Labor Relations Commission are hereby AFFIRMED.
CASE 452

LEIDEN FERNANDEZ v. NLRC

G.R. No. 105892 January 28, 1998

FACTS:

The instant case stemmed from a consolidated complaint against private respondents Agencia
Cebuana-H. Lhuillier and/or Margueritte Lhuillier (Lhuillier) for illegal dismissal (Rec., pp. 56-
58). The Agencia Cebuana is a sole proprietorship operated by Margueritte Lhuillier. This is a
petition for certiorari under Rule 65 of the Rules of Court assailing the March 11, 1992 Decision
of Respondent National Labor Relations Commission (NLRC) decision:

The judgment is rendered in favor of the complainants and against the respondent. The
respondent is hereby ordered: To reinstate the complainants to their respective position [sic] at
the Agencia Cebuana with full back wages without qualification; if reinstatement is not feasible,
for one reason or another, to pay to the complainants their respective separation pay, service
incentive leave pay with full back wages without qualification

ISSUE:

Whether or not there is a limit to the amount of service incentive leave pay and back wages that
may be awarded to an illegally dismissed employee.

HELD:

The clear policy of the Labor Code is to grant service incentive leave pay to workers in all
establishments, subject to a few exceptions. Section 2, Rule V, Book III of the Implementing
Rules and Regulations provides that [e]very employee who has rendered at least one year of
service shall be entitled to a yearly service incentive leave of five days with pay. Service
incentive leave is a right which accrues to every employee who has served 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 contracts, is less than 12 months,
in which case said period shall be considered as one year. It is also commutable to its money
equivalent if not used or exhausted at the end of the year. In other words, an employee who has
served for one year is entitled to it. He may use it as leave days or he may collect its monetary
value. To limit the award to three years, as the solicitor general recommends, is to unduly restrict
such right. The law indeed does not prohibit its commutation.

The Implementing Rules clearly state that entitlement to benefit provided under this Rule shall
start December 16, 1975, the date the amendatory provision of the [Labor] Code took effect.
Hence, petitioners, except Lim and Canonigo, should be entitled to service incentive leave pay
from December 16, 1975 up to their actual reinstatement.

The petition is GRANTED and the assailed Decision and Resolution are REVERSED and SET
ASIDE. The labor arbiter’s decision is REINSTATED with MODIFICATIONS, such that the
award of separation pay is deleted and the service incentive leave pay is computed from
December 16, 1975 up to petitioner’s actual reinstatement.
CASE 453

McBurnie V Ganzon
GR Nos. 178034 & 178117 October 17, 2013

FACTS:

On October 4, 2002, McBurnie, an Australian national, instituted a complaint for illegal

dismissal and other monetary claims against the respondents. McBurnie claimed that on May 11,
1999, he signed a five-year employment agreement with the company EGI as an Executive Vice-
President who shall oversee the management of the company's hotels and resorts within the
Philippines. He performed work for the company until sometime in November 1999, when he
figured in an accident that compelled him to go back to Australia while recuperating from his
injuries. While in Australia, he was informed by respondent Ganzon that his services were no
longer needed because their intended project would no longer push through. The respondents
opposed the complaint, contending that their agreement with McBurnie was to jointly invest in
and establish a company for the management of hotels. They did not intend to create an
employer-employee relationship, and the execution of the employment contract that was being
invoked by McBurnie was solely for the purpose of allowing McBurnie to obtain an alien work
permit in the Philippines. At the time McBurnie left for Australia for his medical treatment, he
had not yet obtained a work permit.
In a Decision dated September 30, 2004, the Labor Arbiter LA declared McBurnie as having
been illegally dismissed from employment, and thus entitled to receive from the respondents the
following amounts: (a) US$985,162.00 as salary and benefits, (b) P2,000,000.00 as moral and
exemplary damages, and (c) attorney's fees equivalent to 10% of the total monetary award.
On November 5, 2004, they filed their Memorandum of Appeal and Motion to Reduce Bond, and
posted an appeal bond in the amount of P100,000.00. They claimed that an award of "more than
P60 Million Pesos to a single foreigner who had no work permit and who left the country for
good one month after the purported commencement of his employment" was a patent nullity.
Furthermore, they claimed that because of their business losses that may be attributed to an
economic crisis, they lacked the capacity to pay the bond of almost P60 Million, or even the
millions of pesos in premium required for such bond.
ISSUE:

Whether or not McBurnie, can be considered as an employee of Ganzon?

HELD:

No. The court basically adopted the ruling of NLRC. Court held that before McBurnie can allege
illegal dismissal, it was necessary for him to establish, first and foremost, that he was qualified
and duly authorize to obtain employment within our jurisdiction. Failure to do so poses serious
problem in obtaining relief from the Court. Hence, by the very fact that McBurnie failed to
obtain employment permit necessitates the dismissal of his labor complaint. The court also noted
that McBurnie failed to establish employer–employee relationship. The records disclose that
employment of McBurnie is conditional on the successful completion of the project financing for
the hotel project in Baguio City and his acquisition of Alien Employment Permit. o It must be
noted that the project didn’t push through. McBurnie likewise failed to prove employer-
employee relationship in accordance w/ the four-fold test: (1) selection & engagement (2)
payment of wages (3) power of dismissal and (4) control. McBurnie also failed to show any
document such as payslips or vouchers of his salaries during the time that he allegedly worked
for the respondent.
CASE 454

J.D Magpayo Customs Brokerage Inc vs NLRC

G.R. No. L-60950. November 19, 1982

FACTS:
A complaint for illegal dismissal and non-payment of wages was filed on August 19,
1979, by Francisco Granatan, the private respondent herein, against his employer J.D. Magpayo
Customs Brokerage Corporation. In a decision dated March 10, 1981, the employer was ordered
by the Labor Arbiter to reinstate Granatan without loss of seniority and pay his back wages.

The employer appealed the decision to the NLRC within the reglementary period but the latter
dismissed the appeal because "there is no showing whatsoever that a copy of the appeal was
served by the appellant on the appellee.

ISSUE:

Whether or not there is grave abuse of discretion?

HELD:
Yes. There is grave abuse of discretion in this case. The failure to give a copy of the
appeal to the adverse party was a mere formal lapse, an excusable neglect. Time and again We
have acted on petitions to review decisions of the Court of Appeals even in the absence of proof
of service of a copy thereof to the Court of Appeals as required by Section 1 of Rule 45, Rules of
Court. We act on the petitions and simply require the petitioners to comply with the rule.

WHEREFORE, the petition is granted; the National Labor Relations Commission is hereby
ordered to give due course to the petitioner's appeal. No special pronouncement as to costs.
CASE 455

Corazon R. Pagdonsalan vs NLRC

G.R No.L-63701 January 31, 1984

FACTS:
Petitioner was employed by respondent Gilmart Industries Phil. as machine operator from
April 4, 1956 up to 1958 when a union strike was declared causing the temporary closure of the
company. Upon resumption of the company’s operations sometime in 1959, petitioner was
employed anew as a “separator”. In May 1975, she was transferred to the yarn section of the
company’s plant and made to perform the work of a security guard. However, she was not
extended any formal appointment as security guard or watchwoman. Sometime in 1980, after
having worked with respondent company for twenty-three (23) years, petitioner’s health began to
fail. On October 2, 1980, she filed an application for retirement benefits under the Collective
Bargaining Agreement entered into by the company and the Union of its employees.

On December 19, 1980, the company terminated her employment, without prior notice of
dismissal or clearance from the Ministry of Labor and Employment. Hence, petitioner filed a
complaint against respondent company for retirement benefits provided for by the CBA. After
due hearing, Labor Arbiter Ricarte T. Soriano rendered a decision dated April 27, 1981
dismissing petitioner’s complaint “for being devoid of merit.” On May 25, 1981, petitioner
appealed said decision with the respondent NLRC, but the same was dismissed on the ground
that petitioner failed to furnish respondent employer with copy of her memorandum of appeal, as
required by Article 223 of the New Labor Code and Section 9, Rule XIII of the Implementing
Rules and Regulations. Reconsideration thereof having been denied, petitioner filed the instant
petition.

ISSUE:
Whether or not petitioner’s failure to furnish respondent employer with copy of her appeal
memorandum justifies dismissal of the appeal

HELD:
No. The court ruled that it does not justify the dismissal of the appeal. The failure to give
a copy of the appeal to the adverse party was a mere formal lapse, an excusable neglect. Time
and again We have acted on petitions to review decisions of the Court of Appeals even in the
absence of proof of service of a copy thereof to the Court of Appeals is required by Section 1 of
Rule 45, Rules of Court. We act on the petitions and simply require the petitioners to comply
with the rule. Moreover, the dismissal of an employee’s appeal on a purely technical ground is
inconsistent with the constitutional mandate on protection to labor.
CASE 456

RJL Martinez Fishing Corporation vs. NLRC

127 SCRA 455 (1984)

FACTS:
Petitioners are principally engaged in deep-sea fishing business. Since 1978, private respondents
were employed by them as stevedores at Navotas Fish Port for the unloading of tuna fish catch
from petitioners' vessels and then loading them on refrigerated vans for shipment abroad.
Respondents Boticario, and 30 others, upon the premise that they are petitioners' regular
employees, filed a complaint against petitioners for non-payment of overtime pay, premium pay,
legal holiday pay, emergency allowance, service incentive leave pay and night shift differential.
They were dismissed afterwards by the Petitioners. Petitioners contend that private respondents
are contract laborers whose work terminated upon completion of each unloading, and that in the
absence of any boat arrivals, private respondents did not work for petitioners but were free to
work or seek employment with other fishing boat operators. The Labor Arbiter upheld
petitioners' position ruling that the latter are extra workers, who were hired to perform specific
tasks on contractual basis; that their work is intermittent depending on the arrival of fishing
vessels; that if there are no fish to unload and load, they work for some other fishing boat
operators; that private respondent Antonio Boticario had executed an employment contract under
which he agreed to act as a labor contractor and that the other private respondents are his men;
that even assuming that private respondents are employees of petitioners, their employer-
employee relation is co-terminous with each unloading and loading job; that in the same manner,
petitioners are not under any obligation to hire petitioners exclusively, hence, when they were
not given any job on March 29, 1981, no dismissal was effected but that they were merely not
rehired.

ISSUE:
Was there in Fact Employer-Employee Relationship?

HELD:
Yes. It may be that private respondents alternated their employment on different vessels when
they were not assigned to petitioners' boats, that did not affect their employee status. The
employer-employee relationship between the parties herein is not co-terminous with each
loading and unloading job. As earlier shown, respondents are engaged in the business of fishing.
For this purpose, they have a fleet of fishing vessels. Under this situation, respondents' activity of
catching fish is a continuous process and could hardly be considered as seasonal in nature. This
circumstance makes the employment of complainants a regular one, in the sense that it does not
depend on any specific project or seasonal activity. Therefore, that the employer-employee
relationship existed between the parties notwithstanding evidence to the fact that petitioners
Visayas and Bergado, even during the time that they worked with respondent company alternated
their employment on different vessels when they were not assigned on the company's vessels.
Considering the length of time that private respondents have worked for petitioner, there is
justification to conclude that they were engaged to perform activities usually necessary or
desirable in the usual business or trade of petitioners and are, therefore, regular employees. As
such, they are entitled to the benefits awarded them by respondent NLRC.
CASE 457

Philippine National Construction Corp vs NLRC

G.R. No. 103670 July 10, 1998

FACTS:
Private respondents Efren Manabo and Ireneo Soriano, for about seven and nine years
respectively, had been employees of petitioner, a government-owned and controlled corporation
engaged in the business of general construction, both in the Philippines and overseas. On July,
19, 1985 private respondents filed separate complaints against petitioner charging illegal
dismissal and claiming separation pay. Petitioner hired Efren Manabo as a laborer on July 10,
1976 at the petitioner’s MSEX/Carmona Project. On October 11, 1977 he was transferred to the
company’s international operation in Najran, Kingdom of Saudi Arabia working initially as
shovel raker and eventually as asphalt distributor. Upon completion of the project, he was
repatriated to the Philippines on August 7, 1983. However, after his return to the Philippines, he
was not given any assignment for which reason he claims that he was illegally dismissed.
Petitioner, on the other hand, claims that private respondents were project employees; that they
were hired for specific projects and their tenure was fixed for the duration of the project; and, it
was the termination of the project that ended their employment. Therefore, they are not entitled
to any separation pay pursuant to the provisions of Policy Instruction No. 20 On June 26, 1990,
the Labor Arbiter dismissed the complaints for lack of merit declaring private respondents
project employees of petitioner. Private respondents appealed. In a decision dated January 13,
1992 respondent NLRC reversed the Labor Arbiter after finding private respondents to be
regular, not project employees, of the petitioner and therefore entitled to separation pay.
Petitioner did not file a motion for reconsideration stating that it was not aware of the appeal
interposed by private respondents, as it was not furnished a copy of private respondents’
memorandum of appeal. Instead, petitioner directly filed this petition for certiorari.

ISSUE:
Whether or not there is due process in this case?

HELD:
No, the court find the petition meritorious. Petitioner claims that respondent NLRC acted
in excess of its jurisdiction when it entertained the instant appeal when the same is null and void.
In this regard, the Solicitor General recommends that the NLRC decision be set aside on the
ground that petitioner was denied due process and that further proceedings be held to afford
petitioner the opportunity to participate therein.
After a careful examination of the records, the Court fully agrees with the Solicitor General’s
view that the proceedings before the NLRC were tainted with due process violation. It appears
that petitioner was not a participant in the appeal interposed by private respondents. Apparently,
such non-participation was never petitioner’s choice as the record is bereft of any indication that
petitioner was ever informed or notified of private respondents’ appeal. There is no proof that
petitioner was furnished a copy of private respondents’ Memorandum of Appeal, nor was it
required to comment thereon. That petitioner was denied due process is well-substantiated. The
NLRC’s grave omission to afford petitioner a chance to be heard on appeal is a clear violation of
its constitutional right and has the effect of rendering its judgment null and void.
WHEREFORE, the decision of the NLRC is hereby SET ASIDE and the case is hereby
REMANDED to the NLRC for further proceedings to afford petitioner the opportunity to be
heard.
CASE 458

St. Martin Funeral Homes vs NLRC

G.R. No. 130866 September 16, 1998

FACTS:
Private respondent alleges that he started working as Operations Manager of petitioner St. Martin
Funeral Home on February 6, 1995. However, there was no contract of employment executed
between him and petitioner nor was his name included in the semi-monthly payroll. On January
22, 1996, he was dismissed from his employment for allegedly misappropriating P38,000.00.
Petitioner on the other hand claims that private respondent was not its employee but only the
uncle of Amelita Malabed, the owner of petitioner St.Martin’s Funeral Home and in January
1996, the mother of Amelita passed away, so the latter took over the management of the
business. Amelita made some changes in the business operation and private respondent and his
wife were no longer allowed to participate in the management thereof. As a consequence, the
latter filed a complaint charging that petitioner had illegally terminated his employment. The
labor arbiter rendered a decision in favor of petitioner declaring that no employer-employee
relationship existed between the parties and therefore his office had no jurisdiction over the case.

ISSUE:
WON the decision of the NLRC are appealable to the Court of Appeals.

HELD:
The Court is of the considered opinion that ever since appeals from the NLRC to the SC were
eliminated, the legislative intendment was that the special civil action for certiorari was and still
is the proper vehicle for judicial review of decisions of the NLRC. The use of the word appeal in
relation thereto and in the instances, we have noted could have been a “lapsus plumae” because
appeals by certiorari and the original action for certiorari are both modes of judicial review
addressed to the appellate courts. The important distinction between them, however, and with
which the Court is particularly concerned here is that the special civil action for certiorari is
within the concurrent original jurisdiction of this Court and the Court of Appeals; whereas to
indulge in the assumption that appeals by certiorari to the SC are allowed would not subserve,
but would subvert, the intention of the Congress as expressed in the sponsorship speech on
Senate Bill No. 1495.
Therefore, all references in the amended Section 9 of B.P No. 129 to supposed appeals from the
NLRC to the Supreme Court are interpreted and hereby declared to mean and refer to petitions
for certiorari under Rule65. Consequently, all such petitions should henceforth be initially filed
in the Court of Appeals in strict observance of the doctrine on the hierarchy of courts as the
appropriate forum for the relief appropriate forum for the relief desired.
CASE 459

Philippine Airlines vs NLRC

G.R. No. 120567. March 20, 1998

FACTS:
Private respondents are flight stewards of the petitioner. Both were dismissed from the service
for their alleged involvement in the currency smuggling in Hong Kong. Aggrieved by said
dismissal, private respondents filed with the NLRC a petition for injunction. The NLRC issued a
temporary mandatory injunction enjoining petitioner to cease and desist from enforcing its
Memorandum of dismissal. Petitioner moved for reconsideration arguing that the NLRC erred in
granting a temporary injunction order when it has no jurisdiction to issue an injunction or
restraining order since this may be issued only under Article 218 of the Labor Code if the case
involves or arises from labor disputes. The NLRC denied petitioner's motion for reconsideration.
The now petitioner, for one, cannot validly claim that NLRC cannot exercise its injunctive power
under Article 218 (e) of the Labor Code on the pretext that what NLRC have here is not a labor
dispute as long as it concedes that as defined by law, Labor Dispute includes any controversy or
matter concerning terms or conditions of employment.

ISSUE:
WON the NLRC even without a complaint for illegal dismissal filed before the labor arbiter,
entertain an action for injunction and issue such writ enjoining petitioner Philippine Airlines, Inc.
from enforcing its Orders of dismissal against private respondents, and ordering petitioner to
reinstate the private respondents to their previous positions.

HELD:
No. It is an essential requirement that there must first be a labor dispute between the contending
parties before the labor arbiter. In the present case, there is no labor dispute between the
petitioner and private respondents as there has yet been no complaint for illegal dismissal filed
with the labor arbiter by the private respondents against the petitioner. The petition for injunction
directly filed before the NLRC is in reality an action for illegal dismissal. Thus, the NLRC
exceeded its jurisdiction when it issued the assailed Order granting private respondents' petition
for injunction and ordering the petitioner to reinstate private respondents. Under the Labor Code,
the ordinary and proper recourse of an illegally dismissed employee is to file a complaint for
illegal dismissal with the labor arbiter. In the case at bar, private respondents disregarded this
rule and directly went to the NLRC through a petition for injunction praying that petitioner be
enjoined from enforcing its dismissal orders. Furthermore, an examination of private
respondents' petition for injunction reveals that it has no basis since there is no showing of any
urgency or irreparable injury which the private respondents might suffer. Thus, injunctions may
be issued only in cases of extreme necessity based on legal grounds clearly established, after due
consultations or hearing and when all efforts at conciliation are exhausted which factors,
however, are clearly absent in the present case. The essential conditions for granting such
temporary injunctive relief are that the complaint alleges facts which appear to be sufficient to
constitute a proper basis for injunction and that on the entire showing from the contending
parties, the injunction is reasonably necessary to protect the legal rights of the plaintiff pending
the litigation. Injunction is also a special equitable relief granted only in cases where there is no
plain, adequate and complete remedy at law.
CASE 460

TUPAS v. Coscolluela
G. R. No. 71959, November 28, 1985

FACTS:
Petitioner union filed a notice of strike with the Ministry of Labor and Employment against
Super Garments Manufacturing Corporation. It is alleged by the petitioner union that goods of
Super Garments were spirited out of its strike-bound premises thru Rustan's warehouse.
Whereupon, the union picketed not only Super Garments but also Rustan.

As a result Rustan filed a civil case before the respondent judge for injunction and damages and
filed a petition with the National Labor Relations Commission also to enjoin the union from
picketing its premises.

ISSUE:
Whether or not picketing is lawful even there is no employer-employee relationship exist
between the parties.

HELD:
The Court, while allowing that a peaceful picketing is a phase of the freedom of expression
guaranteed by the Constitution and could not be curtailed even in the absence of an employer-
employee relationship, maintained that this is not an absolute right.

The Court are not without power to localize the sphere of demonstration, whose interest are
foreign to the context of the dispute. This the right that may be recognized at the instance of an
“innocent bystander” who is not involved in the labor dispute if it appears that the result of the
picketing is to create an impression that a labor dispute exist between him and the picketing
union.
CASE 461

PALEA v. De la Rosa
G.R. No. L-28266, Sep 04, 1981

FACTS:
Petitioner Fortunato Biangco was elected PALEA president somewhere in April, 1967. He
succeeded as president of the petitioner PALEA, Vicente Balajadia who in turn succeeded
Emilio F. Saño. Petitioner PALEA under the presidency of Vicente Balajadia, did not hold office
at the premises in question. Vicente Balajadia removed their offices when this respondent
advised them to vacate the premises. When petitioner Fortunato Biangco then assumed the
presidency, the offices of petitioner PALEA were not in the premises in question.

When the petitioners' offices were transferred by Vicente Balajadia from the premises in
question, Saño remained, for which reason ejectment proceedings were taken against him.
Petitioners filed an urgent motion for a reconsideration of the order of the court dated September
1, 1967 and to stay the execution of the alias writ of preliminary mandatory injunction which
was heard by the respondent Judge. After the said urgent motion was heard and submitted for
resolution, petitioners by way of a second thought filed the instant petition on grounds not
sanctioned by the Rules of Court.

ISSUE:
Whether the grant of a preliminary mandatory injunction by then respondent Judge Francisco de
la Rosa, now deceased, amounted to a judicial interference with a labor dispute?

HELD:

The answer submitted denied that the grant of such preliminary mandatory injunction could be
characterized as a grave abuse of discretion and denied further that it was a result of a bias or
prejudice against petitioner Biangco, who, in the elections of officers in such labor organization,
won over a re-electionist candidate.

The petition failed to state was that such a case was then on appeal before respondent Judge.
Thereafter, defendant-appellant Saño filed a motion to dismiss appeal which was granted not by
the late respondent Judge but by the Judge then presiding, Judge Enrique A. Agana, Sr.

There is, therefore, ample support for the view advanced by private respondent that no right of a
labor organization or of petitioner Biangco as the then President was violated by the issuance of
the preliminary mandatory injunction.

It is equally far-fetched, although a semblance of plausibility was sought to be imparted to the

petition, to impute to the late respondent Judge failure to manifest fidelity to the protection that
the Constitution accords to labor, as interpreted by a host of decisions of this Tribunal notable for
their unfailing sympathy with its objective.

WHEREFORE, the petition is dismissed. No costs.

CASE 462

Associated Labor Union vs. Judge Borromeo

G.R. No. L-26461, November 27, 1968

FACTS:
Prior to the expiration of the collective bargaining contract between ALU and SUGECO,
negotiations had started for the renewal of said contract and that during said negotiations, twelve
(12) SUGECO employees resigned from ALU, owing — according to charges preferred by ALU
and confirmed by a complaint filed by a CIR prosecutor — to unfair labor practices allegedly
committed by SUGECO and its supervisors who, it was also claimed, had induced and coerced
said employees to quit the ALU, which they did.
Thereupon, SUGECO stopped negotiating with ALU alleging that, with the resignation of said
twelve (12) members, ALU no longer represented a majority of the SUGECO employees.
Consequently, ALU declared a strike and picketed the SUGECO plant in Mandaue. Then,
SUGECO filed a case in the CFI of Cebu, which forthwith issued a writ of preliminary
injunction ALU maintains that the lower Court has no jurisdiction over the because it had grown
out of a labor dispute, is intimately connected with an unfair labor practice case pending before
the CIR. Upon the other hand, respondents argue that the issue in the lower court does not fall
within the jurisdiction of the CIR, there being no employer-employee relationship and “no labor
dispute” between the ALU members and Cebu Home, also owned by the owners of SUGECO.

ISSUE:
Whether CIR has the jurisdiction over a case wherein there is no employer-employee
relationship between the parties?

HELD:
Yes, CIR has the jurisdiction over the case even if there is the absence of employer-employee
relationship. To begin with, Section 5(a) of Republic Act No. 875 vests in the Court of Industrial
Relations exclusive jurisdiction over the prevention of any unfair labor practice. Moreover, for
an issue “concerning terms, tenure or conditions of employment, or concerning the association or
representation of persons in negotiating, fixing, maintaining, changing, or seeking to arrange
terms or conditions of employment” to partake of the nature of a “labor dispute”, it is not
necessary that “the disputants stand in the proximate relation of employer and employee.”
Then, again, in order to apply the provisions of Sec. 9 of Republic Act No. 875, governing the
conditions under which “any restraining order” or “temporary or permanent injunction” may
issue in any “case involving or growing out of a labor dispute,” it is not indispensable that the
persons involved in the case be “employees of the same employer,” although this is the usual
case. Sec. 9, likewise, governs cases involving persons: 1) “who are engaged in the same
industry, trade, craft, or occupation”; or 2) “who . have direct or indirect interests therein;” or 3)
“who are members of the same or an affiliated organization of employers or employees”; or 4)
“when the case involves any conflicting or competing interests in a `labor dispute’ (as herein
before defined) or `persons participating or interested’ therein (as hereinafter defined).”
CASE 463

Guimoc v. Rosales
G.R. No. 89982, September 9, 1991

FACTS:
On January 4, 1989, Labor Arbiter Benjamin Guimoc to whom the case was reassigned in view
of De Asis’ transfer to the NLRC Bicol Region, issued a writ of execution directing NLRC
sheriff Felicisimo Basilio to execute the judgment against respondents Looc Bay Timber
Industries (LBTI) and Visayan Forest Development Corporation (VFDC). Failing to collect the
sum due, sheriff Basilio was directed to cause the satisfaction of the award out of the movable
goods or chattels (machinery and logging equipment), or, in their absence, from the immovable
property of respondent LBTI. Because of the filing of the third-party claims, the auction sale was
suspended while Guimoc held hearings on the merits of the claims.
On April 24, 1989, Guimoc issued a resolution 2 declaring invalid and dismissing the third-party
claims of Valvueco, Inc., Bueno Industrial and Development Corporation, Butuan Lumber
Manufacturing Corporation, Puzon & Sons Enterprises, Inc., Big Country Ranch Corporation,
Sierra Madre Projects, Inc. and herein respondent GESCOR.

ISSUE:
Whether a civil court may interfere by injunction with the execution of a final and executory
judgment of the NLRC?

HELD:
No. Article 254 of the Labor Code explicitly prohibits the issuance of an injunction in a labor
case.
"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."
In executing an order, resolution, or decision of the NLRC, the sheriff of the Commission, or
other officer acting as such, must "be guided strictly by the Sheriff’s Manual which shall form
part of these Rules" (Sec. 4, Rule XI, Revised Rules of the NLRC).
The Manual of Instructions for Sheriffs of the NLRC was adopted and promulgated pursuant to
Article 218(a) of the Labor Code, as amended, which authorizes the NLRC —
"ART. 218. Powers of the Commission. — . . .

A. ) To promulgate rules and regulations governing the hearing and disposition of cases before it
and its regional branches, as well as those pertaining to its internal functions and such rules and
regulations as may be necessary to carry out the purposes of this Code;"

Upon the denial of its third-party claim by Labor Arbiter Guimoc, GESCOR should have
appealed to the NLRC within ten (10) working days instead of filing in the Regional Trial Court
of Allen, Samar, a petition for Certiorari, Annulment of Judgment, and Quashal of Levy with
Preliminary Prohibitory Injunction. Appellate jurisdiction over decisions, awards and orders of
the Labor Arbiters is exclusively vested in the NLRC (Filipino Pipe Workers Union v. Batario,
Jr., 163 SCRA 789). Therefore, Judge Rosales should have granted petitioners’ motion to
dismiss the action for he did not have jurisdiction to entertain it.
CASE 464

PAL vs. NLRC

G.R. No. 85985, August 13, 1993

FACTS:
On March 15, 1985, the Philippine Airlines, Inc. (PAL) completely revised its 1966 Code of
Discipline. The Code was circulated among the employees and was immediately implemented
without notice and prior discussion with the Philippine Airlines Employees Association
(PALEA) by the Management. Some employees were subjected to the disciplinary measures
embodied therein.

On August 20, 1985, PALEA filed a complaint before the National Labor Relations Commission
(NLRC) for unfair labor practice.

ISSUE:
Whether or not the formulation of a Code of Discipline among employees is a shared
responsibility of the employer and the employees.

HELD:
To achieve industrial peace, the employees must be granted their just participation in the
discussion of matters affecting their rights. It is the policy of the State to promote the
enlightenment of workers concerning their rights and obligations as employees. The New Code
of Discipline containing disciplinary measures cannot be implemented in the absence of full
cooperation of the employees as it affects their rights, duties and welfare. Management cannot
exclude labor in the deliberation and adoption of rules and regulations that will affect them.
Workers have the right to participate in decision and policy making process affecting their rights,
duties and welfare.

Participation in Decision-Making Process –

A line must be drawn between management prerogatives regarding business operations per se
and those which affect the rights of the employees. In treating the latter, management should see
to it that its employees are at least properly informed of its decisions or modes of action. Indeed,
industrial peace cannot be achieved if the employees are denied their just participation in the
discussion of matters affecting their rights.
CASE 465

Rustan’s Supervisory Union v. Dalisay

GR. No. L-32891 April 29, 1971

FACTS:
An original action for certiorari and prohibition was filed challenging the jurisdiction of the
Court of First Instance of Lanao del Norte to issue the injunction orders complained of.Petitioner
union is a legitimate labor organization and individual petitioners are the union's principal
officers. The union wrote respondent company that a great number of the supervisory personnel
of respondent's plant had affiliated with it and presented a set of proposals for incorporation into
a collective bargaining agreement.
The respondent unheeded the ultimatum letter sent for union recognition. Thus, the union
declared a strike and picketed the company’s premises. Though several conferences were held at
the Iligan City Labor Office between the party’s representatives, there is no good outcome as
petitioner alleges that the company refused to negotiate with it whereas respondent claims in that
it is the petitioners who refused to negotiate in good faith.
The respondent company filed a complaint with respondent court for actual, moral and
exemplary damages with preliminary injunction against the union and its principal officers as
they prevent and destruct coercively, violently and intimidating the business operation of the
respondent company. The respondent court issued ex parte writ enjoining the defendants from
preventing the business operations of the company until further orders of the Court.
However, the respondent court denied it on the ground that the case has not filed in the Court of
Industrial Relations and neither filed a notice of strike in the Department of Labor.

ISSUE:
Whether or not the respondent court can enjoin the union strike or picketing. Whether or not
notice of strike is necessary.

HELD:
The Court finds merit in the petition.
The Court stressed the exclusive jurisdiction of the industrial court as against the regular courts
over unfair labor practices in Veterans Security Free Workers Union vs. Cloribel 6 thus: "(I)t has
long been accepted as dogma that cases involving unfair labor practice fall within the exclusive
jurisdiction of the Court of Industrial Relations, by virtue of the explicit provisions of Section
5(a) of the Industrial Peace Act that said Court 'shall have jurisdiction over the prevention of
unfair labor practices and is empowered to prevent any person from engaging in any unfair labor
practice.
This power shall be exclusive and shall not be affected by any other means of adjustment or
prevention that has been or may be established by an agreement, code, law or otherwise.'
Respondent court's stated reasons for denying dissolution of the injunction, to wit, that petitioner
union had not filed a case in the industrial court nor a strike notice with the Labor Department
constituted grave error.
CASE 466

PAFLU v. Tan
GR. No. L-9115, August 31, 1956

FACTS:
On September 11, 1954, a collective bargaining agreement was entered into by and between the
Republic Theater Enterprises and the Majestic Theater, Inc. on one hand and the Majestic and
Republic Theaters Employees Association on the other. This agreement was to run for a period
of two years. Because of the failure of the theater enterprises to comply with some terms of the
agreement, the employees of the association went on strike on January 2, 1955.
In consideration of the return of the strikers to work, the collective bargaining contract was
modified and a new one entered into also for a term of two years on February 16, 1955. This new
agreement was signed by the Philippine Association of Free Labor Unions (PAFLU), with which
the employees association had affiliated after the conclusion of the original collective bargaining
agreement. Among the pertinent provisions of the agreement, as amended, were that during the
period of its life the association or any laborer or employee shall not declare a strike, nor engage
in picketing, while the management of the theaters in return “shall not lockout their employees.”
The revised agreement also included rigid clauses in the payment of overtime pay, night
differential pay and a provision for the examination of the books of the theaters on June 30,
1955.

ISSUE:
Does it come under the jurisdiction of an ordinary court of justice or should it be left entirely to
the Court of Industrial Relations?

HELD:
This involves a little digression on the scope and extent of the jurisdiction of the Court of
Industrial Relations which is now conferred upon it by the Industrial Peace Act.
It should be noted that prior to the approval of the Industrial Peace Act (Republic Act No. 875),
the law that governed the jurisdiction of the Court of Industrial Relations over cases involving
labor disputes is Commonwealth Act 103. This Act gave to that court broad powers of
compulsory arbitration on any matter involving a labor dispute. In fact, that Act gave that court
“jurisdiction over the entire Philippines, to consider, investigate, decide and settle all questions,
matters, controversies, or disputes arising between, and/or affecting employers and employees or
laborers, and landlords and tenants or farm-laborers, and regulate the relations between them”
(section 1).
In other words, that court could take cognizance “of any industrial or agricultural dispute causing
or likely to cause a strike or lockout” with the only limitation that the employees, laborers or
tenants that may bring the matter to court exceed thirty in number (section 4).
It therefore appears that with the exception of the four cases above specified the Court of
Industrial Relations has no jurisdiction even if it involves a labor dispute. And as the issue
involved in the instant case does not fall under, nor refer to, any of those specified cases, it
follows that the lower court has jurisdiction to entertain the same.
CASE 467

Ilaw at Buklod ng Manggagawa (IBM) v. NLRC

198 S 586 (91)

FACTS:
IBM representing 4500 employees of SMC working at various plants, offices and warehouses in
NCR presented to the company a demand for correction of the significant distortion in the
workers’ wages pursuant to the Wage Rationalization Act. Demand unheeded by company hence
the union members refused to render overtime services until the distortion has been corrected by
SMC.
It appears that the employees working hours/schedule has been freely observed by the employees
for the past 5 years and due to the abandonment of the longstanding schedule of work and
reversion to the eight-hour shift substantial losses were incurred by SMC.
SMC filed a complaint with arbitration branch of NLRC then before the NLRC for the latter to
declare the strike illegal.
Union’s contention: workers’ refusal to work beyond 8 hours was a legitimate means of
compelling SMC to correct distortion.
SMC: The coordinated reduction by the Union’s members of the work time in order to compel
SMC to yield to the demand was an illegal and unprotected activity.

ISSUE:
Whether the strike was legal?

HELD:
No, it was illegal. The strike invoking the issue of wage distortion is illegal. The legality of these
activities depends on the legality of the purposes sought to be attained. These joint or
coordinated activities may be forbidden or restricted by law or contract.
The legislative intent that solution of the problem of wage distortions shall be sought by
voluntary negotiation or arbitration, and not by strikes, lockouts, or other concerted activities of
the employees or management, is made clear in the rules implementing RA 6727 issued by the
Secretary of Labor and Employment pursuant to the authority granted by Section 13 of the Act.
Section 16, Chapter I of these implementing rules, after reiterating the policy that wage
distortions be first settled voluntarily by the parties and eventually by compulsory arbitration,
declares that, “Any issue involving wage distortion shall not be a ground for a strike/lockout.”
Moreover, the collective bargaining agreement between the SMC and the Union, relevant
provisions of which are quoted by the former without the latter’s demurring to the accuracy of
the quotation, also prescribes a similar eschewal of strikes or other similar or related concerted
activities as a mode of resolving disputes or controversies, generally, said agreement clearly
stating that settlement of “all disputes, disagreements or controversies of any kind” should be
achieved by the stipulated grievance procedure and ultimately by arbitration.
CASE 468

Union of FiliPro Employees v. NLRC and Nestle Philippines, Inc.

G.R. No. 91025, December 19, 1990

FACTS:

On June 22, 1988, the petitioner Union of the Filipro Employees, the sole and exclusive
bargaining agent of all rank-and-file employees of Nestle Philippines, (private respondent) filed
a Notice of Strike at the DOLE raising the issues of CBA deadlock and unfair labor practice.
Private respondent assailed the legal personality of the proponents of the said notice of strike to
represent the Nestle employees, before the NCMB. This notwithstanding, the NCMB proceeded
to invite the parties to attend the conciliation meetings and to which private respondent failed to
attend contending that it will deal only with a negotiating panel duly constituted and mandated in
accordance with the UFE Constitution and By-laws. Thereafter, Company terminated from
employment all UFE Union officers, and all the members of the negotiating panel for instigating
and knowingly participating in a strike staged at the Makati, Alabang, Cabuyao and Cagayan de
Oro on September 11, 1987 without any notice of strike filed and a strike vote obtained for the
purpose. The union filed a complaint for illegal dismissal. LA upheld the validity of the
dismissal; NLRC en banc affirmed. Subsequently, company concluded separate CBAs with the
general membership of the union at Cebu/Davao and Cagayan de Oro units; Assailing the
validity of these agreements, the union filed a case of ULP against the company with the NLRC-
NCR Arbitration Branch Efforts to resolve the dispute amicably were taken by the NCMB but
yielded negative result. Petitioner filed a motion asking the Secretary of Labor to assume
jurisdiction over the dispute of deadlock in collective bargaining between the parties. On October
28, 1988, Labor Secretary Franklin Drilon “certified” to the NLRC the said dispute between the
UFE and Nestle, Philippines. Second Division of the NLRC promulgated a resolution granting
wage increase and other benefits to Nestle’s employees, ruling on non-economic issues, as well
as absolving the private respondent of the Unfair Labor Practice charge. Petitioner finds said
resolution to be inadequate and accordingly, does not agree therewith. It filed a motion for
reconsideration, denied. Hence, this petition.

ISSUE: Whether or not the second division of the NLRC acted without jurisdiction in rendering
the assailed resolution, the same being rendered only by a division of the public respondent and
not by en banc?

HELD:
This case was certified on October 28, 1988 when existing rules prescribed that, it is incumbent
upon the Commission en banc to decide or resolve a certified dispute.
However, R.A. 6715 took effect during the pendency of this case. Aside from vesting upon each
division the power to adjudicate cases filed before the Commission, said Act further provides
CASE 469

that the divisions of the Commission shall have exclusive appellate jurisdiction over cases within
their respective territorial jurisdiction. Section 5 of RA 6715 provides as follows: xxxx The
Commission may sit en banc or in five (5) divisions, each composed of three (3) members. The
Commission shall sit en banc only for purposes of promulgating rules and regulations governing
the hearing and disposition of cases before any of its divisions and regional branches and
formulating policies affecting its administration and operations. The Commission shall exercise
its adjudicatory and all other powers, functions and duties through its divisions. xxxx In view of
the enactment of Republic Act 6715, the aforementioned rules requiring the Commission en banc
to decide or resolve a certified dispute have accordingly been repealed. Confirmed in
Administrative Order No. 36 (Series of 1989) promulgated by the Secretary under his delegated
rule-making power. Moreover, it is to be emphasized and it is a matter of judicial notice that
since the effectivity of R.A. 6715, many cases have already been decided by the 5 divisions of
the NLRC.
We find no legal justification in entertaining petitioner’s claim considering that the clear intent of
the amendatory provision is to expedite the disposition of labor cases filed before the
Commission. To rule otherwise would not be congruous to the proper administration of justice.
ACCORDINGLY, PREMISES CONSIDERED, the petition is DISMISSED..

216 Philtread v. NLRC

GR 102185, February 15, 1993

FACTS:

ADFLO-Philtread (aka Union) filed a notice of strike against Philtread, for alleged
discrimination, union busting, non-granting of merit increases, and other acts of ULP. In
reaction, Philtread filed a Notice of Lockout, claiming it was the union which was guilty for
violation of the CBA.

Philtread later filed criminal criminal charges for libel against 36 union officers who distributed
leaflets imputing defects in the company’s products.
Union then files a petition for the SOLE to assume jurisdiction. SOLE certified the case to the
NLRC for compulsory arbitration; and SOLE ordered the parties to return to work, and the
management to accept them back to the same terms and conditions prior to the dispute. Philtread
said it would not reinstate these workers until the labor dispute is resolved. Union thus files a
motion for execution of the SOLE’s return-to-work order. NLRC grants the union’s motion.

But the Union’s counsel decided to re-file its previous motion for execution. So, the NLRC
finally decided to rule on the dispute. Instead of acting on the Union’s motion for execution, the
NLRC resolved the dispute altogether:

NLRC did not reinstate the 36 employees, but gave them backwages, and dismissed all other
claims.

ISSUE:
Was the Union denied due process?

HELD:

No. The Union cannot claim a denial of due process because the employees themselves already
accepted the deferred return-to-work order.

In fact, when the Union re-filed its motion to execute the return-to-work order, majority of the
employees objected to such re-filing, since these employees preferred the financial concessions
to be given out by the employer.
CASE 470

Furthermore, the NLRC found that Philtread complied with the necessary procedural
requirements of a valid lockout. NLRC also found that Philtread was able to show that it was
resorting to a lockout because industrial peace could not be obtained as long as the locked-out
employees remained part of the business.

PALEA v. PAL
G.R. No. L-32740, March 31, 1971

FACTS:

PALEA, as the bargaining representative of the employees of respondent Philippine Air Lines,
Inc., (PAL) presented a set of demands to the latter, among them increases in pay.Voluntary
conciliation proceedings between the parties followed, through the mediation of the Bureau of
Labor Relations, and when no settlement was agreed upon PALEA went on strike on September
30, 1970.
On October 3, 1970 it was joined by the Air Line Pilots Association (ALPAP).
On October 10, 1970 the trial Judge, having been informed that the strikes had not been called
off, issued another order directing the strikers to lift their pickets and return to work, and
explaining that his order of October 7 partook of the nature of a mandatory Injunction.
On October 19, 1970 the CIR en banc, acting on the motion for clarification and/or
reconsideration, issued a resolution affirming the basic return-to-work order of Judge Paredes.
After PALEA received a copy of the said resolution it filed a motion informing the CIR that after
the order of October 10, 1970 was issued its members reported back for work but that PAL
"converted their employment status to provisional workers, such that many refused such status
and preferred to wait for the outcome of the motion for reconsideration;" that after the resolution
en banc of October 19, 1970 the employees again reported for work and while the majority of
them were admitted some were refused employment, consisting mostly of the officers of the
union and numbering 21 in all, according to a list subsequently submitted.

ISSUE:
Whether there was failure of the CIR to order PAL to reinstate some 21 employees
notwithstanding that they had offered to return to work?

HELD:
There is nothing in the orders here under review which shows that the respondent Court has
definitely ruled against the reinstatement of said employees. Since they offered to return to work
only after the resolution of the CIR en banc of October 19, 1970 was issued, affirming the order
of the trial Judge dated October 7, 1970, their situation falls under the following portion thereof:
"Failure to comply with any provision of this order shall constitute contempt of court,
and, the employee failing or refusing to work by October 9, 1970, without justifiable cause, shall
CASE 471

immediately be replaced by PAL, and may not be reinstated without prior court order and on
justifiable grounds."
In other words, the burden is upon the petitioner to show before the respondent court that
reinstatement of the employees concerned is justified in spite of their failure to comply strictly
with the return-to-work order, or that the refusal of PAL to reinstate them constitutes unjust
discrimination, as they now claim.These particular questions, as well as the charge of contempt
against some of the strikers, should be ventilated before the respondent court, where in fact they
are now pending.Any ruling on the merits of these incidents by this Court at this stage of the case
would therefore be premature.

WHEREFORE, the petition is dismissed, and the restraining order issued by this Court is lifted,
with costs against the petitioner.

St. Scholastica’s College v. Torres

GR No. 100158, June 29, 1992

FACTS:

Petitioner St. Scholastica's College (COLLEGE, for brevity) and private respondent Samahan ng
Manggagawang Pang-Edukasyon sa Sta. Eskolastika-NAFTEU (UNION, for brevity) initiated
negotiations for a first-ever collective bargaining agreement. A deadlock in the negotiations
prompted the UNION to file a Notice of Strike with the Department of Labor and Employment.
The UNION declared a strike, public respondent SECRETARY immediately assumed
jurisdiction over the labor dispute and issued on the same day a return-to-work order. The
UNION filed a motion for reconsideration of the return-to-work order questioning inter alia the
assumption of jurisdiction by the SECRETARY over the labor dispute which was denied.
The COLLEGE sent individual letters to the striking employees enjoining them to return to
work, the UNION presented a list of (6) demands to the COLLEGE. The most important of these
demands was the unconditional acceptance back to work of the striking employees. But these
were flatly rejected. The COLLEGE mailed individual notices of termination to the striking
employees. The UNION officers and members then tried to return to work but were no longer
accepted by the COLLEGE. The UNION moved for the enforcement of the return-to-work order
before respondent SECRETARY, citing "selective acceptance of returning strikers" by the
COLLEGE. Respondent SECRETARY required the parties to submit their respective position
papers. The COLLEGE prayed that respondent SECRETARY uphold the dismissal of the
employees who defied his return-to-work order.

ISSUE:

Whether respondent SECRETARY has the power to assume jurisdiction over a labor dispute and
its incidental controversies, causing or likely to cause a strike or lockout in an industry
indispensable to the national interest?

HELD:

Yes. The Secretary was explicitly granted by Article 263 (g) of the Labor Code the authority to
assume jurisdiction over a labor dispute causing or likely to cause a strike or lockout in an
industry indispensable to the national interest, and decide the same accordingly. Necessarily, this
CASE 472

authority to assume jurisdiction over the said labor dispute must include and extend to all
questions and include and extend to all questions and controversies arising therefrom, including
cases over which the Labor Arbiter has exclusive jurisdiction.
Article 217 of the Labor Code did contemplate of exceptions thereto where the SECRETARY is
authorized to assume jurisdiction over a labor dispute otherwise belonging exclusively to the
Labor Arbiter. This is readily evident from its opening proviso reading "(e)xcept as otherwise
provided under this Code .
The submission of an incidental issue of a labor dispute, in assumption and/or certification cases,
to the Secretary of Labor and Employment for his resolution is thus one of the instances referred
to whereby the latter may exercise 3concurrent jurisdiction together with the Labor Arbiters.

Quetulio v. Flores
G.R. No. L-16406., November 29, 1960

FACTS:
An examination of the original decision promulgated on June 29, 1956 reveals that Primo
Quetulio, petitioner herein, was ordered to pay the defendants and the intervenors the sum of
P11,500 per annum from 1945 onwards). The records of G .R. No. L-6831, supra, having been
remanded to the Court of First Instance, this court, upon motion of respondent herein Evaristo
Ver, issued a writ of execution against all the properties of petitioner herein. Subsequently, on
July 15, 1958, upon petition of Quetulio, the court set the case for hearing and cancelled the writ
of execution. But on June 1, 1959, upon motion of counsel for defendants and the intervenors,
the lower court issued another order continuing the writ of execution previously issued and
including in the levy against the properties of petitioner his undivided interests in Lots 67 and 68.
Reason for this order is as follows:
"For the proper determination of the shares of the plaintiff Primo Quetulio and the value of the
fruits of the portion corresponding to him in lots 67 and 68, there is, therefore, a need for
partition proceedings. But assuming that after the partition proceedings, the share of Primo
Quetulio shall have been determined, just the same, it will be attached to be sold at public
auction to satisfy the damages.
Therefore, in order to avoid multiplicity of suits, that is, to do away with the filing of a partition
proceedings between plaintiff Primo Quetulio on one hand and the co-heirs of Juan Ver on the
other, so as to determine the corresponding shares of each in these two lots, it is the considered
opinion of this Court to continue the writ of execution and to include in the levied properties of
the plaintiff’s undivided share in lots 67 and 68. If the defendants and intervenors will purchase
the said interest of Quetulio in these two lots, being relatives, they will know what to do with the
same.”
After a hearing on Quetulio’s motion for reconsideration of Said order, the court ordered on June
3, 1959, the issuance of the alias writ of execution. The ex-parte motion for reconsideration of
the last order having been denied, petitioner filed this petition.

ISSUE:
Whether or not the decision of the Supreme Court in G.R. No. L-6831 is final and executory.

HELD:
CASE 473

No. (1) The decision of the Supreme Court itself orders further proceedings by the lower court;
(2) A partition proceedings in the court below is still necessary to determine Quetulio’s interest
in Lost Nos. 67 and 68; (3) The value of the fruits of said lots should be determined, as the same
will be deducted from the damages awarded against Quetillo. (According to petitioner herein,
respondents have been in possession of said lots for nine years already in September, 1959). The
lower court cannot assume that the fruits of said lots will not completely pay for or reduce the
damages awarded; and (4) Execution is being issued also against properties of Quetulio, other
than said Lots No. 67 and 68. How will the lower court know how much of said properties
should be sold to satisfy the damages, if the actual amount of said damages is not first
determined?
Wherefore, the order of the lower court dated June 3, 1959 issuing the alias writ of execution, is
hereby set aside. No costs, So ordered.

Danao Development Corporation v. NLRC

GR Nos. L-40706 & L-40707, Feb 16, 1978

FACTS:
On October 16, 1974, the Court of Industrial Relations issued the corresponding writ of
execution for the reinstatement thus ordered of the 119 complainants. Later, an alias writ was
issued and according to the return of the sheriff dated February 21, 1975, he was unable to effect
any reinstatement. Incidentally, in that report, the sheriff stated that of the 119 supposed
complainants, only seventy (70) were available at the time of service and that fifteen (15) of the
119 were already dead.
When the Court of Industrial Relations was abolished, the implementation of the portion of that
decision referring to backwages was transferred to the National Labor Relations Commission,
herein public respondent. On January 23, 1975, Mr. Aurelio Cruz, formerly of the Examining
Division of the defunct Court of Industrial Relations was directed by the Commission to proceed
to the premises of petitioner Danao Development Corporation at Toboso, Negros Occidental, to
make the necessary computation of the backwages ordered to be paid to the complainants.
Petitioner filed a motion on March 19, 1975 asking the respondent Commission to order Mr.
Cruz to proceed to Toboso again to complete his report. This motion was seemingly granted.

ISSUE:
Whether or not under the circumstances obtaining as of April 1, 1975, was legal and proper for
respondent Commission to issue the impugned alias writ of execution?

HELD:
No. After mature deliberation, the Court are persuaded to resolve the said issue in the negative.
It is readily evident from the very nature of the Industrial Court's judgment of February 20, 1974
that whereas, the portion thereof regarding reinstatement was capable of immediate execution
after the Supreme Court's decision affirming the same had become final, hence the writ of
execution of the Industrial Court of October 16, 1974 was in accordance with law, it is equally
obvious that the backwages aspect thereof could not be the object of execution until the
respective amounts due to all the complainants has been duly ascertained in a manner wherein
both parties have been duly heard.
CASE 474

Finally, it bears making it unmistakably clear here that the beneficiaries in this case are the
individual claimants or complainants themselves. Nothing short of personal acknowledgments on
their part may be deemed as legal satisfaction of this judgment. The union to which they belong
and their counsel can only assist them; they cannot decide for them, even as they are entitled to
their corresponding dues and fees in accordance with the by-laws and the corresponding contract
for services.
By way of final execution of the aforementioned judgment of the Court of Industrial Relations in
Cases Nos. 134-ULP-ILO and 144-ULP-ILO, petitioner is hereby ordered to pay individually the
complainants above referred to backwages at the rate of P8.00 a day for the number of days each
year, for three years, that in the normal course before they were dismissed they used to be paid
during season and off-season, with the corresponding bonuses and other benefits they used to be
entitled to.

GSIS v. Court of Appeals

218 SCRA 233

FACTS:
Several years back, the Queen's Row Subdivision, Inc. (QRSI) entered into a construction project
agreement with the Government Service Insurance System (GSIS) by virtue of which the latter
agreed to extend a financing loan to the former for the construction and development of a
residential subdivision, comprising some four thousand four hundred ninety-three (4,493)
housing units, situated at Molino, Bacoor, Cavite; these units were to be sold to GSIS members
in accordance with the System's housing program.

Pursuant to said project agreement, QRSI entered into a construction contract with private
respondent Valencia involving various phases of land development in the said subdivision. Upon
accomplishing and completing his undertaking under the contract, Valencia demanded payment
from QRSI. Despite repeated demands, however, QRSI refused to pay. Valencia then filed the
complaint, an action for a sum of money with prayer for the issuance of a writ of preliminary
attachment. On 2 March 1982, the trial court rendered its decision in favor of the plaintiff and
against the defendants.

ISSUE:
Whether or not the respondent court of appeals erred in holding that the present petition is barred
by prior judgment and estoppel.

HELD:
The private respondent's claim that the petitioner is estopped from questioning the twelve percent
(12%) interest because it had made some payments is untenable. The petitioner is an
instrumentality of the Government which functions as an administrative body. Its officials are
public officials. The general rule is that the Government is not estopped by errors, mistakes or
omissions of its officials or agents. This is especially true in the case of the petitioner because of
the fiduciary character of its management which is "rendered more strict by the fact that the
funds under its administration are partly contributed by the thousands upon thousands of
employees and workers in all the branches and instrumentalities of the government."
CASE 475

WHEREFORE, the instant petition is GRANTED. The Resolution of respondent Court of 15

January 1992 in CA-G.R. SP No. 24021 is SET ASIDE and its Decision therein of 28 June 1991
is hereby REINSTATED and AFFIRMED.

INSUREFCO v. CIR,
8 SCRA 270

FACTS:

On 14 June 1952, the respondent union staged a strike against the old Insular Sugar Refining
Corporation owned and controlled by the Philippine Sugar Institute. In 1953, the Court of
Industrial Relations, in its Case No. 707-V(3), found and declared the strike illegal, and
authorized the management to dismiss at its discretion those responsible for the strike. This order
was subsequently affirmed by the Supreme Court. Accordingly, in September, 1954, the
management dismissed several employees.

On 18 November 1955, the union moved to reopen the case on the ground that the 39 workers
named in their petition were dismissed even though they were not responsible for the illegal
strike, and therewith prayed for their reinstatement, and in the event that they cannot be
reinstated, they be paid gratuity equivalent to one (1) month pay for every year of continuous
service. Then, in a motion dated 28 April 1961, the union moved for the inclusion, as additional
parties, of the Philippine Sugar Institute and the present petitioner, the new Insular Sugar
Refining Corporation.

Other relevant facts are that the new INSUREFCO is a private corporation registered with the
Securities and Exchange Commission on 6 February 1961; that PHILSUGIN and the National
Development Company sold the assets of the old Insular Refining Company to the new
INSUREFCO on 7 February 1961; over the protest of the Union, based on the pending case; and
that the new INSUREFCO knew of the pending case involving the 39 workers at the time it
bought the properties.

ISSUE:
CASE 476

Whether or not the Court of Industrial Relations had jurisdiction over the original parties and the
subject-matter.

HELD:

The Court of Industrial Relations has no jurisdiction over the new INSUREFCO because it
cannot, primordially, compel the reinstatement of employees upon an employer that had no
previous employer-employee relationship with the former. The two INSUREFCOs, although
carrying the same corporate name, are admittedly distinct from each other, and no charge is
made that the sale was fictitious or made in order to enable the old INSUREFCO to escape its
liability to the discharged employees. consequently, the impleading therein of the petitioner (new
INSUREFCO) against the latter's objection would be to no purpose. This Court has repeatedly
held that pure money claims not connected with any unfair labor practice, or with the opposite
violation of the Eight-Hour Labor Law or of the Minimum Wage Act, must be prosecuted in the
proper courts of first instance.

WHEREFORE, the writ of certiorari prayed for is granted, and the order of 10 October 1961 of
the Court of Industrial Relations is set aside. Costs against respondent INSUREFCO & Paper
Pulp Project Workers' Union.

Callanta v. Carnation
145 SCRA 268

FACTS:
Petitioner Virgilio Callanta was employed by respondent Carnation Philippines, Inc. as a
salesman in the Agusan del Sur area. 5 years later, respondent Carnation filed with the Regional
Office of the Ministry of Labor and Employment an application for clearance to terminate the
employment of petitioner on the alleged grounds of serious misconduct and misappropriation of
company funds amounting to P12,000, more or less. Upon approval by MOLE Reg Director
Baterbonia of said application, petitioner’s employment with Carnation was terminated.
Respondent Carnation questioned the timeliness of petitioner’s complaint alleging that the same
is barred by prescription for having been filed more than 3 years after the date of Callanta’s
dismissal. Respondent Carnation was ordered to reinstate Callanta to his former position with
backwages of 1 year without qualification inc all fringe benefits. Respondent Carnation
Philippines appealed to respondent NLRC which thereafter set aside the decision of LA and
declared complaint for illegal dismissal filed by Callanta to have already prescribed.
Callanta was dismissed from his employment effective JUNE 1, 1979; and on JULY 5, 1982, he
filed the instant complaint against respondent for Unlawful Dismissal with Backwages, etc.
Hence, this petition.

ISSUE:
Whether or not NLRC was correct in ruling that the complaint for illegal dismissal filed by
complainant Callanta has already prescribed thus should be dismissed.

RULINGS:
No. The dismissal without just cause of an employee from his employment constitutes a
violation of the Labor Code and its implementing rules and regulations. Such violation, however,
does not amount to an "offense" as understood under Article 291 of the Labor Code. In its broad
sense, an offense is an illegal act which does not amount to a crime as defined in the penal law,
but which by statute carries with it a penalty similar to those imposed by law for the punishment
of a crime. “ILLEGAL DISMISSAL” - termination of an employment without just or valid cause
CASE 477

is not categorized as an unlawful practice One's employment, profession, trade or calling is a

"property right," and the wrongful interference therewith is an actionable wrong. The right is
considered to be property within the protection of a constitutional guaranty of due process of
law. Clearly then, 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.

There is merit in the contention of petitioner that the four [4]-year prescriptive period under
Article 1146 of the New Civil Code, applies by way of supplement. The action for illegal
dismissal was filed by petitioners on July 5, 1982, or three [3] years, one [1] month and five [5]
days after the alleged effectivity date of his dismissal on June 1, 1979 which is well within the
four [4]-year prescriptive period under Article 1146 of the New Civil Code. - Public respondent
dismissed the action for illegal dismissal on the sole issue of prescription of actions. It did not
resolve the case of illegal dismissal on the merits.

Columbian Rope Co. v. TALE

6 SCRA 425

FACTS:
Respondents Braulio Malpas, Felipe Superable, Jose de la Rosa and Andres Macamay were the
complainants below against petitioner Columbian Rope Company of the Philippines (Tacloban
Branch), alleging that they were employees of the latter who were dismissed by reason of their
membership in the Tacloban Association of Laborers and Employees (CIR Case No. 16-ULP-
Cebu). Superable was dismissed on September 17,1954; Malpas on November 17, 1954; de la
Rosa on December 1, 1954; and Macamay on February 8, 1955. After trial and pending decision
of the court, the Company filed an "urgent petition" for permission to close down its Tacloban
branch effective October 15, 1955, on the ground of continuing losses in its local business.
Acting on the petition, the court on September 29, 1955 issued an order stating that "there being
no provision in Republic Act No. 875 or in any other act to the effect that an employer could not
close his or its business without first securing authority from this Court if there is a pending
certification or unfair practice case involving said business, the granting of such authority is
unnecessary," but that "should the Tacloban branch of respondent Company be actually closed as
planned, such closing should be without prejudice to the results of the two pending cases (Cases
16-ULP-Cebu and 28MC-Cebu) involving said Company and the Tacloban Association of
Laborers and Employees." On September 22, 1958 the Industrial Relations Court rendered its
decision declaring that the dismissal of the complainants was violative of Section 4 (a),
subsections 1, 2 and 4 of Republic Act 875 and requiring the company "to cease and desist from
committing unfair labor practice; to pay back wages to the complainants from the time of their
dismissal until they are made whole; and to maintain the terms and conditions of employment at
the time of their dismissal and not to disturb their seniority."

ISSUE:
CASE 478

Whether or not an employer, found guilty of unfair labor practice in dismissing four employees,
be ordered to reinstate them after the closure of its branch office where they were employed, and
to pay the dismissed employees back wages from the date of such closure until they are actually
reinstated.

HELD:

The decision of respondent Court is set aside and the case is remanded for further proceedings-
specifically to receive evidence on, and decide the questions of (1) whether or not the Tacloban
branch of petitioning Company was closed on September 30,1955 or on any other date there
after; (2) whether such closure was for a justifiable cause, as alleged by said company, or was
resorted to in order to circumvent any decision requiring reinstatement which the said court
might render, as alleged by respondent employees and (3) if the closure was true and justified,
whether or not, on the basis of the evidence, to order the reinstatement of said employees in the
Company's other branches or to put them on a preferential list for that purpose, on the basis of
the exigencies of its business. Without costs.

Arrastre Security v. Ople

127 SCRA 580

FACTS:

The Arrastre Security Association-TUPAS, ASA in short, is a duly registered labor organization
with Registration Certificate No. 1159-IP, issued on December 22, 1954 having as members
security employees in the arrastre service at South Harbor, Port Area, Manila, and was under the
employ of the Delgado Brothers, Inc., Arrastre operator. The Court of Industrial Relations
repeatedly certified it on August 6, 1955 and May 14, 1957 as the sole and exclusive contractor.

On April 11, 1972 the Court of Industrial Relations certified the ASA as the sole and exclusive
agent of all the security employees of respondent Guacods Marine Terminal for purposes of
collective bargaining as regards wages, hours of work, terms and other conditions of
employment. On October 9, 1972 the Philippine Constabulary issued Letter Directive M-10, by
virtue of, and pursuant to, Proclamation No. 1081, requiring company guards being employed by
private firms companies and corporations to acquire the necessary 'License to Exercise
Profession' as watchmen or security guards. ASA sent letters to the Guacods Marine Terminal
and E. Razon, Inc. requesting them to give the necessary individual certification of employment
to all its members security guard and/or watchmen but the latter refused to issue saidcertification.

Questioning the respondent corporations' refusal to make the required certifications of

employment, the petitioner-union in representation of the 350 security guards filed with the
Bureau of Labor Relations a "Request for Assistance In Dispute Settlement" alleging union
busting discrimination, harassment, violation of collective bargaining agreement, and other acts
constituting unfair labor practices.

ISSUE:
CASE 479

Whether or not the decision of the Ad Hoc National Labor Relations Commission denying the
reinstatement of some of the individual petitioners and the non-payment of backwages is without
any factual and legal basis, and constitutes a grave abuse of discretion amounting to lack of
jurisdiction, and is therefore null and void ab initio.

HELD:

The petition calling for the nullification and setting aside of the questioned decision and
resolution is dismissed for lack of merit. The resolution of the respondent Secretary of Labor is
modified to entitle the three hundred fifty (350) security guards-petitioners to separation pay
according to the terms of their collective bargaining agreement or the pertinent provisions of the
Labor Code and implementing rules and regulations but in no event to be less than the one month
salary ordered by the respondent Secretary.

Dangan v. NLRC
127 SCRA 706

FACTS:

The petitioner started her employment with the respondent firm on January 24, 1977 as a
purchasing clerk on probationary basis with a basic salary of P450.00. On May 1, 1977, she was
made a permanent employee with a monthly salary of P500.00. On July 16, 1979, she was
transferred from the Purchasing Department to the Financial Services Department as clerk-typist.
On May 1, 1980, she was promoted as Secretary to the Manager of the Financial Services
Department with a new salary rate of P1,090.00 per month. On February 15, 1981, the
petitioner's boss, Manager Andres S. Roy F. Lim tendered his resignation from the company
effective a month later. Sometime in March, 1981, petitioner Dangan was re-assigned as clerk-
typist in the Logistics Department. On May 15, 1981, she was pulled out of Logistics and
assigned as billing clerk in the Accounting Department. From July 20, 1981 to October 1, 1981,
the petitioner went on maternity leave. On October 3, 1981, the corporation transferred Dangan
from her temporary assignment in the Billing Section to Secretary to the Technical Training
Senior Manager with office at Bicutan, Taguig, Metro Manila. It was at this juncture that she
filed the first complaint for illegal demotion. Because her maternity leave had expired, the
petitioner applied for vacation and sick leaves which were approved by management ending
November 1, 1981.

On November 6, 1981, in response to a telegram sent by her employer, Mrs. Dangan submitted a
letter to the respondent's Personnel Manager Leonardo A. Pineda, informing him that she will
not be reporting for work until the instant case has been decided and terminated. Respondent,
however, is ordered to accept complainant back to work but without backwages. And
complainant is directed to report to work within fifteen (15) days from receipt of this decision.
Failure to do so would mean waiver on her right to reinstatement.
CASE 480

ISSUE:

Whether or not the honorable respondent commission erred in ordering the reinstatement of the
petitioner without payment of backwages from the time of her termination from employment and
without declaring that said reinstatement should be to her former position of department
secretary at private respondent's makati offices.

HELD:

We, therefore, agree with the public respondent's findings that the company was not guilty of
illegal constructive dismissal and that instead of being terminated in her employment, the
petitioner was merely re-assigned pursuant to a legitimate exercise of managerial prerogatives.
The petition is partly granted insofar as petitioner's reinstatement as Secretary, Technical
Training Department is concerned. In the alternative, the employer shall cause payment to the
petitioner of separation pay computed on the basis of her compensation as Secretary, Technical
Training Department. The petition is DENIED insofar as it prays that private respondent be
required to reinstate the petitioner to the position of Secretary, Technical Services Department,
with full backwages.

Philippine Engineering Corporation v. CIR

41 SCRA 89

FACTS:

On February 1, 1965, the employees in the machine shop of petitioner were served by
management with written notice that their services would be terminated within the month of
February, although the regular employees would still be paid for the period from February 1,
1965 to March 31, 1965. The union members continued their efforts to negotiate with the
petitioner corporation for a new collective bargaining agreement. On May 31, 1965 the
corporation closed the machine shop at Raon Street, dismantled the machineries and transferred
them, together with the equipment and tools, to its bodega at Carpena Street. Effective June 1,
1965, about 70% of the union members (about 57 of them) were dismissed, but the remaining
30% of the union members, mostly mechanics and mechanic helpers, including union president
Amado Cuison, union adviser Francisco Sanga and union board member Tomas Peña, were
retained for the maintenance of customers' equipment. The corporation started selling its
machineries that came from Raon Street, but continued accepting machine jobs and service and
repair works which it turned over, on a sub-contract basis to other machine shops. Before and
after the closure of the Raon machine shop a number of employees and laborers had been, and
were being, hired by the corporation.

The respondent union, on behalf of its laid off 57 members, through a complaint dated July 28,
1965, filed by the acting prosecutor of the CIR, charged petitioner with unfair labor practice
under Section 4(a), sub-paragraphs 1 and 4 or Rep. Act No. 875, for having discriminatorily
dismissed the 57 members of the union for no other reason than because of their membership
and activities in the union, and praying, among other things, their reinstatement to their former
CASE 481

positions with full back wages from the date of their dismissal to the date of their actual
reinstatement.

ISSUE:

Whether or not the respondent CIR erred, and gravely abused its discretion and/or acted without
or in excess of jurisdiction.
HELD:
It can not be said that the CIR abused its discretion when it did not consider petitioner's evidence
credible and sufficient. We find that the testimonies of petitioner's witnesses, Antonio
Tamparon and Gilbert Gullen, regarding the losses were not given credit by the CIR because
they failed to state specifically the amount of the alleged losses in 1965 or 1964, and in prior
years. The corporation, according to the CIR, did not present its books of account and its
statements of profit and loss which would clearly demonstrate the alleged financial losses, nor
did petitioner present its accountant or auditor to testify on that matter. The failure of petitioner
to present the best evidence in its possession, concluded the CIR, gives rise to the presumption
that there was suppression on its part of evidence unfavorable to its interests. the decision of the
CIR appealed from is modified by eliminating therefrom the order of reinstatement.  In all other
respects the said decision is affirmed.

Espejo v. NLRC
255 SCRA 430

FACTS:

On 1 August 1987 Cooperative Insurance System of the Philippines (CISP) hired petitioner as
General Manager with a monthly salary of P9,000.00 .plus privileges one of which was the use
of a company car with driver.  On 11 September 1989 the Board of Directors of CISP held a
special meeting to discuss the "cease and desist order" issued by the Office of the Insurance
Commission against CISP on grounds of "capital impairment and margin of solvency
deficiency." In order to put up the needed capital requirements set by the Insurance Commission
the Board passed Resolution authorizing the sale of some CISP properties, including the
company car assigned to petitioner. Petitioner objected to such sale.  However, the Board
overruled petitioner's opposition prompting the latter to tender his resignation addressed to the
Chairman of CISP. Pursuant to Resolution No. 07 (S-1989) the Chairman met on 26 September
1989 with petitioner who manifested that he had changed his mind about resigning and that he
would continue as General Manager despite the sale of the company car. This prompted the
Chairman to write a Memorandum to the Board on 3 October 1989 informing the latter of
petitioner' s oral revocation of his resignation and seeking advice on the matter. On 9 October
1989 petitioner received a letter from the Chairman relaying the acceptance by the Board of his
resignation effective 11 October 1989. Forthwith, petitioner wrote the Chairman stating that he
was surprised about the action of the Board as he had verbally withdrawn his resignation. He
asked that he be given an opportunity to speak before the members of the Board to explain and
clarify matters. However on 14 November 1989 CISP paid petitioner a total of P14,839.00
CASE 482

representing the cash value of his unused vacation leave and transportation expenses. On 28
February 1990 petitioner filed a case against CISP for illegal dismissal and damages.

ISSUE:

Whether or not NLRC committed grave abuse of authority for its decision affirming the finding
of illegal dismissal by the Labor Arbiter.

HELD:

the Decision of the First Division, National Labor Relations Commission dated 17 September
1993 insofar as it declared the reinstatement of petitioner moot and academic and granted him
ten percent (10%) of the award of backwages as attorney's fees is AFFIRMED. However, the
portion relating to the period covered by the award of backwages is SET ASIDE; instead, the
Court ORDERS private respondent Cooperative Insurance System of the Philippines to pay
petitioner his back wages from U October 1989 to 31 January 1990, inclusive of allowances and
the monetary equivalent of other benefits owing to him for that period, less the amount of
P14,839.00 paid to him representing the cash value of his unused vacation leave and
transportation expenses.

Respondent Labor Arbiter, or whoever may now be acting in his behalf, is DIRECTED to make
the proper computation of this award within twenty (20) days from receipt of this Decision
which respondent Cooperative Insurance System of the Philippines must pay to petitioner within
ten (10) days from receipt of such computation.

Davao Free Workers Front v. CIR

67 SCRA 418

FACTS:

On the basis of the undisputed findings of respondent court that respondent employer was guilty
of grossly unfair labor practices and discriminatory acts aimed at the elimination of petitioner
labor union which fully justified petitioner union's strike, as... affirmed by this Court's action in
September, 1968 which rejected respondents1 separate appeal there from in Case L-29331 "for
being factual and for lack of merit," the Court sustains petitioners' appeal at bar. Since all five
judges of respondent court concurred in these facts... and voted in favor of the reinstatement of
the nine unlawfully dismissed petitioners-employees arid of the strikers' return to work, the
Court grants with modifications the petition for upholding the trial court's decision awarding the
nine unlawfully dismissed employees full... backwages without qualification from dismissal to
reinstatement and to the striking members of petitioner union strike-duration pay less earnings
elsewhere.

In short, while all the five judges sustained the findings of the trial court on respondents' unfair
labor practices and discriminatory acts which justified petitioner-union's strike and all voted in
favor of reinstatement and of the strikers' return to work, only three judges... voted to award
backwages without deduction but in varying periods as above stated (with two of them excluding
certain periods thus modifying the trial judge's award of backwages from dismissal to
reinstatement) while two judges voted against any award of backwages. On the award... of strike-
CASE 483

duration pay to the strikers, two judges voted to grant strike duration pay while three voted
against any such award.

ISSUE:

Whether or not an award for full backwages to certain workers from the date of their dismissal
up to the time of their actual reinstatement is fair, equitable and just where there has been no
findings on the nature of the employment of the workers concerned?"... the striking members of
petitioning union are clearly entitled to strike duration pay."
HELD:

On the matter of payment of strike-duration pay to the striking members of petitioner union
whose strike was upheld by respondent court to be justified and legal, the Court finds that
respondents' unfair labor practices and discriminatory practices to the extent of... unlawfully
dismissing the nine petitioners, coercing the members of petitioner union to join another union
obviously sponsored by it and threatening to virtually lock them out and "to shut up Davao plant,
if necessary" fully justify the trial court's original decision ordering... respondents to allow the
return to work of the striking members of petitioner union and to give strike duration pay with
deduction of earnings elsewhere, without loss of seniority and other benefits granted by the
company. The trial court's award of strike duration pay less earnings must be sustained as urged
by petitioners. The self-same considerations of the company's unfair labor practices and
discriminatory acts and anti-union activities that fully justify the award of backwages to the...
unlawfully dismissed employees equally justify the granting of strike duration pay to petitioner
union's members who were left no other alternative by their employer's improper and oppressive
conduct but to declare a strike to render aid and protection to themselves and their... unlawfully
dismissed companions.

Espejo v. NLRC
255 SCRA 430

FACTS:
On 1 August 1987 Cooperative Insurance System of the Philippines (CISP) hired petitioner as
General Manager with a monthly salary of P9,000.00 .plus privileges one of which was the use
of a company car with driver.  On 11 September 1989 the Board of Directors of CISP held a
special meeting to discuss the "cease and desist order" issued by the Office of the Insurance
Commission against CISP on grounds of "capital impairment and margin of solvency
deficiency." In order to put up the needed capital requirements set by the Insurance Commission
the Board passed Resolution authorizing the sale of some CISP properties, including the
company car assigned to petitioner. Petitioner objected to such sale.  However, the Board
overruled petitioner's opposition prompting the latter to tender his resignation addressed to the
Chairman of CISP. Pursuant to Resolution No. 07 (S-1989) the Chairman met on 26 September
1989 with petitioner who manifested that he had changed his mind about resigning and that he
would continue as General Manager despite the sale of the company car. This prompted the
Chairman to write a Memorandum to the Board on 3 October 1989 informing the latter of
petitioner' s oral revocation of his resignation and seeking advice on the matter. On 9 October
1989 petitioner received a letter from the Chairman relaying the acceptance by the Board of his
resignation effective 11 October 1989. Forthwith, petitioner wrote the Chairman stating that he
was surprised about the action of the Board as he had verbally withdrawn his resignation. He
asked that he be given an opportunity to speak before the members of the Board to explain and
CASE 484

clarify matters. However on 14 November 1989 CISP paid petitioner a total of P14,839.00
representing the cash value of his unused vacation leave and transportation expenses. On 28
February 1990 petitioner filed a case against CISP for illegal dismissal and damages.

ISSUE:

Whether or not NLRC committed grave abuse of discretion in deleting the Labor
Arbiter’s award of reinstatement.
HELD:

the Decision of the First Division, National Labor Relations Commission dated 17 September
1993 insofar as it declared the reinstatement of petitioner moot and academic and granted him
ten percent (10%) of the award of backwages as attorney's fees is AFFIRMED. However, the
portion relating to the period covered by the award of backwages is SET ASIDE; instead, the
Court ORDERS private respondent Cooperative Insurance System of the Philippines to pay
petitioner his back wages from U October 1989 to 31 January 1990, inclusive of allowances and
the monetary equivalent of other benefits owing to him for that period, less the amount of
P14,839.00 paid to him representing the cash value of his unused vacation leave and
transportation expenses.

Respondent Labor Arbiter, or whoever may now be acting in his behalf, is DIRECTED to make
the proper computation of this award within twenty (20) days from receipt of this Decision
which respondent Cooperative Insurance System of the Philippines must pay to petitioner within
ten (10) days from receipt of such computation.

Intercontinental Broadcasting Corporation v. Benedicto

495 SCRA 561

FACTS:

Reynaldo Benedicto was appointed by Ceferino Basilio, the general manager then of petitioner,
as marketing manager with a monthly compensation of P20,000 plus 1% commission from
collections of all advertising contracts consummated. In a letter dated October 11, 1994 signed
by Tomas Gomez III, at that time the president of petitioner, Benedicto was terminated from his
position.

On December 3, 1996, Benedicto filed a complaint with the NLRC for illegal dismissal and
damages. He alleged that after his appointment, he was able to increase the televiewing, listening
and audience ratings of petitioner which resulted in its improved competitive financial strength.
Labor arbiter Jovencio LL. Mayor, Jr., in a decision dated August 17, 1998, ruled in favor of
Benedicto finding that he was indeed illegally dismissed. Consequently, Mayor: (1) ordered his
reinstatement with full backwages from the time of his dismissal up to his actual reinstatement
(amounting to P920,000 at the time of the promulgation of the decision); (2) directed petitioner
to pay his 1% commission on the contract with VTV Corporation (P645,000), attorney's fees in
the amount of 10% of the total award (P156,500) and (3) dismissed the claim for moral and
exemplary damages.
CASE 485

Finding the award excessive, petitioner, on October 15, 1998, filed with the NLRC its
memorandum on appeal with motion to re-compute the award on which the appeal bond was to
be based. This motion was not acted upon, hence, on December 10, 1998, petitioner proceeded to
file the appeal bond based on the amounts awarded in the judgment appealed from. In a decision
promulgated on March 5, 1999, the NLRC dismissed the appeal and ruled that petitioner failed to
perfect its appeal since it did not file the appeal bond within the reglementary period. The CA
affirmed the NLRC's decision.

ISSUE:

Whether or not the CA erred in affirming the assailed decision/resolution of the [nlrc] on mere
technicality, failing to recognize that petitioner has in fact perfected its appeal under existing law
and jurisprudence.

HELD:

This case shall be remanded to the labor arbiter for re-computation of backwages and
commissions to be paid by petitioner to respondent(s) for the period October 11, 1994 to
December 1, 1994 and 10% of the total amount as attorney's fees. The labor arbiter shall also set
for further hearing Atty. Barriga's motion to determine his attorney's fees and thereafter to fix the
amount thereof if he is so entitled. The assailed decision dated October 18, 2001 and resolution
dated March 18, 2002 of the Court of Appeals in CA-G.R. SP No. 53413 are hereby
REVERSED and SET ASIDE.

Petitioner is ORDERED to pay the deceased respondent's backwages and commissions to his
heirs from the time he was illegally dismissed on October 11, 1994 up to the time he reached
compulsory retirement age on December 1, 1994.

Durable Shoe Factory v. CIR

99 Phil. 1043

FACTS:
Appeal by certiorari from the order of the Court of Industrial Relations in Case No. 528-V
requiring the petitioner to reinstate three of its workers and to pay each of them his wages during
the period of dismissal. The main issue here is the correctness of the method used by the court in
computing the back wages of the dismissed employees. These laborers were not receiving
regular salaries but were hired on piece-work or pakyaw basis, and their work was not steady
throughout the year, for tbey worked only when there was work to do. The only fair way to fix
their back wages would be to determine what these laborers would have normally earned if they
had not been dismissed, using as basis for that purpose the wages actually earned by other
irregular workers doing the same kind of work who have not been dismissed. As to the question
of whether the award of back wages should extend beyond the time when the business closed its
operations, it is only fair that they should not where the closure was due to legitimate business
reasons and not merely to an attempt to defeat the order for reinstatement. Moreover, wages
earned elsewhere after the laborers dismissal should be deducted from the amount of back wages
to be awarded to them. These questions require the reception of further evidence.

ISSUE:
The correctness of the method used by the court in computing the back wages of the dismissed
employees.
CASE 486

HELD:
Order under review set aside and the case remanded to the court below for a new determination
of the back wages to be paid to the three dismissed laborers, with instruction for the court to
receive or require such further evidence as may be necessary. Reyes, A. J., ponente.

DURABUILT RECAPPING PLANT AND CO. VS NLRC

G.R No. 76746
July 27, 1987

FACTS:

On July 11, 1983, a complaint for illegal dismissal was filed by respondent Reynaldo Bodegas,
against petitioner Durabuilt, a tire recapping company. In a decision rendered by the Labor
Arbiter, the private respondent was ordered reinstated to his former position with full back
wages, from the time he was terminated up to the time he is actually reinstated, without loss of
seniority rights and benefits accruing to him. The petitioners failed to file a seasonable appeal
and entry of final judgment. The petitioner filed its opposition to the computation on the ground
that it contemplated a straight computation of twenty six (26) working days in one month when
the period covered by the computation was intermittently interrupted due to frequent brownouts
and machine trouble and that respondent Bodegas had only a total of 250.75 days of attendance
in 1982 due to absences. According to the petitioner, Bodegas is entitled only to the amount of
P3,834.05 broken down as follows: salaries — P1,993.00; ECOLA — P1,433.50, and 13th
month pay — P407.55. The Labor Arbiter denied the opposition to the computation. The
petitioner appealed to the NLRC which affirmed the order of the Labor Arbiter and dismissed the
appeal.

ISSUE:
CASE 487

Whether or not the computation of back wages should be based on daily rather than on monthly
pay schedules.

HELD:

The petition is granted. It was held that where the failure of workers to work was not due to the
employer's fault, the burden of economic loss suffered by the employees should not be shifted to
the employer. Each party must bear his own loss. It would neither be fair nor just to allow
respondent to recover something he has not earned and could not have earned and to further
penalize the petitioner company over and above the losses it had suffered due to lack of raw
materials and the energy-saving programs of the government. The private respondent cannot be
allowed to enrich himself at the expense of the petitioner company. The computation of back
wages should be based on daily rather than on monthly pay schedules where, as in the case at
bar, such basis is more realistic and accurate.

ALEJANDRO JONAS P. MAGTOTO V. NLRC, 140 SCRA 58

FACTS:

Petitioner Alejandro Jonas P. Magtoto, who worked with private respondent Wyeth-Suaco
Laboratories, Inc. as a sales administrative clerk, was arrested on September 3, 1980 by virtue of
an Arrest, Search and Seizure Order (ASSO) dated September 1, 1980 issued by the Minister of
National Defense. He was subsequently charged with violation of Article 136 (Conspiracy and
Proposal to Commit Rebellion) and Article 138 (Inciting to Rebellion or Insurrection) of the
Revised Penal Code before the City Fiscal of Manila. He was then detained at Camp Bagong
Diwa, Taguig, Metro Manila, but was later transferred to the Bilibid Prison, Muntinlupa, Metro
Manila.

The petitioner informed the private respondent about his detention and requested that the
company consider him on leave "until such time when the concerned authorities decide in favor
of my release". But the private respondent denied the petitioner's request for an indefinite leave
of absence stating that there was no company rule or regulation allowing an employee to be
considered on leave during a period of detention. Magtoto was given five (5) days from receipt
of the letter within which to secure his release and to report for work. The petitioner failed to
report for work as required. The private respondent took corresponding action and considered
him resigned as of September 25, 1980 or twenty-two (22) days after his arrest.
CASE 488

About seven (7) months after the petitioner’s arrest, he case was dismissed and released from
custody and right away informed the private respondent that he will start working with the
company in his old position. The private respondent reminded the petitioner that the report on
"Resigned Employees" which it had submitted and which the petitioner opposed was still
pending before the Ministry of Labor and Employment. The employer stated that the request to
work was, therefore, still inappropriate.

Labor Arbiter Tito F. Genilo rendered a decision in favor of the petitioner and ordered the
private respondent to "Reinstate complainant to a job substantially equivalent to his former
position with full backwages computed on the basis of his latest basic monthly salary starting
from the date he was refused work until actually reinstated without loss of seniority rights and
other privileges." The respondent National Labor Relations Commission modified the decision
of the Labor Arbiter as earlier indicated and affirmed the termination of employment as valid.
This led the petitioner to file the petition for certiorari but it was dismissed for lack of merit.

ISSUE:

Whether or not the seven (7) months detention of the petitioner by the military authorities on
charges later found without basis, justify the respondent's earlier dismissing the petitioner?

HELD:

No, the petitioner argues that his detention was a special case, the cause of which was found non-
existent, and, therefore, the dismissal based on that cause is illegal. The petitioner is correct. The
employer tries to distance itself from the detention by stressing that the petitioner was dismissed
due to prolonged absence. However, Mr. Magtoto could not report for work because he was in a
prison cell. The detention cannot be divorced from prolonged absence. One caused the other.
Since the causes for the detention, which in turn gave the employer a ground to dismiss the
petitioner, proved to be non-existent, it was ruled that the termination was illegal and
reinstatement is warranted. A non-existent cause for dismissal was explained in Pepito v.
Secretary of Labor (96 SCRA 454).

PEDROSO VS CASTRO GR NO 70361 JANUARY 30, 1986

FACTS:

Petitioners Antonio and Pelagia are husband and wife who worked with the private respondent
MANHATTAN Manufacturing and Marketing Co., Inc. together with Nelio Asiao. On
September 1, 1982, Antonino, Pelagia, and Asiao were arrested and detained by military
authorities by virtue of a Presidential Commitment Order (PCO). They were charged with
Conspiracy to Commit Rebellion under Article 136 of the Revised Penal Code before the then
Court of First Instance of Quezon City and were detained at Camp Crame.

Approximately three (3) months after arrest, Pelagia was released and immediately reported for
work but was refused admission. MANHATTAN informed her that her work assignment was
already being occupied by a substitute who was hired to avoid disruption of normal business
operations and who became regular and cannot, therefore, be dismissed by MANHATTAN
without incurring the risk of being sued for illegal transfer and/or dismissal. MANHATTAN's
counsel advised the company to pay PELAGIA her separation pay. Same happened with Antonio
and Asiao.

The three then filed before the MOLE a Complaint for Illegal Dismissal and Unfair Labor
Practice against MANHATTAN. On August 2, 1984, the Labor Arbiter rendered a decision
CASE 489

declaring the dismissal of complainants Antonino Pedroso and Nelio Asiao as legal. However, in
consonance with Art. 284 of the Labor Code, respondent is hereby ordered to pay said
complainants a separation pay equivalent to one (1) month for every year of service. While
Pelagia's complaint was dismissed on the ground of res judicata, the Complaint she had
supposedly filed jointly with Ilagan, also with the same case, having been prioly dismissed. The
couple appealed to the NLRC hence, this present recourse.

ISSUE:

Whether or not the dismissal of complainants but ordering the payment of their separation pay
equivalent to one (1) month for every year of service, and further dismissing the complaint of
Pelagia Pedroso is legal?

HELD:

No, the Labor Arbiter and the NLRC committed grave abuse of discretion in declaring
ANTONINO's dismissal by MANHATTAN as legal, and in dismissing PELAGIA's complaint.
On different dates, Antonio and Pelagia were released from military custody showing that the
charge against them had not been proven. Thus, the cause for their replacement and dismissal by
MANHATTAN was proved to be nonexistent. In the case of Pepito vs. Secretary of Labor a non-
existent or false cause for dismissal was made plain, to wit: "x x x. A distinction, however,
should be made between a dismissal without cause and a dismissal for a false or non-existent
cause. In the former, it is the intention of the employer to dismiss his employee for no cause
whatsoever, in which case the Termination Pay Law would apply. In the latter case, the employer
does not intend to dismiss the employee but for a specific cause which turns out to be false or
non-existent."

Their reinstatement to their former positions, therefore, would have been warranted. However, it
is undisputed that MANHATTAN has already hired replacements. To reinstate petitioners now
to their former position, therefore, would neither be fair nor just under the circumstances.
MANHATTAN's remedy is to reinstate them to substantially equivalent positions pursuant to
Section 4(a) of Rule I, Book VI of the Rules and Regulations Implementing the Labor Code.

EMILIO D. CAMPOMANES v. CANUTO BARTOLOME

38 Phil. 808

FACTS:

On or about the 11th day of August, 1916, said defendant, Canuto Bartolome, as sheriff for the
Province of Tayabas, and under the execution aforesaid, did levy and seize and caused to be
levied and seized a petroleum motor belonging to plaintiff. After the seizure of the motor, the
defendant, Canuto Bartolome, in his official capacity, caused notices to be posted as required by
law in the municipality of Atimonan announcing that the said petroleum motor would be sold at
public auction at the residence of the deputy sheriff. The said petroleum motor is reasonably
worth three thousand (P3,000) pesos and plaintiff had made preparations to bid a reasonable sum
for aforesaid motor on September 9, 1916, but was unable to be present at the sale by reason of
lack of notice.

On September 16, 1916, the said defendant Canuto Bartolome, as sheriff for the Province of
Tayabas, sold the parcels of land at public auction to the defendant Germann & Co. (Ltd.), for
P854.42. Plaintiff tendered and paid to Germann & Co. (Ltd.), Inc., the sum of P954.03 together
with interest at the rate of one (1%) per centum per month from September 16, 1916, to
September 5, 1917. The defendant Germann & Co. (Ltd.), reconveyed to the plaintiff the various
CASE 490

parcels of land and to return to plaintiff said petroleum motor or to pay its value, P3,000 pesos,
but the defendants and each of them have refused and neglected to return said petroleum motor
or pay the value thereof.

That by reason of the unlawful acts of defendants herein complained of, plaintiff has been
deprived of the use of said petroleum motor and by reason of such deprivation has been damaged
by incurring attorney's fees in the sum of four thousand seven hundred (P4,700) pesos and has
suffered general damages in the sum of one thousand (P1,000) pesos.

ISSUE:

Whether or not the facts stated constitute any cause of action.

HELD:

The court erred in sustaining the demurrer upon that ground. It is the duty of a sheriff to act in
accordance with the law in the sale of property seized upon execution, and one of the most
important requirements of the statute (section 454, Code of Civil Procedure) is that notice of the
time and place of sale shall be given. If the sheriff sells without such notice, or at a time and
place other than that designated in the notice, he acts without warrant of law. If his illegal
conduct is the result of inducement or promise of indemnity by the judgment creditor, as is here
averred, the sheriff and such judgment creditor are joint tort feasors and are liable in solidum for
all damages caused by their wrongful acts.

Notwithstanding the alleged sale the engine in question continued to be the property of the
judgment debtor, the plaintiff herein, and that when he subsequently discharged his liability to
Germann & Co. (Ltd.), by paying the judgment in full, he was entitled to demand the return of
the engine, from the defendants, or to recover of them in solidum its value, together with any
damages which he may have suffered by reason of its unlawful detention. The third amended
complaint states a good cause of action against both defendants.

PHILIPPINE NATIONAL BANK V. BONDOC

14 SCRA 770
JULY 30, 1965

FACTS:

In the first civil case, PNB (plaintiff-appellant) obtained a judgment from the CFI Manila on
June 29, 1949 against Joaquin Bondoc (defendant-appellee) for an unpaid promissory note with
the amount of P10,289.60 plus interest (7% per annum computed from June 29, 1949) and
attorney’s fees. However, the judgment was not executed.

After 5 years and upon the instance of PNB, the judgment (from the first civil case) has revived
on February 20, 1957 becoming the second civil case. The CFI Manila condemned Bondoc to
pay PNB the amount of P16, 841.64 plus 7% interest. However, the judgment still has not
enforced during the five years after that time.

Upon the third civil case, on June 7, 1962 PNB instituted in the CFI Manila the enforcement of
the judgment rendered under the second civil case. However, the defendant filed a motion to
dismiss (to revive the judgment) on the ground of prescription and lack of cause of action.
CASE 491

The lower court ruled that the right to revive the judgment has already prescribed that more than
10 years has elapsed since it was first rendered on June 29, 1949. It also ruled that the New Civil
Code does not provide for the revival of a revived judgment.

ISSUE:

Whether or not defendants contention that 10 years has already elapsed since the first judgment
became final hence, the action to enforce the judgment is already barred by statute of limitations
is on point?

HELD:

The judgment is revived only when the same cannot be enforced by motion which is after four
years from the time it becomes final. A revived judgment can be enforced by motion within four
years from its finality.

The Court ruled that the defendant’s contention is inconsistent because reviving a previous
judgment becomes a new and different judgment. The Court also added that there are three
different causes of actions in the three civil cases.

The judgment in the second civil action (February 20, 1957) in which it provided the cause of
action in the case, was rendered on February 20, 1957 and became final in the same year.

Following the provision of Article 1144 (3), it states that the right to enforce a judgment
prescribes in 10 years counted from the date the judgment becomes final. In the case at bar, the
action upon such judgment must be brought within 10 years from 1957 until 1967. The case was
instituted on court on June 7, 1962, which is within the prescriptive period.

CALLANTA v. CARNATION PHILS.

145 SCRA 268, G.R. No. 70615 October 28, 1986

FACTS:

Upon clearance approved by the MOLE Regional Office, respondent dismissed the petitioner in
June 1979. On July 1982, petitioner filed an illegal dismissal case with claim for reinstatement
with the Labor Arbiter, who granted it. On appeal, the NLRC reversed the judgment based on the
contention that the action by the petitioner has already prescribed, since Art. 291 & 292 of the
Labor Code is expressed that offenses penalized under the Code and all money claims arising
from employer-employee relationships shall be filed within 3 years from when such cause of
action arises, otherwise it will be barred.

ISSUE:

Is ruling of the NLRC correct?

HELD:
CASE 492

No. It is a principle well recognized in this jurisdiction, that one's employment, profession, trade
or calling is a property right, and the wrongful interference therewith is an actionable wrong. The
right is considered to be property within the protection of the Constitutional guarantee of due
process of law.

Verily, the dismissal without just cause of an employee from his employment constitutes a
violation of the Labor Code and its implementing rules and regulations. Such violation, however,
does not amount to an "offense" as understood under Article 291 of the Labor Code. In its broad
sense, an offense is an illegal act which does not amount to a crime as defined in the penal law,
but which by statute carries with it a penalty similar to those imposed by law for the punishment
of a crime. The confusion arises over the use of the term "illegal dismissal" which creates the
impression that termination of an employment without just cause constitutes an offense. It must
be noted, however that unlike in cases of commission of any of the prohibited activities during
strikes or lockouts under Article 265, unfair labor practices under Article 248, 249 and 250 and
illegal recruitment activities under Article 38, among others, which the Code itself declares to be
unlawful, termination of an employment without just or valid cause is not categorized as an
unlawful practice.

PNCC V. NLRC

FACTS:

Angeles and Pablo were employed by PNCC as tollway guards posted in NLEX who were
terminated on the ground of serious misconduct. Rosario Maravilla complained to the Tollway
General Manager, Mr Paulino about mulcting activities of some security in NLEX. Acting on
complaint Mr Paulino formed an investigating team to stage an entrapment and handed the
marked money to Maravilla with instructions to give to whoever that may demand money from
her. Together they rode a jeepney with cargo of dogs destined for Baguio. The jeepney was
stopped by Angeles suspecting them of illegal transporting of dogs. The members of the
investigating team saw Angeles and Pablo accepted cash and a sack containing a dog from
Maravilla, then they were allowed to leave.

Mr Ibarra issued a notice of Dismissal to private respondents requiring them to answer the
charge of serious misconduct. Private respondents filed their respective answers and a formal
investigation was held. Dismissal was recommended. Mr. Ibarra then issued a termination notice
CASE 493

to the respondents informing them of their dismissal. Private respondents filed a complaint for
illegal dismissal alleging that they were dismissed without just or authorized cause and without
due process. The complaint prayed for reinstatement plus payment of backwages and mid-year
bonus.

The Labor arbiter ruled that respondents dismissal was illegal because it failed to prove clear and
convincing evidence that they committed serious misconduct. But Labor arbiter didn't order for
their reinstatement but ordered for separation pay, backwages and mid-year bonus. On appeal,
NLRC modified the decision and held that the bribery was a sufficient ground for dismissal but
ordered nonetheless for the separation pay on ground of equity. Petitioner filed for
reconsideration but was denied by NLRC for lack of merit.

ISSUES:

(1) Error in not finding the PNCC guilty of estoppel and laches.
(2) Before NLRC, decision of court has become final and executory.
(3) Whether or not they are entitled to pay, backwages and bonus?

HELD:

(1) No. Laches, in a general sense, is the failure or neglect, for an unreasonable and unexplained
length of time, to do that which, by exercising due diligence, could or should have been done
earlier. Estoppel by laches arises from the negligence or omission to assert a right within a
reasonable time, warranting a presumption that the party entitled to assert it either has abandoned
it or declined to assert it. It does not merely speak of delay but unreasonable delay, which is
absent in this case. An employer is not expected to dismiss an erring employee instantly because
it may opt to give the employee the chance to reform and to regain his confidence.
(2) There was no fixed standard to determine the reasonableness of the period, but the Court
generally considered the period of three (3) months to be reasonable.
The records show that petitioner received the resolution of the NLRC denying its motion for
reconsideration on December 16, 1996 and the petition at bar was filed two (2) months and
twenty-seven (27) days later. We thus find that the instant petition was filed on time.
(3) No. An employee who is dismissed for just cause is generally not entitled to separation pay.
In some cases, however, the Court awards separation pay to a legally dismissed employee on the
grounds of equity and social justice. This is not allowed, though, when the employee has been
dismissed for serious misconduct or some other cause reflecting on his moral character.

E. GANZON VS NLRC
GR No. 123769, Dec 22, 1999

FACTS:

Petitioner E. Ganzon is engaged in the construction business. It manufactures its own building
materials, e.g., slab runners, acropos, jack bases, window grills, pulleys, sliding doors and all
kinds of aluminum products, hollow blocks and all kinds of concrete products. It has its own
machine shop, five (5) mixer trucks, tower cranes, alimak, elevator shaft, and others.

The remaining fourteen (14) complainants who did not sign the Release and Quitclaim were
hired on various dates for different positions and salaries. Complainants claimed that during the
period of their employment insurance premiums were deducted from their salaries without their
consent, and they were not given overtime pay for work performed ten (10) hours a day, legal
holiday pay, premium pay for holiday and rest day, five (5) days incentive leave pay despite
having rendered services for more than a year, vacation/sick leave pay and 13th month pay. They
claimed further that when they reported for work on 25 January 1991 the security guards of
petitioner informed them: "Hindi na kayo puedeng pumasok/magtrabaho dito, 'yan ang order
galing sa itaas."
CASE 494

Petitioner countered that the complainants were all contractual, project, temporary or casual
employees as evidenced by their employment contracts expressly providing that the acceptance
of their services was based on the need for their skill such that upon completion of the project
and/or when reduction of the workforce was necessary, their services would be terminated. Their
employment contracts were renewed every three (3) months. Petitioner denied having dismissed
the complainants from employment but that their employment contracts expired on 25 January
1991. Petitioner then disputed their money claims as exaggerated, baseless and/or that they had
already prescribed.

ISSUE:

Whether or not NLRC did not commit grave abuse of discretion?

HELD:

No. 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
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 activity exists.
This provision classifies regular employees into two (2) kinds: (a) regular employees by nature
of work, and (b) regular employees by years of service. Expounding thereon the Court said in De
Leon v. NLRC.

AMADO DE GUZMAN and MANILA WORKERS UNION AND GENERAL

WORKERS UNION (MALEGWU) VS COURT OF APPEALS
G.R. No. 132257 October 12, 1998

FACTS:

The private respondent, on April 16, 1992, because of serious business reverses, undertook a
partial suspension of operation resulting in the forced leave for six (6) months of fifteen (15)
rank-and-file employees. The Petitioner Union, in two (2) letters, treated the forced leave as a
“grievance” supposedly because of violation of the CBA with respect to optional retirement and
separation pay grant. The private respondent sought dismissal of the case for the reason that the
Voluntary Arbitrator, not the Labor Arbiter, has the original and exclusive jurisdiction to hear
and decide all grievances arising from the interpretation of the CBA. This was however denied
by the Labor Arbiter and the Supreme Court ‘dismissed the petition’. There was another case
instituted by the petitioners on December 7, 1992 before the NLRC for illegal dismissal or in the
alternative, the payment of CBA benefits. The Labor Arbiter, dismissed the case but directed the
respondent to pay the individual petitioners the amount of P206,959.19, representing
retrenchment benefits.
CASE 495

In the appeal by the petitioners, they questioned why the Decision of the Labor Arbiter did not
touch on the retirement benefits under the CBA, even if the CBA benefits were being raised
repeatedly as one of the causes of action. Another error imputed to the Labor Arbiter has to do
with his not applying the CBA concerning retirement benefits.

ISSUES:

(1) Whether or not the complainants are entitled to optional retirement?

(2) If complainants are entitled to the above benefits, whether or not, they be entitled to 90-day
pay per year of service as optional retirement benefits or 67 days per year of service as
separation assistance grants under the CBA, as the case maybe?

HELD:

No to both issues. The CBA is a written contract, petitioners contend that any cause of action
arising therefrom is governed by the prescriptive period under Article 1144 of the Civil Code not
Article 291 of the Labor Code. This contention is devoid of merit.

Undisputed is the fact that an employer-employee relation exists between the parties in this case.
It is precisely this relation that justified the execution of the CBA. Thus, any money claim arising
from the said agreement is merely a consequence of the employer-employee relation. We take
this occasion to emphasize that the language of Article 291 of the Labor Code does not limit its
application only to “money claims specifically recoverable under said Code,” but covers all
money claims arising from employer-employee relation. Since petitioners’ demand for unpaid
retirement/separation benefits is a money claim arising from their employment by private
respondent, Article 291 of the Labor Code is applicable. Therefore, petitioners’ claim should be
filed within three years from the time their cause of action accrued, or be forever barred by
prescription.

It should be noted further that Article 291 of the Labor Code is a special law applicable to money
claims arising from employer-employee relations; thus, it necessarily prevails over Article 1144
of the Civil Code, a general law. Basic is the rule in statutory construction that “where two
statutes are of equal theoretical application to a particular case, the one designed therefor
specially should prevail.

ECC VS Sanico
321 SCRA 268

FACTS:

Private respondent was a former employee of John Gotamco and Sons. He worked in said
company as wood filer from 1986 until he was separated from employment on 31 December
1991 due to his illness. His medical evaluation report, dated 31 September 1991, showed that he
was suffering from pulmonary tuberculosis (PTB). Subsequent chest x-rays taken diagnostically
confirmed his illness. Private respondent filed with the Social Security System (SSS) a claim for
compensation benefits. SSS denied private respondents claim on the ground of prescription. The
SSS ruled that under Article 201 of the Labor Code, a claim for compensation shall be given due
course only when the same is filed with the System three (3) years for the time the cause of
action accrued. In private respondents case, the SSS reckoned the three-year prescriptive period
on 21 September 1991 when his PTB first became manifest.
CASE 496

When he filed his claim on 9 November 1994, the claim had allegedly already prescribed. On
appeal, petitioner affirmed the decision of the SSS. Private respondent then elevated the case to
the CA, which reversed petitioner‘s decision and granted private respondents claim for
compensation benefits. In ruling that private respondents claim was filed well within the
prescriptive period under the law, the CA reconciled Article 201 of the Labor Code with Article
1144(2) of the Civil Code. Under the latter provision of law, an action upon an obligation created
by law must be filed within ten (10) years from the time the cause of action accrues. Thus, while
private respondents illness became manifest in September 1991, the filing of his compensation
claim on 9 November 1994 was within, even long before, the prescriptive period.

ISSUE:

Whether or not private respondents claim for compensation benefit had already prescribed when
he filed his claim on 9 November 1994.

HELD:

NO. The Court has consistently ruled that disability should not be understood more on its
medical significance but on the loss of earning capacity. Permanent total disability means
disablement of an employee to earn wages in the same kind of work, or work of similar nature
that he was trained for or accustomed to perform, or any kind of work which a person of his
mentality and attainment could do. It does not mean absolute helplessness. Petitioner thus
seriously erred when it affirmed the decision of the SSS denying private respondents claim on
the ground of prescription. In determining whether or not private respondents claim was filed
within the three-year prescriptive period under Article 201 of the Labor Code, petitioner and the
SSS reckoned the accrual of private respondents cause of action on 31 September 1991, when his
PTB became known. This is erroneous.

As an official agent charged by law to implement social justice guaranteed and secured by the
Constitution, the ECC should adopt a liberal attitude in favor of the employee in deciding claims
for compensability especially where there is some basis in the facts for inferring a work
connection with the incident. This kind of interpretation gives meaning and substance to the
compassionate spirit of the law as embodied in Article 4 of the New Labor Code which states
that all doubts in the implementation and interpretation of the provisions of the Labor Code
including its implementing rules and regulations should be resolved in favor of labor.

ULIBAS VS REPUBLIC
G.R. No. L-43320, June 30, 1978

FACTS:

Petitioner-claimant Cecilia V. Ulibas was a classroom teacher employed with Bureau of Public
Schools from 1930 to 1968 with interruption during the time of war. As such classroom teacher,
she handled subjects in the elementary level such as Reading, Writing, Arithmetic, Social
Studies, Health & Science, Music, Language, Arts, FIlipino, Art Education and Work Education.

Sometime in 1966, in the course of employment, claimant began to complain of pains and
inflammation of joints and muscles particularly the knees and ankle especially so during the
night. This condition had been on and off. She also experienced a feeling of general debility,
easy fatigability, dizziness, and fainting spells. Likewise, she suffered from loss of voice and
difficulty in continuous talking in the classroom. She continued to work until the symptoms of
these ailments became more frequent and more severe that it necessitated medical attendance.
CASE 497

After meeting with a doctor, she was diagnosed with chronic laryngiti, anemia hypotension and
chronic warping eczema for which she administered several medicines. However, when the
manifestations of body weakness became more prevailing she was compelled to apply for
retirement because she felt she could no longer work on accont of her disabling ailments.

ISSUE:

Whether or not petitioner's claim for disability compensation is compensable.

HELD:

In deciding the matter in favor of petitioner Ulibas, the SC cited previous cases which ruled in
favor of the employer.

In Bellow vs WCC, the Court held that disability occurs when an employee is disabled from
rendering further service due to his physical inability to perform work in the usual and customary
way. For purpose of the Workmen's Compensation Act, there is disability when there is a loss or
diminution of earning power which is due to an injury arising out of and in the course of the
employment. It is not the injury which is compensated but rather, it is the incapacity to work
resulting in the impairment of one's earning capacity.

CIMAFRANCA V. INTERMEDIATE APPELLATE COURT

FACTS:

Pedro Gurdiel sold a portion of the lot to Perfecto Jalosjos, respondent’s father. The
latter took possession of the portion of the lot and constructed a house on it. Pedro Gurdiel
and the heirs of Dalman executed a "Deed of Extrajudicial partition and confirmation of Previous
Sale". In the deed, Lot 86 was adjudicated to Pedro Gurdiel and Lot 9 to the Dalman’s. Also, in
the deed, Pedro further ratified the sale he made of ¼ interests in Lot 86 to Perfecto.
Subsequently,OTC No. RO-1708 (6515) was cancelled and TCT No. T-4569 was issued. It
appears that some of the heirs of Pedro conveyed their 1/9 share in Lot No. 86 pertaining to the
share of the late father.

The heirs of the deceased Pedro executed an "Extrajudicial Settlement of Estate of

Deceased Person with Simultaneous Deed of Sale and Confirmation of Previous Sales" whereby
3/4 share over Lot No. 86 of the deceased Pedro was first adjudicated to his 8 children in 1/9
CASE 498

share each, except Dominador who had acquired the 1/9 share of his mother and was given 2/9
share; and thereafter, taking cognizance of the various conveyances made by some of the heirs in
favor of Vibesa Gurdiel married to Francisco Cimafranca declared the latter the owner of 7/9
share of 3/4 of the lot. It appears that the other 2/9 shares were acquired by the sisters Eguia, 1/9
share each, who are co-plaintiffs in this case and owners of an adjoining Lot No. 87.

When surveyed, the portion occupied by the petitioners had an area of 487 square meters while
the portion occupied by private respondents had an area of 1,109 square meters as shown in the
Sketch Plan. Petitioners filed a Complaint for Partition and Damages seeking the partition of the
property in question and the re-conveyance by private respondents of the excess portion
they had been allegedly illegally occupying, the demolition and transfer of their residential
building and fence, and damages. Said complaint was amended to include private respondent
Bonifacia. In the answer of private respondents, they pray for the cancellation of TCT No.T-
4569, and for an award of damages by way of counterclaim. Petitioners argue that TCT No. T-
4569 which respondents sought to nullify is and has always been valid and binding against the
whole world, and its validity cannot now be properly raised in the instant suit. The trial court
decided in favor of the respondents. Upon appeal, the CA affirmed trial court’s decision in toto.
Hence, the appeal to the Supreme Court.

ISSUE:

Whether or not after the lapse of 14 years respondent can still question thevalidity of the deed of
extrajudicial partition and subsequently TCT No. T-4569.

HELD:

NO. An action for reconveyance of real property on the ground of fraud must be filed within 4
years from the discovery of the fraud. Such discovery is deemed to have taken place from the
issuance of the certificates of title. Respondents had only4 years from October, 1958 or until
1962 to bring this action which respondents failed to do. They have not taken any step to have
the deed of extrajudicial partition corrected, if it is true as they claim it is, that what had been
sold to their father is 3/4 share of Lot 86 instead of 1/4 share. It is now both too late and bereft of
basis to ask for the cancellation of TCT No. T-4569.

In fact, petitioners' claim that it is private respondents themselves who are in estoppel or are
barred by prescription and laches from questioning the validity and binding effect of TCT No.
4569 is well taken under the circumstances considering particularly the time that has elapsed
since the issuance of the pertinent Torrens Title.

RENO FOODS, INC. V. NLRC

249 SCRA 379

FACTS:

Private respondent was employed by petitioner as a utility worker on January 7, 1989 According
to private respondent, on January 2, 1990, he was verbally informed by Antonio Ong, manager
of petitioner, that he was terminated from employment effective January 3, 1990. Despite several
pleas from private respondent’s father (who was also employed by petitioner) and mother to re-
employ him, private respondent was never allowed to return back to work. On the other hand,
petitioner claims that private respondent failed to report for work on January 2, 1990 and had
completely abandoned his job since then. Thus, on June 18, 1992, or two (2) years and five(5)
months after he was allegedly illegally dismissed, private respondent filed a complaint against
petitioner for illegal. In the proceedings before the Labor Arbiter, private respondent presented
his father and mother as witnesses but chose not to testify himself. After the case had been
CASE 499

submitted for resolution, the Labor Arbiter rendered a Decision dated December 22, 1992
dismissing the complaint for lack of merit.

Private respondent appealed the said Decision of the Labor Arbiter to public respondent, which,
in a Resolution dated April 27, 1993 ordered the Labor Arbiter of origin "to conduct further
proceedings, including but not limited to the testimony of the complainant himself and the
presentation of such other witnesses as would shed light on the issues raised in this case. In the
remanded proceedings before the Labor Arbiter, private respondent presented himself and a
certain Danilo Ballon as witnesses while petitioner presented its Production Superintendent
Romeo Tan as witness together with several documentary evidences. In a Decision dated
February 10, 1994, the Labor Arbiter reversed his Decision dated December 22, 1992 and
ordered that private respondent be reinstated but without backwages.

Both parties appealed the said Decision to public respondent, which in a Decision dated May 30,
1994 affirmed the Labor Arbiter’s Decision. Petitioner filed a Motion for Reconsideration dated
June 30, 1994, which was denied by public respondent in a Resolution dated July 21, 1994.

ISSUE:

Whether or not there is a grave abuse of discretion on the part of the Labor Arbiter and the
NLRC in holding that there was no abandonment on the part of the private respondent and that
the latter was illegally dismissed.

HELD:

No. The jurisdiction of the Supreme Court to review decisions of the NLRC in a petition for
certiorari under Rule 65 of the Rules of Court is confined to issues of jurisdiction or grave abuse
of discretion. In termination cases, the burden of proving just and valid cause for dismissing an
employee from his employment rests upon the employer, and the latter’s failure to do so would
result in a finding that the dismissal is unjustified. Abandonment as adjust and valid ground for
termination means the deliberate, unjustified refusal of the employee to resume his employment,
and the burden of proof is on the employer to show a clear and deliberate intent on the part of the
employee to discontinue employ- merit without any intention of returning. The petitioner failed
to discharge this burden. Moreover, if the private respondent was dismissed because of his
abandonment of work, the petitioner should have given him a written notice of termination in
accordance with Section 2, Rule XIV, Book V of the Omnibus Rules Implementing the Labor
Code. But, the petitioner failed to present as evidence such notice despite its policy to record and
file every transaction including notices of termination.

HAGONOY RURAL BANK V. NLRC

FACTS:

This is a special civil action for certiorari seeking the reversal of the decision of 20 June 1995 1
and the resolution of 25 August 1995 2 of public respondent National Labor Relations
Commission (NLRC), Third Division, in NLRC CA No. 007692-94. The former modified the
decision of 28 July 1994 3 of Labor Arbiter Dominador A. Saludares in the consolidated NLRC
Cases Nos. RAB-III-09-5257-93 and RAB-III-02-5488-94 finding petitioner Hagonoy Rural
Bank, Inc., guilty of illegally dismissing the private respondents, and directing it to immediately
reinstate them and pay their back wages, 13th month pay, damages, and attorney's fees. The
latter denied the motion to reconsider the decision of 20 June 1995.

ISSUES:
CASE 500

(1) Whether or not public respondent NLRC committed grave abuse of discretion in its
challenged decision and resolution.

(2) Whether the first nine private respondents were illegally dismissed.

HELD:

(1) No, the NLRC committed no grave abuse of discretion in affirming it with modification and
in holding that the private respondents did not abandon their employment.

For abandonment to exist, two elements must concur: (1) the failure to report for work or
absence without valid or justifiable reason; and (2) a clear intention, as manifested by some overt
acts, to sever the employer-employee relationship, with the second element as the more
determinative factor. Mere absence is not sufficient; and 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.

(2) Yes. The private respondents had chosen to go on leave for one month effective 16 October
1992, the choice was not of their complete free will because the other alternative given by the
petitioner was suspension. The threat of suspension thus became the proximate cause of the
"leave." It was a coerced option imposed by the petitioner. That the petitioner had in fact in mind
private respondents' suspension was finally made evident by its refusal to take them back after
the expiration of the leave. The petitioner extended their leave for another month with a promise
to pay them salaries. After the expiration of the "extended" leave, the petitioner still refused to
accept them back. Ineluctably, the private respondents were constructively dismissed from 16
October 1992.

The case of private respondent Rodolfo Manalo must be treated separately. He was preventively
suspended on 23 October 1992 because he was one of petitioner's employees at its Money Shop
allegedly found by a Central Bank examiner to have made "cash abstractions." After the
expiration of the suspension on 23 November 1992, Manalo reported to work, but petitioner
prevented him from entering its premises.