1. PASEI v.
Drilon participation “in policy and decision-making processes
G.R. No. 81958
June 30, 1988
By: Ju
Topic: Police Power of the State
Petitioners: Philippine Association of Service Exporters, Inc.
Respondents: Hon. Franklin M. Drilon as Secretary of Labor and
Employment, and Tomas D. Achacoso, as Administrator of the
Philippine Overseas Employment Administration
Ponente: J. Sarmiento
DOCTRINE
• Police power is defined as state authority to enact legislation that
may interfere with personal liberty or property in order to promote
the general welfare.
• Department Order No. 1 is a valid implementation of the Labor
Code, in particular, its basic policy to "afford protection to labor,"
pursuant to the respondent Department of Labor's rule-making
authority vested in it by the Labor Code. "Protection to labor" does
not signify the promotion of employment alone. What concerns the
Constitution more paramountly is that such an employment be
above all, decent, just, and humane.
FACTS
• The petitioner, engaged principally in the recruitment of Filipino
workers, male and female, for overseas placement, challenges the
Constitutional validity of Department Order No. 1, Series of 1988, of
the Department of Labor and Employment, in the character of
“GUIDELINES GOVERNING THE TEMPORARY SUSPENSION OF
DEPLOYMENT OF FILIPINO DOMESTIC AND HOUSEHOLD
WORKERS,” in this petition for certiorari and prohibition.
• Specifically, the measure is assailed for “discrimination
against males or females;” that it “does not apply to all Filipino
workers but only to domestic helpers and females with similar
skills;” and that it is violative of the right to travel. It is held
likewise to be an invalid exercise of the lawmaking power,
police power being legislative, and not executive, in character.
• In its supplement to the petition, PASEI invokes Section 3, of
Article XIII, of the Constitution, providing for worker
affecting their rights and benefits as may be provided by law.”
• Department Order No. 1, it is contended, was passed in the
absence of prior consultations. It is claimed, finally, to be in
violation of the Charter’s non-impairment clause, in addition to
the “great and irreparable injury” that PASEI members face
should the Order be further enforced.
• The Solicitor General invokes the police power of the state to uphold
the validity of the Guidelines.
ISSUE
Whether the Department Order of the Respondent is in violation of the
Equal
Protection Clause and Discriminatory against Sexes (NO)
HELD/RATIO
• Department Order No. 1 is a police power measure. Police
power is defined as state authority to enact legislation that may
interfere with personal liberty or property in order to promote the
general welfare.
• There is no question that Department Order No. 1 applies only to
"female contract workers," but it does not thereby make an undue
discrimination between the sexes. It is well-settled that "equality
before the law" under the Constitution does not import a perfect
Identity of rights among all men and women. It admits of
classifications, provided that
• (1) such classifications rest on substantial distinctions -
The Court is satisfied that the classification made-the
preference for female workers — rests on substantial
distinctions. The sordid tales of maltreatment suffered by
migrant Filipina workers, even rape and various forms of
torture, confirmed by testimonies of returning workers, are
compelling motives for urgent Government action… The
same, however, cannot be said of male workers; there is no
evidence that, except perhaps for isolated instances, Filipino
men abroad have been afflicted with an identical predicament.
• (2) they are germane to the purposes of the law -
Unquestionably, it is the avowed objective of Department
Order No. 1 to "enhance the protection for Filipino female
overseas workers" this Court has no quarrel that in the midst
 of the terrible mistreatment Filipina workers have suffered
abroad, a ban on deployment will be for their own good and
welfare.
• (3) they are not confined to existing conditions - it is
intended to apply indefinitely so long as conditions of
maltreatment and torture exist
• (4) they apply equally to all members of the same class -
applicable to all female domestic overseas workers
• Likewise, the right to travel is subject, among other things, to the
requirements of "public safety," "as may be provided by law."
Further, the right granted by the provision on worker participation "in
policy and decision-making processes affecting their rights and
benefits" must submit to the demands and necessities of the State's
power of regulation. Also, the non-impairment clause of the
Constitution, invoked by the petitioner, must yield to the loftier
purposes targeted by the Government.
• Department Order No. 1 is a valid implementation of the Labor
Code, in particular, its basic policy to "afford protection to
labor," pursuant to the respondent Department of Labor's rule-
making authority vested in it by the Labor Code. "Protection to
labor" does not signify the promotion of employment alone. What
concerns the Constitution more paramountly is that such an
employment be above all, decent, just, and humane.
• Finally, Department Order No. 1 does not constitute an invalid
exercise of legislative power. It is true that police power is the
domain of the legislature, but it does not mean that such an
authority may not be lawfully delegated. The Labor Code itself
vests the Department of Labor and Employment with
rulemaking powers in the enforcement whereof.
 2.St Lukes Medical Center Employees Association-AFW v NLRC.
GR.162053
March 7,2007
By: MJB
Topic: Police Power of the State
Petitioners: St Lukes Medical Center Employees Association- AFW and
Maribel Santos
Respondents: NLRC and St Lukes Medical Center
Ponente: Azcuna,J
DOCTRINE:
 While the right of workers to security of tenure is guaranteed by the
Constitution, its exercise may be reasonably regulated pursuant to
the police power of the State to safeguard health, morals, peace,
education, order, safety, and the general welfare of the people.
Consequently, persons who desire to engage in the learned professions
requiring scientific or technical knowledge may be required to take an
examination as a prerequisite to engaging in their chosen careers.
 In the field of medicine, the practice of which in all its branches has been
closely regulated by the State. Regulation of this field is a reasonable
method of protecting the health and safety of the public to protect the
public from the potentially deadly effects of incompetence and ignorance
among those who would practice medicine. The same rationale applies
in the regulation of the practice of radiologic and x-ray technology. It
should be noted that the police power embraces the power to
prescribe regulations to promote the health, morals, educations,
good order, safety or general welfare of the people. The state is
justified in prescribing the specific requirements for x-ray
technicians and/or any other professions connected with the health
and safety of its citizens
FACTS :
 Oct. 13, 1984: Maribel Santos (Santos) was hired as X-ray Technician
in the Radiology Department of St. Luke’s Medical Center Inc. (SLMC).
 Maribel is a graduate of Associate in Radiologic Technology from
The Family Clinic Incorporated School of Radiologic Technology.
 April 22, 1992: Congress passed and enacted R.A. No. 7431
(Radiologic Technology Act of 1992)
 “no person shall practice or offer to practice as radiology
and/or x-ray technologist in the Philippines without having
obtained the proper certificate of registration from the Board
of Radiologic Technology.
 Sept. 12, 1995: SLMC issued final notice to all practitioners of Radio
Technology to comply with the requirement of R.A. No. 7431 by Dec.
31, 1995. Otherwise, employee will be transferred to an area which
does not require a license to practice if a slot is available.
 Three (3) notices were given to Santos by SLMC’s Director of Institute
of Radiology to comply with R.A. 7431 by taking and passing the
examination required for the issuance of the certificate.
1) March 4, 1997: final notice to Santos requiring her to comply
with Republic Act. No. 7431 by taking and passing the
examination scheduled in June 1997; otherwise, SLMC may
be compelled to retire her from employment should there be
no other position available where she may be absorbed.
2) May 14, 1997: memorandum directing Santos to submit her
PRC Registration form/Examination Permit per
Memorandum dated March 4, 1997
3) March 13, 1998: advising her that only a license can assure
her of her continued employment at the Institute of Radiology
of SLMC and SLMC is giving her the last chance to take and
pass the board examination scheduled in June 1998;
otherwise, private SLMC shall be constrained to take action
which may include her separation from employment.
 SLMC’s Director of Institute of Radiology issued 2 Notices to Santos for
her failure to comply with the requirements of the R.A.:
1) Nov. 3, 1998: informing Santos that the management of
SLMC has approved her retirement in lieu of separation pay
2) Nov. 26, 1998: “Notice of Separation from the Company”
effective December 30, 1998 in view of the Santos’ refusal to
accept SLMC’s offer for early retirement. The notice also
states that while SLMC exerted its efforts to transfer
petitioner Santos to other position/s, her qualifications do not
fit with any of the present vacant positions in the hospital.
 Lappay, President of the Philippine Association of Radiologic
Technologists, Inc., wrote to Betita, Personnel Manager of SLMC,
requesting to give “due consideration for not passing yet the Board of
Examination for X-ray Technology,” “by giving them an assignment in
any department of your hospital awaiting their chance to pass the future
Board Exam.
 Betita issued “Notice of Separation from the Company” to Santos
effective February 5, 1999 after the Santos failed to present/submit her
appeal for rechecking to the Professional Regulation Commission
(PRC) of the recent board examination which she took and failed.
 March 2, 1999: Santos filed a complaint against SLMC for illegal
dismissal and non-payment of salaries, allowances and other monetary
benefits. She also prayed for the award of moral and exemplary
damages plus attorney’s fees.
  September 5, 2000: Labor Arbiter came out with a Decision ordering  The law is clear that the Certificate of Registration cannot be substituted
SLMC to pay Santos 115,500.00) representing her separation pay. All by any other requirement to allow a person to practice as a Radiologic
other claims of petitioner were dismissed for lack of merit. Technologist and/or X-ray Technologist (Technician).”
 Dissatisfied, petitioner Santos perfected an appeal with NLRC.  The records bear out the fact that petitioner Santos was given ample
 On August 23, 2002: NLRC promulgated its Decision affirming the opportunity to qualify for the position and was sufficiently warned that her
Decision of the Labor Arbiter. It likewise denied the Motion for failure to do so would result in her separation from work in the event
Reconsideration filed in its Resolution promulgated on December 27, there were no other vacant positions to which she could be transferred.
2002. Despite these warnings, petitioner Santos was still unable to comply and
Santos filed petition for Certiorari with CA which affirmed NLRC’s decision. pass the required exam. To reiterate, the requirement for Board
Hence the case. certification was set by statute.
 Labor laws do not authorize interference with the employer’s judgment in
ISSUE: the conduct of the latter’s business. SLMC is free to determine, using its
 WON Santos was illegally dismissed by SLMC on the basis of her own discretion and business judgment, all elements of employment,
inability to secure a certificate of registration from the Board of Radiologic “from hiring to firing” except in cases of unlawful discrimination or those
Technology? - NO which may be provided by law. None of these exceptions is present in
the instant case.
HELD/RATIO :  Since SLMC is engaged in the hospital and health care business, it
 No. SLMC is not guilty of illegal dismissal. is a proper subject of the cited law; thus, having in mind the legal
 RA 7432 is a valid exercise of police power. SLMC is merely requirements of the laws, SLMC cannot close its eyes and let
exercising its management prerogative and these rights are entitled Santos’ private interest override public interest.
respect and enforcement in the interest of fair play. There was no
malice imputed upon an employer where the separation of an FALLO:
employee is undertaken in conformance with an existing law as in  WHEREFORE, the petition is DENIED for lack of merit. Costs against
this case. petitioners.
 Requirement for a certificate of registration is stated in Sec. 15 of R.A.
No. 743:
Sec. 15 Requirement for the Practice of Radiologic
Technology and X-ray Technology.—Unless exempt from
the examinations under Sections 16 and 17 hereof, no
person shall practice or offer to practice as a radiologic
and/or x-ray technologist in the Philippines without having
obtained the proper certificate of registration from the Board.
the sole cause for petitioner Santos’ separation from work is
her failure to pass the board licensure exam for X- ray
technicians, a precondition for obtaining the certificate of
registration from the Board
 To quote NLRC’s decision: The enactment is recognized as an exercise
of the State’s inherent police power. It should be noted that the police
power embraces the power to prescribe regulations to promote the
health, morals, educations, good order, safety or general welfare of
the people. The state is justified in prescribing the specific
requirements for x-ray technicians and/or any other professions
connected with the health and safety of its citizens.
 3 Magana v Medicard
December 15, 2010
G.R. No. 174833
Shang
Topic: Police Power
Petitioner: Myrna P. Magana (Magana)
Respondent: Medicard Philippines, Inc. (Medicard) and Court of
Appeals
Ponente: Carpio, J.
Doctrine: The unusual, mandatory order by law to execute
reinstatement orders pending appeal is a police power measure,
grounded on the theory that the preservation of the lives of the
citizens is a basic duty of the State that is more vital than the
preservation of corporate profits.
Facts:
1. In 1990, Respondent Medicard hired Petitioner Magana as
company nurse whom Medicard detailed to its corporate client,
the Manila Pavilion Hotel. Initially hired on probation, she
became a permanent employee in 1993.
2. In 1994, Medicard was summarily replaced with another nurse.
Medicard then offerd Magan the position of liaison officer.
3. Magana, finding the offer unacceptable and with her continued
non-assignment, sued Medicard and Manila Pavilion in the
NLRC for illegal dismissal and payment of benefits and
damages.
4. Labor Arbiter ruled the Medicard was a mere labor contractor
for the Manila Pavilion which exercised control and termination
powers over Magana. The summary replacement was without
cause and of bad faith. It ordered the Manila Pavilion to
reinstate Magana and with Medicard, be solidarily liable for
backwages, etc.
5. Medicard and Manila Pavilion appealed to the NLRC.
6. The NLRC affirmed but modified the LA ruling. It found
Medicard, not Manila Pavilion, as Magana’s employer, and
held it liable for constructive illegal dismissal and for the
payment of separation pay, 13th month pay, attorney’s fees,
and reinstatement wages for Medicard’s failure to reinstate her
pending appeal as required by the Labor Code.
7. Medicard appealed to the CA.
8. The CA found Magana’s dismissal with cause. It found that
Medicard failed to assign Magana to a suitable position within
six months after her replacement. The failure is “[a]nalogous to
a suspension of operations of an enterprise”. This entitled her
to separation pay only. The CA deleted reinstatement wages.
9. Magana filed this petition. She concedes the legality of her
constructive dismissal and instead contends that the CA erred
in deleting the reinstatement wages the NLRC awarded in her
favor.
Issue: Whether Magana is entitled to draw wages under an arbiter’s
ruling ordering her reinstatement even though such order is
subsequently reversed on appeal?
Ratio: YES.
1. The SC applied the second paragraph of Article 233 of the
Labor Code, It is a police power measure and is mandatory
and immediately executory. The requirement for employers to
pay wages to employees obtaining favorable rulings in illegal
dismissal suits pending appeal is statutorily mandated under
the second paragraph of Article 223 of the Labor Code. It
gives employers two options: (1) to actually reinstate the
dismissed employees or, (2) constructively reinstate them in
the payroll.
Article 223. Appeal. - x x x x
In any event, the decision of the Labor Arbiter
reinstating a dismissed or separated employee, insofar
as the reinstatement aspect is concerned, shall
immediately be executory, even pending appeal The
employee shall either be admitted back to work under
 the same terms and conditions prevailing prior to his
dismissal or separation or, at the option of the
employer, merely reinstated in the payroll. The posting
of a bond by the employer shall not stay the execution
for reinstatement provided herein. (Emphasis supplied)

2. This unusual, mandatory order by law to execute

reinstatement orders pending appeal, unheard of in ordinary
civil proceedings, is a police power measure, grounded on the
theory that the preservation of the lives of the citizens is a
basic duty of the State that is more vital than the preservation
of corporate profits. The state may authorize an immediate
implementation, pending appeal, of a decision reinstating a
dismissed or separated employee since that saving act is
designed to stop, allhough temporarily, since the appeal may
be decided in favor of the appellant, a continuing threat or
danger to the survival or even the life of the dismissed or
separated employee and its family.
3. The employee shall either be admitted back to work under the
same terms and conditions prevailing prior to his dismissal or
separation or, at the option of the employer, merely reinstated
in the payroll. This must be done immediately upon the filing of
their appeal, without the need of any executory writ.
4. Even if the order of reinstatement of the Labor Arbiter is
reversed on appeal, it is obligatory on the part of the employer
to reinstate and pay the wages of the dismissed employee
during the period of appeal until reversal by the higher court.

WHEREFORE, we GRANT the petition We REVERSE the Decision

dated 11 April 2006 and the Resolution dated 5 September 2006 of
the Court of Appeals insofar as they deleted the award of
reinstatement wages to petitioner Myrna P. Magana. We ORDER
respondent Medicard Philippines, Inc. to pay petitioner reinstatement
wages computed from the filing of respondent's appeal of the labor
arbiter's decision on 5 October 2000 until its receipt of the Court of
Appeals' Decision dated 11 April 2006.
 4 JMM Promotion and Management v CA
GR 120095
Aug 5 1996
Calaguas
Petitioners: JMM Promotion and Management, Inc, and Kary International,
Inc
Respondents: Hon. Court of Appealls, Hon. Ma. Nieves Confessor (Sec of
DOLE), Hon. Jose Brillantes (acting Sec of DOLE), Hon. Felicisimo Joson
(Administrator of POEA)
Ponente: Kapunan, J
Topic: Police Power
Facts
1. President Cory ordered a total ban against the deployment of
performing artists to Japan and other foreign destinations after the
death of Maricris Sioson, an OFW and performing artist deployed in
Japan
a. Later rescinded after the overseas employment industry
promised to extend their full support in fixing the system of
deployment
2. The PH government for their part, through the Sec of Labor and
Employment issued Department Order No 28 (DO 28)
a. DO 28 created the Entertainment Industry Advisory Council
(EIAC)
b. EIAC issues the guidelines on the training, testing
certification and deployment of performing artists abroad
3. With the recommendation of the EIAC, the Sec of Labor issued DO 3
a. DO 3 established new screening requirements which
included training, testing, and certification before the
performing artists were deployed
4. Performing artists who successfully pass the screening are issued an
Artist’s Record Book (ARB)
a. ARB is required prior to processing of any contract of
employment by the POEA
b. In short, DOLE introduced the ARB requirement before
anyone could be deployed as an entertainment artist
abroad
5. DOLE then issued more DOs (3-A, 3-B, 3-E, 3-F) which fine-tuned
and implemented the new system for deployment of entertainment
professional abroad
a. 3-A: additional guidelines for the training, testing,
certification, and deployment
b. 3-B: requires the artists to show proof of academic and skills
training as well as passing the required tests before the ARB
can be processed
c. 3-E: the minimum salary of a performing artist bound for
Japan is $600, and provides for the authorized deductions
therefrom
d. 3-F: guideline for the issuance of the ARB for returning
artists
i. Returning artist shall undergo a shorter program but
still have to pass the academic test
6. Federation of Entertainment Talent Managers of the Philippines
(FETMOP) initiated a class suit questioning the above DOs
a. In short, petitioners are questioning the validity of the
ARB requirement
b. JMM Promotion and Management, Inc, and Kary
International, Inc (the petitioners) are intervenors in this case
via a Motion for Intervention
7. Petitioners sought for the issuance of a Writ of Preliminary Injunction
against the DOs
a. Trial Court dismissed the complaint
b. It was appealed to the CA but likewise dismissed on the
ground that the DOs were valid exercise of Police Power
Issue
Whether the DOs issued by the DOLE were valid exercise of Police Power
(Yes)
Held
Yes. The SC affirms the decision of the CA and agrees that the DOs issued
by the DOLE were valid exercise of Police Power.
Police Power
● Salus populi suprema lex (the good of the people shall be the
supreme law)
● It is an inherent attribute of sovereignty, which is regulatory in nature
o Extends to all public needs
o “the law of overruling necessity” (J. Malcom, Rubi v
Provincial Board of Mindoro)
● Least limitable of governmental powers
● Parens patriae (parent of the nation: the government is responsible
for the protection of its citizens)
● It concerns with government enactments which precisely interfere
with personal liberty or property in order to promote the general
welfare of the common good
Presumption of Validity and Justification for the DOs
● DOs issued by DOLE are presumed to be valid
o Burden to disprove the validity of DOs lies with the
petitioners
o To disprove the validity, petitioners needed to demonstrate
that:
▪ the DOs were not for the enhancement of the public
welfare or
▪ that the DOs were issued arbitrarily or unreasonably
● PH is big labor sending country in Asia
o Many/most of those deployed were women
o Many were also undocumented
● Judicial notice of the trend of exploitative conditions
o Such as physical and personal abuse, rape, various forms of
torture
o Many were forced into prostitution
● The DOs issued by the DOLE were meant to regulate and protect
those who were being deployed abroad
o DO 3 was for the prevention of deployment to high-risk
destinations
o The ARB requirement also separated those real artists and
performers from amateurs who are merely eager to accept
any job available and thus are vulnerable to exploitation
● DOs were aimed at enhancing the safety and security of the
deployed Filipino artists
● Constitution mandates that the government must extend the fullest
protection to overseas workers
o The State affirms labor as a primary social economic force. It
shall protect the rights of workers and promote their welfare.
(Const, Art II, Sec 18)
o The State shall afford full protection to labor, local and
overseas, organized and unorganized and promote full
employment and equality of employment opportunities for all
(Const, Art XIII, Sec 1)
● Promotion of full employment cannot take a backseat to the duty to
protect the Filipino workforce, local or overseas.
● Employment must be just and humane (PASEI v Drilon)
No right is absolute
● Petitioner contend that profession, trade or calling is a property right
and is constitutionally guaranteed
o That the ARB deprives them of their right
● BUT no right is absolute and regulation of profession, trade, calling,
business, or trade has been upheld as a valid exercise of Police
Power
o Provided that it is for the preservation of the State, the public
health and welfare, and public morals
● sic utere tuo ut alienum non laedas (legislative may define the mode
and manner in which one may enjoy his property so as not to prose
injury to himself and to others)
● Regulating entry to the practice of trade or profession is a valid
exercise of Police Power
● Non-impairment clause is likewise not absolute
o It must yield to the loftier purposes targeted by the
government (PASEI v Drilon)
o May be limited by Police Power as long as it is for the public
welfare
No violation of the equal protection clause
● The DOs clearly apply to all performing artists and entertainers for
deployment abroad
o A measure to enable our government to assume a measure
of control on those being deployed and to protect them from
possible exploitation
● Equal protection clause does not require absolute equality but merely
that all persons be treated alike under like conditions both as to
privileges conferred and liabilities imposed
o It does not forbid classification so long as such classification
is based on real and substantial differences
o Elements of valid classification
▪ There is substantial distinction
▪ Germane to the purpose of the law
▪ Applies present and future
▪ Applies equally to all members of the same class
 5 EAGLE SECURITY AGENCY v. NLRC
GR NO. 81314
May 18, 1989
BDC
Topic: Police Power of the State
Petitioners: Eagle Security Agency
Respondents: NLRC, LABOR ARBITER EDUARDO G. MAGNO,
RODOLFO DEQUINA, AVELINO M. NARVAEZ, JACULO J.
JEROME, ROLANDO N. VALENCIA, CLODUALDO N. ANGRA,
JOSE SAMONTE, RUEL A. LAGASTOS, PRISCILO MALDO, JR.,
R.C. DELA CRUZ, JOSE AJEDA, JOSE ANASTACIO, LAURO
ROBERTO, ISMAEL SALACATA, ULDARICO CAMU, JESUS
CARILLO, and DIORITO BRAGA
Ponente: Cortes, J.
DOCTRINE: Labor standard legislations enacted to alleviate the plight
of the workers whose wages barely meet the spiralling costs of their
basic needs. They are ordered precisely to ensure the workers'
health, efficiency and well-being towards achieving the country's goal
of ensuring increased productivity and viability of business and
industry. Thus, falling under the police power of the State.
FACTS
● Philippine Tubercolosis Society Inc. (PTSI) and the petitioner
entered into a contract for security services wherein the latter
agreed to provide security guards in the former’s premises
from November 2, 1979 to July 31, 1985.
o Private respondents were assigned by EAGLE to PTSI.
● On Nov. 5, 1985, a complaint was filed by private respondents
against PTSI and EAGLE for unpaid wage and allowance
increases under Wage Orders Nos. 2, 3, 5 and 6 with interest,
damages and attorneys fees.
● On Nov. 27, 1987, the labor arbiter ordered PTSI and EAGLE
to jointly and severally pay all complainants of their unpaid
wages and allowances under the said Wage Orders, but
dismissed the claim for damages and attorneys fees.
● Both PTSI and EAGLE filed their MRs, but both were denied
by the NLRC on December 29, 1987 for lack of merit.
● PTSI and EAGLE filed separate petitions for certiorari with the
SC, but on motion of PTSI, both petitions were consolidated.
They also filed a TRO to enjoin the NLRC from enforcing said
Nov. 27 and Dec. 29 resolutions.
o Both PTSI and EAGLE point to the other as the one
who should be solely liable for paying the increases.
▪ PTSI alleges that payment of wage and
allowance increases under Wage Orders Nos.
2, 3, 5 and 6 should be borne exclusively by
EAGLE pursuant to the provision in Art. VII Sec.
3 of their contract:
“AGENCY hereby binds itself to pay its employees in
accordance with the provision of the New Labor
Code, as amended, Eight Hour Labor Law, the
Minimum Wage Law, and the other laws, and/or
decrees governing security agency. AGENCY
shall be solely responsible for the payment
of all indemnities to its employees which
may arise under PD No. 442, as amended,
and shall comply with the provisions of all
other Philippine Laws relative to its
employees....”
▪ PTSI also alleges that it is exempt from
payment under the subject Wage Orders
because it is a public sector employer while it
cover only private sector employers.
Furthermore, PTSI also contends that upholding
the NLRC would be violative of the
Constitutional prohibition against impairment of
contracts.
▪ EAGLE, on the other hand, invokes the
provision common to Wage Order Nos. 3, 5 and
6 which provides:
“In case of contracts for construction projects
and for security, janitorial and similar
services, the increase in the minimum
wage and allowance rates of the
workers shall be borne by the
principal or client of the
construction/service contractor and
the contract shall be deemed
amended accordingly..”

ISSUE
1. WON both the the principal and contractor has joint liability for the
payment of the minimum wage and cost of living allowance increases
to security guards under Wage Orders Nos. 2, 3, 5 and 6.
2. WON ruling of the NLRC is violative of the Constitutional prohibition
against impairment of contracts. [MAIN ISSUE]
HELD/RATIO
NLRC acted correctly in ordering the PTSI and EAGLE to jointly and
severally pay the wage and allowance increases to the security
guards.
The solidary liability for the amounts due the security guards finds
support in Arts. 106, 107 and 109 of the Labor Code. This is
mandated by the code to assure compliance of the provisions therein
including the statutory minimum wage. This joint and several liability
facilitates, if not guarantees, payment of the workers' performance of
any work, task, job or project, thus giving the workers ample
protection as mandated by the 1987 Constitution [See Article II Sec.
18 and Article XIII Sec. 3]. The solidary liability of PTSI and EAGLE,
however, does not preclude the right of reimbursement from his co-
debtor by the one who paid [See Article 1217, Civil Code]. It is with
respect to this right of reimbursement that petitioners can find support
in the aforecited contractual stipulation and Wage Order provision.
In view of the foregoing, the security guards should claim the amount
of the increases from EAGLE, being their employer. Under the Labor
Code, in case the agency fails to pay them the amounts claimed,
PTSI should be held solidarily liable with EAGLE [Articles 106,107
and 109]. Should EAGLE pay, it can claim an adjustment from PTSI
for an increase in consideration to cover the increases payable to the
security guards because of the contract between these entities.
Premises considered, the security guards' immediate recourse for the
payment of the increases is with their direct employer, EAGLE.
However, in order for the security agency to comply with the new
wage and allowance rates it has to pay the security guards, the Wage
Orders made specific Provision to amend existing contracts for
security services by allowing the adjustment of the consideration paid
by the principal to the security agency concerned. In view of the
foregoing, the security guards should claim the amount of the
increases from EAGLE. Under the Labor Code, in case the agency
fails to pay them the amounts claimed, PTSI should be held solidarily
liable with EAGLE [Articles 106,107 and 109]. Should EAGLE pay, it
can claim an adjustment from PTSI for an increase in consideration to
cover the increases payable to the security guards since there has
been no amendment to the service contract.
THE NLRC RULING DOES NOT VIOLATE THE PROHIBITION ON
IMPAIRMENT OF CONTRACTS IN THE CONSTITUTION.
Time and again, this Court has rejected this line of reasoning in
sustaining the validity and constitutionality of labor and social
legislations like the Blue Sunday Law, compulsory coverage of private
sector employees in the Social Security System, and the abolition of
share tenancy enacted pursuant to the police power of the State. 
The Wage Orders are no different from the aforecited laws. They are
labor standard legislations enacted to alleviate the plight of the
workers whose wages barely meet the spiralling costs of their
basic needs. The increase in the minimum wage and the cost of
living allowance was ordered precisely to ensure the workers'
health, efficiency and well-being towards achieving the country's
goal of ensuring increased productivity and viability of business
and industry [See Whereas Clause of the Wage Orders].
WHEREFORE, in view of the foregoing, the petitions in G.R. No.
81314 and G.R. No. 81447 are hereby DISMISSED and the decision
and resolution of the NLRC in NLRC-NCR-11-3652-85 dated
November 27, 1987 and December 29, 1987, respectively, are
AFFIRMED. The temporary restraining order issued by the Court on
June 20, 1988 is hereby LIFTED and SET ASIDE. 
SO ORDERED.
 6. Calalang v. Williams
G.R. No. 47800 / 2 DEC 1940 / Laurel, J.
By: RAD
TOPIC: Police Power defined
PETITIONER: Maximo Calalang
RESPONDENT: A.D. Williams et al
DOCTRINE:
FACTS:
● Maximo Calalang brought before this petition for a writ of
prohibition against the respondents, A. D. Williams, as
Chairman of the National Traffic Commission; Vicente
Fragante, as Director of Public Works; Sergio Bayan, as Acting
Secretary of Public Works and Communications; Eulogio
Rodriguez, as Mayor of the City of Manila; and Juan
Dominguez, as Acting Chief of Police of Manila.
● It is alleged in the petition that:
○ The National Traffic Commission resolved to
recommend to the Director of Public Works and to the
Secretary of Public Works and Communications that
animal-drawn vehicles be prohibited from passing
certain streets at given times, one year from the date of
the opening of the Colgante Bridge to traffic;
■ Rosario Street extending from Plaza Calderon
de la Barca to Dasmariñas Street, 7:30 am -
12:30 pm and 1:30 pm to 5:30 pm
■ Rizal Avenue extending from the railroad
crossing at Antipolo Street to Echague Street,
from 7 am to 11 pm
○ This recommendation was in pursuance of the
provisions of C.A. 548 which authorizes the Director of
Public Works, with the approval of the Secretary of
Public Works and Communications, to promulgate
rules and regulations to regulate and control the use of
and traffic on national roads;
○ The Director of Public Works, recommended the
approval of the recommendation.
○ The Secretary of Public Works and Communications
approved the recommendation.
○ The Mayor of Manila and the Acting Chief of Police of
Manila enforced the rules and regulations thus
adopted;
○ As a consequence of such enforcement, all animal-
drawn vehicles are not allowed to pass and pick up
passengers in the places above-mentioned to the
detriment not only of their owners but of the riding
public as well.
● It is contended by the petitioner that the rules and regulations
promulgated by the respondent pursuant to the provisions of
C.A. 548 constitute an unlawful interference with legitimate
business or trade and abridge the right to personal liberty and
freedom of locomotion.
ISSUE: Whether the rules and regulations promulgated in pursuance
of CA 548 is a valid exercise of police power. YES.
RULING:
● Commonwealth Act No. 548 was passed by the National
Assembly in the exercise of the paramount police power of the
state.
● Said Act aims to promote safe transit upon and avoid
obstructions on national roads, in the interest and convenience
of the public. The National Assembly was prompted by
considerations of public convenience and welfare. It was
inspired by a desire to relieve congestion of traffic. which is, to
say the least, a menace to public safety.
● Public welfare, then, lies at the bottom of the enactment of
said law, and the state in order to promote the general welfare
may interfere with personal liberty, with property, and with
 business and occupations. Persons and property may be
subjected to all kinds of restraints and burdens, in order to
secure the general comfort, health, and prosperity of the state.
To this fundamental aim of our Government the rights of the
individual are subordinated. Liberty is a blessing without which
life is a misery, but liberty should not be made to prevail over
authority because then society will fall into anarchy. Neither
should authority be made to prevail over liberty because then
the individual will fall into slavery. The citizen should achieve
the required balance of liberty and authority in his mind
through education and personal discipline, so that there may
be established the resultant equilibrium, which means peace
and order and happiness for all. The moment greater authority
is conferred upon the government, logically so much is
withdrawn from the residuum of liberty which resides in the
people. The paradox lies in the fact that the apparent
curtailment of liberty is precisely the very means of insuring its
preservation.
● The scope of police power keeps expanding as civilization
advances. In Dobbins v. Los Angeles, "the right to exercise the
police power is a continuing one, and a business lawful today
may in the future, because of the changed situation, the
growth of population or other causes, become a menace to the
public health and welfare, and be required to yield to the public
good."
● In People v. Pomar, it was observed that "advancing
civilization is bringing within the police power of the state today
things which were not thought of as being within such power
yesterday. The development of civilization, the rapidly
increasing population, the growth of public opinion, with an
increasing desire on the part of the masses and of the
government to look after and care for the interests of the
individuals of the state, have brought within the police power
many questions for regulation which formerly were not so
considered."
● The petitioner finally avers that the rules and regulations
complained of infringe upon the constitutional precept
regarding the promotion of social justice to insure the well-
being and economic security of all the people. The promotion
of social justice, however, is to be achieved not through a
mistaken sympathy towards any given group. Social justice is
"neither communism, nor despotism, nor atomism, nor
anarchy," but the humanization of laws and the equalization of
social and economic forces by the State so that justice in its
rational and objectively secular conception may at least be
approximated. Social justice means the promotion of the
welfare of all the people, the adoption by the Government of
measures calculated to insure economic stability of all the
competent elements of society, through the maintenance of a
proper economic and social equilibrium in the interrelations of
the members of the community, constitutionally, through the
adoption of measures legally justifiable, or extra-
constitutionally, through the exercise of powers underlying the
existence of all governments on the time-honored principle of
salus populi est suprema lex.
● Social justice, therefore, must be founded on the recognition of
the necessity of interdependence among divers and diverse
units of a society and of the protection that should be equally
and evenly extended to all groups as a combined force in our
social and economic life, consistent with the fundamental and
paramount objective of the state of promoting the health,
comfort, and quiet of all persons, and of bringing about "the
greatest good to the greatest number."cralaw virtua1aw library
DISPOSITION
In view of the foregoing, the writ of prohibition prayed for is hereby
denied, with costs against the petitioner. So ordered.
 7 HFS PHILIPPINES v PILAR
G.R. No. 168716
April 16, 2009
By: JMG
TOPIC: Social Justice
PETITIONER: HFS Philippines, Inc., Ruben T. Del Rosario and IUM
Shipmanagement
RESPONDENT: Ronaldo R. Pilar
PONENTE: Corona, J.
Complaint
SUMMARY: Pilar was engaged by petitioner, as an electrician of the
Norwegian Vessel. 4 months after he boarded, respondent complained
loss of appetite, nausea, vomiting and severe nervousness. When the
vessel arrived in Japan, he was brought to a hospital and later was
diagnosed with depression and thus was forced to send back to Manila.
Petitioner brought the respondent to the Medical Center, which confirmed
his depression and declared that he was unfit to work. Respondent filed a
complaint before NLRC for underpayment of disability and other damages.
NCMB ruled in favor of the respondent, however, CA reversed the
decision of the former and stated that he is not entitled of compensation
granted by CBA.
SC ruled affirming the decision of NCMB. Although the respondent is not
entitled to the compensation under Articles 12 and Section 20(B) of the
CBA, nevertheless, respondent is entitled to compensation under the
principle of social justice.
DOCTRINE: In labor cases, where the evidence may be reasonably
interpreted in two divergent ways, one prejudicial and the other favorable
to him, the balance must be tilted in his favor consistent with the principle
of social justice.
FACTS:
 Ronaldo R. Pilar was engaged by petitioners IUM Shipmanagement
AS and its Philippine manning agent, HFS Philippines, Inc. (HFS), as
an electrician of the Norwegian vessel M/V Hual Triumph for the
duration of 9 months, a pay of $981 per month, vacation leave of 8
days per month
 Four months after he boarded respondent complained of loss of
appetite, nausea, vomiting and severe nervousness.
o Despite being given medical treatment, his condition did not
improve.
 When the vessel arrives in Japan, he was brought to Komatsu
Hospital where he was diagnosed with depression and gastric ulcer.
The attending physician declared him unfit for work and was sent
back to manila on the same day.
 HFS then brought to the Medical Center Manila, respondent was
placed in continuous care after a physician confirmed his depression.
 Respondent was soon after declare fit to work by the company
physician but after consulting other physicians on his own he was
then declared unfit to work.
 Respondent filed a complaint for underpayment of disability and
medical benefits and for moral and exemplary damages in the
National Labor Relations Commission (NLRC).
o Claiming that while sleeping during his rest hours on March
9, 2002, he was suddenly awakened by his officer who hit
him on the head.
o He was so traumatized by the incident that thereafter, he lost
his appetite, vomited incessantly and experienced severe
nervousness.
o He claimed to be entitled to disability compensation under
Article 12 of the Collective Bargaining Agreement (CBA)
between AMOSUP and the Norwegian Shipowners
Association which provides:
 “If a seafarer due to no fault of his own, suffers injury
as a result of an accident while serving on board or
while traveling to or from the vessel on the
companys business or due to marine peril, and as a
result his ability to work is permanently reduced,
totally or partially, the Company shall pay him a
disability compensation xxx”
 Petitioners, on the other hand, asserted that in the absence of proof
his depression was caused by an accident, respondent was not
entitled to disability and medical benefits under Article 12 of the CBA.
o Instead, he was only entitled to the 120-day sick pay
provided under Article 10 of the CBA which provides:
 “During the period of employment and at the time of
signing off, the officer shall submit to a medical
examination when requested by the company or its
representative, at the company's expense. Xxx If
the officer is sick or injured at the termination of the
service period, he has the same entitlement for a
maximum period of one hundred and twenty (120)
days from the date of signing off. xxx In the event of
 sickness or injury necessitating signing-off, the
officer is entitled to travel to Manila at the company's
expense. The officer is entitled to sick pay (at the
same rate as basic wage) for up to 120 days after
signing off, provided the sickness or the injury is
verified by written statement from an authorized
physician.”
Decision
 The National Conciliation and Mediation Board (NCMB): held that
the nature of respondent's occupation significantly contributed to the
deterioration of his psychological condition.
o Respondents depression was therefore a compensable
sickness since it arose out of his employment. In view of the
principle of social justice (that those who have less in life
should have more in the law), the NCMB awarded disability
compensation to him
 CA (reverse): Article 12 of the CBA applies when a seafarer suffers
an injury:
o (1) as a consequence of an accident that took place on
board the vessel or
o (2) while traveling to and from the vessel on company
business or
o (3) due to a marine peril.
o Since respondents’ illnesses were not the result of any of the
said circumstances, he was not entitled to disability
compensation granted by the CBA.
o Nonetheless, because he proved that his illnesses impaired
him, he is entitled to disability benefits granted by the
employment contract.
ISSUE:
1. WON respondent can be compensated on the basis of Social justice.
(YES)
HELD/RATIO:
1. YES. RESPONDENT CAN BE COMPENSATED ON THE BASIS OF
SOCIAL JUSTICE.
 Although the respondent is not entitled to the compensation under
Articles 12 and Section 20(B) of the CBA, nevertheless, respondent
is entitled to compensation under the principle of social justice.
 In this case, the company-accredited doctor opined that respondent
was fit to work but respondents’ own physicians declared otherwise.
 We note that Section 20(B) of the employment contract states that it
is the company-designated physician who determines a seafarer's
fitness to work or his degree of disability.
o Nonetheless, a claimant may dispute the company-
designated physician's report by seasonably consulting
another doctor.
o In such a case, the medical report issued by the latter shall
be evaluated by the labor tribunal and the court, based on its
inherent merit
 The company-designated physician declared respondent as having
suffered a major depression but was already cured and therefore fit
to work.
o On the other hand, the independent physicians stated that
respondent’s major depression persisted and constituted a
disability.
o More importantly, while the former totally ignored the
diagnosis of the Japanese doctor that respondent was also
suffering from gastric ulcer, the latter addressed this.
o The independent physicians thus found that respondent was
suffering from chronic gastritis and declared him unfit for
work.
 The bottom-line is this: the certification of the company-designated
physician would defeat respondents claim while the opinion of the
independent physicians would uphold such claim. In such a situation,
we adopt the findings favorable to respondent.
 The law looks tenderly on the laborer. Where the evidence may be
reasonably interpreted in two divergent ways, one prejudicial and the
other favorable to him, the balance must be tilted in his favor
consistent with the principle of social justice.
DISPOSITION: WHEREFORE, the petition is hereby DENIED. The
November 22, 2004 decision and June 22, 2005 resolution of the Court of
Appeals in CA-G.R. SP No. 85197 affirming the May 27, 2002 decision of the
National Conciliation Mediation Board in NCMB Case No. NCMB-NCR-CRN
Case No. 06-007-03 are AFFIRMED.
 8. PLDT v NLRC
GR No. 80609
August 23, 1988
By: Happy
Topic: Social Justice applied
Petitioner: PLDT
Respondents: NLRC and Marilyn Abucay
Ponente: Cruz
Doctrine: The policy of social justice is not intended to countenance
wrongdoing simply because it is committed by the underprivileged. At best it
may mitigate the penalty but it certainly will not condone the offense.
Compassion for the poor is an imperative of every humane society but only
when the recipient is not a rascal claiming an undeserved privilege. Social
justice cannot be permitted to be refuge of scoundrels any more than can
equity be an impediment to the punishment of the guilty. Those who invoke
social justice may do so only if their hands are clean and their motives
blameless and not simply because they happen to be poor. This great policy
of our Constitution is not meant for the protection of those who have proved
they are not worthy of it, like the workers who have tainted the cause of labor
with the blemishes of their own character.
Facts:
1. Marilyn Abucay is a traffic operator of PLDT. She was accused by
two complainants of having demanded and received from them the
total amount of P3800 in consideration of her promise to facilitate
approval of their applications for telephone installation.
2. She was found guilty and accordingly separated.
3. She went to Ministry of Labor and Employment claiming she had
been illegally removed.
a. Company was sustained and complaint was dismissed for
lack of merit.
b. Dispositive portion: “ xxx complainant must be given one
month pay for every year of service as financial assistance."
4. Petitioner and private respondent appealed to NLRC which upheld
the decision in toto and dismissed the appeals.
a. Private respondent took no further action thereby impliedly
accepting the validity of her dismissal.
5. Petitioner is now questioning the award as having been made with
grave abuse of discretion.
a. NLRC upheld the award of financial assistance in Abucay’s
favor consideration her long years of service to the company
whereby she had undoubtedly contributed to the success of
respondent.
6. Petitioner’s position: an employee illegally dismissed is entitled to
reinstatement and backwages as required by the labor laws.
a. However, an employee dismissed for cause is entitled to
neither reinstatement nor backwages and is not allowed any
relief at all because his dismissal is in accordance with law.
b. In the case of the private respondent, she has been awarded
financial assistance equivalent to ten months pay
corresponding to her 10-year service in the company despite
her removal for cause. She is, therefore, in effect rewarded
rather than punished for her dishonesty, and without any
legal authorization or justi􏰁cation. The award is made on the
ground of equity and compassion, which cannot be a
substitute for law. Moreover, such award puts a premium on
dishonesty and encourages instead of deterring corruption.
7. NLRC’s position: the employee is sufficiently punished with her
dismissal. The grant of financial assistance is not intended as a
reward for her offense but merely to help her for the loss of her
employment after working faithfully with the company for ten years.
Issue: W/N the grant of separation pay is justified
Ruling: NO.
1. The private respondent has been dismissed for dishonesty, as found
by the labor arbiter and affirmed by the NLRC and as she herself has
impliedly admitted.
2. The fact that she has worked with the PLDT for more than a decade,
if it is to be considered at all, should be taken against her as it
reflects a regrettable lack of loyalty that she should have
strengthened instead of betraying during all of her 10 years of
service with the company. If regarded as a justification for
moderating the penalty of dismissal, it will actually become a prize for
disloyalty, perverting the meaning of social justice and undermining
the efforts of labor to cleanse its ranks of all undesirables.
3. Separation pay shall be allowed as a measure of social justice only
in those instances where the employee is validly dismissed for
causes other than serious misconduct or those reflecting on his
moral character.
a. Where the reason for the valid dismissal is, for example,
habitual intoxication or an offense involving moral turpitude,
like theft or illicit sexual relations with a fellow worker, the
employer may not be required to give the dismissed
 employee separation pay, or financial assistance, or
whatever other name it is called, on the ground of social
justice.
4. A contrary rule would, as the petitioner correctly argues, have the
effect, of rewarding rather than punishing the erring employee for his
offense. And we do not agree that the punishment is his dismissal
only and that the separation pay has nothing to do with the wrong he
has committed. Of course it has. Indeed, if the employee who steals
from the company is granted separation pay even as he is validly
dismissed, it is not unlikely that he will commit a similar offense in his
next employment because he thinks he can expect a like leniency if
he is again found out. This kind of misplaced compassion is not
going to do labor in general any good as it will encourage the
infiltration of its ranks by those who do not deserve the protection
and concern of the Constitution.
WHEREFORE, the petition is GRANTED. The challenged resolution of
September 22, 1987, is AFFIRMED in toto except for the grant of separation
pay in the form of financial assistance, which is hereby DISALLOWED. The
temporary restraining order dated March 23, 1988, is LIFTED. It is so
ordered.
DISCUSSION:
The rule embodied in the Labor Code is that a person dismissed for cause as
defined therein is not entitled to separation pay.
Equity has been defined as justice outside law, being ethical rather than jural
and belonging to the sphere of morals than of law. It is grounded on the
precepts of conscience and not on any sanction of positive law. Hence, it
cannot prevail against the expressed provision of the labor laws allowing
dismissal of employees for cause and without any provision for separation
pay.
Strictly speaking, however, it is not correct to say that there is no express
justification for the grant of separation pay to lawfully dismissed employees
other than the abstract consideration of equity. Our Constitution is replete
with positive commands for the promotion of social justice, and particularly
the protection of the rights of the workers. The enhancement of their welfare
is one of the primary concerns of the present charter. In fact, instead of
confining itself to the general commitment to the cause of labor in Article II on
the Declaration of Principles of State Policies, the new Constitution contains
a separate article devoted to the promotion of social justice and human rights
with a separate sub-topic for labor. Article XIII expressly recognizes the vital
role of labor, hand in hand with management, in the advancement of the
national economy and the welfare of the people in general. The categorical
mandates in the Constitution for the improvement of the lot of the workers are
more than sufficient basis to justify the award of separation pay in proper
cases even if the dismissal be for cause.
There should be no question that where it comes to such valid but not
iniquitous causes as failure to comply with work standards, the grant of
separation pay to the dismissed employee may be both just and
compassionate, particularly if he has worked for some time with the
company. For example, a subordinate who has irreconcilable policy or
personal differences with his employer may be validly dismissed for
demonstrated loss of confidence, which is an allowable ground. A working
mother who has to be frequently absent because she has also to take care of
her child may also be removed because of her poor attendance, this being
another authorized ground. It is not the employee's fault if he does not have
the necessary aptitude for his work but on the other hand the company
cannot be required to maintain him just the same at the expense of the
efficiency of its operations. He too may be validly replaced. Under these and
similar circumstances, however, the award to the employee of separation pay
would be sustainable under the social justice policy even if the separation is
for cause.
But where the cause of the separation is more serious than mere efficiency,
the generosity of the law must be more discerning. There is no doubt it is
compassionate to give separation pay to a salesman if he is dismissed for his
inability to fill his quota but surely he does not deserve such generosity if his
offense is misappropriation of the receipts of his sales. This is no longer mere
incompetence but clear dishonesty. A security guard found sleeping on the
job is doubtless subject to dismissal but may be allowed separation pay since
his conduct, while inept, is not depraved. But if he was in fact not really
sleeping but sleeping with a prostitute during his tour of duty and in the
company premises, the situation is changed completely. This is not only
inefficiency but immorality and the grant of separation pay would be entirely
unjustified.
9 TOYOTA MOTOR PHILS. CORP. WORKERS ASSOC. (TMPCWA)
NLRC, TOYOTA MOTOR PHIL CORP et al vs NLRC
G.R. Nos. 158786 & 158789
October 19, 2007
By: Euge
Topic: Constitutional Provisions (right to peaceful assembly and
association)
Petitioners: TOYOTA MOTOR PHILS. CORP. WORKERS ASSOC.
(TMPCWA) NLRC, TOYOTA MOTOR PHIL CORP et al
Respondents: NATIONAL LABOR RELATIONS COMMISSION,
(NLRC-2ND DIVISION), HON. COMMISSIONERS: VICTORINO
CALAYCAY, ANGELITA GACUTAN, and RAUL AQUINO, TOYOTA
MOTOR PHILIPPINES CORPORATION, TAKESHI FUKUDA, and
DAVID GO.
Ponente: Velasco JR, J.
Doctrine: There are six (6) categories of illegal strikes, viz.: first,
when it is contrary to a specific prohibition of law, such as strike by
employees performing governmental functions, second, when it
violates a specific requirement of law, third, when it is declared for an
unlawful purpose; fourth, when it employs unlawful means in the
pursuit of its objective, fifth, when it is declared in violation of an
existing injunction, and sixth, when it is contrary to an existing
agreement, such as a no-strike clause or conclusive arbitration
clause.
FACTS:
The Union filed a petition for certification election among the Toyota
rank and file employees with the National Conciliation and Mediation
Board (NCMB). The Med-Arbiter denied the petition, but, on appeal,
the DOLE Secretary granted the Union’s prayer, and, through an
Order, directed the immediate holding of the certification election.
After Toyota’s plea for reconsideration was denied, the certification
election was conducted. The Med-Arbiter’s Order certified the Union
as the sole and exclusive bargaining agent of all the Toyota rank and
file employees. Toyota challenged said
Order via an appeal to the DOLE Secretary.
In the meantime, the Union submitted its Collective Bargaining
Agreement (CBA) proposals to Toyota, but the latter refused to
negotiate in view of its pending appeal. Consequently, the Union filed
a notice of strike with the NCMB based on Toyota’s refusal to bargain.
In connection with Toyota’s appeal, Toyota and the Union were
required to attend a hearing on before the Bureau of Labor Relations
(BLR). The February 21, 2001 hearing was cancelled and reset to
February 22.
STRIKE 1: On February 21, 135 Union officers and members failed to
render the required overtime work, and instead marched to and
staged a picket in front of the BLR office. The Union, in a letter of the
same date, also requested that its members be allowed to be absent
on February 22 to attend the hearing and instead work on their next
scheduled rest day. This request however was denied by Toyota.
Despite denial of the Union’s request, more than 200 employees
staged mass actions on February 22 and 23 in front of the BLR and
the DOLE offices, to protest the partisan and anti-union stance of
Toyota. Due to the deliberate absence of a considerable number of
employees on February 22 to 23, Toyota experienced acute lack of
manpower in its manufacturing and production lines, and was unable
to meet its production goals resulting in huge losses.
On February 27,  Toyota sent individual letters to some 360
employees requiring them to explain within 24 hours why they should
not be dismissed for their obstinate defiance of the company’s
directive to render overtime work on February 21, for their failure to
report for work on February 22 and 23, and for their participation in
the concerted actions which severely disrupted and paralyzed the
plant’s operations. These letters specifically cited Section D,
paragraph 6 of the Company’s Code of Conduct, to wit:
xx
Inciting or participating in riots, disorders, alleged strikes, or concerted
actions detrimental to [Toyota’s] interest.
1st offense – dismissal.11
xx
On the next day, the Union filed with the NCMB another notice of
strike for union busting amounting to unfair labor practice.
On March 1,  the Union nonetheless submitted an explanation in
compliance with the February 27 notices sent by Toyota to the erring
employees. Consequently, on March 2 and 5, Toyota issued 2
memoranda to the concerned employees to clarify whether or not they
are adopting the March 1, 2001 Union’s explanation as their own. The
employees were also required to attend an investigative interview, but
they refused to do so.
On March 16, Toyota terminated the employment of 227 employees
for participation in concerted actions in violation of its Code of
Conduct and for misconduct under Article 282 of the Labor Code.
STRIKE 2: In reaction to the dismissal of its union members and
officers, the Union went on strike on March 17. Subsequently, from
March 28 to April 12,  the Union intensified its strike by barricading the
gates of Toyota’s Bicutan and Sta. Rosa plants. The strikers
prevented workers who reported for work from entering the plants.
On March 29, Toyota filed a petition for injunction with a prayer for the
issuance of a TRO with the NLRC. It sought free ingress to and
egress from its Bicutan and Sta. Rosa manufacturing plants. Acting on
said petition, the NLRC issued a TRO against the Union, ordering its
leaders and members as well as its sympathizers to remove their
barricades and all forms of obstruction to ensure free ingress to and
egress from the company’s premises.
Meanwhile, Toyota filed a petition to declare the strike illegal with the
NLRC arbitration branch, , and prayed that the erring Union officers,
directors, and members be dismissed.
On April 10,  the DOLE Secretary assumed jurisdiction over the labor
dispute and issued an Order certifying the labor dispute to the NLRC.
In said Order, the DOLE Secretary directed all striking workers to
return to work at their regular shifts by April 16. On the other hand, it
ordered Toyota to accept the returning employees under the same
terms and conditions obtaining prior to the strike or at its option, put
them under payroll reinstatement. The parties were also enjoined from
committing acts that may worsen the situation.
The Union ended the strike on April 12. The union members and
officers tried to return to work on April 16 but were told that Toyota
opted for payroll-reinstatement authorized by the Order of the DOLE
Secretary.
STRIKE 3: Meanwhile, on May 23, despite the issuance of the DOLE
Secretary’s certification Order, several payroll-reinstated members of
the Union staged a protest rally in front of Toyota’s Bicutan Plant
bearing placards and streamers in defiance of the April 10 Order.
Then, on May 28, around Union members staged another protest
action in front of the Bicutan Plant. At the same time, some payroll-
reinstated employees picketed in front of the Santa Rosa Plant’s main
entrance, and were later joined by other Union members.
On June 5, notwithstanding the certification Order, the Union filed
another notice of strike.
—
In the meantime, the NLRC ordered both parties to submit their
respective position papers on June 8. The union, however, requested
for abeyance of the proceedings considering that there is a pending
petition for certiorari with the CA assailing the validity of the DOLE
Secretary’s Assumption of Jurisdiction Order.
Thereafter, on June 19, the NLRC issued an Order, reiterating its
previous order for both parties to submit their respective position
papers on or before June 2, 2001. Only Toyota submitted its position
paper. During the August 3, 2001 hearing, the Union, despite several
accommodations, still failed to submit its position paper. Later that
day, the Union claimed it filed its position paper by registered mail.
NLRC decision
Subsequently, the NLRC, in its August 9 Decision, declared the
strikes staged by the Union on February 21 to 23 (as the Union failed
to comply with the procedural requirements of a valid strike under Art.
263 of the Labor Code) and May 23 and 28 as illegal and Declared
that the dismissal of the 227 who participated in the illegal strike on
February 21-23 is legal. Lastly, award of severance compensation
was given to the dismissed Union members
After the DOLE Secretary assumed jurisdiction over the Toyota
dispute on April 10, the Union again staged strikes on May 23 and 28.
The NLRC found the strikes illegal as they violated Art. 264 of the
Labor Code which proscribes any strike or lockout after jurisdiction
is assumed over the dispute by the President or the DOLE Secretary.
The NLRC held that both parties must have maintained the status quo
after the DOLE Secretary issued the assumption/certification Order,
and ruled that the Union did not respect the DOLE Secretary’s
directive.
Accordingly, both Toyota and the Union filed MRs, which the NLRC
denied. Consequently, both parties questioned the Resolutions of the
NLRC in separate petitions for certiorari filed with the CA. The CA
then consolidated the petitions.
In its February 27, 2003 Decision, the CA ruled that the Union’s
petition is defective in form for its failure to append a proper
verification and certificate of non-forum shopping, given that, out of
the 227 petitioners, only 159 signed the verification and certificate of
non-forum shopping. Despite the flaw, the CA proceeded to resolve
the petitions on the merits and affirmed the assailed NLRC Decision
and Resolution with a modification, however, of deleting the award of
severance compensation to the dismissed Union members.
However, in its June 20, 2003 Resolution, the CA modified its
February 27, 2003 Decision by reinstating severance compensation to
the dismissed employees based on social justice.]
ISSUE:
Whether the mass actions committed by the Union on different
occasions are illegal strikes
HELD:
YES, THERE IS ILLEGAL STRIKE
A strike means any temporary stoppage of work by the concerted
action of employees as a result of an industrial or labor dispute. A
labor dispute, in turn, includes any controversy or matter concerning
terms or conditions of employment or the association or
representation of persons in negotiating, fixing, maintaining, changing,
or arranging the terms and conditions of employment, regardless of
whether the disputants stand in the proximate relation of the employer
and the employee.
Noted authority on labor law, Ludwig Teller, lists six (6) categories of
an illegal strike, viz:
(1) [when it] is contrary to a specific prohibition of law, such as strike
by employees performing governmental functions; or
(2) [when it] violates a specific requirement of law[, such as Article
263 of the Labor Code on the requisites of a valid strike]; or
(3) [when it] is declared for an unlawful purpose, such as inducing the
employer to commit an unfair labor practice against non-union
employees; or
(4) [when it] employs unlawful means in the pursuit of its objective,
such as a widespread terrorism of non-strikers [for example,
prohibited acts under Art. 264(e) of the Labor Code]; or
(5) [when it] is declared in violation of an existing injunction[, such as
injunction, prohibition, or order issued by the DOLE Secretary and the
NLRC under Art. 263 of the Labor Code]; or
(6) [when it] is contrary to an existing agreement, such as a no-strike
clause or conclusive arbitration clause
Petitioner Union contends that the protests or rallies conducted on
February 21 and 23 are not within the ambit of strikes as defined in
the Labor Code, since they were legitimate exercises of their right to
peaceably assemble and petition the government for redress of
grievances. The Union’s position fails to convince us.
Applying pertinent legal provisions and jurisprudence, we rule that the
protest actions undertaken by the Union officials and members on
February 21 to 23 are not valid and proper exercises of their right to
assemble and ask government for redress of their complaints, but are
illegal strikes in breach of the Labor Code. The Union’s position is
weakened by the lack of permit from the City of Manila to hold
“rallies.” Shrouded as demonstrations, they were in reality temporary
stoppages of work perpetrated through the concerted action of the
employees who deliberately failed to report for work on the convenient
excuse that they will hold a rally at the BLR and DOLE offices on
February 21 to 23. The purported reason for these protest actions was
to safeguard their rights against any abuse which the med-arbiter may
commit against their cause. However, the Union failed to advance
convincing proof that the med-arbiter was biased against them. The
acts of the med-arbiter in the performance of his duties are presumed
regular. Sans ample evidence to the contrary, the Union was unable
to justify the February 2001 mass actions. What comes to the fore is
that the decision not to work for two days was designed and
calculated to cripple the manufacturing arm of Toyota. It becomes
obvious that the real and ultimate goal of the Union is to coerce
Toyota to finally acknowledge the Union as the sole bargaining agent
of the company. This is not a legal and valid exercise of the right of
assembly and to demand redress of grievance.
It is obvious that the February 21 to 23 concerted actions were
undertaken without satisfying the prerequisites for a valid strike under
Art. 263 of the Labor Code. The
Union failed to comply with the following requirements:
(1) a notice of strike filed with the DOLE 30 days before the intended
date of strike, or 15 days in case of unfair labor practice;
(2) strike vote approved by a majority of the total union membership in
the bargaining unit concerned obtained by secret ballot in a meeting
called for that purpose; and
(3) notice given to the DOLE of the results of the voting at least seven
days before the intended strike. These requirements are mandatory
and the failure of a union to comply with them renders the strike
illegal.
The evident intention of the law in requiring the strike notice and the
strike-vote report is to reasonably regulate the right to strike, which is
essential to the attainment of legitimate policy objectives embodied in
the law. As they failed to conform to the law, the strikes on February
21, 22, and 23 (STRIKE 1) were illegal.
With respect to the strikes committed from March 17 to April 12
(STRIKE 2),  those were initially legal as the legal requirements were
met. However, on March 28 to April 12, the Union barricaded the
gates of the Bicutan and Sta. Rosa plants and blocked the free
ingress to and egress from the company premises.
Toyota employees, customers, and other people having business with
the company were intimidated and were refused entry to the plants.
As earlier explained, these strikes were illegal because unlawful
means were employed. The acts of the Union officers and members
are in palpable violation of Art. 264(e), which proscribes acts of
violence, coercion, or intimidation, or which obstruct the free ingress
to and egress from the company premises. Undeniably, the strikes
from March 28 to April 12.
(STRIKE 2) was illegal.
Petitioner Union also posits that strikes were not committed on May
23 and 28
(STRIKE 3). The Union asserts that the rallies held on May 23 and 28
could not be
considered strikes, as the participants were the dismissed employees
who were on payroll reinstatement. It concludes that there was no
work stoppage.
This contention has no basis. It is clear that once the DOLE Secretary
assumes jurisdiction over the labor dispute and certifies the case for
compulsory arbitration with the NLRC, the parties have to revert to the
status quo ante (the state of things as it was before).
This was not heeded by the Union and the individual respondents who
staged illegal concerted actions on May 23 and 28, in contravention of
the Order of the DOLE Secretary that no acts should be undertaken
by them to aggravate the “already deteriorated situation.”
 10. YRASUEGUI vs PAL
GR NO.168081
Oct. 17, 2008
By: Madrid
Topic:
Petitioners: Armando Yrasuegui
Respondents: Phil. Airlines
Ponente:
DOCTRINE: Control lang sa pag kain. Wag maging mataba.
FACTS:
- Yrasuegui was a former international flight steward of PAL, he was
dismissed because of his failure to adhere to the weight standards of
PAL.
- The ideal weight for his height (5’8”) is 166 lbs. as mandated by the
Cabin and Crew Administration Manual of PAL.
- PAL advised him to go on an extended vacation leave to address his
weight concerns. He failed to meet the standards prompting another
leave without pay
- After meeting the required weight, he was allowed to return to work.
But his weight problem recurred. He again went on leave without pay.
- In line with company policy, he was removed from flight duty and
was formally requested to trim down to his ideal weight.
- When he went back for a weight check, it was discovered that he
gained weight (215 lbs.).
- Yrasuegui, in a letter, made a commitment addressed to the Cabin
Crew Group Manager to reduce weight.
- Despite the ninety-day period given him to reach his ideal weight, he
remained overweight. He remained grounded. He was directed to
report every two weeks for weight check but he failed to go.
- He was still given one more month to comply. He continuously
ignored all directives to report back for weight checks. He requested
for leniency but PAL finally served a Notice of Administrative Charge
for violation of company standards on weight requirements. He was
given 10 days to file his answer.
- Yrasuegui: His violation, if any, had already been condoned since no
action has been taken by the company regarding the case. And that
PAL discriminated against him because the company has not been
fair in treating the cabin crew members who are similarly situated.
- After a hearing, Yrasuegui was informed that due to his inability to
attain his ideal weight, and considering the utmost leniency given to
him, his services were considered terminated effective immediately.
- He filed for illegal dismissal against PAL.
- Labor Arbiter: Illegally dismissed. Weight standards need not be
complied with under pain of dismissal since his weight did not hamper
the performance of his duties. Directed reinstatement.
- NLRC: Affirmed, entitled to full backwages. Obesity is a disease in
itself. There can be no intentional defiance or serious misconduct to
lawful order of PAL.
- CA: Reversed, NLRC looked at wrong and irrelevant considerations.
Weight standards of PAL are meant to be continuing qualification for
an employee’s position. Failure to adhere is an analogous cause for
dismissal.
ISSUE:
1. W/N Yrasuegui’s obesity is a ground for dismissal. YES
2. W/N he is entitled to reinstatement and backwages. NO. But
he is entitled to separation pay.
HELD/RATIO:
1.
- The weight standards were a continuing qualification to keep his job.
He was able to reduce weight so it clearly shows that it is possible for
him to lose weight. He also repeatedly ignored all requests for weight
checks.
- His obesity may not be unintended but it is voluntary.
- PAL has committed itself to safely transport its passengers. In order
to achieve this, it must necessarily rely on its employees, its cabin
flight deck crew on board the aircraft.
- The weight standards should be viewed as imposing strict norms of
discipline upon its employees.
- In other words, the primary objective of PAL in the imposition of the
weight standards for cabin crew is flight safety.
- On board an aircraft, the body weight and size of a cabin attendant
are important factors to consider in case of emergency. Aircrafts have
constricted cabin space, and narrow aisles and exit doors.
- The biggest problem with an overweight cabin attendant is the
possibility of impeding passengers from evacuating the aircraft,
should the occasion call for it. The job of a cabin attendant during
emergencies is to speedily get the passengers out of the aircraft
safely. Being overweight necessarily impedes mobility. Indeed, in an
emergency situation, seconds are what cabin attendants are dealing
with, not minutes. Three lost seconds can translate into three lives
lost. Evacuation might slow down just because a wide-bodied cabin
attendant is blocking the narrow aisles. These possibilities are not
remote.

2.
- No record of him actually rendering services for PAL when he was
dismissed, in order to insist on the payment of his full backwages.
- Separation pay is granted to a legally dismissed employee as an act
of “social justice” or based on “equity.”
- In both instances, it is required that the dismissal (1) was not for
serious misconduct
and (2) does not reflect on the moral character of the employee.
 11. DIGITAL TELECOM PH. INC. V. AYAPANA
G.R. No. 195614
JANUARY 10, 2018
TOPIC: POLICE POWER OF THE STATE
PETITIONER: DIGITAL TELECOMMUNICATIONS PHIL.,
INC./JOHN GOKONGWEI JR.
RESPONDENT: NEILSON M. AYAPANA
PONENTE: MARTIRES, J.
DOCTRINE:
●Generally, an employee dismissed for any of the just causes under
LC 297 is not entitled to separation pay. By way of exception, the
Court has allowed the grant of separation pay based on equity and
as a measure of social justice, as long as the dismissal was for
causes other than serious conduct or those manifesting moral
depravity.
●In its new rule established in Toyota vs NLRC, SC held “that in
addition to serious misconduct, in dismissals based on other
grounds under LC 282 like willful disobedience, gross and habitual
neglect of duty, fraud or willful breach of trust, and commission of a
crime against the employer or his family, separation pay should not
be conceded to the dismissed employee."
FACTS:
● Digitel hired Ayapana as a Key Accounts Manager for its products
and services for various provinces w/ a monthly pay og PhP13.1K.
Ayapana was tasked to offer and sell Digitel’s products.
● Ayapana was able to offer 2 FEX lines for Antimonan, Quezon to
Estela Lim, the owner of Star Lala Group of Companies to w/c he
issued 2 receipts. He got a total of PhP7k for said lines but was not
able to remit such amount to Digitel.
● Digitel’s sales team together w/ respondent met where he then
learned from his superiors that no such lines were available for the
said area and it was impossible to have said lines due to technical
difficulties. Ayapana then retrieved the receipts then replaced them
with acknowledgement receipts instead.
● Lim’s secretary, Teresita Cielo, went to Digitel’s office to pay the bills
and to refund said amount but upon validation, there was no existing
application for said service under Star Lala’s name. It was found that
Ayapana was the person handling said accounts and was informed
of said request for refund but it was only later that Ayapana was able
to refund said accounts.
● Digitel issued a Notice to Explain to Ayapana to shed light on the ff.:
○Why he offered an inexistent FEX line;
○Why he withdrew the ORs issued to Lim and replaced w/
acknowledgement receipts;
○Why did he not immediately remit the proceeds; and
○Why did he retain the proceeds for 84 days.
●Ayapana responded.
○He said he was unaware of the unavailability of the lines when he
offered them to Lim;
○He retrieved the ORs to avoid explaining the late remittance as Lim
was undecided whether to take Ayapana’s alternative offer to
subscribe to FEX lines in Lucena until the Antimonan lines were
available;
○He issued the acknowledgement receipt as proof that said amount
is in his possession;
○He attempted to obtain Cielo’s advice as to return said amount but
to no avail;
○After being informed of the refund, he went to Lim’s office but was
closed and tried to go to Cielo’s place but to no avail hence handed
the money to Digitel’s customer service for Cielo’s retrieval.
●Digitel issued a Notice of Offense to Ayapana and subject to
hearing. A Notice of Dismissal was issued w/c found him guilty by
breaching the trust and confidence reposed to him and under
company rules, merited a dismissal.
●Labor Arbiter: Dismissed Ayapana’s complaint ruling that
substantial evidence exists that he merited the loss of trust and
confidence of Digitel hence his dismissal was valid.
●NLRC: Reversed the LA’s decision as he was merely guilty of
imprudence and not of malice. The dismissal was too harsh since
Ayapana had a clean record despite Notice of Final Warning. He had
certificates of commendation for being an outstanding employee. It
ordered that Digitel pay Ayapana’s separation fee worth PhP78.6k
computed at 1-month pay for every year in service. Ayapana filed an
MR but was denied hence appealed to the CA
●CA: Affirmed NLRC’s ruling but modified that Digitel was ordered to
pay full back wages w/ allowances and other benefits. The dismissal
was invalid as neglect of duty is not a cause for dismissal only if it
was habitual and the transaction was an isolated act.

ISSUE: WoN the CA correctly upheld that Ayapana’s dismissal
was invalid - NO
RULING:
●The ground relied upon by Digitel was Ayapana’s breach of the trust
and confidence reposed in him by DIgitel contrary to CA’s ruling w/c
based its decision on gross and habitual neglect, a separate ground
under LC 29.
●The willful breach by the employee of the trust reposed in him by his
employer or the latter's duly authorized representative is a just cause
for dismissal. However, the validity of a dismissal based on this
ground is premised upon the concurrence of these conditions:
○(1) the employee concerned must be holding a position of trust and
confidence; and
○(2) there must be a willful act that would justify the loss of trust and
confidence.
●First requisite is present. It was held that rank-and-file employees
who are routinely charged with the care and custody of the
employer's money or property are classified as occupying positions
of trust and confidence.
●It is undisputed that Ayapana’s job was to solicit subscribers for
Digitel’s FEX lines and then collect money from it and issue ORs
thereafter. Since he is involved in handling Digitel’s proceeds, his
position is one of trust and confidence.
●Second requisite is present. A finding that an employer's trust and
confidence has been breached by the employee must be supported
by substantial evidence, or such amount of relevant evidence w/c a
reasonable mind might accept as adequate to justify a conclusion. It
must not be based on the employer's whims or caprices or
suspicions; otherwise, the employee would eternally remain at the
mercy of the employer.
●Based on substantial evidence, Ayapana’s dismissal was based on
such fact that he had willfully breached the trust reposed on him and
Digitel did not act whimsically or capriciously.
●Ayapana took part on a series of irregularities on the said deal.
○He offered an inexistent FEX line for w/c he received PhP7k from
Lim. Granted he was unaware that a FEX line was unavailable, he
neglected to validate if a FEX line was in place before closing the
deal w/ Lim. As to the nature of his position, he should checked
first the availability of the said lines;
○He failed to remit the proceeds and had no sufficient explanation
for it;
○He admitted that when he knew that there was no FEX line, he did
not immediately refund nor told management of his decision to
retain the money and instead got the ORs and replaced them with
acknowledgement receipts.
●Ayapana’s contentions that no malice may be imputed on him as he
had the honest belief that the lines were available and he retained
the money to give Lim time to consider his alternative offer and
issued an acknowledgement receipt are untenable.
●But his acts betray his intentions. In response to the Notice of
Explain, he knew the FEX lines were unavailable during his meeting
w/ the sales team and that no lines will be available in the future yet
he still gave Lim the option to avail of a different FEX line until an
Antimonan line was available even when he knew that it would not.
●His act of retrieving and cancelling the ORs w/o Digitel’s consent is
irregular and prejudicial as it would affect the tax and reports w/c
may result in Digitel’s liability and he concealed the late remittance
from Digitel. He retained the money w/o any explanation.
●No good faith may be imputed to Ayapana. In Bristol vs Baban, SC
held that as a general rule, employers are allowed a wider latitude of
discretion in terminating the services of employees who perform
functions by which their nature require the employer's full trust and
confidence. Mere existence of basis for believing that the employee
has breached the trust and confidence of the employer is sufficient
and does not require proof beyond reasonable doubt.
●Digitel did not harbor any bad faith as evidence by calling a hearing
and even apprised Ayapana on the charges against him and had
him explain his actions.
●However, even if Ayapana was validly dismissed, he is still entitled
to separation pay as a measure of social justice.
●Generally, an employee dismissed for any of the just causes under
LC 297 is not entitled to separation pay. By way of exception, the
Court has allowed the grant of separation pay based on equity and
as a measure of social justice, as long as the dismissal was for
causes other than serious conduct or those manifesting moral
depravity.
●In its new rule established in Toyota vs NLRC, SC held “that in
addition to serious misconduct, in dismissals based on other
 grounds under LC 282 like willful disobedience, gross and habitual
neglect of duty, fraud or willful breach of trust, and commission of a
crime against the employer or his family, separation pay should not
be conceded to the dismissed employee."
●However, SC also recognizes that some cases merit a relaxation of
this rule, taking into consideration their peculiar circumstances.
●While its clear that Ayapana’s acts were a willful breach of trust and
confidence w/c led to his dismissal, it also appears that he was
overeager in acquiring and retaining subscribers rather than any
intent to misappropriate company funds; as he admitted in his
response to the notice to explain that offering an alternative FEX line
to Lim was part of his strategy to ensure her subscription.
●There was no lack of moral depravity as evidence by his numerous
commendations and has served for several years and he was also
allowed to retain the money even though immaterial to this case and
his actions were an inordinate lapses of judgement w/c led to his
dismissal.

FALLO: WHEREFORE, premises considered, the petition is

GRANTED. The assailed 7 October 2010 Decision and 4 February
2011 Resolution of the Court of Appeals in CA-G.R. SP No. 112160,
are REVERSED and SET ASIDE. The Decision of the Labor Arbiter
dismissing respondent Neilson M. Ayapana's complaint for illegal
dismissal and other monetary claims is REINSTATED with
MODIFICATION that respondent should be paid separation pay
equivalent to one month of his latest salary for every year of service.