Labor Standards

Case Digests

Marc Angelo E. Sison I 19102617

EH304
Atty. Jefferson M. Marquez
 Table of Contents

Basic Principles

Sonza vs. ABS-CBN Broadcasting Corporation, 2004 --------------------------------------------------5

Lazaro vs. Social Security Commission (SSS), 2004-----------------------------------------------------6

Phil. Global Communication vs. De Vera, 2005----------------------------------------------------------6

Aliviado vs. Proctor & Gamble Phils., Inc., and Promm-gem Inc., 2010---------------------------7

ALBERT TENG, doing business under the firm name ALBERT TENG FISH TRADING, and EMILIA
TENG-CHUA vs. PAHAGAC, et. al---------------------------------------------------------------------------------------8

Hiring of Employees

Duncan Association of Detailman-PTGWO v. Glaxo Wellcome Philippines, Inc, 2004---------9

Star Paper Corporation, Ongsitco & Chua vs. Simbol, Comia & Estrella, 2006-------------------10

Del Monte Philippines vs. Velasco, 2007------------------------------------------------------------------10

Yrasuegui vs. Philippine Airlines, Inc, 2008---------------------------------------------------------------11

Wages

Vergara, Ricardo vs. Coca-Cola Bottlers Philippines Inc, 2013--------------------------------------12

Milan, et. Al vs. NLRC, Solid Mills Inc., and/or Philip Ang, 2015------------------------------------13

Toyota Pasig, Inc., vs. De Peralta, 2016-------------------------------------------------------------------13

S.I.P Food House vs. Batolina, 2010-----------------------------------------------------------------------14

Ricardo vs Coca-Cola Bottlers Philippines Inc, 2013---------------------------------------------------15

Wage Enforcement and Recovery

Tiger Construction and Development Corp vs. Abay Et Al., 2010-----------------------------------16

Superior Packaging Corporation vs. Balagsay, 2012----------------------------------------------------17

Department of Labor & Employment vs. Kentex Manufacturing Corp., 2019-------------------18

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Wage Protection Provisions and Prohibitions Regarding Wages

Nina Jewelry Manufacturing of Metal Arts Inc. vs. Montecillo, 2011-----------------------------------19

Antonio Locsin II v. MEKENI Food Corporation, 2013-------------------------------------------------------20

Wesleyan University-Phils. vs. Wesleyan University-Phils., Faculty & Staff Association, 2014----21

Payment of Wages

Congson vs. NLRC, 1995--------------------------------------------------------------------------------------------22

North Davao Mining Corporation and Asset Privatization Trust vs. NLRC, et.al, 1996--------------23

Heirs of Sara Lee vs. Rey, 2006------------------------------------------------------------------------------------24

Conditions of Employment

San Juan De Dios Hospital Employees Association vs. NLRC------------------------------------------------

25

Sime Darby Pilipinas, Inc. vs. NLRC,1998-------------------------------------------------------------------------

26

Philippine Airlines vs. NLRC, 1999---------------------------------------------------------------------------------

27

Minimum Labor Standard Benefits

San Miguel Corporation vs. CA, 2002-----------------------------------------------------------------------------

28

Tan vs. Lagrama, 2002------------------------------------------------------------------------------------------------

29

Lambo vs. NLRC, 1999------------------------------------------------------------------------------------------------

30

Other Special Benefits

Reyes vs. NLRC and Universal Robina Corporation Grocery Division, 1995-----------------------------
31

Cercado vs. UNIPROM, INC., 2010---------------------------------------------------------------------------------

32

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 Radio Mindanao Network, Inc. and Canoy vs. Ybarola, Jr. and Rivera, Jr., 2012-----------------------
33

2011 NLRC Rules of Procedure

Lockheed Detective and Watchman Agency, Inc. vs. University of the Philippines, 2012-----------
34

Indophil Textile Mills, Inc. vs. Engr. Adviento, 2014-----------------------------------------------------------

35

Ilaw Buklod ng Manggagawa (ibm) Nestle Philippines, Inc. Chapter (ice cream and chilled
products division), its Officers, Florendo, Palanas and Laxamana vs. Nestle Philippines, Inc.,
2015---------------------36

Other Important Labor Provisions

San Miguel Corp. vs. Semillano et. al., 2010--------------------------------------------------------------------

38

Government Service Insurance System v. National Labor Relations, 2010------------------------------

39

Polyfoam-RGC International Corporation and Gramaje, vs. Concepcion, 2012------------------- ----40

Miscellaneous Provisions

Bernardo, et. al. vs. NLRC, 1999------------------------------------------------------------------------------------

41

PT&T vs. NLRC, 1997--------------------------------------------------------------------------------------------------

42

Del Monte Phillipines Inc. vs. Velasco, 2007--------------------------------------------------------------------

43

Vigilla vs. Philippine College of Criminology, 2013------------------------------------------------------------44

Alilin et al., v. Petron Corp., 2014----------------------------------------------------------------------------------

45

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Basic Principles

Sonza vs. ABS-CBN Broadcasting Corporation, 2004

 Around May 1994, the respondent corporation had a signed agreement with Mel and Jay
Management and Development Corp. (MJMDC), represented by Sonza.
 The agreement was that MJMDC was to provide Sonza’s services to ABS-CBN as a talent for radio
and television.
 In 1996, Sonza filed a complaint against ABS-CBN with the Dept. of Labor and Employment.
 The complaint pertained to the issue where ABS-CBN failed to pay his salaries, separation pay,
service incentive leave, 13th month pay, and other benefits due him through the Employee Stock
Option Plan.
 ABS-CBN opposed by saying that there existed no employer-employee relationship (EER) between
them ans Sonza, and that it was no remiss in paying him his talent fees.
 The Labor Arbiter (LA) dismissed the case due to lack of jurisdiction.
 Sonza’s arguments were that ABS-CBN had control of his work because they supplied him with
equipment crew, and was subjected to the rules of performance. As such, there was the existence of
EER between him and ABS-CBN.

Issue: Whether or not (WON) there existed an employer-employee relationship (EER) between Sonza,
and ABS-CBN. – No, there wasn’t an EER between them.

Ruling of the Supreme Court

 There are elements to an EER:

1. Selection and engagement of the employee

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 2. Payment of wages
3. Power of dismissal
4. Control test
 Among the four elements, the control test is the most essential.
 In the application of the control test, one must ask the question whether the employer had control
over the work of the employee as to not only the results of his work but as well as the means and
methods in achieving those results.
 In this case, ABS-CBN did not have complete control over Sonza and his work.
 Sonza only needed his skills and talent.
 In this delivery of his lines, ABS-CBN did not dictate him in what to say.
 The only restriction imposed on him was to not criticize ABS-CBN or its interest when on screen.
 ABS-CBN did not also subject him to eight hours per day.
 As such, ABS-CBN’s control was only over the final product or the result of Sonza’s work.
 Therefore, there was no EER between Sonza and ABS-CBN.

Lazaro vs. Social Security Commission (SSS), 2004

 Laudato, herein private respondent, filed a petition before the SSS for social security coverage and
remittance of unpaid monthly social security contributions against her employers.
 Among the respondents of her complaint was Lazaro, the proprietor of an establishment engaged in
the selling of home appliances.
 The argument of Lazaro is that Laudato held the position of sales supervisor of the establishment,
and that the latter was a mere sales agent paid on a commission basis, was not subjected to normal
hours of work, was not in the company payroll, and therefore, cannot be considered as an employee
of Royal Star.
 On the other hand, Laudato argues that Lazaro failed to remit her social security coverage from
1979 to 1986.

Issue: Whether or not (WON) Laudato is an employee of Royal Star, thereby bringing under the coverage
of the Social Security Act. – Yes, she is an employee.

Ruling of the Supreme Court:

 In applying the control test to determine the existence of EER, the fact that Laudato was paid on a
commission is immaterial.
 It does not also follow that if a worker does not have regular or normal hours of work, he is
discounted as an employee as defined under the Labor Code.
 What is important in the control test is the that employer has control over the means, methods, and
the result of the work of the employee.
 A Memorandum by Lazaro proves that without a doubt that he had control over the work of
Laudato.

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 This memorandum states that no commissions were to be given on all "main office" sales from walk-
in customers and enjoining salesmen and sales supervisors to observe this new policy.
 Hence, Laudato is an employee of Royal Star.

Phil. Global Communication vs. De Vera, 2005

 The respondent doctor herein offered his services to Philcom, herein petitioner.
 The respondent’s job was to attend to the medical needs of Philcom’s employees.
 The agreement was denominated as a “retainership contract” which will last for one year subject to
renewal.
 The contract was then renewed annually from 1981 1994.
 For the years 1995 and 1996, the renewal was only made verbally.
 In the December 1996, Philcom informed De Vera that it would discontinue the retainer’s contract
because the management decided it would be more practical to employ medical services to its
employees through hospitals near the company premises.
 De Vera then filed a complaint for illegal dismissal before the NLRC.
 The Labor Arbiter than dismissed his complaint because De Vera was only a retained physician and
was thus considered an independent contractor. As such, there was no dismissal to speak of.

Issue: WON De Vera was an employee of Philcom. – No, he is not.

Ruling of the Supreme Court:

 De Vera is not an employee, following the control test.

 De Vera set his own parameters of what his duties would be in his services to Philcom.
 When he started working, he was never included in the payroll, thereby eliminating the power of
payment as a requisite of determining employer-employee relationship.
 Also, De Vera could even engage in private practice if he chose to do so.
 Therefore, he is not an employee of Philcom.

Aliviado vs. Proctor & Gamble Phils., Inc., and Promm-Gem Inc., 2010

 Petitioners worked as merchandisers of P&G from various dates, starting as early as 1982 or as late
as June 1991, to either May 1992 or March 1993.
 They all individually signed employment contracts with either Promm-Gem or SAPS for periods of
more or less five months at a time.
 They were assigned at different outlets, supermarkets and stores where they handled all the
products of P&G. They received their wages from Promm-Gem or SAPS.
 P&G is principally engaged in the manufacture and production of different consumer and health
products, which it sells on a wholesale basis to various supermarkets and distributors. To enhance
consumer awareness and acceptance of the products, P&G entered into contracts with Promm-Gem
and SAPS for the promotion and merchandising of its products.

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 In December 1991, petitioners filed a complaint against P&G for regularization, service incentive
leave pay and other benefits with damages. The complaint was later amended to include the matter
of their subsequent dismissal.
 Petitioners insist that they are employees of P&G and that they were recruited by the salesmen of
P&G and were engaged to undertake merchandising chores for P&G long before the existence of
Promm-Gem and/or SAPS.
 They also claim that when the latter had its so-called re-alignment pro-gram, petitioners were
instructed to fill up application forms and report to the agencies which P&G created.
 They further claim that P&G instigated their dismissal from work as can be gleaned from its letter to
SAPS dated February 24, 1993, informing the latter that their Merchandising Services Contract will
no longer be renewed.

Issue: WON Promm-Gem or SAPS is a labor only contractor.

Ruling:

 ART. 106. Contractor or subcontractor.

There is "labor-only" contracting where the person supplying workers to an employer does not have
substantial capital or investment in the form of tools, equipment, machineries, work premises, among
others, and the workers recruited and placed by such person are performing activities which are directly
related to the principal business of such employer. In such cases, the person or intermediary shall be
considered merely as an agent of the employer who shall be responsible to the workers in the same
manner and extent as if the latter were directly employed by him.

 The financial statements of Promm-Gem show that it has substantial investment which relates to
the work to be performed.
 It is also relevant to mention that Promm-Gem already considered the complainants working under
it as its regular, not merely contractual or project, employees.
 As such, Promm-Gem cannot be considered as a labor-only contractor. We find that it is a legitimate
independent contractor.
 On the other hand, in the Articles of Incorporation of SAPS, there is no showing of substantial in-
vestment in tools, equipment or other assets. Considering that SAPS has no substantial capital or
invest-ment and the workers it recruited are performing activities which are directly related to the
principal busi-ness of P&G, we find that the former is engaged in "labor- only contracting".
 Where ‘labor-only’ contracting exists, the Labor Code itself establishes an employer-employee rela-
tionship between the employer and employees of the ‘labor-only’ contractor.
 Consequently, the petitioners recruited and supplied by SAPS— which engaged in labor-only con-
tracting — are considered as the employees of P&G. On the other hand, the petitioners who worked
under and were dismissed by Promm-Gem, are considered employees of Promm-Gem, not of P&G.

ALBERT TENG, doing business under the firm name ALBERT TENG FISH TRADING, and EMILIA TENG-
CHUA vs. PAHAGAC, et. al

 Albert Teng Fish Trading engaged in deep sea fishing and owned boats (basnig), equipment, and
other fishing paraphernalia.

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 Teng claims that he customarily enters into joint venture agreements with master fisherman
(maestros) who are skilled and are experts in deep sea fishing; they take charge of the management
of each fishing venture, including the hiring of the members of its complement.
 He says that the maestros hired the respondent workers as checkers to determine the volume of the
fish caught in every fishing voyage.
 The respondent workers filed a complaint for illegal dismissal against Albert Teng Fish Trading, Teng,
and Chua before the NCMB, Region Branch No. IX, Zamboanga City.
 They alleged that Teng hired them, without any written employment contract performing several
activities relative to fishing expeditions.
 They also argue that they received regular monthly salaries, 13th month pay, Christmas bonus, and
incentives in the form of shares in the total volume of fish caught.
 Petitioner Teng expressed his doubts on the correct volume of fish caught in every fishing voyage
thereafter, their services had been terminated.

Issue: WON there was employer-employee relationship existed between Teng and the respondent
workers. – Yes, there was.

Ruling:

 The Court agrees with the CA’s finding that sufficient evidence exists indicating the existence of an
employer-employee relationship exist between Teng and the respondent workers.
 The element of control which the court ruled in a number of cases to is considered to be a strong
indicator of the existence of an employer-employee relationship.
 Teng cannot hide behind his argument that the respondent workers were hired by the maestros.
 To consider the respondent workers as employees of the maestros would mean that Teng
committed impermissible labor-only contracting which is prohibited by Section 5 of the DO No. 18-
02, which implements Article 106 of the Labor Code.

Hiring of Employees

Duncan Association of Detailman-PTGWO v. Glaxo Wellcome Philippines, Inc, 2004

 Tecson was hired by Glaxo Wellcome Philippines, Inc. (Glaxo) as a medical representative.
 After being hired, he underwent training and orientation.
 Tecson then signed a contract of employment which stipulates that an employee must resign from
Glaxo if they should have any affinity with employees or employees from a competing drug
companies if such affinity could pose a conflict of interest.
 The Code of Conduct of Glaxo Company also provides that an employee is expected to inform
management of any existing or future relationship.
 After some time, Tecson entered into a romantic relationship with Bettsy, an employee from Astra
Pharmaceuticals (Astra), competitor of Glaxo.
 Even before they got married, Tecson received reminder from his District Manager regarding the
conflict of interest the affinity might pose.

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 Still, they both got married.
 Tecon’s superiors then requested that either him or Betsy would resign from their job, but also
expressed that they want to retain him as well.
 Tecson requested more time to decide.
 He then decided to apply for the milk division of Glaxo, thinking that Astra did not have one, but the
application was denied due to Glaxo’s “least-movement-possible” policy.
 Glaxo then transferred him to Butuan branch to which Tecson was not really happy about.
 He brought the matter to the grievance committee but to no avail.
 The National Conciliation and Mediation Board affirmed Glaxo’s right to transfer Tecson to another
sales territory.

Issue: WON Glaxo’s policy of not allowing an affinity with an employee of another competing drug
company valid exercise of management prerogative – Yes, it is.

Ruling:

 Prohibiting an employee from having a relationship with an employee of a competitor company is a

valid exercise of management prerogative.
 Glaxo has the right to guard its secrets, manufacturing formulas, and marketing strategies from its
competitors.
 The prohibition against personal and marital relationships with employees from competitor
companies is reasonable because such relationships might compromise the interests of the
company.
 Moreover, the argument that Tecson was constructively dismissed cannot be supported because
Glaxo even expressed its desire to retain him and made it an option for him that Bettsy resign to
eliminate conflict of interest.

Star Paper Corporation, Ongsitco & Chua vs. Simbol, Comia & Estrella, 2006

 Star Paper Corp. (Star Corp.) is engaged in trading paper products, and it was the employer of
Simbol and Comia.
 Simbol met Dayrit, who is also an employee of Star Corp., whom he married.
 As for Comia, she met Howard, a co-employee, whom she married.
 Another employee by the name of Estralla also had a relationship with a co-employee from which
she got pregnant.
 All of them were proven to be regular employees from evidence.
 Under Star Corporation’s policy, the employees were informed that if two employees developed a
friendly relationship in their employment, and decided to get married, one of them should resign.
 Respondents herein then assail the policy as they were forced to resign in the implementation of the
same.

Issue: WON the policy of Star Corp. is a valid management prerogative. – No, it is not.

Ruling:

 It should be noted that when the respondents were hired, they were found fit for the job.

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 The petitioners herein fail to prove that such relationship within the workplace could be detrimental
to its business operations.
 This is just a mere fear of less efficiency on the part of married employees, both working together
which is unsubstantiated.
 As such an unproven presumption cannot be a valid basis for such an exercise of management
prerogative.

Del Monte Philippines vs. Velasco, 2007

 Lolita was a seasonal employee of Del Monte Philippines, but she was later on regularized.
 Her latest assignment was a Field Laborer.
 Due to her absences, she was given warning by the company.
 Her absences without permission led to the forfeiture of her vacation leave entitlement for the year
1991 to 1992.
 Later on a notice of hearing was sent to her notifying her of the charges filed against her for
violating the Absence Without Official Leave rule.
 After hearing, petitioner then terminated the services of Lolita.
 Aggrieved, Lolita filed a case of illegal dismissal against Del Monte because she argues that her
absences were valid due to her suffering of urinary tract infection.

Issue: WON the termination due to excessive absences was valid. – NO, it was not.

Ruling:

 Petitioner cannot use previous infractions to lay down a pattern of absenteeism or habitual
disregard of company rules to justify the dismissal of respondent.
 The undeniable fact is that her absences in 1994, respondent was pregnant and suffered related
illnesses.
 Respondent's discharge by reason of absences caused by her pregnancy is covered by the
prohibition under the Labor Code.
 Since her last string of absences is justifiable and had been subsequently explained, the petitioner
had no legal basis in considering these absences together with her prior infractions as gross and
habitual neglect.
 Therefore, there was illegal dismissal.

Yrasuegui vs. Philippine Airlines, Inc, 2008

 Yrasuegui was a former international flight steward of Philippine Airlines, Inc. (PAL).
 He stands five feet and eight inches (5'8") with a large body frame. The proper weight for a man of
his height and body structure is from 147 to 166 pounds, the ideal weight being 166 pounds, 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.
 Petitioner failed to meet the company’s weight standards prompting another leave without pay, and
having failed so many times, the cycle went on until he was formally informed by PAL that due to his

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 inability to attain his ideal weight, “and considering the utmost leniency” extended to him “which
spanned a period covering a total of almost five (5) years”, his services were considered terminated
“effective immediately”.
 Hence, he filed this petition claiming that he was illegally dismissed.

ISSUE: WON the petitioner was illegally dismissed. – Yes, he was.

Ruling:

 The obesity of petitioner is a ground for dismissal under Article 282 (e) of the Labor Code.
 A reading of the weight standards of PAL would lead to no other conclusion than that they
constitute a continuing qualification of an employee in order to keep the job. An employee may be
dismissed the moment he is unable to comply with his ideal weight as prescribed by the weight
standards. The dismissal of the employee would thus fall under Article 282 (e) of the Labor Code.
 The obesity of petitioner, when placed in the context of his work as flight attendant, becomes an
analogous cause under Article 282 (e) of the Labor Code that justifies his dismissal from the service.
 His obesity may not be unintended, but is nonetheless voluntary.
 As the CA correctly puts it, “[v]oluntariness basically means that the just cause is solely attributable
to the employee without any external force influencing or controlling his actions. This element runs
through all just causes under Article 282, whether they be in the nature of a wrongful action or
omission. Gross and habitual neglect, a recognized just cause, is considered voluntary although it
lacks the element of intent found in Article 282 (a), (c), and (d).”

Wages

Vergara, Ricardo vs. Coca-Cola Bottlers Philippines Inc., 2013

 Vergera, Jr. was an employee of Coca-Cola Phil. Inc. from 1968 to 2002 as a District Sales Supervisor
for Las Pinas City.
 In the Retirement Plant and Regulations of the time, the Annual Performance Incentive Pay of RSMs,
DDS, and SSS shall be considered in the computation of retirement benefits.
 In the case herein, he claims to be entitled to an additional Php 474,600.00 as Sales Management
Incentives and to 496,016.67.
 He filed a complaint before the NLRC for the payment of Retirement Benefits, Merit Increase,
Commission/Incetives, Length of Service.
 After several conferences, both parties agreed to the merit license increase and length of service.
 Thereafter, thy filed a position dealing with the other issues of Sales Management Incentive
entitlement and illegal deduction.

Issue: WON the Sales Management Incentive should be included in the computation of petitioner’s
retirement benefits. – NO, he is not.

Ruling

 Petition lacks merit.

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 As a general rule, employees have a right to the benefits voluntarily granted to them by their
employer.
 As such, those benefits cannot be reduced, or discontinued by the employer pursuant to the non-
diminution of benefits supported by the Constitution.
 Article 4 of the Labor Code also says that, "all doubts in the implementation and interpretation of
this Code, including its implementing rules and regulations, shall be rendered in favor of labor."
 The requirements of the diminution of benefits are: [1] the benefit or grant is founded on a policy or
a practice, [2] the policy or practice is consistent and deliberate, [3] the practice is not due to error
in the application of a difficult question of law, and [4] diminution or discontinuance is unilaterally
done by the employer
 All these requisites must be proven by the employee, and not the employer.
 Jurisprudence will show that there is not fixed length of time required for a practice or policy to be
considered as being deliberately implemented.
 What matters in the previous cases is the regularity and deliberateness of the grant over a great
period of time.
 In this case, the Court herein did not find substantial evidence to prove that the grant of Sales
Management Incentive (SMI) had ripened into company practice.
 This is because the petitioner failed to adduce the evidence.
 All he had were the sworn statements of former co-workers who claimed that the SMI was included
in their retirement package which did not constitute sufficient proof, more so when these were
sufficiently countered by the respondent.

Milan, et. Al vs. NLRC, Solid Mills Inc., and/or Philip Ang, 2015

 Petitioners are the employees of Solid Mills Inc. (SMI) and they are represented by their collective
bargaining agent, NAFLU.
 Petitioners were allowed to stay in a village owned by SMI for their convenience and there was an
agreement that the petitioners would vacate anytime SMI deems fit.
 IN 2003, SMI ceased operations due to serious business losses.
 Petitioners were then sent notices to vacate the premises, and were asked to sign a Memorandum
of Agreement with Release and Quitclaim.
 Such signing would be considered as a condition for the release of their termination benefits and
separation pay, but they refused to sign it.
 Petitioners then filed a complaint before the LA on the ground that there accrued benefits and
separation pay cannot be withheld because it is based on company policy and practice.
 SMI countered that the complaint was premature because they have not yet vacated the property in
view of the Memorandum of Agreement.

Issue: May SMI withheld validly the benefits? -Yes, they can.

Ruling:

 As a general rule, the Labor Code provides that employers are prohibited from withholding wages
from employee, pursuant to Article 116 of the Labor Code (LC).

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 The LC also prohibits elimination and diminution of benefits under Article 100.
 However, there is an exception.
 However, the employers' institution of clearance procedures before the release of wages is an
exception to the general rule.
 In addition, the Civil Code provides that the employer is authorized to withhold wages for debts due
under Article 1706.
 In the case herein, the debt herein incurred by the employees was the use of the village, and as
such, it is subject to clearance procedures.
 This is consistent with the equitable principle that "no one shall be unjustly enriched or benefited at
the expense of another."
 Thus, SMI can validly withhold the benefits of its employees until they have vacated the premises.

Toyota Pasig, Inc., vs. De Peralta, 2016

 Respondent herein field a complaint for illegal dismissal, illegal deduction, unpaid commission,
annual profit sharing, and damages against Toyota Pasig and company.
 The complaint alleges that Toyota Pasig hired respondent as a cashier in 1997 and that the she
worked her way up the ranks to Insurance Sales Executive.
 The respondent’s relations with petitioner went downhill when her husband, also an employee od
petitioner, and President of Toyota Pasig organized a collective bargaining unit through a
certification election which was suddenly dismissed from service with the other officials and
directors of the union.
 Respondent then alleges that she was repeatedly harassed by petitioner due to her husband’s active
involvement in the union.
 She was issued an issuance of a Notice to Explain accusing her of the various act in relation to the
processing of the insurance of 3 units as outside transactions and claiming commissions for it.
 As such, she was preventively terminated thereafter.
 Petitioner justifies this by saying that respondent’s dismissal was with just cause because she was
proven to have committed acts of dishonesty and falsification by claiming commissions for new
business accounts which should have been duly credited to the dealership.

Issue: WON respondent should be awarded her monetary claims representing unpaid commissions as
part of her wages. – Yes

Ruling:

 The Court herein defined wage as, “renumeration of earnings, however, designated, capable of
being expressed in terms of money, whether fixed or ascertained on a time, task, piece, or
commission basis.”
 It also cited Iran v. NLRC, where it ruled that commissions are part of wages because while they are
included to inspire employees to put a little more industry on their jobs, commissions are still direct
renumerations for services rendered.
 Therefore, commissions also constitute as part of wages.

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S.I.P Food House vs. Batolina, 2010

 The GSIS Multi-Purpose Cooperative (GMPC) is an entity organized by the employees of the
Government Service Insurance System (GSIS). Incidental to its purpose, GMPC wanted to operate a
canteen in the new GSIS Building, but had no capability and expertise in this area.
 Thus, it engaged the services of the petitioner S.I.P. Food House (SIP), owned by the spouses
Alejandro and Esther Pablo, as concessionaire. The respondents Restituto Batolina and nine (9)
others (the respondents) worked as waiters and waitresses in the canteen.
 In February 2004, GMPC terminated SIP's "contract as GMPC concessionaire".
 The termination of the concession contract caused the termination of the respondents'
employment, prompting them to file a complaint for illegal dismissal, with money claims, against SIP
and the spouses Pablo.
 The respondents allege before the Labor Arbiter that they were SIP employees who were illegally
dismissed sometime in February and March 2004.
 SIP did not implement Wage Order Nos. 5 to 11 for the years 1997 to 2004. They did not receive
overtime pay although they worked from 6:30 in the morning until 5:30 in the afternoon, or other
employee benefits such as service incentive leave, and maternity benefit (for their co-employee
Flordeliza Matias). Their employee contributions were also not remitted to the Social Security
System.

Issues:

1. WON the SIP is the employer of the workers.

2. WON SIP is liable for the money claims of the employees.

Ruling:

 The Court held in Mabeza v. National Labor Relations Commission that the employer cannot simply
deduct from the employee's wages the value of the board and lodging without satisfying the
following requirements: (1) proof that such facilities are customarily furnished by the trade; (2)
voluntary acceptance in writing by the employees of the deductible facilities; and (3) proof of the
fair and reasonable value of the facilities charged. As the CA aptly noted, it is clear from the records
that SIP failed to comply with these requirements.
 SIP and its proprietors could not be considered as mere agents of GMPC because they exercised the
essential elements of an employment relationship with the respondents such as hiring, payment of
wages and the power of control, not to mention that SIP operated the canteen on its own account
as it paid a fee for the use of the building and for the privilege of running the canteen. The fact that
the respondents applied with GMPC in February 2004 when it terminated its contract with SIP, is
another clear indication that the two entities were separate and distinct from each other.
 b) Respondents’ money claims
 The free board and lodging SIP furnished the employees cannot operate as a set-off for the
underpayment of their wages.
 On the collateral issue of the proper computation of the monetary award, we also find the CA ruling
to be in order. Indeed, in the absence of evidence that the employees worked for 26 days a month,

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 no need to recompute the award for the respondents who were "explicitly claiming for their salaries
and benefits for the services rendered from Monday to Friday or 5 days a week or a total of 20 days
a month."

Ricardo vs Coca-Cola Bottlers Philippines Inc, 2013

 Vergara Jr., was an employee of the respondent Coca-Cola Bottlers Philippines Inc., from May 1968
until he retired on January 31, 2002 as a District Sales Supervisor for Las Pinas City, Metro Manila.
 As stipulated in respondent’s existing Retirement Plan Rules and Regulations at the time, the Annual
Performance Incentive Pay of RSMs, DSS, and SSS shall be considered in the computation of
retirement benefits
 Petitioner claims that he is entitled to an additional Php 474,600.00 as Sales Management Incentives
and to the amount of Php 496, 016.67 which respondent allegedly dedicated illegally representing
the unpaid accounts of two dealers within his jurisdiction.
 He filed a complaint before NLRC for the payment of his Full Retirement Benefits, Merit Increase,
Commisssion/Incentives, Length of Service.
 After series of mandatory conference, both parties agreed with regard the issue of merit increase
and length of service. Subsequently, they filed respective position dealing with the other issues of
Sales Management Incentive entitlement and illegal deduction
 While on appeal, parties executed a compromise agreement whereby petitioner acknowledge full
payment of respondent of the amount go Php 496, 016.67 covering the amount illegally deducted.

Issue: WON Sales Management Incentive should be included in computation of petitioner’s retirement
benefits on the ground of consistent company practice.

Ruling

 Employees have a vested right over existing benefits voluntarily granted to them by their employer.
Thus, any benefit and supplement being enjoyed by the employees cannot be reduced, diminished,
discontinued or eliminated by the employer. The principle of non-diminution of benefits is actually
founded on the Constitutional mandate to protect the rights of workers, to promote their welfare,
and to afford them full protection. In turn, said mandate is the basis of Article 4 of the Labor Code
which states that "all doubts in the implementation and interpretation of this Code, including its
implementing rules and regulations, shall be rendered in favor of labor."
 In the case, the Court finds no substantial evidence to prove that the grant of Sales Management
Incentive to all retired DSSs regardless of whether or not they qualify to the same had ripened into
company practice. The petitioner failed to adduce proof to establish his allegation that SMI has been
consistently, deliberately and voluntarily granted to all retired DSSs without any qualification or
conditions whatsoever.
 At best, what the petitioner presented was sworn statements of Hidalgo and Velasquez, former DSSs
of respondent who retired in 2000 and 1998 respectively claiming that the SMI was included in their
retirement package even if they did not meet the sales and collection qualifiers.

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 Therefore, respondent's isolated act of including the SMI in the retirement package of Velazquez
could hardly be classified as a company practice that may be considered an enforceable obligation.
To repeat, the principle against diminution of benefits is applicable only if the grant or benefit is
founded on an express policy or has ripened into a practice over a long period of time which is
consistent and deliberate; it presupposes that a company practice, policy and tradition favorable to
the employees has been clearly established; and that the payments made by the company pursuant
to it have ripened into benefits enjoyed by them.

Wage Enforcement and Recovery

Tiger Construction and Development Corp (TCDC) vs. Abay Et Al., 2010

 An inspection was conducted by DOLE officials at the premises of TCDC, and several Labor Standard
Violations were noted like deficiencies in record keeping, non-compliance with wage orders, non-
payment of holiday pay, and underpayment of 13 th month pay.
 Thereafter, the case was set for summary hearing.
 Before the hearing, however, the Director of the Regional Office issued an Order saying that the
case be referred back to the NLRC on the ground that the money claim of the workers exceeds the
jurisdictional amount of 5,000.
 There was yet again another inspection on the same case by Secretary Sto. Tomas and he found that
jurisdiction really belonged to the Regional Director and therefore, declared that the endorsement
to the NLRC was an error.
 TCDC argues that the case was dismissed due to lack of jurisdiction as adjudged by the Regional
Director.

Issue: WON the Regional Director may still have cognizance over the case even though it mistakenly
referred the matter to the NLRC. – Yes, it still has jurisdiction

Ruling:

 While it is true that orders issued without jurisdiction are considered null and void and, as a general
rule, may be assailed at any time, the issue is in this case is that the Regional Director herein issued
an order thinking it had no jurisdiction.
 Under Article 128 (b) of the Labor Code,14 as amended by Republic Act (RA) No. 7730,15 the DOLE
Secretary and her representatives, the regional directors, have jurisdiction over labor standards
violations based on findings made in the course of inspection of an employer’s premises.
 Such a mistaken referral to the NLRC by the Regional Director in this case would not, in effect, oust
the Regional Director from taking back its cognizance of the case.

Superior Packaging Corporation vs. Balagsay, 2012

 Petitioner herein engaged the services of Lancer so that it could provide services to its business,
involving the manufacture and sale of commercial and industrial corrugated boxes.

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 The petitioner alleges that the respondents worked with them for four months from February to
June 1998.
 The respondent’s tasks consisted of loading, unloading, and segregation of boxes.
 The president of the respondent filed a complaint against the petitioner for the underpayment of
wages, non-payment of premium pay for worked rest, overtime pay, and non-payment of salary.
 As such, the DOLE conducted an inspection of the petitioner’s premises and found several violations.
 These violations were (1) non-presentation of payrolls and daily time records, (2) non-submission of
annual report of safety organization, (3) medical and accident/illness reports, (4) non-registration of
establishment under Rule 1020 of Occupational and Health Standards, and (5) no trained first aide.
 The petitioner was not present during the summary investigations by the DOLE.
 Later on, an Order was issued in favor of the respondents.
 Petitioner was ordered to pay respondents their claims.
 However, the petitioner filed a motion for reconsideration (MR) on the ground that the respondents
are not its employees and should therefore, not make any payment.

Issue:

a. WON the Petitoner is solidarily liable with the contractor. – Yes.

b. WON the respondent is engaged in labor-only contracting. – Yes, it was.

Ruling:

 In labor-only contracting, the contractor is regarded as a mere agent between its employees and the
principal who engages in the services of the employees of the contractor.
 The principal is considered as the real employer of the contractor’s employees.
 Thus, the principal shall be liable for the payment of the contractor’s wages.
 In the instant case, the nature of the work of the respondent was directly related to the business of
the petitioner.
 Also, the marked disparity between the petitioner’s actual capitalization (₱ 25,000.00) and the
resources needed to maintain its business, i.e., "to establish, operate and manage a personnel
service company which will conduct and undertake services for the use of offices, stores,
commercial and industrial services of all kinds," supports the finding that Lancer was, indeed, a
labor-only contractor.

Department of Labor & Employment vs. Kentex Manufacturing Corp., 2019

 A fire broke out in the factory owned by Kentex, and it claimed the lives of 72 and injured others as
well.
 DOLE then went to the premises of Kentex after the incident and it assessed the company’s
compliance with the occupational health and safety standards.
 They found out that Kentenx had contracted with the CJC Manpower Services (CJC), and engaged in
the services of its workers.

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 A mandatory conference was set wherein DOLE discovered that CJC was ana unregistered private
recruitment and placement agency and that it was non-compliant with the occupational health and
safety standards as well as with labor standards (underpayment of wages and non-payment of
statutory benefits).
 Due to these findings, DOLE issued a Compliance Order that declared CJC a labor-only contractor
asnd that Kentex is the principal.
 However, CJC said that there was no service contract between them and Kentex CJC's, that CJC had
deployed 99 workers at the Kentex factory on the day of the incident, that there were no
employment contracts between CJC and the workers, that a CJC representative was sent once a
week to Kentex only to check on the workers' daily time records, that Kentex remitted to CJC the
wage of Php230.00/day for each of the deployed workers from which amount CJC deducted
administrative costs and other statutory contributions, leaving each worker a mere wage of
Php202.50 a day.
 Kentex refuted CJC's claims.
 They alleged that CJC's workers were originally engaged by Panday Management and Labor
Consultancy which CJC later absorbed and that the workers' wages ranged from Php250.00 to
Php350.00/day on top of CJC's wage of, more or less, Php202/day.
 They contended that while the corporate/business and employment records had all been gutted by
fire, Kentex nevertheless complied with the labor standards particularly on the minimum wage
requirement and with the occupational health and safety standards, as evidenced by a Certificate of
Compliance (COC) signed by the DOLE-NCR Regional Director Alex Avila (Avila).

Ruling:

 Both the DOLE-NCR and the CA correctly ruled that the Order had already become final and
executory in view of the failure of respondents Kentex and Ong to appeal therefrom to the Secretary
of Labor.
 Notice ought to be taken of the fact that, at the time the DOLE-NCR rendered its ruling, Department
Order No. 131-13 Series of 2013 was the applicable rule of procedure.
 Rule 11, Section 1. Appeal. — The Compliance Order may be appealed to the Office of the Secretary
of Labor and Employment by filing a Memorandum of Appeal, furnishing the other party with a copy
of the same, within ten (10) days from receipt thereof.
 No further motion for extension of time shall be entertained. A mere notice of appeal shall not stop
the running of the period within which to file an appeal.
 In this case, Kentex and its officers moved for the reconsideration of the subject Order.
 This did not halt or stop the running of the period to elevate the matter to the DOLE Secretary.

Wage Protection Provisions and Prohibitions Regarding Wages

Nina Jewelry Manufacturing of Metal Arts Inc. vs. Montecillo, 2011

 Theft was being committed in Nina’s Jewelry.

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 Because of this, Nina Jewelry imposed a policy where goldsmiths are required to post a cash bond or
deposit but not exceeding 15% of the weekly salary.
 The deposits were made to answer for any possible loss or damage that may be sustained from the
goldsmith’s fault in handling gold.
 These deposits will then be returned upon completion of the work of the goldsmith and after
accounting of the gold.
 Respondents herein argue that they were given no option but to post the deposits and allege that
they were illegally dismissed by Nina Jewelry.
 However, the complaint was amended on September 20, 2004 for reinstatement and payment of
back wages, attorney’s fee and 13th month pay.
 The petitioner on the other hand argues that the respondents no longer reported for work but the
policy has not been implemented.

Issue:

1. WON there was constructive dismissal. – NO, there was not.

2. WON there was basis for the policy to be implemented – No, there is no basis.

Ruling:

 Constructive dismissal occurs when there is cessation of work because continued employment is
rendered impossible, unreasonable or unlikely; when there is a demotion in rank or diminution in
pay or both; or when a clear discrimination, insensibility, or disdain by an employer becomes
unbearable to the employee.
 In this case, records show that respondent failed to prove termination as they did not submit any
notice of termination issued by the petitioner.
 In the second issue, employers should generally be given leeway in their exercise of management
prerogatives.
 In employing a new policy, it should follow the requirements as set by Article 113 and 114 undder
the Labor Code: [1] establish that the making of deductions from the salaries is authorized by law, or
regulations issued by the Secretary of Labor and [2] the posting of cash bonds should be proven as a
recognized practice in the jewelry manufacturing business, or alternatively, the petitioners should
seek for the determination by the Secretary of Labor.
 However, the petitioner herein failed to adduce evidence that posting bonds is either a practice in
the jewelry or recognized by the DOLE Secretary.

Antonio Locsin II v. MEKENI Food Corporation, 2013

 Respondent is the employer of the petitioner.

 When Locsin was hired he was offered a car plan where half of the cost of the vehicle is to be paid
by the MEKENI and the other to be deducted from his salary.
 Petitioner began working in 2004.
 The car is a used Honda Civic valued at P280,000 and he paid for his 50% share through salary
deductions of P5,000 each month.
 Subsequently, he resigned in February 2006.

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 By then, a total of P112,500 had been deducted from his monthly salary and applied as part of the
employee’s share in the car plan.
 In his resignation letter, Locsin made an offer to purchase his service vehicle by paying the
outstanding balance thereon.
 However, the parties could not agree on the terms of the proposed purchase. Petitioner thus
returned the vehicle to Mekeni on 2006.
 Petitioner made personal and written follow-ups but to no avail.
 Mekeni replied that the company car plan benefit applied only to employees who have been with
the company for 5 years.
 Petitioner then filed against Mekeni a complaint for recovery of monetary claims and recovery of
monthly salary deductions for his cost-sharing in the car plan with the NLRC.

Issue: WON the petitioner is entitled to refund of all amounts applied to the cost of the service vehicle
under the car plan. – Yes, but only pertaining to his contributions in the car plan.

Ruling:

 From the evidence on record, the car plan offered to petitioner was subject to no other term or
condition than that Mekeni shall cover one-half of its value, and petitioner shall in turn pay the
other half through deductions from his monthly salary.
 Respondent did not show, by evidence, that there are other terms and conditions governing its car
plan agreement with petitioner.
 There is no evidence suggesting that if petitioner failed to completely cover one-half of the cost of
the vehicle, then all the deductions from his salary going to the cost of the vehicle will be treated as
rentals for his use thereof while working with Mekeni, and shall not be refunded.
 The Court then cannot allow that payments made on the car plan should be forfeited by Mekeni and
treated simply as rentals for petitioner’s use of the company service vehicle nor may they be
retained by it as purported loan payments, as it would have this Court believe.
 In light of the foregoing, it is unfair to deny petitioner a refund of all his contributions to the car
plan. Under Article 22 of the Civil Code, “every person who through an act of performance by
another, or any other means, acquires or comes into possession of something at the expense of the
latter without just or legal ground, shall return the same to him.”
 Mekeni cannot enrich itself by charging petitioner for the use of its vehicle which is otherwise
absolutely necessary to the full and effective promotion of its business. It may not, under the claim
that petitioner’s payments constitute rents for the use of the company vehicle, refuse to refund
what petitioner had paid, for the reasons that the car plan did not carry such a condition; the subject
vehicle is an old car that is substantially, if not fully, depreciated; the car plan arrangement
benefited Mekeni for the most part; and any personal benefit obtained by petitioner from using the
vehicle was merely incidental.
 However, petitioner cannot recover Mekeni’s contribution to the cost of the vehicle because that is
not property or money that belongs to him.

Wesleyan University-Phils. vs. Wesleyan University-Phils., Faculty & Staff Association, 2014

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 Wesleyan University-Philippines is a non-stock, non-profit educational institution duly organized and
existing under the laws of the Philippines.
 Respondent Wesleyan University-Philippines Faculty and Staff Association, on the other hand, is a
duly registered labor organization acting as the sole and exclusive bargaining agent of all rank- and-
file faculty and staff employees of petitioner.
 In December 2003, the parties signed a 5-year CBA effective June 2003 until May 2008.
 In August 2005, petitioner, through its president, issued a Memorandum stating guidelines on the
implementation of vacation and sick leave credits as well as vacation leave commutation which
states that vacation and sick leave credits are not automatic as leave credits would be earned on a
month-to-month and only vacation leave is commuted or monetized to cash after the second year of
continuous service of an employee.
 Respondents President, Cynthia De Lara questioned the guidelines for being violative of existing
practices and the CBA which provide that all covered employees are entitled to 15 days sick leave
and 15 days’ vacation leave with pay every year and that after the second year of service, all unused
vacation leave shall be converted to cash and paid to the employee not later than August 30 of each
year.
 Respondent filed a grievance complaint on the implementation of the vacation and sick leave policy.
 Petitioner announced the plan of implementing a one-retirement policy that unacceptable to
respondent.
 Respondent submitted affidavits to prove that there is an established practice of giving two
retirement benefits, one from the Private Education Retirement Annuity Association Plan and
another from the CBA Retirement Plan.

Issue: WON the respondents are entitled to two retirement plans. – Yes, they are entitled.

Ruling:

 The Non-Diminution Rule of the Labor Code prohibits employers from eliminating or reducing the
benefits received by their employees.
 This rule applies only if the benefit is based on an express policy, a written contract, or has ripened
into a practice.
 To be considered a practice, it must be consistently and deliberately made by the employer over a
long period of time.
 An exception to the rule is when "the practice is due to error in the construction or application of a
doubtful or difficult question of law."
 The error, however, must be corrected immediately after its discovery; otherwise, the rule on Non-
Diminution of Benefits would still apply.
 Respondent presented evidence (affidavits) to support its claim that there are two retirement plans.
 Based on the affidavits, petitioner has been giving two retirement benefits as early as 1997.
 Petitioner, on the other hand, failed to present evidence to counter the veracity of the affidavits.
 Petitioner's assertion that there is only one retirement plan since the CBA Retirement Plan and the
PERAA Plan are one and the same is not supported by any evidence.
 Thus, petitioner can’t eliminate the two-retirement policy and implement a one-retirement policy as
this would violate the rule on non- diminution of benefits.

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Payment of Wages

Congson vs. NLRC, 1995

 Congson is the owner of Southern Fishing Industry.

 The private respondents were hired by petitioner as piece-rate workers and they were paid at a rate
of P1.00 per tuna weighing thirty (30) to eighty (80) kilos per movement.
 During the first week of June 1990, petitioner proposed to his workers the reduction of the rate-per-
tuna movement due to the scarcity of tuna.
 Respondents then resisted petitioner's rate reduction.
 When they reported for work the next day, they had been replaced by a new set of workers.
 When they requested for a dialogue with the management, they were instructed to wait for further
notice. They waited for the notice of dialogue for a full week but in vain.
 Respondents filed against petitioner a case of underpayment of wages and non-payment of
overtime pay, 13th month pay, holiday pay, rest day pay, and five (5)-day service incentive leave
pay; and for constructive dismissal.
 Respondents then filed another case for claim of separation pay in case their complaint for
constructive dismissal be upheld.
 These two cases were consolidated.

Issue: WON the respondents are entitled to separation pay. - Yes

Ruling:

 Wages shall be paid only by means of legal tender.

 The only instance when an employer is permitted to pay wages in forms other than legal tender,
that is, by checks or money order, is when the circumstances prescribed in the second paragraph of
Article 102 are present.
 Since there is an existence of a strained relationship between parties evidenced by petitioner
refusing to reinstate the respondents.
 Petitioner even replaced private respondents with a new set of workers to perform the tasks of
private respondents.
 Hence, the respondents are entitled to be paid by legal tender and to separation pay since
petitioner refuses for re-instate them

North Davao Mining Corporation and Asset Privatization Trust vs. NLRC, et.al, 1996

 Because of financial losses, North Davao Mining Corporation laid off workers.
 Guillema is one among employees of North Davao who were separated by reason of the company’s
closure.
 It appears that from the beginning of its operations in 1981 until closure in 1992, it had been giving
separation pay equivalent to thirty (30) days’ pay for every year of service.

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 The region where North Davao operated was plagued by insurgency, so the employees had to
collect their salaries at a bank in Tagum, Davao del Norte, far from their workplace and with 2 hours
travel time.
 Petitioner here argues that the travel time to collect pay is not compensable.

Issue: WON time spent in collecting wages in a place other than the place of employment is
compensable. Yes, it is compensable.

Ruling:

 Under the Omnibus Rules of the Labor Code, Payment in a place other than the workplace shall be
permissible only under the following circumstances:
(1) When payment cannot be effected at or near the place of work by reason of the deterioration of
peace and order conditions, or by reason of actual or impending emergencies caused by fire, flood,
epidemic or other calamity rendering payment thereat impossible;
(2) When the employer provides free transportation to the employees back and forth; and
(3) Under any analogous circumstances; provided that the time spent by the employees in
collecting their wages shall be considered as compensable hours worked.
 Records also show that when an inspection was conducted by the DOLE at the premises of
petitioner NDMC at Amacan, Maco, Davao del Norte, it was found that petitioners had violated
labor standards law, place of payment of wages.
 Thus, payment of travel time should be compensable.

Heirs of Sara Lee vs. Rey, 2006

 Cynthia Rey, an Accounts Receivable Clerk, later became the Credit Administration Supervisor of
House of Sara Lee, a company engaged in the selling of a variety of product lines for men and
women, including cosmetics, apparels, perfumes, clothes and other items, through its various
outlets nationwide.
 Rey was found to have violated the company policies because of her unauthorized extension of
credit periods, non-collection of remittances , non-imposition of penalty charges, authorizing
purchases and giving of supervision fee despite non-remittance, etc.
 In the company policy, the dealers are to remit to the petitioner the proceeds of the sales within a
designated credit period counted from the day the said dealers acquired the merchandise from the
petitioner.
 To avoid late remittances, the petitioner imposed a penalty charge on the value of the unremitted
payment.
 If the dealer concerned has overdue payments or is said to be in default, he cannot purchase
additional products from the petitioner.
 Rey allegedly instructed the Accounts Receivables Clerk of CDO outlet to change the credit term of
one of the IBMs of the petitioner, who is the respondent’s sister-in-law, from the 52-day limit to
“unauthorized” term of 60 days.
 Since she violated the policies, she was dismissed from her job as it was a breach of trust and
confidence.

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Issue: WON was validly dismissed and is entitled to 13th Month Pay. – Yes, she was validly dismissed
but is not entitled to 13th month pay.

RULING:

 The respondent cannot feign ignorance of irregularity as she was sufficiently aware that the credit
extensions she made were beyond acceptable limits.
 She was aware of the implications of her extension which would inflate the sales commissions.
 As a consequence, a higher management immediately undertook an Auditor’s Report was issued,
expressly finding the respondent guilty of violating company policy. The activities conducted by the
management negated the suggestion that management tolerated Rey’s unauthorized extension.
 As a just cause for dismissal, loss of confidence is premised on the fact that an employee concerned
holds a position of trust and confidence.
 This situation applies where a person is entrusted with confidence on delicate matters, such as the
custody, handling, or care and protection of the employer’s property.
 But, in order to constitute a just cause for dismissal, the act complained of must be “work-related,”
such that the employee concerned is unfit to continue working for the employer.
 Distinction must be made as to the application of the doctrine of breach of trust and confidence
with respect to rank-in-file employees and managerial employees.
 In the case at bar, respondent is not an ordinary rank-and-file employee.
 Respondent occupied a highly sensitive and critical position and may thus be dismissed on the
ground of loss of trust and confidence.
 The position carried with it the duty to observe proper company procedures in the fulfillment of her
job, as it relates closely to the financial interests of the company.
 As to 13th month pay, she is not entitled thereto because it is only awarded to rank-and-file
employees.
 In this case, Rey had an important position above that of rank-and-file, so she is not entitled to 13 th
month pay.

Conditions of Employment

San Juan De Dios Hospital Employees Association vs. NLRC and San Juan De Dios Hospital, 1997

 Petitioners are the rank-and-file employee-union officers and members of San Juan De Dios Hospital
Employees Association
 They requested for the implementation and payment of the “40 Hours/5 Day Workweek with
compensable weekly two days off provided by Republic Act 5901.”
 The respondent hospital failed to give the favorable response and so the Petitioners filed a case
before the NLRC.
 The Labor Arbiter dismissed the complaint and it was later on affirmed by the NLRC.

Issue: WON Policy Instructions No. 54 issued by then Labor Secretary (now Senator) Franklin M. Drilon is
valid. – Yes, it was invalid.

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Ruling:

 The Policy Instructions assailed states — “Consistent with such spirit and intent, it is the position of
the Department that personnel in subject hospital and clinics are entitled to a full weekly wage for
seven (7) days it they have completed the 40-hours/5-day workweek in any given workweek.”
 The policy instruction seemingly implements Republic Act No. 5901, otherwise known as An Act
Prescribing Forty Hours A Week of Labor for Government and Private Hospitals Or Clinic Personnel.
 A thorough reading of Article 83 of the Labor Code betrays petitioners position that hospital
employees are entitled to a full weekly salary with paid two (2) days off if they have completed the
40-hour/5-day workweek.
 What Article 83 merely provides are: (1) the regular office hour of eight hours a day, five days per
week for health personnel, and (2) where the exigencies of service require that health personnel
work for six days or forty-eight hours then such health personnel shall be entitled to an additional
compensation of at least thirty percent of their regular wage for work on the sixth day. There is
nothing in the law that supports then Secretary of Labors assertion that personnel in subject
hospitals and clinics are entitled to a full weekly wage for seven (7) days if they have completed the
40-hour/5-day workweek in any given workweek.
 Therefore, The Secretary of Labor exceeded his authority by including a two-days off with pay in
contravention of the clear mandate of the statute.

Sime Darby Pilipinas, Inc. vs. NLRC (2nd Division) and Sime Darby Salaried Employees Association (Alu-
Tucp), 1998

 Petitioner is engaged in the manufacture of automotive tires, tubes, and other rubber products.
 Respondents herein is an association of monthly salaried employees of petitioner.
 They all worked from 7:45AM to 3:45PM with a 30-minute paid “on call” lunch break.
 Petitioner herein issued a memorandum advising all monthly salaried employees, except those
in the Warehouse and Quality Assurance Department, a change in work schedule.
 The hours were such that coffee break was only ten minutes, and that lunch break would be one
hour.
 Respondents felt affected by the change in the work schedule and the discontinuance of the 30-
minute paid “on-call” lunch break.
 They filed a complaint with the Labor Arbiter for unfair labor practice, discrimination and
evasion of liability.

Issue: WON the new work schedule was discriminatory of the union members and constitutes unfair
labor practice on the part of the petitioner. – No, it was not discriminatory.

Ruling:

 The new work schedule complies with the period of eight (8) hours per day without violating the
Labor Code.
 The new schedule applies to all employees whether they are union members or not.
 The change in working time applies to all factory employees in the same line of work whether or
not they are members of the private union.

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  The new scheme adopted does not prejudice the right of the respondents to self-organization.
 Even as the law is solicitous of the welfare of the employees, it must also protect the right of an
employer to exercise what are clearly management prerogatives.
 Thus, management is free to regulate, according to its own discretion and judgment, all aspects
of employment, including hiring, work assignments, working methods, time, place and manner
of work, processes to be followed, supervision of workers, working regulations, transfer of
employees, work supervision, lay off of workers and discipline, dismissal and recall of workers.
 Further, management retains the prerogative, whenever exigencies of the service so require, to
change the working hours of its employees.
 So long as such prerogative is exercised in good faith for the advancement of the employer's
interest and not for the purpose of defeating or circumventing the rights of the employees
under special laws or under valid agreements, this Court will uphold such exercise.

Philippine Airlines vs. NLRC, 1999

 Dr. Fabros was the flight surgeon of the petitioner company.

 He was assigned at the PAL Medical Clinic and was on duty from the afternoon until midnight.
 One night at 7 in the evening, Fabros left the clinic to have dinner at his residence not too far
from the clinic.
 Minutes after leaving, the clinic got an emergency call.
 One of the petitioner’s employees had suffered a heart attack.
 The nurse called private respondent at home to inform him of the emergency.
 The patient arrived at the clinic and was immediately rushed to the hospital.
 When Fabros reached the clinic, the nurse had already left with the patient to the hospital. The
patient died the following day.
 An investigation was then conducted.
 During the investigation, Fabros said that he was entitled to a thirty-minute meal break, that he
left his residence upon being informed by the nurse about the emergency and he arrived at the
clinic as fast as he could.
 The management charged private respondent with abandonment of post while on duty.
 Fabros was given a suspension for three months.
 Fabros then filed a complaint for illegal suspension against petitioner.

Issue: WON the suspension is proper – No, it was not.

Ruling:

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  Art. 85. 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, except in the following
cases when a meal period of not less than twenty (20) minutes may be given by the employer
provided that such shorter meal period is credited as compensable hours worked of the
employee; (a) Where the work is non-manual work in nature or does not involve strenuous
physical exertion; (b) Where the establishment regularly operates not less than sixteen hours a
day; (c) In cases of actual or impending emergencies or there is urgent work to be performed on
machineries, equipment or installations to avoid serious loss which the employer would
otherwise suffer; and (d) Where the work is necessary to prevent serious loss of perishable
goods. Rest periods or coffee breaks running from five (5) to twenty (20) minutes shall be
considered as compensable working time.
 The eight-hour work period does not include the meal break.
 Nowhere in the law may it be inferred that employees must take their meals within the
company premises.
 Employees are not prohibited from going out of the premises as long as they return to their
posts on time.
 Private respondent’s act, therefore, of going home to take his dinner is not abandonment.

Minimum Labor Standard Benefits

San Miguel Corporation vs. CA, 2002

 DOLE conducted a routine inspection in the premises of San Miguel Corporation (SMC) in Sta.
Filomena, Iligan City.
 It was discovered that there was underpayment by SMC of regular Muslim holiday pay to its
employees.
 SMC contested the findings and DOLE conducted summary hearings.
 SMC failed to submit proof that it was paying regular Muslim holiday pay to its employees.
 Hence, Director IV of DOLE Iligan District Office issued a compliance order, directing SMC to consider
Muslim holidays as regular holidays and to pay both its Muslim and non-Muslim employees holiday
pay within thirty (30) days from the receipt of the order.
 SMC appealed to the DOLE main office in Manila but the appeal was dismissed for lack of merit and
the order of the Director was affirmed.
 SMC went to this Court for relief via a petition for certiorari, which this Court referred to the Court
of Appeals.
 The appellate court, promulgated ruled, as follows: the Order of Director Macaraya is hereby
MODIFIED with regards the payment of Muslim holiday pay from 200% to 150% of the employee's
basic salary.

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Issue: WON public respondents seriously erred and committed grave abuse of discretion when they
granted Muslim holiday pay to non-Muslim employees. – No, there was no grave abuse of discretion.

Ruling:

 Under Article 170 of the Labor Code, Muslim holidays shall be officially observed in the Provinces of
Basilan, Lanao del Norte, Lanao del Sur, Maguindanao, North Cotabato, Iligan, Marawi, Pagadian,
and Zamboanga and in such other Muslim provinces and cities as may hereafter be created;
 The foregoing provisions should be read in conjunction with Article 94 of the Labor Code, which
provides:
Art. 94. Right to holiday pay. -
(a)Every worker shall be paid his regular daily wage during regular holidays, except in retail and
service establishments regularly employing less than ten (10) workers;
(b)The employer may require an employee to work on any holiday but such employee shall be
paid a compensation equivalent to twice his regular rate; x x x.
 There should be no distinction between Muslims and non-Muslims as regards payment of benefits
for Muslim holidays.

Tan vs. Lagrama, 2002

 Petitioner Tan is the president of Supreme Theater Corporation and the general manager of Crown
and Empire Theaters in Butuan City.
 Respondent Lagrama is a painter, making ad billboards and murals for the motion pictures shown at
the Empress, Supreme, and Crown Theaters for more than 10 years.
 On October 1998, Lagrama's employment was terminated by Tan for allegedly urinating inside the
work area.
 Lagrama denied the charge against him.
 He then filed a complaint for illegal dismissal.

Issues:

1. WON there was an employer-employee relationship existed between petitioner and private
respondent. – Yes, there was.
2. WON petitioner illegally dismissed private respondent. – Yes, he did.

Ruling:

 An independent contractor is one who carries on a distinct and independent business and
undertakes to perform the job, work, or service on its own account and under its own responsibility
according to its own manner and method, free from the control and direction of the principal in all
matters connected with the performance of the work except as to the results thereof.
 The primary standard for determining regular employment is the reasonable connection between
the particular activity performed by the employee in relation to the usual trade or business of the
employer.

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 In this case, there is such a connection between the job of Lagrama painting billboards and murals
and the business of petitioner. To let the people know what movie was to be shown in a movie
theater requires billboards.
 Petitioner in fact admits that the billboards are important to his business.
 The employer has the burden of proving the lawfulness of his employee's dismissal.
 The validity of the charge must be clearly established in a manner consistent with due process.
 The Implementing Rules of the Labor Code provide that no worker shall be dismissed except for a
just or authorized cause provided by law and after due process.
 This provision has two aspects: (1) the legality of the act of dismissal, that is, dismissal under the
grounds provided for under Article 282 of the Labor Code and (2) the legality in the manner of
dismissal.
 In this case, by his refusal to give Lagrama work to do and ordering Lagrama to get out of his sight as
the latter tried to explain his side, petitioner made it plain that Lagrama was dismissed.
 Urinating in a work place other than the one designated for the purpose by the employer
constitutes violation of reasonable regulations intended to promote a healthy environment under
Art. 282(1) of the Labor Code for purposes of terminating employment, but the same must be
shown by evidence.
 In the case at bar, there is no evidence that Lagrama did urinate in a place other than a rest room in
the premises of his work.

Lambo vs. NLRC, 1999

 Lambo and Belocura were tailors of private respondents J.C. Tailor Shop and/or Johnny Co on
September 1985 and March 1985.
 They worked from 8:00 a.m. to 7:00 p.m. daily, including Sundays and holidays and were paid on a
piece-work basis just like the other employees.
 Regardless of the number of pieces they finished in a day, they were each given a daily pay of at
least P64.00.
 Petitioners filed a complaint against private respondents for illegal dismissal and sought recovery of
overtime pay, holiday pay, premium pay on holiday and rest day, service incentive leave pay,
separation pay, 13th month pay, and attorney’s fees.
 After hearing, Labor Arbiter found private respondents guilty of illegal dismissal and accordingly
ordered them to pay petitioners’ claims.
 Petitioners allege that they were dismissed by the respondents as they were about to file a petition
with the DOLE for the payment of benefits such as SSS coverage, sick leave and vacation leave. They
deny that they abandoned their work.
 Respondents argue that petitioners haven’t dismissed but that they merely threatened with a
closure of the business if they insisted on their demand for a straight payment of their minimum
wage and then walked out of the meeting.
 Private respondents say that petitioners refused to report for work when they learned that the J.C.
Tailoring and Dress Shop Employees Union had demanded their dismissal for conduct unbecoming
of employees.

Issue: WON are entitled to the minimum labor benefits provided by law. - Yes, they are.

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Ruling:

 There are two categories of employees paid by results: (1) those whose time and performance are
supervised by the employer. (Here, there is an element of control and supervision over the manner
as to how the work is to be performed.
 A piece-rate worker belongs to this category especially if he performs his work in the company
premises.); and (2) those whose time and performance are unsupervised. (Here, the employers
control is over the result of the work. Workers on pakyao and takay basis belong to this group.)
 Both classes of workers are paid per unit accomplished.
 In this case, private respondents exercised control over the work of petitioners.
 As tailors, petitioners worked in the company’s premises from 8:00 a.m. to 7:00 p.m. daily, including
Sundays and holidays.
 The mere fact that they were paid on a piece-rate basis does not negate their status as regular
employees of private respondents.
 The term wage is broadly defined in Art. 97 of the Labor Code as remuneration or earnings, capable
of being expressed in terms of money whether fixed or ascertained on a time, task, piece or
commission basis.
 Payment by the piece is just a method of compensation and does not define the essence of the
relations.
 Nor does the fact that petitioners are not covered by the SSS affect the employer-employee
relationship.

Other Special Benefits

Reyes vs. NLRC and Universal Robina Corporation Grocery Division, 1995

 Petitioner was a salesman at respondent's Grocery Division in Davao City.

 He was later appointed as unit manager of Sales Department-South Mindanao District
 He held the position until his retirement in 1997.
 He later received a letter regarding his separation pay.
 Insisting that his retirement benefits and 13th month pay must be based on the average monthly
salary of P42,766.19, which consists of P10,919.22 basic salary and P31,846.97 average monthly
commission, petitioner refused to accept the check issued by private respondent in the amount of
P200,322.21.
 Instead, he filed a complaint before the arbitration branch of the NLRC for retirement benefits, 13th
month pay, tax refund, earned sick and vacation leaves, financial assistance, service incentive leave
pay, damages and attorney's fees.
 He contends that the commissions form part of the basic salary, citing the case of Philippine
Duplicators, Inc. v. NLRC, where the Court held that commissions earned by salesmen form part of
their basic salary.
 Private respondent counters that petitioner knew that the overriding commission is not included in
the basic salary because it had not been considered as such for a long time in the computation of
the 13th month pay, leave commissions, absences and tardiness.

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Issue: the overriding commission is included in the computation of the retirement benefits and 13th
month pay. – No, they are not.

Ruling:

 In Philippine Duplicators, the salesmen’s commissions, comprising a pre-determined percentage of

the selling price of the goods sold by each salesman, were properly included in the term basic salary
for purposes of computing the 13th month pay.
 The salesmen’s commissions are not overtime payments, nor profit-sharing payments nor any other
fringe benefit, but a portion of the salary structure which represents an automatic increment to the
monetary value initially assigned to each unit of work rendered by a salesman.
 Contrarily, in Boie-Takeda, the so-called commissions paid to or received by medical representatives
of Boie-Takeda Chemicals or by the rank and file employees of Philippine Fuji Xerox Co., were
excluded from the term basic salary because these were paid to the medical representatives and
rank-and-file employees as productivity bonuses, which are generally tied to the productivity, or
capacity for revenue production, of a corporation and such bonuses closely resemble profit-sharing
payments and have no clear direct or necessary relation to the amount of work actually done by
each individual employee.
 Further, commissions paid by the Boie-Takeda Company to its medical representatives could not
have been sales commissions in the same sense that Philippine Duplicators paid the salesmen their
sales commissions.
 Medical representatives are not salesmen; they do not effect any sale of any article at all.
 In this case, SC ruled that commissions should be excluded.
 The commissions which Reyes received were not part of his salary structure but were profit-sharing
payments and had no clear, direct or necessary relation to the amount of work he actually
performed.
 The collection made by the salesmen from the sale transactions was the profit of respondent from
which petitioner had a share in the form of a commission.

Cercado vs. UNIPROM, INC., 2010

 Cerdaco was an employee of UNIPROM Inc. for 22 years from 1978.

 The respondent came up with a retirement plan sometime in 1980 and then amended it in 2001
 The retirement plan provides that any employee with a minimum of 20 years of service, regardless
of age, may be retired at the option of the employer.
 In December 2000, UNIPROM implemented a company-wide retirement program, including herein
petitioner.
 She was offered an early retirement package but the petitioner rejected the offer.
 UNIPROM exercised its option under the retirement plan and decided to retire petitioner effective
2001
 As such, she was no longer given any work assignment after.
 Petitioner then filed a complaint for illegal dismissal before the Labor Arbiter, alleging that
UNIPROM did not have a bona fide retirement plan, and even if there was, she didn‘t consent
thereto.

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 Respondent argues that the petitioner was covered by the retirement plan when she agreed to the
company‘s rules and regulations, and that her retirement was an exercise of management
prerogative.

Issue: WON was validly retired – No, she was not.

Ruling:

 Retirement is the result of a bilateral act of the parties, a voluntary agreement between the
employer and the employee whereby the latter, after reaching a certain age, agrees to sever his or
her employment with the former.
 In this case, petitioner was retired by UNIPROM, after having served the company for 22 years,
pursuant to the company‘s retirement plan.
 Petitioner herein was not validly retired.
 Jurisprudence has upheld that it is axiomatic that a retirement plan giving the employer the option
to retire its employees below the ages provided by law must be assented to and accepted by the
latter, otherwise its adhesive imposition will amount to a deprivation of property without due
process. In decided cases, the retirement plans were either embodied in the CBA, or established
after consultations and negotiations with the employees’ bargaining representative.
 The consent of the employees to be retired even before the statutory retirement age of 65 years
was thus clear and unequivocal.
 Acceptance by the employees of an early retirement age must be explicit, voluntary, free and
uncompelled.

Radio Mindanao Network, Inc. and Canoy vs. Ybarola, Jr. and Rivera, Jr., 2012

 Ybarola, Jr. and Rivera, Jr. were hired by Radio Mindanao Network (RMN).
 They later became account managers.
 They tasks in their positions were soliciting advertisements and servicing various clients of RMN.
 In 2002, the respondents were terminated due to RMN's reorganization/restructuring
 They were given their separation pay.
 In December 2002, they executed release/quitclaim affidavits.
 Dissatisfied with their separation pay, the respondents filed separate complaints (which were later
consolidated) against RMN and its President, Eric S. Canoy, for illegal dismissal with several money
claims, including attorney's fees.
 They indicated that their monthly salary rates were P60,000.00 for Ybarola and P40,000.00 for
Rivera.

Issue: WON the amounts the respondents received represented a fair and reasonable settlement of
their claims.

Ruling:

 The petitioners say that the respondents' commissions were not part of their salaries because they
did not present proof that they earned the commission due to actual market transactions
attributable to them.

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 Petitioners argue that the commissions are profit-sharing payments which do not form part of their
salaries.
 The Supreme Court herein did not agree with the petitioners.
 If the commissions had been really profit-sharing bonuses to the respondents, they should have
received the same amounts.
 The NLRC itself noted, Ybarola and Rivera received P372,173.11 and P586,998.50 commissions,
respectively, in 2002.
 The variance in amounts the respondents received as commissions supports the CA's finding that
the salary structure of the respondents was such that they only received a minimal amount as
guaranteed wage; a greater part of their income was derived from the commissions they get from
soliciting advertisements; these advertisements are the "products" they sell.
 As the CA aptly noted, this kind of salary structure does not detract from the character of the
commissions being part of the salary or wage paid to the employees for services rendered to the
company, as the Court held in Philippine Duplicators, Inc. v. NLRC.
 The petitioners' reliance on our ruling in Talam v. National Labor Relations Commission, regarding
the "proper appreciation of quitclaims," as they put it, is misplaced.
 While Talam, in the cited case, and Ybarola and Rivera, in this case, are not unlettered employees,
their situations differ in all other respects.
 In Talam, the employee received a valuable consideration for his less than two years of service with
the company; he was not shortchanged and no essential unfairness took place.
 In this case the separation pay of the respondents each received was deficient by at least P400,
000.00; thus, they were given only half of the amount they were legally entitled to.
 A settlement under these terms is not and cannot be a reasonable one, given especially the
respondents' length of service — 25 years for Ybarola and 19 years for Rivera.
 The CA was correct when it said that the respondents were in dire straits when they executed the
release/quitclaim affidavits.
 Without jobs and with families to support, they dallied in executing the quitclaim instrument, but
were eventually forced to sign given their circumstances.

2011 NLRC Rules of Procedure

Lockheed Detective and Watchman Agency, Inc. vs. University of the Philippines, 2012

 Lockheed entered had a contract of security with the University of the Philippines.
 In 1998, several guards assigned to UP filed a complaint for unpaid wages, 25% overtime pay,
premium pay for rest days and special holidays, holiday pay, service incentive leave pay, night shift
differentials, 13th month pay, refund of cash bond, refund of deductions for the Mutual Benefits
Aids System (MBAS), unpaid wages from December 16-31, 1998, and attorney's fees.
 The Labor Arbiter declared UP solidarily liable.
 The decision was appealed but sustained by the NLCR, but with modifications.
 The parties’ motion to reconsider were likewise denied.

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 In July 2005, a Notice of Garnishment 10 was issued to Philippine National Bank UP Diliman Branch
for the satisfaction of the award.
 In August 2005, UP filed an Urgent Motion to Quash Garnishment and contended that the funds
being subjected to garnishment at PNB are government/public funds.
 Nevertheless, the execution of the garnishment was carried out.
 UP elevated their case to the court of appeals.
 The Appellate Court issued the assailed Amended Decision.
 It held that without departing from its findings that the funds covered in the savings account sought
to be garnished do not fall within the classification of public funds, it reconsiders the dismissal of the
petition in light of the ruling in the case of National Electrification Administration v. Morales which
mandates that all money claims against the government must first be filed with the Commission on
Audit (COA).
 Lockheed appealed this decision to the Supreme Court arguing that the NEA case should not apply
and that UP could be both sued and held liable and that the quashal sought was moot because it
had already become fait accompli.

Issues:

1. WON the NEA Case applies and the funds be garnished directly bypassing the COA. - Yes

2. Whether or not the previous garnishment and withdrawal of funds was fait accompli. - No

Ruling:

 The CA correctly applied the NEA case.

 Like NEA, UP is a juridical personality separate and distinct from the government and has the
capacity to sue and be sued.
 Thus, also like NEA, it cannot evade execution, and its funds may be subject to garnishment or
levy.
 However, before execution may be had, a claim for payment of the judgment award must first
be filed with the COA. (suability does not immediately mean liability).
 As to the fait accompli argument of Lockheed, contrary to its claim that there is nothing that can
be done since the funds of UP had already been garnished, since the garnishment was
erroneously carried out and did not go through the proper procedure (the filing of a claim with
the COA), UP is entitled to reimbursement of the garnished funds plus interest of 6% per annum,
to be computed from the time of judicial demand to be reckoned from the time UP filed a
petition for certiorari before the CA which occurred right after the withdrawal of the garnished
funds from PNB.

Indophil Textile Mills, Inc. vs. Engr. Adviento, 2014

 This case originated from a complaint filed by the respondent for damage and injury due to
gross negligence.
 It was alleged that respondent used to work as a facility maintenance officer for the petitioner’s
factory, engaged in the deleterious industry of dying and chemical manufacture.

35 | P a g e
  Daily confrontations with these hazards prompted him to suggest to the management in his and
all the other workers’ behalf.
 Unfortunately, these suggestions were ignored.
 It was also alleged that the petitioner’s negligence in listening and acting to the complaints
eventually resulted in the deterioration of respondent’s health which caused his dismissal.
 Petitioners argue that the matter falls outside the jurisdiction of the RTC because these are
matters within the sole jurisdiction of the Labor Arbiter considering that the controversy arose
from an employer-employee relationship.
 Petitioners also argue that that there is a pending case involving the same parties and cause in
the NLRC.
 The RTC affirmed its jurisdiction over the matter.
 The court noted that matters involving negligence, notwithstanding the fact that it arose during
employment, is a case of quasi-delict within its jurisdiction.
 The petitioner then appealed to the RTC which dismissed the complaint and affirmed the RTC’s
decision.

Issue: WON the fact that the complaint was founded on gross negligence arising from employment is
within the jurisdiction of the Regional Trial Court. – Yes, the RTC has jurisdiction

Ruling:

 The plaintiffs have not alleged any unfair labor practice.

 Theirs is a simple action for damages for tortious acts allegedly committed by the defendants.
 Such being the case, the governing statute is the Civil Code and not the Labor Code.
 Based the facts and issues, jurisdiction must belong to the civil Courts.
 While petitioner's claim for damages arises from employer-employee relations, and the latest
amendment to Article 217 of the Labor Code under PD No. 1691 and BP Blg. 130 provides that
all other claims arising from employer-employee relationship are cognizable by Labor Arbiters
[citation omitted], in essence, petitioner's claim for damages is grounded on the "wanton failure
and refusal without just cause of private respondent Cruz to report for duty despite repeated
notices served upon him of the disapproval of his application for leave of absence without pay.
 This and also that Cruz "maliciously and with bad faith" violated the terms and conditions of the
conversion training course agreement to the damage of petitioner removes the present
controversy from the coverage of the Labor Code and brings it within the purview of Civil Law.
 The complaint was based not on the abandonment by private respondent Cruz of his job—as the
latter was not required in the Complaint to report back to work—but on the manner and
consequent effects of such abandonment of work translated in terms of the damages which
petitioner had to suffer.
 However, it should be stressed that respondent’s claim for damages is specifically grounded on
petitioner’s gross negligenceto provide a safe, healthy and workable environment for its
employees −a case of quasi-delict.
 Thus, the matter rightfully belongs to the jurisdiction of the trial courts.

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Ilaw Buklod ng Manggagawa (ibm) Nestle Philippines, Inc. Chapter (ice cream and chilled products
division), its Officers, Florendo, Palanas and Laxamana vs. Nestle Philippines, Inc., 2015

 Petitioner union made a strike against Nestle Philippines Inc. company's Ice Cream and Chilled
Products Division.
 Their grounds for the strike were the following: violation of the collective bargaining agreement,
dismissal of union officers and members, discrimination and other unfair labor practice acts.
 After a series of conciliation meetings and discussions between the parties, they agreed to
resolve their differences and came up with a compromise in a Memorandum of Agreement
(MOA).
 After more than eleven (11) years from the execution of the subject MOA, petitioners filed with
the NLRC a Motion for Writ of Execution saying that they have not been paid the amounts they
are entitled to in accordance with the MOA.
 The respondent filed its Opposition to the Motion for Writ of Execution arguing that petitioners'
remedy is barred by prescription because, pursuant Revised Rules of the NLRC, a decision or
order may be executed on motion within five years from the date it becomes final and
executory and that the same decision or order may only be enforced by independent action
within a period often (10) years from the date of its finality.
 Petitioners contend that the respondent cannot invoke the defense of prescription because it is
guilty of deliberately causing delay in paying petitioners' claims and that they entitled to
protection under the law.

Issue: WON the demand to be paid has prescribed. – No, it did not yet prescribe.

Ruling:

 The compromise agreement between petitioner and respondent was approved through the
NLRC Decision.
 However, petitioners should have moved for the issuance of a writ of execution, considering
their allegation that the terms and conditions of the agreement have not been complied with by
respondent.
 When a compromise agreement is judicially approved, it becomes more than a contract binding
upon the parties.
 It is entered as a determination of a controversy and has the force and effect of a judgment and
is immediately executory and not appealable, except for vices of consent or forgery.
 Non-fulfillment of the terms and conditions warrants the issuance of a writ of execution; in such
an instance, execution becomes a ministerial duty of the court.
 A decision on a compromise agreement is final and executor and has the force of law and is
conclusive between the parties. It becomes a judgment that is subject to execution in
accordance with the Rules.
 Section 8, Rule XI, 2005 Revised Rules of Procedure of the NLRC provides that a judgment may
be executed on motion within five years from the date of its entry or from the date it becomes
final and executory.
 After the lapse of such time, and before it is barred by the statute of limitations, a judgment may
be enforced by action. If the prevailing party fails to have the decision enforced by a mere
motion after the lapse of five years from the date of its entry (or from the date it becomes final

37 | P a g e
 and executory), the said judgment is reduced to a mere right of action in favor of the person
whom it favors and must be enforced, as are all ordinary actions, by the institution of a
complaint in a regular form.
 In the instant case, the five-and ten-year periods provided by law and the rules are more than
sufficient to enable petitioners to enforce their right under the subject MOA.
 it is clear that the judgment of the NLRC, having been based on a compromise embodied in a
written contract, was immediately executory upon its issuance on October 12, 1998.
 Thus, it could have been executed by motion within five (5) years. It was not. Nonetheless, it
could have been enforced by an independent action within the next five (5) years, or within ten
(10) years from the time the NLRC Decision was promulgated. It was not.
 Therefore, petitioners' right to have the NLRC judgment executed by mere motion as well as
their right of action to enforce the same judgment had prescribed by the time they filed their
Motion for Writ of Execution on January 25, 2010.

Other Important Labor Provisions

San Miguel Corp. (SMC) vs. Semillano et. al., 2010

 AMPCO hired the services of Vicente et al. on different dates.

 All of them were assigned to work in SMC's Bottling Plant situated at Bacolod City to segregate
bottles, remove dirt therefrom, file them in designated places, load and unload the bottles to
and from the delivery trucks, and other tasks as may be ordered by the officers of SMC.
 They were required to work inside the premises of SMC using the company’s equipment and
rendered service with SMC for more than 6 months.
 Thereafter, SMC entered into a Contract of Services with AMPCO designating the latter as the
employer of Vicente, et al.
 As a result, Vicente et al., failed to claim the rights and benefits ordinarily ac-corded a regular
employee of SMC.
 Allegedly, they were not paid their 13th month pay.
 On June 1995, they were not permitted to enter the premises of SMC.
 The project manager of AMPCO told them to wait for further instructions from the SMC's
supervisor.
 Vicente et al., waited for one month, but they never heard a word from SMC.
 According to SMC, AMPCO is the employer of the respondents because the latter is an
independent contractor.
 SMC also alleges that it was AMPCO that directly paid their salaries and remitted their
contributions to the SSS.

Issue: WON AMPCO is a legitimate job contractor. – NO, it is not.

Ruling:

 AMPCO is considered as “labor only” contractor.

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  The test to determine an independent contractor is whether, or not the one claiming to be an
existence of an independent and permissible contractor relationship is generally established by
the following criteria: [1] whether or not the contractor has an independent business; [2] the
nature and extent of the work; [3] the skill required; [4] the term and duration of the
relationship; [5] the right to assign the performance of a specified piece of work; [6] the control
and supervision of the work to another; [7] the employer's power with respect to the hiring,
firing and payment of the contractor's workers; [8] the control of the premises; [9] the duty to
supply the premises, tools, appliances, materials, and labor; [10] and the mode, manner and
terms of payment.
 Petitioner did not prove that AMPCO had substantial equipment, tools, machineries, and
supplies actually and directly used by it in the performance orcompletion of the segregation and
piling job.
 There is nothing in AMPCO's list of fixed assets, machineries, tools, and equipment which it
could have used, actually and directly, in the performance or completion of its contracted job,
work or service with petitioner.

Government Service Insurance System v. National Labor Relations, 2010

 Respondents were security guards by DNL Security Agency (DNL Security).

 Sometime in 1993, DNL Security informed respondents that its service contract with petitioner
was terminated but they were instructed to continue reporting for work to petitioner and thus
they worked until April of the same year without receiving wages.
 In 1995, respondents filed with the NLRC a complaint against DNL Security and petitioner for
illegal dismissal, separation pay, salary differential, 13th month pay, and payment of unpaid
salary.

Issue: WON petitioners are liable as an indirect employer.

Ruling:

 That there is no actual and direct employer-employee relationship between petitioner and
respondents does not release the former from liability for the latter’s monetary claims.
 When petitioner contracted DNL Security’s services, they became an indirect employer of
respondents, pursuant to Article 107 of the Labor Code.
 After DNL Security failed to pay respondents the correct wages and other monetary benefits,
petitioner, as principal, became jointly and severally liable, as provided in Articles 106 and 109
of the Labor Code.
 When the respondents continued working for the petitioner even after the expiration of the
contract, the petitioner allowed respondents to render service.
 Hence, petitioner impliedly approved extension of respondent’s services.
 Petitioners liability, however, cannot extend to the payment of separation pay.
 An order to pay separation pay is invested with a punitive character, such that an indirect
employer should not be made liable without a finding that it had conspired in the illegal
dismissal of the employees.

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  The principal is made liable to its indirect employees because, after all, it can protect itself from
irresponsible contractors by withholding payment of such sums that are due the employees and
by paying the employees directly, or by requiring a bond from the contractor or subcontractor
for this purpose.

Polyfoam-RGC International Corporation and Gramaje, vs. Concepcion, 2012

 Respondent herein was an “all-around” factory worker who served for Polyfoam for almost six
years.
 He alleged that his time-card was not in the rack and was later informed by the security guard
that he could no longer punch his time card.
 He then complained to the supervisor but was told that he was dismissed due to his infraction
company rules.
 With the help of counsel, he sent a letter requesting his read-mission to work to the manager
but same was ignored.
 This made respondent file an illegal dismissal case and for money claims.
 Gramaje, a manpower agency, then intervened and claimed to be the real employer of the
respondent.
 Petitioners argue that there is lack of jurisdiction since there is no employer-employee
relationship and that the money claims had prescribed.
 Gramaje alleged that respondent was hired as packer assigned to pack Polyfoam’s finished prod-
ucts.
 She also alleges that Concepcion was not illegally dismissed, but that he simply stopped
reporting for work.
 Respondent, on the other hand, says that he was illegally dismissed by petitioner when he
discovered that his timecard was not in the racks and was later informed that he was dismissed
due to an infraction he made.

Issues:

1. WON Gramaje is an independent job contractor. – No, it was not.

2. WON there was an employer-employee relationship between Polyfoam and respondent. – Yes,
there was as Gramaje is only considered an agent in this case.

Ruling:

 Labor-only contracting, a prohibited act, is an arrangement where the contractor or

subcontractor merely recruits, supplies or places workers to perform a job, work or service for a
principal.
 In labor-only contracting, the following elements are present: [1] the contractor does not have
substantial capital or investment to actually perform the job, work or service under its own

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 account and responsibility; and [2] the employees placed by the contractor or subcontractor are
performing activities directly related to the main business of the principal.
 Gramaje has no substantial capital or investment.
 Gramaje claimed that she furnished containers to carry out the functions of packing mattresses
and placed equipment in Polyfoam.
 However, neither Gramaje nor Polyfoam had proof that showed the former’s ownership of the
equipment used in the job.
 Also, Gramaje did not carry on an independent business or undertake the performance of its
service contract according to its own manner and method, free from the control and supervision
of its principal.
 Its role was merely to recruit persons to work for Polyfoam.
 It was not proven that Gramaje took entire charge, control and supervision of the work and
service agreed.

Miscellaneous Provisions

Bernardo, et. al. vs. NLRC, 1999

 Petitioners are deaf–mutes hired from 1988 to 1993 by respondent Far East Bank and Trust Co.
as Money Sorters and Counters through a uniformly worded agreement called “Employment
Contract for Handicapped Workers.”
 The employment contracts of the petitioners stipulated that they shall be trained for a period of
one month, after which the employer shall determine whether they should be allowed to finish
the 6-month term of the contract.
 Furthermore, the employer may terminate the contract at any time for a just and reasonable
cause.
 Unless renewed in writing by the employer, the contract shall automatically expire at the end of
the term.
 Therafter, they were dismissed because their employment contract ended.
 The case was brought before the Labor Arbiter but was denied.
 NLRC affirmed the decision of the LA stating that petitioners could not be deemed regular
employees under Article 280 and the Magna Carta for Disabled Persons did not apply.

Issue: WON petitioners are regular employees. – Yes, they are.

Ruling:

 Section 5 (Magna Carta for Disabled Persons). Equal Opportunity for Employment. - No disabled
person shall be denied access to opportunities for suitable employment. A qualified disabled
employee shall be subject to the same terms and conditions of employment and the same

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 compensation, privileges, benefits, fringe benefits, incentives or allowances as a qualified able-
bodied person.
 The renewal of the contracts of the handicapped workers and the hiring of others lead to the
conclusion that their tasks were beneficial and necessary to the bank.
 These facts show that they were qualified to perform the responsibilities of their positions.
 Their disability did not render them unqualified or unfit for the tasks assigned to them.
 In this light, the Magna Carta for Disabled Persons mandates that a qualified disabled employee
should be given the same terms and conditions of employment as a qualified able-bodied
person.
 The fact that the employees were qualified disabled persons necessarily removes the
employment contracts from the ambit of Article 80.
 Since the Magna Carta accords them the rights of qualified able-bodied persons, they are thus
covered by Article 280 of the Labor Code.

PT&T vs. NLRC

 Grace was hired by petitioner thrice as a reliever for 3 periods within the years 1990-1991.
 In September 1991, Grace was once more asked to join petitioner-company as a probationary
employee.
 In the job application form that was furnished her to be filled up for the purpose, she indicated
in the portion for civil status therein that she was single although she had contracted marriage a
few months earlier.
 It now appears that de Guzman had made the same representation in the two successive
reliever agreements which she signed. When petitioner supposedly learned about the same
later, she was required to explain the discrepancy.
 She was reminded about the company's policy of not accepting married women for
employment.
 In her reply, de Guzman stated that she was not aware of the company policy. Nonetheless, she
was dismissed from the company which she readily contested by initiating a complaint for illegal
dismissal, coupled with a claim for non-payment of cost of living allowances (COLA), before the
Regional Arbitration Branch of the National Labor Relations Commission in Baguio City.
 The Labor Arbiter handed down a decision declaring that de Guzman, who had already gained
the status of a regular employee, was illegally dismissed by petitioner. The labor arbiter was of
the view that the ground relied upon by petitioner in dismissing de Guzman was clearly
insufficient, and that it was apparent that she had been discriminated against on account of her
having contracted marriage in violation of company rules.
 On appeal to the National Labor Relations Commission (NLRC), the decision of the Labor Arbiter
was upheld.

Issue:

1. WON Grace was discriminated on account of her having contracted marriage in violation of
company rules. Yes, she was discriminated.
2. WON Grace was illegally dismissed. – Yes, she was.

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Ruling:

 Article 136 explicitly prohibits discrimination merely by reason of the marriage of a female
employee.
 ART. 136. Stipulation against marriage. — It shall be unlawful for an employer to re-quire as a
condition of employment or continuation of employment that a woman shall not get married, or
to stipulate expressly or tacitly that upon getting married, a woman employee shall be deemed
resigned or separated, or to actually dismiss, discharge, discriminate or otherwise prejudice a
woman employee merely by reason of marriage.
 The petitioner's policy of not accepting or considering as disqualified from work any woman
worker who contracts marriage runs afoul of the test of, and the right against, discrimination,
afforded all women workers by our labor laws and by no less than the Constitution.
 Petitioner's policy is not only in derogation of the provisions of Article 136 of the Labor Code on
the right of a woman to be free from any kind of stipulation against marriage in connection with
her employment, but it likewise assaults good morals and public policy, tending as it does to
deprive a woman of the freedom to choose her status, a privilege that by all accounts inheres in
the individual as an intangible and inalienable right.

Del Monte Philippines Inc. vs. Velasco, 2007

 Velasco worked with Del Monte Philippines in 1976 as a seasonal employee and was regularized
on 1977.
 Her latest assignment was as Field Laborer.
 In 1987, respondent was warned in writing due to her absences.
 In 1991, respondent was again warned in writing by petitioner about her absences without
permission and a forfeiture of her vacation leave entitlement for the year 1990-1991 was
imposed against her.
 In 1992, another warning letter was sent to respondent regarding her absences without per-
mission during the year 1991-1992.
 Her vacation entitlement for the said employment year affected was consequently forfeited.
 Because of the alleged absences without permission, in 1994, a notice of hearing was sent to
respondent notifying her of the charges filed against her for violating the Absence Without
Official Leave rule: that is for excessive absence without permission on August 15-18, 29-31 and
Sep-tember 1-10, 1994.
 In 1995, after hearing, the petitioner terminated the services of respondent effective January 16,
1994 due to excessive absences without permission.
 Feeling aggrieved, respondent filed a case for illegal dismissal against petitioner.

Issue: WON employment of respondent had been validly terminated on the ground of excessive
absences without permission. – No, there was no valid termination

Ruling:

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  Art. 137. Prohibited acts. — It shall be unlawful for any employer:
To discharge such woman on account of her pregnancy, while on leave or in
confinement due to her pregnancy.
 In this case, the respondent was pregnant and was suffering from urinary tract infection.
 Her absences were due to such facts.
 The petitioner admits these facts in its Petition for Review.
 it was no less than the company doctor who advised the respondent to have "rest-in-quarters"
for four days on account of a pregnancy-related sickness.
 Petitioner's contention that the cause for the dismissal was gross and habitual neglect unrelated
to her state of pregnancy is unpersuasive.
 Respondent's sickness was pregnancy- related and, therefore, the petitioner cannot terminate
respondent's services because in doing so, petitioner will, in effect, be violating the Labor Code
which prohibits an employer to discharge an employee on account of the latter's pregnancy.

Vigilla vs. Philippine College of Criminology, 2013

 The Philippine College of Criminology, Inc. (PCCI) hired Vigilla, et al. as janitors and janitresses
but were told that they would be under the Metropolitan Building Services, Inc. (MBMSI), a
corporation engaged in providing janitorial services to clients.
 PCCI later discovered that MBMSI’s Certificate of Incorporation had been revoked, prompting
them to terminate the school’s relationship with MBMSI. As a result, the employees under
MBMSI were also terminated.
 This made Vigilla e.t al. to file before the Labor Arbiter a complaint for illegal dismissal,
reinstate-ment, back wages and other indemnities against MBMSI and PCCI, alleging among
others that PCCI is their real employer and not MBMSI.
 On the other hand, PCCI submitted releases, waivers and quitclaims made by the employees in
favor of MBMSI to prove that they were employees of MBMSI and not PCCI.
 The NLRC found Vigilla et. al. to have been illegally dismissed and that MBMSI is only a labor
only contractor. The NLRC however excused PCCI and MBMSI from liability on account of the
releases, quitclaims and waivers executed by the janitors.

Ruling:

 The releases, waivers and quitclaims that were executed were valid despite the revocation of
MBSI’s Certificate of Incorporation.
 The revocation does not result in the termination of its liabilities. Section 122 of the Corporation
Code provides for a three-year winding up period for a corporation whose charter is annulled by
forfeiture or otherwise to continue as a body corporate for the purpose of settling and closing
affairs. Even if said documents were executed six (6) years after MBMSI’s dissolution, they are
still valid and binding upon the parties and the dissolution will not terminate the liabilities
incurred by the dissolved corporation pursuant to Section 122 and 145 of the Corporation code.
In the case of Premiere Development Bank v. Flores, the Court held that a corporation is allowed
to settle and close its affairs even after the winding up period of three years.

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  Considering that MBMSI, as a labor-only contractor, is solidarily liable with the corporation, as
the prin-cipal employer, then the NLRC and the Court of Appeals correctly held that the
respondent’s solidary liability was already expunged by virtue of the releases, waivers and
quitclaims executed by each of the petitioners in favor of MBMSI pursuant to Article 1217 of the
Civil Code which provides that “payment made by one of the solidary debtors extinguishes the
obligation.”
 The revocation of the corporation’s articles of incorporation does not result in the termination
of its liabil-ities. Hence even if the quitclaims, releases and waivers were executed six years after
the corporation’s dissolution, they are still valid and binding upon parties.

Alilin et al., v. Petron Corp., 2014

 Petron is a domestic corporation engaged in the oil business. It owns several bulk plants in the
country for receiving, storing and distributing its petroleum products.
 In 1968, Gindang Contractor, which was owned and operated by Gindang, started recruiting
laborers for fielding to Petron's Mandaue Bulk Plant. When
 Gindang died in 1989, his son Romeo D. Gindang (Romeo), through Romeo D. Gindang Services
(RDG), took over the business and continued to provide manpower services to Petron.
 On June 1, 2000, Petron and RDG entered into a Contract for Services for the period from June
1, 2000 to May 31, 2002, whereby RDG undertook to provide Petron with janitorial,
maintenance, tanker receiving, packaging and other utility services in its Mandaue Bulk Plant.
 This contract was extended on July 31, 2002 and further extended until September 30, 2002.
Upon expiration thereof, no further renewal of the service contract was done.

Issue: WON RDG is a legitimate job contractor – No.

Ruling:

 Petron failed to discharge the burden of proving that RDG is a legitimate contractor.
 Hence, the presumption that RDG is a labor-only contractor stands.
 Petitioners have rendered work for Petron for a long period of time even before the service
contract was executed in 2000. Petron even recognized that some of the petitioners were
initially fielded by Romualdo D. Gindang, RDG’s precursor.
 Petron was able to establish that RDG was financially capable as a legitimate contractor at the
time of the execution of the service contract in 2000, it nevertheless failed to establish the
financial capability of RDG at the time when petitioners actually started to work for Petron in
1968, 1979, 1981, 1987, 1990, 1992 and 1993.Petron having failed to show that this condition
was met by RDG, it can be concluded, on this score alone, that RDG is a mere labor-only
contractor.
 Petron's power of control over petitioners exists in this case.
 In relation to the “control test”, of the four elements, it is the power to control which is the
most crucial and most determinative factor, so important, in fact, that, the other elements may

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 even be disregarded. The fact that petitioners were hired by Romeo or his father and that their
salaries were paid by them do not detract from the conclusion that there exists an employer-
employee relationship between the parties due to Petron's power of control over the
petitioners. The power of control is the power to transfer employees from one work assignment
to another;
 Petron could order petitioners to do work outside of their regular "maintenance/utility" job, and
 Petitioners were required to report for work everyday at the bulk plant, observe an 8:00 a.m. to
5:00 p.m. daily work schedule, and wear proper uniform and safety helmets as prescribed by the
safety and security measures being implemented within the bulk plant.
 Petitioners already attained regular status as employees of Petron.
 The Court finds, however, that while the jobs performed by petitioners may be menial and
mechanical, they are nevertheless necessary and related to Petron's business operations. If not
for these tasks, Petron's products will not reach the consumers in their proper state. Indeed,
petitioners' roles were vita-linasmuch as they involve the preparation of the products that
Petron will distribute to its consumers.
 In sum, the Court finds that RDG is a labor-only contractor. As such, it is considered merely as an
agent of Petron. Consequently, the employer-employee relationship which the Court finds to
exist in this case is between petitioners as employees and Petron as their employer.

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