TOPIC: TEMPORARY SUSPENSION OF OPERATIONS/ FLOATING STATUS

Manila Mining Corp. Employees Association-Federation of Free Workers Chapter

et.al., vs. Manila Mining Corp. et.al.,

G.R. Nos. 178222-23, September 29, 2010

Facts: Manila Mining Corporation (MMC) is a publicly-listed corporation engaged in

large-scale mining for gold and copper ore. MMC is required by law to maintain a
tailings containment facility to store the waste material generated by its mining
operations.  Consequently, MMC constructed several tailings dams to treat and store its
waste materials.  One of these dams was Tailings Pond No. 7 (TP No. 7). An essential
component of an ECC is social acceptability or the consent of the residents in the
community to allow TP No. 7 to operate, which MMC failed to obtain.  Hence, it was
compelled to temporarily shut down its mining operations, resulting in the temporary lay-
off of more than 400 employees in the mine site. Petitioner Union challenged the validity
of their lay-off on the averment that MMC was not suffering from business losses.
Petitioners likewise claimed that they were denied due process because they were not
given a 30-day notice informing them of the lay-off.  Neither was the DOLE informed of
this lay-off, as mandated by law.

Issue: Whether the temporary suspension of business operations resulting in the

temporary lay-off is proper?

Ruling: Yes. The lay-off is neither illegal nor can it be considered as unfair labor
practice. The evidence on record indeed clearly shows that MMC's suspension of its
mining operations was bonafide and the reason for such suspension was supported by
substantial evidence.  MMC cannot conduct mining operations without a tailings
disposal system.  For this purpose, MMC operates TP No. 7 under a valid permit from
the Department of Environment and Natural Resources (DENR) through its
Environmental Management Bureau (EMB).  The NLRC did not dispute MMC's claim
that it had timely filed an application for renewal of its permit to operate TP No. 7 but
that the renewal permit was not immediately released by the DENR-EMB, hence, MMC
was compelled to temporarily shutdown its milling and mining operations.   Such
suspension was brought about by the non-issuance of a permit for the continued
operation of TP No. 7 without which MMC cannot resume its milling and mining
operations. Further, even as we declare the validity of the lay-off, we cannot say that
MMC has no obligation at all to the laid-off employees. The validity of its act of
suspending its operations does not excuse it from paying separation pay.

TOPIC: CONSEQUENCES OF DISMMISSAL

Elizabeth D. Palteng vs. United Coconut Planters Bank

G.R. NO. 172199, February 27, 2009]

Facts: Elizabeth D. Palteng was the Senior Assistant Manager/Branch Operations

Officer of respondent United Coconut Planters Bank .On April 15, 1996, Area Head and
Vice-President Eulallo S. Rodriguez reported to the bank’s Internal Audit and Credit
Review Division that bank client Clariza L. Mercado-The Red Shop has incurred Past
Due Domestic Bills Purchased (BP) of P34,260,000. After conducting a diligence audit,
the division reported to the Audit and Examination Committee that Palteng committed
several offenses under the Employee Discipline Code in connection with Mercado’s
Past Due Domestic BP. It also recommended that the matter be referred to the
Committee on Employee Discipline for proper disposition. Palteng was required to
explain why no disciplinary action should be taken against her. In response, Palteng
explained that while she admitted committing a major offense that may cause her
dismissal, she claimed that it was an honest mistake. After hearing and investigation,
the committee recommended Palteng’s dismissal. Palteng filed a complaint for illegal
dismissal seeking reinstatement to her former position without loss of seniority rights
with full backwages, or in the alternative, payment of separation pay with full
backwages, and recovery of her monetary claims with damages.

Issue: Whether the award of backwages is proper?

Ruling: No. Settled is the rule that an employee who is illegally dismissed from work is
entitled to reinstatement without loss of seniority rights, and other privileges as well as
to full backwages, inclusive of allowances, and to other benefits or their monetary
equivalent computed from the time his compensation was withheld from him up to the
time of his actual reinstatement. However, in the event that reinstatement is no longer
possible, the employee may be given separation pay instead. In the case at bar,
petitioner admitted that she granted the BP accommodation against Mercado’s personal
checks beyond and outside her authority. The Labor Arbiter, the NLRC and the Court of
Appeals all found her to have committed an “error of judgment,” “honest mistake,”
“honest mistake” vis-à-vis a “major offense.”Since petitioner was not faultless in regard
to the offenses imputed against her, we hold that the award of separation pay only,
without backwages, is proper.

TOPIC: VOLUNTARY ARBITRATION

Negros Metal Corporation vs. Armelo J. Lamayo

G.R. No. 186557 : August 25, 2010]

Facts: Armelo J. Lamayo began working for Negros Metal Corporation as a machinist.
Sometime in May 2002, while Lamayo was at the company's foundry grinding some
tools he was using, the company manager, called his attention why he was using the
grinder there to which he replied that since the machine there  was bigger, he would
finish his work faster. Lamayo's explanation was found unsatisfactory, hence, he was,
via memorandum, charged of loitering and warned. Taking the warning as a three-day
suspension as penalized under company rules, Lamayo reported for work after three
days, only to be meted with another 10-day suspension. After serving the second
suspension, Lamayo reported for work but was informed that his services had been
terminated and that he should draft his resignation letter. Thus, Lamayo filed a
complaint for illegal dismissal before the Labor Arbiter however it was opposed by
Negros Metal contending that the complaint should be dismissed because the Labor
Arbiter had no jurisdiction over it since, under their Collective Bargaining
Agreement (CBA), such matters must first be brought before the company's grievance
machinery.

Issue: Whether the Labor Arbiter has jurisdiction over the dispute?

Ruling: Yes. Under Art. 217 of the Labor Code, it is clear that a labor
arbiter has original and exclusive jurisdiction over termination disputes. On the other
hand, under Article 261, a voluntary arbitrator has original and exclusive jurisdiction
over grievances arising from the interpretation or enforcement of company policies.
As a general rule then, termination disputes should be brought before a labor
arbiter, except when the parties, under Art. 262, unmistakably express that they agree
to submit the same to voluntary arbitration.

In the present case, the CBA provision on grievance machinery being invoked by
petitioner does not expressly state that termination disputes are included in the ambit of
what may be brought before the company's grievance machinery.  Thus, the matter of
suspension of an employee was under the original and exclusive jurisdiction of the labor
arbiter.