JUSTICE ESTELA PERLAS-BERNABE CASE DOCTRINES IN LABOR LAW

I. GENERAL PROVISIONS
A. Basic policy on labor

B. Construction in favor of labor

Canuel vs. Magsaysay Maritime Corp.

GR. No. 190161 October 13, 2014

A strict and literal construction of the 2000 POEA Standard Employment Contract for Seamen (POEA-
SEC), especially when the same would result into inequitable consequences against labor, is not
subscribed to in this jurisdiction. Concordant with the State’s avowed policy to give maximum aid and
full protection to labor as enshrined in Article XIII of the 1987 Philippine Constitution, 53 contracts of
labor, such as the 2000 POEA-SEC, are deemed to be so impressed with public interest that the more
beneficial conditions must be endeavored in favor of the laborer. 54 The rule therefore is one of liberal
construction.

As enunciated in the case of Philippine Transmarine Carriers, Inc. v. NLRC, the POEA-SEC is designed
primarily for the protection and benefit of Filipino seamen in the pursuit of their employment on board
ocean-going vessels. Its provisions must [therefore] be construed and applied fairly, reasonably and
liberally in their favor [as it is only] then can its beneficent provisions be fully carried into effect. 56 

Applying the rule on liberal construction, the Court is thus brought to the recognition that medical
repatriation cases should be considered as an exception to Section 20 of the 2000 POEA-SEC.
Accordingly, the phrase "work-related death of the seafarer, during the term of his employment contract"
under Part A (1) of the said provision should not be strictly and literally construed to mean that the
seafarer’s work-related death should have precisely occurred during the term of his employment. Rather,
it is enough that the seafarer’s work-related injury or illness which eventually causes his death should
have occurred during the term of his employment. Taking all things into account, the Court reckons that it
is by this method of construction that undue prejudice to the laborer and his heirs may be obviated and the
State policy on labor protection be championed. For if the laborer’s death was brought about (whether
fully or partially) by the work he had harbored for his master’s profit, then it is but proper that his demise
be compensated. Here, since it has been established that (a) the seafarer had been suffering from a work-
related injury or illness during the term of his employment, (b) his injury or illness was the cause for his
medical repatriation, and (c) it was later determined that the injury or illness for which he was medically
repatriated was the proximate cause of his actual death although the same occurred after the term of his
employment, the above-mentioned rule should squarely apply. Perforce, the present claim for death
benefits should be granted.

C. Constitutional and Civil Code provisions relating to Labor Law

II. PRE-EMPLOYMENT
A. Recruitment and placement of local and migrant workers (Labor Code and RA 8042, as amended by
RA 10022)
1. Illegal recruitment and other prohibited activities
a. Elements
b. Types of illegal recruitment
c. Illegal recruitment vs. estafa
2. Liability of local recruitment agency and foreign employer
a. Solidary liability
b. Theory of imputed knowledge
3. Termination of contract of migrant worker without just or valid cause
4. Ban on direct hiring
B. Employment of non-resident aliens

III. LABOR STANDARDS

A. Conditions of employment
1. Coverage
2. Hours of work
a. Normal hours of work; hours worked
b. Meal periods
 c. Night-shift differential
d. Overtime work
e. Computation of additional compensation (rates only); facilities vs. supplements
3. Weekly rest periods
4. Holidays
5. Service incentive leaves
6. Service charges
7. 13th month pay
B. Wages
1. Payment of wages
2. Prohibitions regarding wages
3. Wage distortion; concept
4. Non-diminution of benefits
C. Leaves
1. Service incentive leave
2. Maternity leave
3. Paternity leave
4. Solo parent leave
5. Leave benefits for women workers under RA 9710 and RA 9262
D. Special groups of employees
1. Women
a. Discrimination
b. Stipulation against marriage
c. Prohibited acts
d. Sexual harassment (RA 7877)
2. Minors (RA 7610, as amended by RA 9231)
3. Kasambahay (RA 10361)
4. Homeworkers
5. Night workers
6. Apprentices and learners
7. Persons with Disabilities
a. Discrimination
b. Incentives for employers

IV. SOCIAL WELFARE LEGISLATION

A. SSS Law (RA 8282)
1. Coverage and exclusions
2. Dependents and beneficiaries
3. Benefits
B. GSIS Law (RA 8291)
1. Coverage and exclusions
2. Dependents and beneficiaries
3. Benefits
C. Disability and death benefits
1. Labor Code
2. POEA-Standard Employment Contract

Philsynergy Maritime Inc et. al vsGallano

G.R. No. 228504, June 06, 2018

Facts: Respondent, age 62, was employed by the employer as Ship master and was declared by the
company physician fit to work. During the voyage and while performing his duties, he suffered from
"Cerebrovascular Infarct Middle Cerebral Artery, Right [and] Hypertension" even his Isordil would not
take effect and was certified by the Company Physician not a work related disease. He then applied for
total disability benefit but was denied by the Petitioner contending that he concealed a previously medical
condition and that as certified by the Company Physician his illness was not work related but was refuted
by the respondent showing a certification of an independent physician

ISSUES:
1. Whether or not there was concealment of a pre-existing illness on the part of the respondent
 2. Whether or not respondent is entitled to total and permanent disability benefits
Ruling:

1. No, there was no concealment of a pre-existing illness on the part of the respondent.

Under the 2010 POEA-SEC, an illness shall be considered as pre-existing if prior to the processing of the
POEA contract, any of the following conditions is present: (a) the advice of a medical doctor on
treatment was given for such continuing illness or condition; or (b) the seafarer had been diagnosed and
has knowledge of such illness or condition but failed to disclose the same during the PEME, and such
cannot be diagnosed during the pre-employment medical examination (PEME).

Had respondent been suffering from a pre-existing hypertension at the time of his PEME, the same could
have been easily detected by standard/routine tests conducted during the said examination, However,
respondent's PEME showed normal blood pressure with no heart problem, which led the company-
designated physician to declare him fit for sea duty. 58

2. Yes, respondent is entitled to total and permanent disability benefits.

Section 20 (A) of the 2010 POEA-SEC provides that a seafarer shall be entitled to compensation if he
suffers from a work-related injury or illness during the term of his contract. A work-related illness is
defined as "any sickness as a result of an occupational disease listed under Section 32-A of this Contract
with the conditions set therein satisfied."59 Section 32-A of the 2010 POEA-SEC reads:

SECTION 32-A. OCCUPATIONAL DISEASES

For an occupational disease and the resulting disability or death to be compensable,
ALL of the following conditions must be satisfied:

1. The seafarer's work must involve the risks described herein;

2. The disease was contracted as a result of the seafarer's exposure to the described risks;
3. The disease was contracted within a period of exposure and under such other factors
necessary to contract it; and
4. There was no notorious negligence on the part of the seafarer.

During the term of his contract and while in the performance of his duties as a Ship Master, respondent
undeniably suffered from brain stroke, a CVA, and hypertension – both of which are found listed under
Section 32-A, and therefore, deemed work-related. Also, respondent's brain stroke was brought about by
his hypertension which occurred only while in the performance of his duties as a Ship Master on board
M.V. Pearl Halo. Further, there was no indication that respondent was known to be previously suffering
from hypertension, and considering further that his last PEME showed normal blood pressure, chest x-ray
and ECG results, his illnesses and the resulting disability were correctly declared to be compensable.

CANUEL, ET.AL vs. MAGSAYSAY MARITIME CORPORATION, ET.AL

G.R. No. 190161, October 13, 2014,

As stated in Section 20 of the 2000 POEA-SEC, the seafarer’s beneficiaries may successfully claim death
benefits if they are able to establish that the seafarer’s death is (1) work-related and (2) had occurred
during the term of his employment contract.

The first requirement is complied with if the seafarer incurred an injury when he figured in an accident
while performing his duties. In such case, the injury is the proximate cause of his death or disability for
which compensation is sought, the previous physical condition of the employee is unimportant and
recovery may be had for injury independent of any pre-existing weakness or disease.

With respect to the second requirement, the Court takes this opportunity to clarify that while the general
rule is that the seafarer’s death should occur during the term of his employment, the seafarer’s death
occurring after the termination of his employment due to his medical repatriation on account of a work-
related injury or illness constitutes an exception thereto. The basis of such is the liberal construction of
the afore-mentioned law as impelled by the plight of the bereaved heirs who stand to be deprived of a just
and reasonable compensation for the seafarer’s death, notwithstanding its evident work-connection.

V. LABOR RELATIONS
A. Right to self-organization
1. Coverage
2. Ineligibility of managerial employees; right of supervisory employees
3. Effect of inclusion as employees outside of the bargaining unit
 4. Non-abridgement
B. Bargaining unit
C. Bargaining representative
D. Rights of labor organizations
1. Check off, assessments, and agency fees
2. Collective bargaining

Benson Industries Employees Union vs. Bensons Industries Inc.

GR no. 200746, Aug. 06 2014

Issue: Whether or not Bensons Industries Inc. should pay its employees full separation benefits based on
the CBA

Ruling: Yes, Bensons Industries Inc. should pay its employees full separation benefits based on the CBA.

When the obligation to pay separation benefits, however, is not sourced from law (particularly, Article
297 of the Labor Code), but from contract, such as an existing CBA between the employer and its
employees, an examination of the latter’s provisions becomes necessary in order to determine the
governing parameters for the said obligation. It is fundamental that obligations arising from contracts
have the force of law between the contracting parties and thus should be complied with in good faith; 24 
and parties are bound by the stipulations, clauses, terms and conditions they have agreed to, the only
limitation being that these stipulations, clauses, terms and conditions are not contrary to law, morals,
public order or public policy.25 Hence, if the terms of a CBA are clear and there is no doubt as to the
intention of the contracting parties, the literal meaning of its stipulations shall prevail.
 
An employer which closes shop due to serious business losses is exempt from paying separation benefits
under Labor Code. Conversely, the obligation is maintained when the employer’s closure is not due to
serious business losses. For a similar exemption to obtain against a contract, such as a CBA, the tenor of
the parties’ agreement ought to be similar to the law’s tenor. When the parties, however, agree to deviate
therefrom, and unqualifiedly covenant the payment of separation benefits irrespective of the employer’s
financial position, then the obligatory force of that contract prevails and its terms should be carried out to
its full effect.

Here, Benson agreed to and was thus obligated under the CBA to pay its employees who had been
terminated without any fault attributable to them separation benefits at the rate of 19 days for every year
of service.

E. Unfair Labor Practices

1. Nature, aspects
2. By employers

Pepsi vs. Molon et. Al

GR No. 175002 , Feb. 18, 2013

Issue: Whether or not there was union busting or unfair labor practice (ULP)

Ruling: No, there was no act of union busting or ULP on the part of Pepsi.

Under Article 276(c) of the Labor Code, there is union busting when the existence of the union is
threatened by the employer’s act of dismissing the former’s officers who have been duly-elected in
accordance with its constitution and by-laws. On the other hand, the term unfair labor practice refers
to acts that violate the workers' right to organize. The prohibited acts are related to the workers' right
to self-organization and to the observance of a CBA. Without that element, the acts, no matter how unfair,
are not unfair labor practices. The only exception is Article 248(f) [now Article 257(f)] which provides:
To dismiss, discharge, or otherwise prejudice or discriminate against an employee for having given or
being about to give testimony under this Code.

Here, there was no act of union busting or ULP on the part of Pepsi considering that it retrenched its
employees in good faith. Pepsi tried to sit-down with its employees to arrive at mutually beneficial
criteria which would have been adopted for their intended retrenchment. In the same vein, Pepsi’s
cooperation during the NCMB-supervised conciliation conferences can also be gleaned from the records.
Furthermore, the fact that Pepsi’s rightsizing program was implemented on a company-wide basis dilutes
respondents’ claim that Pepsi’s retrenchment scheme was calculated to stymie its union activities, much
less diminish its constituency. Therefore, absent any perceived threat to LEPCEU-ALU’s existence or a
violation of respondents’ right to self-organization – as demonstrated by the foregoing actuations –Pepsi
cannot be said to have committed union busting or ULP in this case.

3. By labor organizations
F. Peaceful concerted activities
1. Strikes
2. Picketing
3. Lockouts
4. Assumption of jurisdiction by the DOLE Secretary
5. Injunctions

VI. POST-EMPLOYMENT
A. Employer-employee relationship
1. Tests to determine existence

Philippine Pizza Inc vs. Porras Et. Al.

GR No. 230030, August 29, 2018

Facts: Respondents were hired by CBMI, job contractor, and assigned them as delivery riders for PPI’s
Pizza Hut Chain which they rendered service for 7 to 11 years. Hence, they assumed that they are regular
employees. During the course of their service, they alleged that they were transferred to CBMI so as to
prevent them from attaining regular status and was then informed to be on floating status considering that
PPI has reduced its need for their services. PPI contended that they entered Contract of Service with
CBMI to provide delivery services and CBMI added that they are the respondent’s employer as they are
the one paying their wages and benefits and oversee their functions. 

Issue: Whether or not the respondents are employees of PPI

Ruling: No, respondents are not employees of PPI.

Here, CBMI retained and exercise control over the respondents. Records show that at least one (1) CBMI
supervisor was deployed in each Pizza Hut branch to regularly oversee, monitor, and supervise the
employees' attendance and performance.  This claim was further substantiated by CBMI's area
coordinators, who admitted in their Affidavits that:
(a) they oversee, monitor, and ensure CBMI employees' compliance with company policies,
rules, and regulations whichever Pizza Hut branch they may be assigned; 
(b) they are responsible for ensuring that CBMI employees perform their tasks and functions in
the manner that CBMI mandates;
 (c) they regularly visit and monitor each area of deployment;
(d) they track and confirm the attendance and punctuality of CBMI employees; and
(e) they constantly inform CBMI's Human Resource Department (HRD) Manager of any
company violations committed by the employees.

Furthermore, the existence of the element of control can also be inferred from CBMI's act of subjecting
respondents to disciplinary sanctions for violations of company rules and regulations as evidenced by the
various Offense Notices and Memoranda52 issued to them. 

Lastly, no employer-employee relationship exists between PPI and respondents. Here, Respondents
applied for work with CBMI and were consequently selected and hired by the latter. They were then
required by CBMI to attend orientations and seminars wherein respondents were apprised of the working
conditions, basic customer service, basic good grooming, and company rules and regulations. During the
course of their employment, CBMI paid their wages and remitted/paid their SSS, PhilHealth, and Pag-
IBIG contributions.

Talaroc vs. Arpaphil Shipping Corp. et al.

GR no. 223731, August 30, 2017

Issue: Whether or not petitioner can claim permanent disability benefits despite non-compliance of the
third-doctor-referral provision?

Ruling: Yes, petitioner can claim permanent disability benefits despite non-compliance of the third-
doctor-referral provision.
The Third-Doctor Referral Provision provides that if a doctor appointed by the seafarer disagrees with the
assessment, a third doctor may be agreed jointly between the Employer and the seafarer. The third
doctor's decision shall be final and binding on both parties (2010 (A)(3) POEA-SEC).

Hence, seafarer's non-compliance with the said conflict-resolution procedure results in the affirmance of
the fit-to-work certification of the company-designated physician.

However, it should be pointed out that a seafarer's compliance with such procedure presupposes that
the company-designated physician came up with an assessment as to his fitness or unfitness to work
before the expiration of the 120-day or 240-day periods. Alternatively put, absent a certification from
the company-designated physician, the seafarer has nothing to contest and the law steps in to
conclusively characterize his disability as total and permanent.

Here, there was no showing that petitioner duly received a conclusive and definitive assessment for his
lumbar spondylosis. The May 14, 2013 medical report was a confidential document, which was not
shown to have been received by him. In fact, respondents did not respond to his initial query regarding
the true state of his condition and whether or not he would be able to return to his pre-injury capacity and
resume work despite his back pain.

Thus, although petitioner did consult an independent physician regarding his illness, the lack of
conclusive and definite assessment from respondents left him nothing to properly contest and perforce,
negates the need for him to comply with the third-doctor referral provision. Finally, without a valid final
and definite assessment from the company-designated physician, the law already steps in to consider
petitioner's disability as total and permanent.

2. Kinds of employment
a. Regular

USV vs. SamahangManggagawang UST

GR no. 184262 April 24, 2017

Issue:
(1) Whether or not respondents are regularized casual employees
(2) Whether or not respondents are project employees

Ruling:

(1) Yes, respondents are regularized casual employees.

The law provides for two (2) types of regular employees, namely: (a) those who are engaged to perform
activities which are usually necessary or desirable in the usual business or trade of the employer; and
(b) those who have rendered at least one year of service, whether continuous or broken, with respect to
the activity in which they are employed and while such activity exists (regularized casual employee).

The primary standard of 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.
The test is whether the former is usually necessary or desirable in the usual business or trade of the
employer. The connection can be determined by considering the nature of work performed and its relation
to the scheme of the particular business or trade in its entirety. Also, if the employee has been performing
the job for at least a year, even if the performance is not continuous and merely intermittent, the law
deems repeated and continuing need for its performance as sufficient evidence of the necessity if not
indispensability of that activity to the business. Hence, the employment is considered regular, but only
with respect to such activity and while such activity exists.

(3) No, respondents are not project employees.

Here, the specific undertakings or projects for which they were employed were not clearly delineated.
This is evidenced by the vagueness of the project descriptions set forth in their respective Contractual
Employment Appointments (CEAs), which states that they were tasked "to assist" in various carpentry,
electrical, and masonry work. In fact, when the aforesaid CEAs are pieced together, it appears that during
the years 1990 to 1999, respondents were each engaged to perform all-around maintenance services
throughout the various facilities/installations in petitioner's campus. Thus, it seems that petitioner, through
the CEAs, merely attempted to compartmentalize respondents’ various tasks into purported "projects" so
as to make it appear that they were hired on a per-project basis. Verily, the Court cannot countenance this
practice as to do so would effectively permit petitioners to avoid hiring permanent or regular employees
by simply hiring them on a temporary or casual basis, thereby violating the employees' security of tenure
relative to their jobs.

b. Casual
c. Probationary

Abbot Laboratories vsAlcaraz

GR No. 192571, April 22, 2014

Issue: Whether or Alcaraz is a probationary employee

Ruling: Yes, Alcaraz is a probationary employee.

Here, Alcaraz was apprised of the performance standards for her regularization and hence, was properly a
probationary employee. An employee’s failure to perform the duties and responsibilities which have been
clearly made known to him constitutes a justifiable basis for a probationary employee’s non-
regularization.

It is not the probationary employee’s job description but the adequate performance of his duties and
responsibilities which constitutes the inherent and implied standard for regularization. Hence, if the
probationary employee had been fully apprised by his employer of these duties and responsibilities, then
basic knowledge and common sense dictate that he must adequately perform the same; else he fails to
pass the probationary trial and may therefore be subject to termination.

The determination of "adequate performance" is not, in all cases, measurable by quantitative

specification, such as that of a sales quota in Alcaraz’s example. It is also hinged on the qualitative
assessment of the employee’s work; by its nature, this largely rests on the reasonable exercise of the
employer’s management prerogative. While in some instances the standards used in measuring the quality
of work may be conveyed – such as workers who construct tangible products which follow particular
metrics, not all standards of quality measurement may be reducible to hard figures or are readily
articulable in specific pre-engagement descriptions. A good example would be the case of probationary
employees whose tasks involve the application of discretion and intellect, such as – to name a few –
lawyers, artists, and journalists. In these kinds of occupation, the best that the employer can do at the time
of engagement is to inform the probationary employee of his duties and responsibilities and to orient him
on how to properly proceed with the same. The employer cannot bear out in exacting detail at the
beginning of the engagement what he deems as "quality work" especially since the probationary
employee has yet to submit the required output. In the ultimate analysis, the communication of
performance standards should be perceived within the context of the nature of the probationary
employee’s duties and responsibilities.

d. Project

Lopez vs Irvine Construction Corp and Santos

GR. no. 207253, August 20, 2014

Issue: Whether or not Lopez is a project employee

Ruling: No, Lopez is not a project employee.

The principal test for determining whether particular employees are properly characterized as "project
employees" as distinguished from "regular employees," is whether or not the "project employees" were
assigned to carry out a "specific project or undertaking," the duration and scope of which were specified
at the time the employees were engaged for that project.

The project could either be:

(1) a particular job or undertaking that is within the regular or usual business of the employer company,
but which is distinct and separate, and identifiable as such, from the other undertakings of the company;
or (2) a particular job or undertaking that is not within the regular business of the corporation. In order to
safeguard the rights of workers against the arbitrary use of the word "project" to prevent employees from
attaining the status of regular employees, employers claiming that their workers are project employees
should not only prove that the duration and scope of the employment was specified at the time they were
engaged, but also that there was indeed a project.
Irvine Construction Corp. failed to show that Lopez had been assigned to carry out a "specific project or
undertaking," with its duration and scope specified at the time of engagement. Lopez had been employed
by Irvine since November 1994, or more than 10 years from the time he was laid off on December 27,
2005. Labor Code provides that any employee who has rendered at least one year of service, whether
such service is continuous or broken, shall be considered a regular employee

OMNI HAULING SERVICES, INC., LOLITA FRANCO and ANICETO FRANCO vs.
BERNARDO BON, et al., G.R. No. 199388, September 3, 2014, J. Perlas-Bernabe

In order to safeguard the rights of workers against the arbitrary use of the word “project” to prevent
employees from attaining a regular status, employers claiming that their workers are project employees
should not only prove that the duration and scope of the employment was specified at the time they
were engaged, but also that there was indeed a project. Thus, if a garbage contractor terminates the
employment of its garbage truck drivers and Paleros, which the former alleges were project employees
yet the contractor failed to show evidence to prove such assertion, the presumption under Art. 280 of the
labor code that the garbage truck drivers and Paleros are regular employees, and that their refusal to sign
employment contract stating that they were “’rehired’ for the duration of the renewed service contract” is
not a valid ground for dismissal.

MA. CHARITO C. GADIA, et al. vs.  SYKES ASIA, INC./ CHUCK SYKES/ MIKE HINDS/
MICHAEL HENDERSON, G.R. No. 209499 , January 28, 2015, J. Perlas-Bernabe

Sykes Asia terminated the services of the complainants. Hence, the latter filed complaints for illegal
dismissal. In ruling for Sykes Asia, the Supreme Court held that complainant were just mere project
employees, hence, their dismissal upon the termination of the project is proper. Accordingly,, for an
employee to be considered project-based, the employer must show compliance with two (2) requisites,
namely that: (a) the employee was assigned to carry out a specific project or undertaking; and (b)
the duration and scope of which were specified at the time they were engaged for such project. 

Montallana vs. La Consolacion College Manila

GR No. 208890, December 8, 2014

Issue: Whether or not petitioner was illegally dismissed

Ruling: Yes, petitioner was illegally dismissed.

“Willful disobedience by the employee of the lawful orders of his employer or representative in
connection with his work” is one of the just causes to terminate an employee. In order for this ground to
be properly invoked as a just cause for dismissal, the conduct must be willful or intentional, willfulness
being characterized by a wrongful and perverse mental attitude. “Willfulness” was described as
“attended by a wrongful and perverse mental attitude rendering the employee’s act inconsistent with
proper subordination.” It is well to stress that it is the employer who bears the burden of proving,
through substantial evidence, that the aforesaid just cause – or any other authorized cause for that matter
– forms the basis of the employee’s dismissal from work. Failing in which, the dismissal should be
adjudged as illegal.

Here, respondents failed to prove, by substantial evidence, that Montallana’s non-compliance with
respondents’ directive to apologize was “willful or intentional.” The Court finds itself in complete
agreement with the NLRC that the disobedience attributed to Montallana could not be justly characterized
as “willful”.

Even on the assumption that there was willful disobedience, still, the Court finds the penalty of dismissal
too harsh. It bears to stress that not every case of insubordination or willful disobedience by an employee
reasonably deserves the penalty of dismissal. The penalty to be imposed on an erring employee must be
commensurate with the gravity of his offense. An employee who is compelled to apologize for a previous
infraction but fails to do so is not one which would properly warrant his termination, absent any proof that
the refusal was made in brazen disrespect of his employer.

e. Seasonal
f. Fixed-term
g. Security guards
h. Floating status
3. Legitimate subcontracting vs. labor-only contracting
a. Elements
b. Trilateral relationship
c. Solidary liability
B. Termination by employer
1. Just causes

Abbot Laboratories vsAlcaraz

GR No. 192571, April 22, 2014

Issue: Whether or not Alcaraz was illegally dismissed

Ruling: No, Alcaraz was not illegally dismissed.

If the probationary employee had been fully apprised by his employer of these duties and responsibilities,
then basic knowledge and common sense dictate that he must adequately perform the same; else he fails
to pass the probationary trial and may therefore be subject to termination.

Alcaraz was terminated because she (a) did not manage her time effectively; (b) failed to gain the trust of
her staff and to build an effective rapport with them; (c) failed to train her staff effectively; and (d) was
not able to obtain the knowledge and ability to make sound judgments on case processing and article
review which were necessary for the proper performance of her duties. Due to the nature and variety of
these managerial functions, the best that Abbott could have done, at the time of Alcaraz's engagement,
was to inform her of her duties and responsibilities, the adequate performance of which, to repeat, is an
inherent and implied standard for regularization.

Hence, since the reasonableness of Alcaraz's assessment clearly appears from the records, her termination
was justified. Bear in mind that the quantum of proof which the employer must discharge is only
substantial evidence which, as defined in case law, means that amount of relevant evidence as a
reasonable mind might accept as adequate to support a conclusion, even if other minds, equally
reasonable, might conceivably opine otherwise.

Abbot Laboratories vsAlcaraz

GR No. 192571, July 23, 2013

A probationary employee, like a regular employee, enjoys security of tenure. However, in cases of
probationary employment, aside from just or authorized causes of termination, an additional ground is
provided under Article 295 of the Labor Code, i.e., the probationary employee may also be terminated for
failure to qualify as a regular employee in accordance with the reasonable standards made known by the
employer to the employee at the time of the engagement. 59 Thus, the services of an employee who has
been engaged on probationary basis may be terminated for any of the following: (a) a just or (b) an
authorized cause; and (c) when he fails to qualify as a regular employee in accordance with reasonable
standards prescribed by the employer.60

Corollary thereto, Section 6(d), Rule I, Book VI of the Implementing Rules of the Labor Code provides
that if the employer fails to inform the probationary employee of the reasonable standards upon which the
regularization would be based on at the time of the engagement, then the said employee shall be deemed a
regular employee, viz.:

(d) In all cases of probationary employment, the employer shall make known to the employee the
standards under which he will qualify as a regular employee at the time of his engagement. Where no
standards are made known to the employee at that time, he shall be deemed a regular employee.

In other words, the employer is made to comply with two (2) requirements when dealing with a
probationary employee: (1) the employer must communicate the regularization standards to the
probationary employee; and (2) the employer must make such communication at the time of the
probationary employee’s engagement. If the employer fails to comply with either, the employee is
deemed as a regular and not a probationary employee.

MAERSK-FILIPINAS CREWING, INC., A.P. MOLLER SINGAPORE PTE.LIMITED, AND

JESUS AGBAYANI vs. TORIBIO C. AVESTRUZ, G.R. No. 207010, February 18, 2015, J. Perlas-
Bernabe

Issue: Whether or not respondent was illegally dismissed

Ruling: Yes, respondent was illegally dismissed.

 Insubordination, as a just cause for the dismissal of an employee, necessitates the concurrence of at least
two requisites: (1) the employee’s assailed conduct must have been willful, that is, characterized by a
wrongful and perverse attitude; and (2) the order violated must have been reasonable, lawful, made
known to the employee, and must pertain to the duties which he had been engaged to discharge.

Here, the contents of Captain Woodward’s e-mails do not establish that Avestruz’s conduct had been
willful, or characterized by a wrongful and perverse attitude. Avestruz’s statement regarding the incident
in the galley deserves more credence, being corroborated by Kong, a messman who witnessed the same.
Conversely, apart from Captain Woodward’s e-mails, no other evidence was presented by the petitioners
to support their claims. While rules of evidence are not strictly observed in proceedings before
administrative bodies, petitioners should have offered additional proof to corroborate the
statements described therein.

St Luke’s Medical Center Inc vs. Sanchez

Issue: Whether or not Sanchez was illegally dismissed

Ruling: No, Sanchez was not illegally dismissed.

An employer may terminate an employment for serious misconduct or willful disobedience by the
employee of the lawful orders of his employer or his representative in connection with his work. For an
employee to be validly dismissed on this ground, the employer’s orders, regulations, or instructions must
be: (1) reasonable and lawful, (2) sufficiently known to the employee; and (3) in connection with the
duties which the employee has been engaged to discharge. ”

Hence, Sanchez was validly dismissed by SLMC for her willful disregard and disobedience of the Code
of Discipline, which reasonably punishes acts of dishonesty, i.e., “theft, pilferage of hospital or co-
employee property, x xx or its attempt in any form or manner from the hospital, co-employees, doctors,
visitors, [and] customers (external and internal)” with termination from employment. 60 Such act is
obviously connected with Sanchez’s work, who, as a staff nurse, is tasked with the proper stewardship of
medical supplies. Significantly, records show that Sanchez made a categorical admission 61 in her
handwritten letter that despite her knowledge of its express prohibition under the Code of Discipline, she
still knowingly brought out the subject medical items with her. It is apt to clarify that SLMC cannot be
faulted in construing the taking of the questioned items as an act of dishonesty (particularly, as theft,
pilferage, or its attempt in any form or manner) considering that the intent to gain may be reasonably
presumed from the furtive taking of useful property appertaining to another.

Further, it is well-settled that conviction in a criminal case is not necessary to find just cause for
termination of employment. Criminal and labor cases involving an employee arising from the same
infraction are separate and distinct proceedings which should not arrest any judgment from one to the
other.

Martinez vs CENPELCO
GR no. 192306, Jul. 15, 2013

To validly dismiss an employee on the ground of loss of trust and confidence, the following guidelines
must be observed: (1) the employee concerned must be holding a position of trust and confidence; and (2)
there must be an act that would justify the loss of trust and confidence.

Anent the first requisite, it is noteworthy to mention that there are two classes of positions of trust,
namely: (1) managerial employees whose primary duty consists of the management of the establishment
in which they are employed or of a department or a subdivision thereof, and to other officers or members
of the managerial staff; and (2) fiduciary rank-and-file employees such as cashiers, auditors, property
custodians, or those who, in the normal exercise of their functions, regularly handle significant amounts
of money or property. These employees, though rank-and-file, are routinely charged with the care and
custody of the employer’s money or property, and are thus classified as occupying positions of trust and
confidence. Being an employee tasked to collect payments and remit the same to CENPELCO, Martinez
belongs to the latter class and thus, occupies a position of trust and confidence.

Anent the second requisite, the audit report conducted on Martinez's cash count revealed that he had a
shortage. When asked to explain such shortage, Martinez not only admitted the same but even tried to
exculpate himself from liability by attempting to offset said shortage with his alleged overage. This
practice should never be countenanced because it would allow the employees to patch up inaccuracies or
even their own wrongdoings and thus, the true revenues or losses of the company will never be correctly
identified. Verily, this irregular practice would be detrimental to the interests of the employer whose
bread and butter depends solely on realized profits. Perforce, Martinez's failure to properly account for his
shortage of such a significant amount is enough reason for CENPELCO to lose trust and confidence in
him.

1. Authorized causes

Benson Industries Employees Union vs Bensons Industries Inc.

GR no. 200746, Aug. 06 2014

Issue: Whether or not closure of business is a ground for authorized dismissal

Ruling: Yes, closure of business is a ground for authorized dismissal.

Closure of business may be considered as a reversal of an employer’s fortune whereby there is a complete
cessation of business operations and/or an actual locking-up of the doors of the establishment, usually due
to financial losses. Under the Labor Code, it is treated as an authorized cause for termination, aimed at
preventing further financial drain upon an employer who cannot anymore pay its employees since
business has already stopped. As a form of recompense, the employer is required to pay its employees
separation benefits, except when the closure is due to serious business losses.

3. Due process
a. Twin-notice requirement

MAERSK-FILIPINAS CREWING, INC., A.P. MOLLER SINGAPORE PTE.LIMITED, AND

JESUS AGBAYANI vs. TORIBIO C. AVESTRUZ, G.R. No. 207010, February 18, 2015, J. Perlas-
Bernabe

Issue: Whether or not Avestruz was accorded procedural due process

Ruling: No, Avestruz was not accorded procedural due process.

The “two-notice rule” provides that an erring seaman should be given a written notice of the charge
against him and is afforded an opportunity to explain or defend himself. Should sanctions be imposed,
then a written notice of penalty and the reasons for it shall be furnished the erring seafarer. It is only in
the exceptional case of clear and existing danger to the safety of the crew or vessel that the required
notices are dispensed with; but just the same, a complete report should be sent to the manning agency,
supported by substantial evidence of the findings.

Here, there is dearth of evidence to show that Avestruz had been given a written notice of the charge
against him, or that he was given the opportunity to explain or defend himself. The statement  given by
Captain Woodward requiring him to explain in writing the events that transpired at the galley hardly
qualifies as a written notice of the charge against him, nor was it an opportunity for Avestruz to explain or
defend himself. While Captain Woodward claimed in his e-mail that he conducted a “disciplinary
hearing” informing Avestruz of his inefficiency, no evidence was presented to support the same.

Neither was Avestruz given a written notice of penalty and the reasons for its imposition. Instead, Captain
Woodward verbally informed him that he was dismissed from service and would be disembarked from
the vessel. It bears stressing that only in the exceptional case of clear and existing danger to the safety of
the crew or vessel that the required notices may be dispensed with, and, once again, records are bereft of
evidence showing that such was the situation when Avestruz was dismissed.

b. Hearing

Surigao del Norte Electric Coop. vs. Gonzaga

GR no. 187722, June 10, 2013

Issue: Whether or not a formal hearing or conference is required in order to comply with the requirement
that an employee is given an ample opportunity to be heard

Ruling: Yes, a formal hearing or conference is required in order to comply with the requirement that an
employee is given an ample opportunity to be heard
Jurisprudence dictates that it is not enough that the employee is given an "ample opportunity to be heard"
if company rules or practices require a formal hearing or conference. In such instance, the requirement of
a formal hearing and conference becomes mandatory.

In Perez v. Philippine Telegraph and Telephone Company, the Court laid down the following principles
in dismissing employees:

(a) "ample opportunity to be heard" means any meaningful opportunity (verbal or written) given to
the employee to answer the charges against him and submit evidence in support of his defense,
whether in a hearing, conference or some other fair, just and reasonable way.
(b) a formal hearing or conference becomes mandatory only when requested by the employee in
writing or substantial evidentiary disputes exists or a company rule or practice requires it, or when
similar circumstances justify it.
(c) the "ample opportunity to be heard" standard in the Labor Code prevails over the "hearing and
conference" requirement in the implementing rules and regulations.

The rationale behind this mandatory characterization is premised on the fact that company rules and
regulations which regulate the procedure and requirements for termination, are generally binding on the
employer. Company policies or practices are binding on the parties. Some can ripen into an obligation on
the part of the employer, such as those which confer benefits on employees or regulate the procedures and
requirements for their termination.

While Gonzaga was given an ample opportunity to be heard within the purview of the foregoing
principles, SURNECO, however, failed to show that it followed its own rules which mandate that the
employee who is sought to be terminated be afforded a formal hearing or conference. As above-discussed,
SURNECO remains bound by – and hence, must faithfully observe – its company policy embodied in its
own Code of Ethics.

Accordingly, since only an informal inquiry was conducted in investigating Gonzaga’s alleged cash
shortages, SURNECO failed to comply with its own company policy, violating the proper termination
procedure altogether. In this relation, case law states that an employer who terminates an employee for a
valid cause but does so through invalid procedure is liable to pay the latter nominal damages.

C. Termination by employee

1. Resignation versus constructive dismissal

Tatel vs. JLFP Investigation Security Agency

GR no. 206942, Feb 25, 2015

Facts: Respondents themselves claimed that after having removed Tatel from his post at Bagger Werken
on August 24, 2009 due to several infractions committed thereat, they subsequently reassigned him to
SKI from September 16, 2009 to October 12, 2009 and then to IPVG from October 21 to 23, 2009.
Thereafter, and until Tatel filed the instant complaint for illegal dismissal six (6) months later, or on May
4, 2010, he was not given any other postings or assignments. While it may be true that respondents
summoned him back to work through the November 26, 2009 Memorandum, which Tatel acknowledged
to have received on December 11, 2009, records are bereft of evidence to show that he was given another
detail or assignment.

Issues:
1. Whether or not Tatel was constructively dismissed
2. Whether or not Tatel abandoned his work

Ruling:
1. Yes, Tatel was constructively dismissed.

Constructive dismissal exists when an act of clear discrimination, insensibility, or disdain, on the part of
the employer has become so unbearable as to leave an employee with no choice but to forego continued
employment, or when there is cessation of work because continued employment is rendered impossible,
unreasonable, or unlikely, as an offer involving a demotion in rank and a diminution in pay.
Here, respondents themselves claimed that after having removed Tatel from his post at Bagger Werken on
August 24, 2009 due to several infractions committed thereat, they subsequently reassigned him to SKI
from September 16, 2009 to October 12, 2009 and then to IPVG from October 21 to 23, 2009. Thereafter,
and until Tatel filed the instant complaint for illegal dismissal six (6) months later, or on May 4, 2010, he
was not given any other postings or assignments. While it may be true that respondents summoned him
back to work through the November 26, 2009 Memorandum, which Tatel acknowledged to have received
on December 11, 2009, records are bereft of evidence to show that he was given another detail or
assignment. As the "off-detail" period had already lasted for more than six (6) months, Tatel is therefore
deemed to have been constructively dismissed.

2. No, Tatel did not abandon his work.

To constitute abandonment, two elements must concur: (a) the failure to report for work or absence
without valid or justifiable reason, and (b) a clear intention to sever the employer-employee relationship,
with the second element as the more determinative factor and being manifested by some overt acts. Mere
absence is not sufficient. The employer has the burden of proof to show a deliberate and unjustified
refusal of the employee to resume his employment without any intention of returning. Abandonment is
incompatible with constructive dismissal. The charge of abandonment in this case is belied by the high
improbability of Tatel intentionally abandoning his work, taking into consideration his length of service
and, concomitantly, his security of tenure.

No rational explanation exists as to why an employee who had worked for his employer for more than ten
(10) years would just abandon his work and forego whatever benefits he may be entitled to as a
consequence thereof. As such, respondents failed to sufficiently establish a deliberate and unjustified
refusal on the part of Tatel to resume his employment, which therefore leads to the logical conclusion that
the latter had no such intention to abandon his work.

D. Preventive Suspension
E. Reliefs from illegal dismissal
F. Money claims arising from employer-employee relationship
G. Retirement

Grace Christian High School vs Lavandera

GR NO. 177845, Aug. 20, 2014

Issue: Whether or not CA committed an error in using the multiplier of 22.5 days in computing the
retirement pay differential

Ruling: No, the CA did not commit an error in using the multiplier of 22.5 days in computing the
retirement pay differential.

RA 7641 states that an employee’s retirement benefits under any collective bargaining [agreement
(CBA)] and other agreements shall not be less than those provided under the law – that is, at least one-
half (1/2) month salary for every year of service, a fraction of at least six (6) months being considered as
one whole year – and that unless the parties provide for broader inclusions, the term one-half (1/2) month
salary shall mean fifteen (15) days plus one-twelfth (1/12) of the 13th month pay and the cash equivalent
of not more than five (5) days of service incentive leaves."

The foregoing provision is applicable where (a) there is no CBA or other applicable agreement providing
for retirement benefits to employees, or (b) there is a CBA or other applicable agreement providing for
retirement benefits but it is below the requirement set by law. Verily, the determining factor in choosing
which retirement scheme to apply is still superiority in terms of benefits provided.

Here, GCHS has a retirement plan for its faculty and non-faculty members, which gives it the option to
retire a teacher who has rendered at least 20 years of service, regardless of age, with a retirement pay of
one-half (1/2) month for every year of service. Considering, however, that GCHS computed Filipinas’
retirement pay without including one-twelfth (1/12) of her 13th month pay and the cash equivalent of her
five (5) days SIL, both the NLRC and the CA correctly ruled that Filipinas’ retirement benefits should be
computed in accordance with Article 287 of the Labor Code, as amended by RA 7641, being the more
beneficent retirement scheme. They differ, however, in the resulting benefit differentials due to divergent
interpretations of the term "one-half (1/2) month salary" as used under the law.

Finally, one-half (1/2) month salary means 22.5 days: 15 days plus 2.5 days representing one-twelfth
(1/12) of the 13th month pay and the remaining 5 days for SIL. GCHS’ argument that the 5 days SIL
should be likewise pro-rated to their 1/12 equivalent must fail.
CONCEPCION A. VILLENA vs. BATANGAS II ELECTRIC COOPERATIVE, INC. AND
GEORGE A. DIN, G.R. No. 205735, February 04, 2015

Issue: Whether or not Villena can claim retirement pay if it was not awarded in the NLRC and CA’s
decision.

Ruling: No, Villena cannot claim retirement pay since it was not awarded in the NLRC and CA’s
decision.

The "other benefits" mentioned in these rulings cannot be construed to include retirement pay for the
primary reason that they adjudged awards relative to Villena’s illegal dismissal complaint, which remains
barren of a specific cause of action for retirement pay.

In order for her retirement pay claim to be considered, Villena’s complaint should have contained
substantial allegations which would show that she (a) had applied for the same, and (b) her application
squares with the requirements of entitlement under the terms of the company’s retirement plan, i.e.,
Policy No. 03-003, which, in fact, was issued after the CA’s Decision had already attained finality.
However, based on the records, what she sought for in her illegal dismissal complaint were the reliefs of
reinstatement, payment of salary differentials, all benefits and allowances that she may have received as
Finance Manager, attorney’s fees, and damages. Thus, as the matter left for determination is whether or
not the aforesaid rulings, when executed, should include retirement pay and representation, transportation,
and cellular phone usage allowances, the Court will harken back only to the context of the illegal
dismissal complaint from which such awards of "other benefits" stemmed from.

Retirement pay and separation pay are not mutually exclusive (unless there is a specific prohibition in the
CBA or retirement plan against the payment of both benefits). However, with Villena’s entitlement to
retirement pay, it is not included as an issue in an illegal dismissal case which had already been finally
decided, it is quite absurd for Villena to submit a "contemporaneous" claim for retirement pay on the
execution phase of these proceedings. In fine, the plea to include retirement pay in the execution of the
final and executory August 31, 2001 CA Decision and March 22, 2007 NLRC Resolution, under the
phrase "other benefits," cannot be granted.

VII. MANAGEMENT PREROGATIVE

A. Discipline

St Luke’s Medical Center Inc vs. Sanchez

Issue: Whether or not the rules and regulations made by St. Luke’s is within its management prerogative

Ruling: Yes, rules and regulations made by St. Luke’s is within its management prerogative.

The right of an employer to regulate all aspects of employment, aptly called “management prerogative,”
gives employers the freedom to regulate, according to their discretion and best judgment, all aspects of
employment, including work assignment, working methods, processes to be followed, working
regulations, transfer of employees, work supervision, lay-off of workers and the discipline, dismissal and
recall of workers.55 In this light, courts often decline to interfere in legitimate business decisions of
employers.  In fact, labor laws discourage interference in employers’ judgment concerning the conduct of
their business.56

Among the employer’s management prerogatives is the right to prescribe reasonable rules and regulations
necessary or proper for the conduct of its business or concern, to provide certain disciplinary measures to
implement said rules and to assure that the same would be complied with. At the same time, the employee
has the corollary duty to obey all reasonable rules, orders, and instructions of the employer; and willful or
intentional disobedience thereto, as a general rule, justifies termination of the contract of service and the
dismissal of the employee.

B. Transfer of employees
C. Productivity standard
D. Bonus
E. Change of working hours
F. Bona Fide Occupational Qualifications
G. Post-employment restrictions
VIII. JURISDICTION AND RELIEFS
A. Labor Arbiter
B. National Labor Relations Commission

LEI SHERYLL FERNANDEZ vs. BOTICA CLAUDIO represented by GUADALUPE JOSE, G.R.
No. 205870, August 13, 2014

While Article 223 of the Labor Code and Section 3(a), Rule VI of the then New Rules of Procedure of the
NLRC require the party intending to appeal from the LA’s ruling to furnish the other party a copy of his
memorandum of appeal, the Court has held that the mere failure to serve the same upon the opposing
party does not bar the NLRC from giving due course to an appeal. Such failure is only treated as a formal
lapse, an excusable neglect, and, hence, not a jurisdictional defect warranting the dismissal of an appeal.
Instead, the NLRC should require the appellant to provide the opposing party copies of the notice of
appeal and memorandum of appeal.

PHILIPPINE TOURISTERS, INC. and/or ALEJANDRO R. YAGUE, JR. vs. MAS TRANSIT
WORKERS UNION-ANGLO-KMU and is members, represented by ABRAHAM TUMALA, JR.,
G.R. No. 201237, September 3, 2014

While it has been settled that the posting of a cash or surety bond is indispensable to the perfection of an
appeal in cases involving monetary awards from the decision of the LA, the Rules of Procedure of the
NLRC nonetheless allows the reduction of the bond upon a showing of: (1) the existence of a meritorious
ground for reduction, and (2) the posting of a bond in a reasonable amount in relation to the monetary
award. Thus, when the appellant employer prayed for the reduction of the bond in view of serious
liquidity problems evidenced by audited financial statements, while simultaneously posting a surety bond
which is more than 10% of the full judgment award, the bond may be reduced and the appeal is
considered perfected.

MICHELIN ASIA APPLICATION CENTER, INC vs. MARIO J. ORTIZ, et al.,

G.R. No. 189861, November 19, 2014

It is clear that the NLRC in due observance of its own procedural rules- had amply justified its dismissal
of Ortiz's appeal in view of his numerous procedural infractions, namely: (a) his failure to attach to his
Memorandum of Appeal a certificate of non-forum shopping in violation of Section 4, Rule VI of the
NLRC Rules; (b) his filing of a Motion for Reconsideration of the NLRC's March 24, 2008 Resolution
beyond the 10 day reglementary period in violation of Section 15, Rule VII of the NLRC Rules; and (c)
his filing of a second Motion for Reconsideration in violation of Section 15, Rule VII of the NLRC Rules.
Time and again, this Court has been emphatic in ruling that the seasonable filing of a motion for
reconsideration within the 10-day reglementary period following the receipt by a party of any order,
resolution or decision of the NLRC, is a mandatory requirement to forestall the finality of such order,
resolution or decision.

C. Judicial review of labor rulings

D. Bureau of Labor Relations
E. National Conciliation and Mediation Board
F. DOLE Regional Directors
G. DOLE Secretary
H. Grievance machinery
I. Voluntary arbitration
J. Prescription of actions
1. Money claims
2. Illegal dismissal
3. Unfair labor practice
4. Offenses under the Labor Code
5. Illegal recruitment