Labor2 Case Digest Refil

I.
GENERAL PRINCIPLES
1. Singer Sewing Machine vs. NLRC, 193 SCRA 271…………………………………………………………………… 3

2. Lazaro vs. Social Security Commission, 435 SCRA 472 [2004] ……………………………………………………… 3
3. Phil. Global Communication vs. De Vera, 459 SCRA 260 [2005]………………………………………………………4
4. ABS-CBN vs. Nazareno, G.R. No. 164156, Sept. 26, 2006 …………………………………………………………… 5
5. Francisco vs. NLRC, 500 SCRA 690 [2006]…………………………………………………………………………… 6
6. Nogales et al., vs. Capitol Medical Center et al., G.R. No. 142625, December 19, 2006……………………………… 7
7. Coca-Cola Bottlers Phils., vs. Dr. Climaco, G.R. No. 146881, February 15, 2007…………………………………….. 8
8. Calamba Medical Center vs. NLRC et al., G.R. No. 176484, Nov. 25, 2008 ………………………………………….. 9
9. Escasinas et al., vs. Shangri-la Mactan Island Resort et al., G.R. No. 178827, March 4, 2009 …………………….… 11
10. Semblante et al., vs. Court of Appeals, et al., G.R. No. 196426, August 15, 2011…………………………….. 11
11. Bernarte vs. Phil. Basketball Association et al., G.R. No. 192084, September 14, 2011 ……………………… 12
12. Jao vs. BCC Products Sales Inc. G.R. No. 163700, April 18, 2012 …………………………………………… 13
13. Legend Hotel (Manila) vs. Realuyo G.R. No. 153511, July 18, 201 ………………………………………….. 14
II. RIGHT TO SECURITY OF TENURE
14. ALU-TUCP vs. NLRC, 234 SCRA 678 [1994] ……………………………………………………………………….15

15. Cosmos Bottling Corp., vs. NLRC, 255 SCRA 358 [1996] …………………………………………………………. 16
16. Purefoods vs. NLRC, 283 SCRA 136 [1997] …………………………………………………………………………18
17. Phil. Fruit & Vegetable Industries vs. NLRC, 310 SCRA 680 [1999] ………………………………………………..19
18. Colegio Del Santisimo Rosario et al., vs. Rojo, G.R. No. 170388, Sept. 4, 2013 …………………………………….20
19. Herrera-Manaois vs. St. Scholasticas College, GR No. 188914, December 11, 2013………………………………...21
20. Gadia vs. Sykes, GR No. 209499, January 28, 2015 ………………………………………………………………….22
21. Expedition Construction Corp., vs. Africa, GR No. 228671, December 14, 2017 ……………………………………24
III. MANAGEMENT PREROGATIVE
22. Dosch vs. NLRC, 123 SCRA 296 [1983] ……………………………………………………………………………. 25

23. Duncan Association of Detailman vs. Glaxo Wellcome Phils., G.R. No. 162994, Sept. 17, 2004 …………………...26
24. PLDT vs. Paquio, G.R. No. 152689, October 12, 2005 ………………………………………………………………27
25. Star Paper Corp., vs. Simbol, G.R. No. 164774, April 12, 2006 ……………………………………………………...28
26. Tiu vs. Platinum Plans, Inc. G.R. No. 163512, February 28, 2007 …………………………………………………...29
IV. TERMINATION OF EMPLOYMENT
27. Maria Del Leon Transportation vs. Macuray, GR No. 214940, June 6, 2018 ………………………………………...30
V. SUSPENSION OF BUSINESS OPERATIONS
28. Spectrum Security Services Inc, vs. Grave et al., GR No. 196650, June 7, 2017 …………………………………….31
VI. DISEASE AS GROUND FOR TERMINATION
29. Sy vs. Court of Appeals, G.R. No. 142293, February 27, 2003 ………………………………………………………32
30. Duterte vs. Kingswood Trading Co., G.R. No. 160325, October 4, 2007 ……………………………………………33
VII. OTHER CAUSES OF SEVERANCE OF EMPLOYMENT RELATION
31. Cercado vs. Uniprom Inc. GR No. 188154, Oct. 13, 2010 ……………………………………………………………34
32. Goodyear Philippines Inc. vs. Angus, GR No. 185449, November 12, 2014 ………………………………………...35
VIII. PRESCRIPTION OF CLAIMS
33. Degamo vs. Avant Lard Shipping Lines, G.R. No. 154460, November 22, 2005 …………………………………….36
34. Victory Liner vs. Race, G.R. No. 164820, March 28, 2007 …………………………………………………………..37
35. J.K Mercado & Sons Agricultural Enterprises vs. Hon. Sto. Tomas, G.R. No. 158084, Aug. 29, 2008 …………….. 38
REAH SHYNE REFIL EH 309 LABOR RELATIONS

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36. PLDT vs. Pingol, GR No. 182622, Sept. 8, 2010 …………………………………………………………………….39
37. Medline Management Inc. vs. Roslinda, GR No. 168715, Sept. 15, 2010 ……………………………………………40
IX. JURISDICTION OF THE LABOR ARBITER
38. Yusen Air & Sea Service Phils vs. Villamor, G.R. No. 154942, August 16, 2005 ……………………………………41
39. Atty Garcia vs. Eastern Telecommunications Phils., et al., GR No. 173115 & 173163-64, April 16, 2009 ………….42
40. Okol vs. Slimmer’s World International, et al., G.R. No. 160146, December 11, 2009 ………………………………43
41. Portillo vs. Rudolf Lietz, Inc. et al., G.R. No. 196539, October 10, 2012 ……………………………………………44
X. 2011 NLRC RULES OF PROCEDURE
42. Calleon vs. HZSC Realty Corp., GR No. 228572, January 27, 2020 …………………………………………………45
XI. RIGHT TO SELF-ORGANIZATION
43. Hijo Resources Corp.vs. Mejares, GR No. 208986, Jan. 13, 2016 ……………………………………………………46
44. Societe Internationale de Telecommunications vs. Huliganga, GR No. 215504, August 20, 2018…………………...47
XII. RIGHTS OF LEGITIMATE LABOR ORGANIZATION
45. SONEDCO Workers free Labor Union et al., vs. Universal Robina Corp., GR No 220383, October 5, 2016 Main &
July 5, 2019 Resolution …………………………………………………………………………………………………..48
XIII. UNFAIR LABOR PRACTICE
46. San Miguel Foods Inc., vs. San Miguel Corp Employees Union-PTGWO, G.R. No. 168569, October 5, 2007 …….49
47. General Santos Coca-Cola Plant Free Workers Union-TUPAS vs. CCBPI (Gen. Santos City) et al., G.R. No. 178647,
Feb. 13, 2009 ……………………………………………………………………………………………………………..50
48. Park Hotel et al., vs. Soriano et al., G.R. No. 17118, September 10, 2012 …………………………………………..51
XIV. REVISED GUIDELINES OF THE NCMB FOR THE CONDUCT OF VOLUNTARY ARBITRATION
PROCEEDINGS
49. Navarro III vs. Damasco, 246 SCRA 260 [1995] ……………………………………………………………………..52
50. Suelo Jr vs. MST Marine Services (Phils) Inc., et al., GR. No. 252914, November 9, 2020 …………………………53

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I. GENERAL PRINCIPLES
1. Singer Sewing Machine vs. NLRC, 193 SCRA 271
Legal Doctrine: The following elements are generally considered in the determination of the
employer-employee relationship; "(1) the selection and engagement of the employee; (2) the
payment of wages; (3) the power of dismissal; and (4) the power to control the employee's conduct
— although the latter is the most important element"
Facts: Respondent union filed a pettition for direct certification as the sole and exclusive bargaining
agent of all collectors of the Singer Sewing Machine Company, Baguio City branch. The Company
opposed the said petition on the ground that the union members are not employees but are
independent contractors as evidenced by the collection agency agreement. The respondent Med-
Arbiter found that there exists an employer-employee relationship between the union members and
the Company thus granted the petition. On appeal, the Secretary of Labor affirmed it.
Issue: Whether or not there exists an employer-employee relationship between the union members
and the Company
Ruling: No. A thorough examination of the facts of the case leads us to the conclusion that the
existence of an employer-employee relationship between the Company and the collection agents
cannot be sustained.
The plain language of the agreement reveals that the designation as collection agent does not
create an employment relationship and that the applicant is to be considered at all times as an
independent contractor. This is consistent with the first rule of interpretation that the literal
meaning of the stipulations in the contract controls. Moreover, the collection agent does his work
"more or less at his own pleasure" without a regular daily time frame imposed on him. The
grounds specified in the contract for termination of the relationship do not support the view that
control exists "for the causes of termination thus specified have no relation to the means and
methods of work that are ordinarily required of or imposed upon employees." The last and most
important element of the control test is not satisfied by the terms and conditions of the contracts.
There is nothing in the agreement which implies control by the Company not only over the end to
be achieved but also over the means and methods in achieving the end.
Since private respondents are not employees of the Company, they are not entitled to the
constitutional right to join or form a labor organization for purposes of collective bargaining.
2. Lazaro vs. Social Security Commission, 435 SCRA 472 [2004]
Legal Doctrine: The Employer-Employee relationship is determined by applying “control test.” This
relationship exists when the employer controls not only the result but also the means and methods
used by the employee in accomplishing the work.
Facts: Private respondent, Laudato filed a petition before the SSC for social security coverage and
remittance of unpaid monthly social securtiy contributions against her three employers. One of the
respondents was petitioner Lazaro who is a proprietor of Royal Star Marketing. Royal Star is
engaged in the business of selling home appliances. Laudato alleged that she was working for Royal
Star as sales supervisor from April 1979 to March 1986. However, Lazaro failed to report her to the

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SSC for remit of Laudato’s social security contributions.
Petitioner denied that Laudato was a sales supervisor of Royal Star but instead a mere sales agent
who is paid purely on commission basis. He also claimed that Laudato could not be deemed as an
employee of Royal Star because she was not subjected to definite hours and conditions of work.
The SCC ruled in favor of Laudato. It held that by applying the “control test”, Laudato was an
employee of Royal Star. Upon appeal, the Court of Appeals affirmed the decision of the SCC.
Issue: Whether or not Laudato was an employee of Royal Star
Ruling: Yes, Laudato was an employee of Royal Star as supported by substantial evidence. For the
purposes of coverage under the Social Security Act, employer-employee relationship is determined
by applying the “control test”, or whether the employer controls or has reserved the right to control
the employee, not only as to the result of the work done, but also as to the means and methods in
accomplishing of work. The SCC examined the cash vouchers, calling cards denominating as a
“Sales Supervisor” of the company, both issued by Royal Star, and Certificates of Appreciation
issued by Royal Star to Laudato in recognition of her efforts in promoting the company. Lazaro
failed to present any convincing evidence in contrary.
Also, as evidenced by a Memorandum by the General Manager of Royal Star, directing that no
commissions were to be given to all “main office” sales from walk-in customers and enjoining
salesmen and sales supervisors to observed the policy, Royal Star exercised control over Laudato, as
its sales supervisor, as to the means and methods of performance of work.
3. Phil. Global Communication vs. De Vera, 459 SCRA 260 [2005]
Legal Doctrine: The determination of the existence of an employer-employee relationship is

adhered to the four-fold test, to wit: [1] the selection and engagement of the employee; [2] the
payment of wages; [3] the power of dismissal; and [4] the power to control the employee's conduct,
or the so-called "control test", considered to be the most important element.
Facts: Petitioner Philippine Global Communications, Inc. (PhilCom), is a corporation engaged in

the business of communication services and allied activities, while respondent De Vera is a physician
enlisted by the petitioner to attend the medical needs of its employees. De Vera offered his services
to the petitioner via a letter with the required works of a practitioner in industrial medicine.
The parties agreed and formalized respondent’s proposal through a Retainership Contract which is
renewable yearly. The retainership arrangement went on from 1981 to 1994 with changes in the
retainer’s fee. But from 1995 to 1996, the renewal of the contract was only made verbally. In
December 1996, PhilCom, discontinued the retainer’s contract with De Vera on the ground that the
management has decided it is more practical to provide medical services to its employees through
accredited hospitals near the company premises.
De Vera filed a complaint for illegal dismissal before the NLRC, alleging that he is employed by
PhilCom as its company physician and was dismissed without due process. He claimed that he
worked on full-time basis and he was paid a basic monthly salary plus fringe benefits just like any
other regular employees of PhilCom. However, the Labor Arbiter dismissed De Vera’s complaint on
the rationale that as “retained physician”, he was considered as an “independent contractor” and that

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he was not illegally dismissed by PhilCom because the retainer's contract ended and was not renewed.
Upon appeal, the NLRC reversed and modified its decision.
Issue: Whether or not Employer-Employee relationship exists between parties
Ruling: No, Employer-Employee relationship does not exist between parties. As supported by
jurisprudence, the determination of the existence of an employer-employee relationship is adhered to
the four-fold test, to wit: [1] the selection and engagement of the employee; [2] the payment of
wages; [3] the power of dismissal; and [4] the power to control the employee's conduct, or the so-
called "control test", considered to be the most important element.
Applying the four-fold test, the court found that it was the respondent himself who sets the
parameters of what his duties would be in offering his services to petitioner and petitioner has no
control over the means and methods the respondent used in performing his work. He was also never
included in the payroll of the petitioner. The elements of an employer-employee relationship is
lacking in the present case. Moreover, the respondent is not a regular employee as he did not satisfy
all the requirements under Article 157 of the Labor Code because the nature of business of petitioner
as telecommunications is not hazardous. And even if he satisfies the requirements, the law does not
provide that the physician engaged in hazardous workplaces becomes a regular employee.
4. ABS-CBN vs. Nazareno, G.R. No. 164156, Sept. 26, 2006
Legal Doctrine: A customary appointment is not essential before an employee may be formally
declared as regular employee. As provided under Article 280 of the Labor Code, where a person has
rendered at least one year of service, regardless of the nature of the activity performed, or where the
work is continuous or intermittent, the employment is considered regular as long as the activity exists,
the reason being that a customary appointment is not indispensable before one may be formally
declared as having attained regular status.
Facts: Petitioner ABS-CBN is engaged in the broadcasting business and owns a network of
television and radio stations. On the other hand, respondents Nazareno, Gerzon, Deiparine, and
Lerasan were employed by petitioner as production assistants (PAs). They were assigned at the news
and public affairs, for various radio programs with a monthly compensation. Petitioner issued
employee’s identification cards to respondents and were required to work for a minimum of eight
hours a day, including Sundays and holidays.
On December 19, 1996, petitioner and its rank-and-file employees executed a Collective Bargaining
Agreement (CBA). The respondents were not included to the CBA because petitioner refused to
recognize PAs as part of the bargaining unit. On October 12, 2000, respondents filed a Complaint for
Recognition of Regular Employment Status, Underpayment of Overtime Pay, Holiday Pay, Premium
Pay, Service Incentive Pay, Sick Leave Pay, and 13th Month Pay with Damages against petitioners
before the NLRC.
Petitioner alleged that the respondents are not regular or station employees but considered as
“program employees”. The compensation of program employees is computed on a program basis
which is fixed no matter the time consumed. Petitioner claimed that respondents were paid all
salaries and benefits under the law as evidenced by the payroll.
The Labor Arbiter held that respondents are regular employees of ABS-CBN but did not award
money benefits under the CBA for lack of jurisdiction. Upon appeal, NLRC modified the decision of

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the Labor Arbiter, granting money benefits under CBA to respondents as regular employees. CA
dismissed the petition.
Issue: Whether or not the respondents are regular employees
Ruling: Yes, the respondents are regular employees. Project employees are employees whose
completion or termination is more or less determinable at the time of employment. However, as
provided under Article 280 of the Labor Code, where a person has rendered at least one year of
service, regardless of the nature of the activity performed, or where the work is continuous or
intermittent, the employment is considered regular as long as the activity exists, the reason being that
a customary appointment is not indispensable before one may be formally declared as having
attained regular status.
The principal test 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. In this case, respondents had continuously performed the same
activities for an average of five years. Their tasks are necessary or desirable in the usual business or
trade of the petitioner. The persisting need for their services is sufficient evidence of the necessity
and indispensability of such services to petitioner’s business or trade.
5. Francisco vs. NLRC, 500 SCRA 690 [2006]
Legal Doctrine: When the relationship between the parties is complex due to several positions held
by the worker, control test is not sufficient. The better approach would therefore be to adopt a two-
tiered test involving: (1) the putative employer’s power to control the employee with respect to the
means and methods by which the work is to be accomplished; and (2) the underlying economic
realities of the activity or relationship.
Facts: Francisco was hired by Kasie Corporation during its incorporation stage as Accountant and
Corporate Secretary. She was assigned to handle all the accounting needs of the company as well as
Liaison Officer to Makati to secure business permits, construction permits and other licenses for the
initial operation of the company. Despite her designation as Corporate Secretary, she was never
entrusted with the corporate documents or attended or required to attend any board meeting. She
never prepared any legal document and represented the company as its Corporate Secretary. However,
she signed documentation for the company on some occasions.
In 1996, petitioner was assigned as Acting Manager and for five years, she performed the duties as
Acting Manager with salary plus housing allowance and a 10% share in the profit of Kasei
Corporation. In January 2001, petitioner was replaced as Manager but was assured that she was still
connected with Kasei Corporation. The Corporation even held a meeting of all employees
announcing that petitioner was still connected to it as Technical Assistant to Seiji Kamura. Her salary
was reduced and she was not paid her mid-year bonus. On October 2001, the company stopped
giving her salary on the ground that the company was not earning well. When petitioner asked for
her salary from the officers, she was informed that she is no longer connected with the company.
Hence, she did not report for work and filed an action for constructive dismissal before the labor
arbiter.
Private respondents claimed that petitioner is not an employee of Kasei Corporation. They alleged
that petitioner was hired as technical consultant on accounting matters and act concurrently as
Corporate Secretary. As technical consultant, the corporation has no control and supervision over

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petitioner. They also alleged that petitioner did not go through the usual procedure of selection of
employees and that petitioner’s designation as technical consultant depended solely upon the will of
management, depending on the needs of the company. Thus, her consultancy may be terminated
anytime. To prove that petitioner was not their employee, they submitted the lists of employees duly
received by the BIR showing that petitioner was not included in the list. They also presented the list
of payees subject to expanded withholding tax which included petitioner and SSS records which
shows that the latest employer of the petitioner was Seiji Corporation.
The Labor Arbiter held that petitioner was dismissed illegally. NLRC affirmed the decision of the
Labor Arbiter with modification. CA reversed the NLRC’s decision.
Issue: Whether or not there was employer-employee relationship between petitioner and private
respondent Kasei Corporation
Ruling: Yes, there was employer-employee relationship between petitioner and private respondent.
When the relationship between the parties is complex due to several positions held by the worker,
control test is not sufficient. The better approach would therefore be to adopt a two-tiered test
involving: (1) the putative employer’s power to control the employee with respect to the means and
methods by which the work is to be accomplished; and (2) the underlying economic realities of the
activity or relationship.
The proper standard of economic dependence is whether the worker is dependent on the alleged
employer for his continued employment in that line of business. By applying the control test, there is
no doubt that petitioner is an employee of Kasei Corporation because she was under the direct
control and supervision of Seiji Kamura, the corporation’s Technical Consultant. She reported for
work regularly and served in various capacities as Accountant, Liaison Officer, Technical Consultant,
Acting Manager and Corporate Secretary, with substantially the same job functions, that is, rendering
accounting and tax services to the company and performing functions necessary and desirable for the
proper operation of the corporation such as securing business permits and other licenses over an
indefinite period of engagement.
6. Nogales et al., vs. Capitol Medical Center et al., G.R. No. 142625, December 19, 2006
Legal Doctrine: In general, a hospital is not liable for the negligence of an independent contractor-
physician. There is, however, an exception to this principle. The hospital may be liable if the
physician is the "ostensible" agent of the hospital. This exception is also known as the "doctrine of
apparent authority."
Facts: Pregnant with her fourth child, Corazon Nogales ("Corazon"), who was then 37 years old,
was under the exclusive prenatal care of Dr. Oscar Estrada ("Dr. Estrada") beginning on her fourth
month of pregnancy or as early as December 1975. While Corazon was on her last trimester of
pregnancy, Dr. Estrada noted an increase in her blood pressure and development of leg edema
indicating preeclampsia, which is a dangerous complication of pregnancy. Corazon was in her last
trimester of pregnancy when Dr. Estrada noted an increase in her blood pressure and development of
leg edemas indicating preeclampsia which is a dangerous complication of pregnancy. About
midnight of May 26, 1976, Corazon started to experience mild labor pains prompting Corazon and
Rogelio Nogales to see Dr. Estrada at his home.
After examining Corazon, Dr. Estrada advised her immediate admission to Capitol Medical Center

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(CMC). Upon her admission, an internal examination was conducted upon her by a resident-
physician. Based on the doctor’s sheet, around 3am, Dr. Estrada advised for 10mg valium to be
administered immediately by intramuscular injection, he later ordered the start of intravenous
administration of syntocinon admixed with dextrose, 5% in lactated ringer’s solution, at the rate of 8-
10 micro-drops per minute. When asked if he needed the services of an anesthesiologist, he refused.
Corazon’s bag of water ruptured spontaneously and her cervix was fully dilated and she experienced
convulsions. Dr. Estrada ordered the injection of 10g of magnesium sulfate but his assisting Doctor,
Dr. Villaflor, only administered 2.5g. She also applied low forceps to extract Corazon’s baby. In the
process, a 10 x 2.5cm piece of cervical tissue was allegedly torn. The baby came out in an apric,
cyanatic weak and injured condition. Consequently the baby had to be intubated and resuscitated.
Corazon had professed vaginal bleeding where a blood typing was ordered and she was supposed to
undergo hysterectomy, however, upon the arrival of the doctor, she was already pronounced dead due
to hemorrhage.
Issue: Whether or not CMC is vicariously liable for the negligence of Dr. Estrada
Ruling: Yes. The Court finds respondent Capitol Medical Center vicariously liable for the
negligence of Dr. Oscar Estrada. In general, a hospital is not liable for the negligence of an
independent contractor-physician. There is, however, an exception to this principle. The hospital may
be liable if the physician is the ostensible agent of the hospital. This exception is also known as the
doctrine of apparent authority. Dr. Estrada is not an employee of CMC, but an independent contractor.
After a thoroughexamination of the voluminous records of this case, the Court finds no single
evidence pointing to CMC's exercise of control over Dr. Estrada's treatment and management of
Corazon's condition. It is undisputed that throughout Corazon's pregnancy, she was under the
exclusive prenatal care of Dr. Estrada. At the time of Corazon's admission at CMC and during her
delivery, it was Dr. Estrada, assisted by Dr. Villaflor, who attended to Corazon. There was no
showing that CMC had a part in diagnosing Corazon's condition. While Dr. Estrada enjoyed staff
privileges at CMC, such fact alone did not make him an employee of CMC. CMC merely allowed Dr.
Estrada to use its facilities when Corazon was about to give birth, which CMC considered an
emergency. The doctrine of apparent authority essentially involves two factors to determine the
liability of an independent-contractor physician. The first factor focuses on the hospital’s
manifestations and is sometimes described as an inquiry whether the hospital acted in a manner
which would lead areasonable person to conclude that the individual who was alleged to be negligent
was an employee or agent of the hospital. In this regard, the hospital need not make express
representations to the patient that the treating physician is an employee of the hospital; rather a
representation may be general and implied. xxx The second factor focuses on the patient’s reliance. It
is sometimes characterized as an inquiry on whether the plaintiff acted in reliance upon the conduct
of the hospital or its agent, consistent with ordinary care and prudence.
7. Coca-Cola Bottlers Phils., vs. Dr. Climaco, G.R. No. 146881, February 15, 2007
Legal Doctrine: In determining the existence of an employer-employee relationship, the court used
the four-fold test: (1) the selection and engagement of the employee; (2) the payment of wages; (3)
the power of dismissal; and (4) the power to control the employee's conduct, or the so-called "control
test," considered to be the most important element.
Facts: Respondent Dr. Dean Climaco is a medical doctor who was hired by petitioner Coca-Cola by
virtue of a Retainer Agreement. Despite the non-renewal of the agreement, the respondent continued
to perform his functions as company doctor. He inquired from the petitioner if it was agreeable

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recognizing him as a regular employee but the management refused to do so.This prompted
respondents to file a complaint seeking recognition as a regular employee. While the case was
pending, the respondent received a letter from the petitioner concluding their retainer agreement
which then prompted him to file a complaint for illegal dismissal. Two complaints were filed in
NLRC which are the following (1) seeking recognition as a regular employee of petitioner company
and prayed for the payment of all benefits of a regular employee, including 13th Month Pay, Cost of
Living Allowance, Holiday Pay, Service Incentive Leave Pay, and Christmas Bonus; (2) a complaint
for illegal dismissal against petitioner company with the NLRC, Bacolod City. The Labor Arbiters in
the two (2) complaints both found that the no employer-employee relationship existed between the
parties. The case was dismissed because (1) Dismissed, found that petitioner company lacked the
power of control over respondent’s performance of his duties, and recognized as valid the Retainer
Agreement between the parties; (2) dismissed the case for illegal dismissal in view of the previous
finding of Labor Arbiter that complainant therein, respondent is not an employee of Coca-Cola
Bottlers Phils., Inc. The Court of Appeals reversed the decision and held that an employer-employee
relationship existed between petitioner company and respondent after applying the four-fold test.
Issue: Whether or not there exists an employer-employee relationship between the parties. Wherein,
the resolution of the main issue will determine whether the termination of respondent’s employment
is illegal
Ruling: No, there’s no employer-employee relationship between the parties. The Court, in
determining the existence of an employer-employee relationship, has invariably adhered to the four-
fold test: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power
of dismissal; and (4) the power to control the employee's conduct, or the so-called "control test,"
considered to be the most important element. The Court agrees with the finding of the Labor Arbiter
and the NLRC that the circumstances of this case show that no employer-employee relationship
exists between the parties. The Labor Arbiter and the NLRC correctly found that the petitioner
company lacked the power of control over the performance byrespondent of his duties. The Labor
Arbiter reasoned that the Comprehensive Medical Plan, which contains the respondent's objectives,
duties and obligations, does not tell respondent "how to conduct his physical examination, how to
immunize, or how to diagnose and treat his patients, employees of [petitioner] company, in each
case." In effect, the Labor Arbiter held that the petitioner company, through the Comprehensive
Medical Plan, provided guidelines merely to ensure that the end result was achieved, but did not
control the means and methods by which the respondent performed his assigned tasks. The NLRC
affirmed the findings of the Labor Arbiter and stated that it is precisely because the company lacks
the power of control that the contract provides that respondent shall be directly responsible to the
employee concerned and their dependents for any injury, harm or damage caused through
professional negligence, incompetence or other valid causes of action. The Labor Arbiter also
correctly found that the provision in the Retainer Agreement that respondent was on call during
emergency cases did not make him a regular employee.
In addition, the Court finds that the schedule of work and the requirement to be on call for
emergency cases do not amount to such control, but are necessary incidents to the Retainership
Agreement. The Court also notes that the Retainership Agreement granted to both parties the power
to terminate their relationship upon giving a 30-day notice. Hence, the petitioner company did not
wield the sole power of dismissal or termination.
8. Calamba Medical Center vs. NLRC et al., G.R. No. 176484, Nov. 25, 2008
Legal Doctrine: For control test to apply, it is not essential for the employer to actually supervise the

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performance of duties of the employee, it being enough that it has the right to wield the power.
Facts: Petitioner Calamba Medical Center is a private hospital engaged in services of medical
doctors-spouses, Dr. Ronaldo Lanzanas and Dr. Merceditha Lanzanas as part of its team of resident
physicians. The spouses report at the hospital twice-a-week on twenty-four-hours shifts and were
paid a monthly “retainer” each. They are also given a percentage share out of fees charged for out-
patient treatments, operating room assistance and discharge bills, in addition to their fixed monthly
retainer. The work schedules of the members of the team of resident physicians were fixed by the
hospital’s medical director, Dr. Desipeda. Identification cards were issued by the petitioner to the
spouses and were enrolled in SSS. Income taxes were also withheld from them.
A fellow resident physician at the hospital, overheard a telephone conversation of respondent Dr.
Ronaldo with a fellow employee, through an extension telephone line allegedly discussing the low
“census” or admission of patients to the hospital. Thus, the medical director issued a Memorandum
to Dr. Ronaldo giving respondent 24 hours to explain why no disciplinary action should be taken
against him and he was given 30 days preventive suspension while the investigation of his case is
pending. Petitioner also did not give any work schedule to Dr. Merceditha after the memorandum is
given to her husband. The HR Department informed her that it was part of cost-cutting measures of
the hospital.
On March 14, 1998, the rank-and-file employees union of petitioner went on strike due to unresolved
grievances over terms and conditions of employment. On March 20, Dr. Ronaldo filed a complaint
for illegal suspension before the NLRC while Dr. Merceditha filed a complaint for illegal dismissal.
In the meantime, the Secretary of DOLE certified the labor dispute to the NLRC and issued return-
to-work Order to the striking union officers and employees of the hospital pending resolution of the
labor dispute. Then, petitioner sent Dr. Ronaldo a notice of termination on the ground of his failure to
report back to work despite the order of DOLE and his supposed role in the striking union. Thus, Dr.
Ronaldo amended his original complaint to include illegal dismissal.
The Labor Arbiter dismissed the spouses’ complaints for want of jurisdiction upon finding that there
was no employer-employee relationship between the parties because the “control test” is lacking. On
appeal, the NLRC reversed the findings of the Labor Arbiter. CA set aside the NLRC ruling but upon
subsequent motion for reconsideration, amended its decision in favor of the respondents.
Issue: Whether or not there exists an employer-employee relationship between petitioner and the
spouses-respondents
Ruling: Yes, an employment relationship exists between petitioner and the spouses-respondents.
Under the “control test,” an employment relationship exists between a physician and a hospital if the
hospital controls both the means and the details of the process by which the physician is to
accomplish his task. In the present case, private respondents maintained specific work-schedules, as
determined by petitioner through its medical director, and which were strictly observed under pain of
administrative sanctions. Petitioner exercised control over respondents based on the facts that in the
emergency room, the operating room, or any department or ward, respondents’ work is monitored
through its nursing supervisors, charge nurses and orderlies. The approval or consent of petitioner or
its medical director is also necessary for operations to be undertaken in those areas. For control test
to apply, it is not essential for the employer to actually supervise the performance of duties of the
employee, it being enough that it has the right to wield the power.

10
9. Escasinas et al., vs. Shangri-las Mactan Island Resort et al., G.R. No. 178827, March 4, 2009
Legal Doctrine: The existence of an independent and permissible contractor relationship is generally
established by considering the following determinants: whether the contractor is carrying on an
independent business; the nature and extent of the work; the skill required; the term and duration of
the relationship; the right to assign the performance of a specified piece of work; the control and
supervision of the work to another; the employer's power with respect to the hiring, firing and
payment of the contractor's workers; the control of the premises; the duty to supply the premises,
tools, appliances, materials and labor; and the mode, manner and terms of payment.
Facts: Petitioners, Escasinas and Sinco, are registered nurses engaged by respondent, Dr. Pepito to
work in her clinic at respondent Shangri-las’s Mactan Island Resort. Dr. Pepito was a retained
physician in Shangri-la. Petitioners filed with the NLRC a complaint for regularization,
underpayment of wages, non-payment of holiday pay, night shift differential and 13th month pay
differential against respondents. Petitioners claim that they are regular employees of Shangri-la.
However, Shangri-la denied the petitioners as its employees. Rather, they are employees of Dr.
Pepito whom it retained via MOA pursuant to Article 157 of the Labor Code. Dr. Pepito claimed that
petitioners were already working for the previous retained physicians of Shangri-la before her. She
continued the service of petitioners upon their request.
The Labor Arbiter declared petitioners as regular employees. The NLRC found that no employer-
employee relationship exists between petitioners and Shangri-La. CA affirmed the decision of the
NLRC.
Issue: Whether or not petitioners are regular employees of Shangri-la
Ruling: No, petitioners are not regular employees of Shangri-la. The existence of an independent
and permissible contractor relationship is generally established by considering the following
determinants: whether the contractor is carrying on an independent business; the nature and extent of
the work; the skill required; the term and duration of the relationship; the right to assign the
performance of a specified piece of work; the control and supervision of the work to another; the
employer's power with respect to the hiring, firing and payment of the contractor's workers; the
control of the premises; the duty to supply the premises, tools, appliances, materials and labor; and
the mode, manner and terms of payment.
The court held that Dr. Pepito is an independent contractor and the employer of petitioners. This is
based on the facts that respondent doctor is the one who underwrites the salaries, SSS contributions
and other benefits of her employees which include the petitioners. The employee manual of the clinic
also govern with the performance of tasks and responsibilities of the petitioners and not the
employee manual followed by Shangri-la’s regular workers. Lastly, Shangri-la does not control how
the work should be performed by petitioners based on various office directives issued by Shangri-la’s
officers because they are administrative in nature since they are related to safety matters.
10. Semblante et al., vs. Court of Appeals, et al., G.R. No. 196426, August 15, 2011
Legal Doctrine: Employer-employee relationship does not exist between parties when the worker
perform his work while relying mainly on his expertise and the employer never supplied any tool
needed for the performance of his work.

11
Facts: Petitioners Semblante and Pilar alleged that they were hired by respondents-spouses Loot as
the official masiador and senteniador, respectively, of the cockpit owned by the spouses. As the
masiador, Semblante calls and takes the bets from the gamecock owners and other bettors and orders
the start of the cockfight. He also distributes the winnings after deducting the arriba, or the
commission for the cockpit. Meanwhile, as the sentenciador, Pilar oversees the proper gaffing of
fighting cocks, determines the fighting cocks’ physical condition and capabilities to continue the
cockfight, and eventually declares the result of the cockfight. Semblante receives compensation of
PhP 8,000 per month while Pilar receives PhP 14,000 per month. They work every Tuesday,
Wednesday, Saturday, and Sunday every week, excluding monthly derbies and cockfights held on
special holidays. Their working days start at 1:00 p.m. and last until 12:00 midnight, or until the
early hours of the morning depending on the needs of the cockpit. Both petitioners had been issued
employees’ identification cards. However, petitioners were denied entry into the cockpit upon the
instructions of respondents, and were informed of the termination of their services effective that date.
Thus, petitioners filed a complaint for illegal dismissal against respondents.
Respondents claimed that petitioners were not their employees but associates of their independent
contractor, Vega. They further claimed that petitioners have no regular working schedule and free to
decide whether to report for work or not. When there are few cockfights in the respondent’s cockpit,
petitioners go to other cockpits. As to the identification cards issued to petitioners, respondents
claimed that they are only for indicating that petitioners were free from the entrance fee and to
differentiate them from the general public.
The Labor Arbiter found petitioners to be regular employees of respondents as they performed work
that was necessary and indispensable to the usual trade or business of respondents for a number of
years. The NLRC held that there was no employer-employee relationship between petitioners and
respondents. CA affirmed the decision of the NLRC.
Issue: Whether or not employer-employee relationship exists between petitioners and respondents
Ruling: No, employer-employee relationship does not exist between petitioners and respondents.
Respondents had no part in petitioner’s selection and management. Compensation of the petitioners
was paid out the arriba or a percentage deducted from the total bets. Petitioners performed their
functions as masiador and sentenciador free from the direction and control of respondents. In
performing their work, petitioners relied mainly on their expertise. Additionally, they were never
given by respondents any tool needed for the performance of their work. As respondents were not
petitioners’ employers, respondents has no power or prerogative to dismissed the petitioners legally
or illegally.
11. Bernarte vs. Phil. Basketball Association et al., G.R. No. 192084, September 14, 2011
Legal Doctrine: The following circumstances indicate that petitioner is an independent contractor:
(1) the referees are required to report for work only when PBA games are scheduled, which is three
times a week spread over an average of only 105 playing days a year, and they officiate games at an
average of two hours per game; and (2) the only deductions from the fees received by the referees are
withholding taxes.
Facts: Complainants Bernarte and Guevarra claim that they were invited to join the PBA as referees.
They signed contracts on a year-to-year basis during the leadership of Commissioner Bernardino.
However, during the term of Commissioner Eala, changers were made on the terms of their

12
employment. In case of Bernarte, he was not made to sign a contract during the first conference of
the All-Filipino Cup. He was only made to sign during the second conference with a one and a half
month contract. Then in 2004, Bernarte received a letter from the Office of the Commissioner
informing him that his contract would not be renewed on the ground of his unsatisfactory
performance on and off the court. Bernarte alleged that he was awarded Referee of the year in 2003.
He claimed that the dismissal was caused by his refusal to fix a game. Guevarra on the other hand,
alleged that he signed a yearly contract with PBA as trainee. Respondent Martinez issued a
memorandum to Guevarra expressing dissatisfaction over his questioning on the assignment of
referees officiating out-of-town games. In February 2004, he was no longer made to sign a contract.
Respondents alleged that complainants entered into two contracts of retainer with the PBA in 2003.
However, after the contracts ended, PBA decided not to renew their contracts. Complainants were
not illegally dismissed because they were not employees of the PBA. Their contracts were simply not
renewed. PBA had the prerogative of whether or not to renew the contracts of complainants.
The Labor Arbiter declared petitioner an employee whose dismissal by respondents was illegal. The
NLRC affirmed the Labor Arbiter’s judgment. Court of Appeals overturned the decisions of the
NLRC and Labor Arbiter.
Issue: Whether or not petitioners are regular employees of PBA
Ruling: No, petitioners are independent contractors because unlike regular employees who
ordinarily report for work eight hours per day for five days a week, petitioner is required to report for
work only when PBA games are scheduled or three times a week at two hours per game. In addition,
there are no deductions for contributions to the Social Security System, Philhealth or Pag-Ibig, which
are the usual deductions from employees’ salaries. These undisputed circumstances buttress the fact
that petitioner is an independent contractor, and not an employee of respondents.
The fact that PBA repeatedly hired petitioner does not by itself prove that petitioner is an employee
of the former. For a hired party to be considered an employee, the hiring party must have control
over the means and methods by which the hired party is to perform his work, which is absent in this
case. The continuous rehiring by PBA of petitioner simply signifies the renewal of the contract
between PBA and petitioner, and highlights the satisfactory services rendered by petitioner
warranting such contract renewal. The non-renewal of the contract between the parties does not
constitute illegal dismissal of petitioner by respondents.
12. Jao vs. BCC Products Sales Inc. G.R. No. 163700, April 18, 2012
Legal Doctrine: When there are grave doubts on the claim of petitioner, there is no need to examine
the other proofs he presented, like the affidavits of some of the employees of BCC, the ID, and the
signed checks, bills and receipts. It is sufficient that other proofs were easily explainable by
respondents and by aforestated circumstances showing the nature of his employment
Facts: Petitioner Jao alleged that respondent BCC and its President, respondent Ty, employed him as
comptroller from September 1995 to handle the financial aspect of BCC’s business. However, in
October 1995, the security guards of BCC, acting upon the instruction of Ty, did not allow him to
enter the premises of BCC where he then worked. His attempts to report to work in November and
December 1995 were frustrated because he was prevented to enter the premises of BCC. Thus, Jao
filed a complaint for illegal dismissal, reinstatement with full backwages, non-payment of wages,

13
damages and attorney’s fees against BCC.
Respondents claimed that petitioner was not their employee but the employee of its major creditor
and supplier, Sobien Food Corporation (SFC). They alleged that SFC had posted Jao as its
comptroller in BCC to oversee BCC’s finances and business operations and to look after SFC’s
interests or investments in BCC.
The Labor Arbiter ruled in favor of petitioner. However, the NLRC vacated the ruling and remanded
the case for further proceedings. Then, the Labor Arbiter rendered a new decision held that there was
no employer-employee relationship between the parties. The NLRC rendered a decision reversing
Labor Arbiter Mayor’s decision, and declared that petitioner had been illegally dismissed. CA set
aside and reversed the decision of NLRC.
Issue: Whether or not an employer-employee relationship existed between petitioner and BCC.
Ruling: No, an employer-employee relationship did not exist between parties. Based on the affidavit
executed of petitioner, the court held that the said affidavit supported the claim of respondents that
petitioner had really worked in BCC as SFC’s representative.
Some of the circumstances and incidents occurring while petitioner was supposedly employed by
BCC that debunked his claim against respondents. First, it can be deduced from the March 1996
affidavit of petitioner that respondents challenged his authority to deliver some 158 checks to SFC.
Considering that he contested respondents’ challenge by pointing to the existing arrangements
between BCC and SFC, it should be clear that respondents did not exercise the power of control over
him, because he thereby acted for the benefit and in the interest of SFC more than of BCC. Second,
petitioner presented no document setting forth the terms of his employment by BCC. The failure to
present such agreement on terms of employment may be understandable and expected if he was a
common or ordinary laborer who would not jeopardize his employment by demanding such
document from the employer, but may not square well with his actual status as a highly educated
professional. Third, petitioner’s admission that he did not receive his salary for the three months of
his employment by BCC, as his complaint for illegal dismissal and non-payment of wages and the
criminal case for estafa he later filed against the respondents for non-payment of wages indicated,
further raised grave doubts about his assertion of employment by BCC. If the assertion was true, the
court are puzzled how he could have remained in BCC’s employ in that period of time despite not
being paid the first salary of P20,000.00/month. Fourth, his name did not appear in the payroll of
BCC despite him having approved the payroll as comptroller. Lastly, the confusion about the date of
his alleged illegal dismissal provides another indication of the insincerity of petitioner’s assertion of
employment by BCC.
With all the grave doubts thus raised against petitioner’s claim, the court held that there is no need to
examine the other proofs he presented, like the affidavits of some of the employees of BCC, the ID,
and the signed checks, bills and receipts. Suffice it to be stated that such other proofs were easily
explainable by respondents and by the aforestated circumstances showing him to be the employee of
SFC, not of BCC.
13. Legend Hotel (Manila) vs. Realuyo, G.R. No. 153511, July 18, 2012
Legal Doctrine: It is the law that defines and governs an employment relationship, whose terms are
not restricted to those fixed in the written contract, for other factors, like the nature of the work the

14
employee has been called upon to perform, are also considered. The law affords protection to an
employee, and does not countenance any attempt to subvert its spirit and intent. Any stipulation in
writing can be ignored when the employer utilizes the stipulation to deprive the employee of his
security of tenure. The inequality that characterizes employer-employee relations generally tips the
scales in favor of the employer, such that the employee is often scarcely provided real and better
options.
Facts: Respondent, Realuyo claimed that he had worked as a pianist at the restaurant of Legend
Hotel. His initial rate of P400 per night was given to him after each night’s performance. His rate
increased to P750 per night and during his employment, he could not choose the time of performance,
which had fixed from 7pm to 10 pm for three to six times per week. He added that the manager of
the restaurant required him to conform with the venue’s motif and that he had been subjected to the
rules on employees representation checks and chits, a privilege granted to other employees. In 1999,
the management had informed him that his services as a pianist would no longer be needed as a cost-
cutting measure. Thus, he filed this complaint. Petitioner Legend Hotel denied the existence of an
employer-employee relationship with respondent. Petitioner insisted that Realuyo had been only a
talent engaged to provide live music on its coffee shop and that because of economic crisis, they
dispense the services of the petitioner.
The Labor Arbiter dismissed the complaint for lack of merit upon finding that the parties had no
employer-employee relationship. NLRC affirmed the Labor Arbiter. CA set aside the decision of the
NLRC.
Issue: Whether or not respondent was an employee of petitioner
Ruling: Yes, a review of the circumstances reveals that respondent was petitioner’s employee. First
of all, petitioner actually wielded the power of selection at the time it entered into the service
contract with respondent. The power of selection was firmly evidenced by, among others, the express
written recommendation by Christine Velazco, petitioner’s restaurant manager, for the increase of his
remuneration. Petitioner could not seek refuge behind the service contract entered into with
respondent. It is the law that defines and governs an employment relationship, whose terms are not
restricted to those fixed in the written contract, for other factors, like the nature of the work the
employee has been called upon to perform, are also considered. The law affords protection to an
employee, and does not countenance any attempt to subvert its spirit and intent. Any stipulation in
writing can be ignored when the employer utilizes the stipulation to deprive the employee of his
security of tenure. The inequality that characterizes employer-employee relations generally tips the
scales in favor of the employer, such that the employee is often scarcely provided real and better
options.
II. RIGHT TO SECURITY OF TENURE
14. ALU-TUCP vs. NLRC, 234 SCRA 678 (1994)
Legal Doctrine: The simple fact that the employment of petitioners as project employees had gone
beyond one (1) year, does not detract from, or legally dissolve, their status as project employees. The
second paragraph of Article 280 of the Labor Code, quoted above, providing that an employee who
has served for at least one (1) year, shall be considered a regular employee, relates to casual
employees, not to project employees.

15
Facts: Petitioners plead that they had been employed by respondent NSC in connection with its Five
Year Expansion Program (FAYEP I & II) for varying lenghts of time when they were separated from
NSC’s service. Petitioners filed separate complaints for unfair labor practice, regulatiozation and
monetary benefits with the NLRC. The complaints were consolidated and after hearing, the Labor
Arbiter declared in a Decision that petitioners are regular project employees but entitled to the salary
of a regular employee pursuant to the provisions in the CBA. Both parties appealed to the NLRC.
Petitioners argued that they were not project employees but regular one. While private respondent
claimed that the petitioners are project employees as they were employed to undertake a specific
project.
The NLRC modified the Labor Arbiter’s decision. It affirmed the holding that petitioners were
project employees but set aside the award to petitioners of the same benefits enjoyed by regular
employees for lack of legal and factual basis.
Issue: Whether or not petitioners are project employees
Ruling: Yes. the particular component projects embraced in the Five Year Expansion Program, to
which petitioners were assigned, were distinguishable from the regular or ordinary business of NSC
which, of course, is the production or making and marketing of steel products. During the time
petitioners rendered services to NSC, their work was limited to one or another of the specific
component projects which made up the FAYEP I and II. There is nothing in the record to show that
petitioners were hired for, or in fact assigned to, other purposes, e.g., for operating or maintaining the
old, or previously installed and commissioned, steel-making machinery and equipment, or for selling
the finished steel products.
Petitioners next claim that their service to NSC of more than six (6) years should qualify them as
regular employees is without legal basis. The simple fact that the employment of petitioners as
project employees had gone beyond one (1) year, does not detract from, or legally dissolve, their
status as project employees. The second paragraph of Article 280 of the Labor Code, quoted above,
providing that an employee who has served for at least one (1) year, shall be considered a regular
employee, relates to casual employees, not to project employees.
15. Cosmos Bottling Corp., vs. NLRC, 255 SCRA 358 [1996]
Legal Doctrine: The mere fact that a project employee has worked on the specific project for more
than one (1) year, does not necessary change his status as project employee and convert it to regular
or permanent employment. For it is obvious that the second paragraph of Article 280 of the Labor
Code, quoted above, providing that an employee who has served for at least one (1) year, shall be
considered a regular employee, relates only to casual employees, not to project employees.
Facts: Gil C. Castro was employed by Cosmos Bottling Corporation for a specific period from
September 5, 1988 to October 4, 1988. He was re-hired for another specific period from May 30,
1989 to November 6, 1989. Having satisfactorily served the company for two (2) terms, Castro was
recommended for reemployment with the company's Maintenance Team for the Davao Project on

16
November 22, 1989. On December 22, 1989, he was re-hired and assigned to the Maintenance
Division of the Davao Project tasked to install the private respondent's annex plant machines in its
Davao plant. May 21, 1990, Castro's employment was terminated due to the completion of the
special project. On May 27, 1990, Cosmos Bottling Corporation in valid exercise of its management
prerogative terminated the services of some 228 regular employees by reason of retrenchment.
Castro was not among the list of those regular employees whose services were terminated by reason
of retrenchment or those who voluntarily resigned. On May 25, 1990, Castro filed a complaint for
illegal dismissal against Cosmos Bottling Corporation with the Labor Arbiter contending that being a
regular employee, he could not be dismissed without a just and valid cause. The company alleged
that Castro was a mere project employee whose employment was co-terminous with the project for
which he was hired.
Labor Arbiter decided that Castro a regular employee but ruling that his employment was validly
terminated because of retrenchment. Hence, Castro was awarded 45-day separation pay, one (1)
month salary as financial assistance and proportionate 13th month pay. The charge of illegal
dismissal.
Both parties appealed the decision to the National Labor Relations Commission (NLRC). The
decision appealed is modified to the effect that respondent is declared guilty of illegal dismissal and
is ordered to reinstate complainant to his former position as equivalent one without loss of seniority
and other benefits and to pay him backwages computed from the time of his dismissal up to the time
of his reinstatement.
Cosmos Bottling Corporation's motion for reconsideration of the above decision having been denied,
the instant petition for certiorari was filed. Petitioner argues that private respondent was a mere
project employee and that his services were co-terminous with the project, hence, may be terminated
upon the end or completion of the project for which he was hired. NLRC and private respondent
maintain that private respondent is a regular employee of petitioner company because his job is
necessary and desirable to the petitioner's mainbusiness. The Office of the Solicitor General filed a
Manifestation in Lieu of Comment and supported petitioner's contention that private respondent is
not a regular employee.
Issue: Whether or not private respondent Gil C. Castro is a regular employee employee of petitioner
Cosmos Bottling Corporation
Ruling: No. Castro is not a regular employee but a project employee. The mere fact that a project
employee has worked on the specific project for more than one (1) year, does not necessary change
his status as project employee and convert it to regular or permanent employment. For it is obvious
that the second paragraph of Article 280 of the Labor Code providing that an employee who has
served for at least one (1) year, shall be considered a regular employee, relates only to casual
employees, not to project employees. Consequently, private respondent's protestation that his period
of employment had exceeded one year and hence must be converted into regular employment is
completely baseless because being a project employee, he does not fall within the ambit of the
pertinent provision. Private respondent being a project employee, or to use the correct term, seasonal
employee, considering that his employment was limited to the installation and dismantling of

17
petitioner's annex plant machines after which there was no more work to do, his employment legally
ended upon completion of the project. That being so, the termination of his employment cannot and
should not constitute an illegal dismissal. Neither should it constitute retrenchment as a private
respondent was a seasonal employee whose services were already terminated on May 21, 1990 prior
to the termination of the other regular employees of Cosmos by reason of retrenchment.
16. Purefoods vs. NLRC, 283 SCRA 136 [1997]
Legal Doctrine: Two kinds of regular employees are (1) those who are engaged to perform activities
which are necessary or desirable in the usual business or trade of the employer; and (2) those casual
employees who have rendered at least one year of service, whether continuous or broken, with
respect to the activity in which they are employed.
Facts: Private respondents were hired by petitioners to work for five months at its tuna cannery plant.
They performed various tasks of receiving, skinning, loining, packing and casing-up of tuna fish.
When their contracts expired, their services were terminated and executed quitclaims. Private
respondents filed a complaint for illegal dismissal. The Labor Arbiter dismissed the complaint on the
ground that they were contractual workers and not entitled to security of tenure and have
relinquished whatever rights they might have against petitioners by executing quitclaims. On appeal,
the NLRC held that private respondents were regular employees and that the five-month contract was
a clandestine scheme to stifle private respondents' right to security of tenure. Private respondents
were ordered reinstatement with full backwages and in case reinstatement is no longer feasible,
ordered paid separation pay. Motion for reconsidering having been denied, hence, this recourse. The
fact that the petitioner repeatedly and continuously hired workers to do the same kind of work as that
performed by those whose contracts had expired negates petitioner's contention that those workers
were hired for a specific project or undertaking only.The five-month period specified in private
respondent's employment contracts having been imposed precisely to circumvent the constitutional
guarantee on security of tenure should be struck down or disregarded as contrary to public policy or
morals. Quitclaims by laborers are frowned upon as contrary to public policy and are held to be
ineffective to bar recovery for the full measure of the workers' rights.Immediate filing of a complaint
for illegal dismissal is inconsistent with voluntary and free consent to dismissal.
Issue: Whether or not the private respondents were regular employees and they were illegally
dismissed
Ruling: Yes. Private respondents were regular employees. NLRC was correct in finding that the
private respondents were regular employees and that they were illegally dismissed from their jobs.
Under Article 279 of the Labor Code and the recent jurisprudence, the legal consequence of illegal
dismissal is reinstatement without loss of seniority rights and other privileges, with full back wages
computed from the time of dismissal up to the time of actual reinstatement, without deducting the
earnings derived elsewhere pending the resolution of the case. However, since reinstatement is no
longer possible because the petitioner's tuna cannery plant had, admittedly, been closed in November
1994, the proper award is separation pay equivalent to one month pay or one-half month pay for

18
every year of service, whichever is higher, to be computed from the commencement of their
employment up to the closure of the tuna cannery plant. The amount of back wages must be
computed from the time the private respondents were dismissed until the time petitioner's cannery
plant ceased operation. This scheme of the petitioner was apparently designed to prevent the private
respondents and the other "casual" employees from attaining the status of a regular employee. It was
a clear circumvention of the employees' right to security of tenure and to other benefits like
minimum wage, cost-of-living allowance, sick leave, holiday pay, and 13th month pay. Indeed, the
petitioner succeeded in evading the application of labor laws. Also, it saved itself from the trouble or
burden of establishing a just cause for terminating employees by the simple expedient of refusing to
renew the employment contracts. The five-month period specified in private respondents'
employment contracts having been imposed precisely to circumvent the constitutional guarantee on
security of tenure should, therefore, be struck down or disregarded as contrary to public policy or
morals . To uphold the contractual arrangement between the petitioner and the private respondents
would, in effect, permit the former to avoid hiring permanent or regular employees by simply hiring
them on a temporary or casual basis, thereby violating the employees' security of tenure in their jobs.
17. Phil. Fruit & Vegetable Industries vs. NLRC, 310 SCRA 680 [1999]
Legal Doctrine: An employment shall be deemed regular where the employee: a) has been engaged
to perform activities which are usually necessary or desirable in the usual business or trade of the
employer; or b) has rendered at least one year of service, whether such service is continuous or
broken, with respect to the activity in which he is employed.
Facts: Petitioner Corporation is a government-owned and controlled corporation engaged in the

manufacture and processing of fruits and vegetable purees for export. Private respondent filed
acomplaint for unfair labor practice and/or illegal dismissal with damages against petitioner
Corporation for and in behalf of its 127 member-workers, which eventually increased to 194. The
Labor Arbiter rendered a decision holding petitioners liable for illegal dismissal. On appeal, the
NLRC set aside the decision and remanded the case to the Arbitration Branch for further proceedings.
Still in the Arbitration Branch, the Labor Arbiter found the petitioners liable for illegal dismissal. On
appeal to the NLRC, the later affirmed the decision of the Labor Arbiter with modification that the
award of attorney's fees shall be based only on the amounts corresponding to 13th month pay. The
NLRC denied the motion for reconsideration filed by the petitioners. Hence, this special civil action
for certiorari.
Issue: Whether or not the private respondents are regular employees in respect to the functions that
they perform for the company
Ruling: Yes. The Court ruled that private respondents in this case are deemed regular employees by
virtue of the functions they performed, which are necessary and desirable in the usual business of the
Corporation as provided for by the Labor Code. However, only 80 of the 194 union members
presented evidence to support and prove their claims. Therefore, only those who were able to prove
their claims are entitled to the awards of claims. The questioned decision of the NLRC was affirmed

19
in so far as the 80 union members are concerned and reversed with respect to the others. In the case
at bar, the work of complainants as seeders, operators, sorters, slicers, janitors, drivers, truck helpers,
mechanics and office personnel is without doubt necessary in the usual business of a food processing
company like petitioner PFVII. It should be noted that complainants' employment has not been fixed
for a specific project or undertaking the completion or termination of which has been determined at
the time of their appointment or hiring. Neither is their employment seasonal in nature. While it may
be true that some phases of petitioner company's processing operations is dependent on the supply of
fruits for a particular season, the other equally important aspects of its business, such as
manufacturing and marketing are not seasonal. The fact is that large-scale food processing
companies such as petitioner company continue to operate and do business throughout the year even
if the availability of fruits and vegetables is seasonal.
18. Colegio Del Santisimo Rosario et al., vs. Rojo, G.R. No. 170388, Sept. 4, 2013 citing
Mercado et al., vs. AMA Computer College-Paranaque City, GR No. 183572, April 13, 2010
Legal Doctrine: Teachers on probationary employment also enjoy the protection afforded by Article
281 of the Labor Code as supported by Section 93 of the 1992 Manual
Facts: Petitioner Colegio del Santisimo Rosario (CSR) hired respondent as a high school teacher on
a probationary basis for the school years 1992-1993, 1993-1994 7 and 1994-1995. On April 5, 1995,
CSR, through petitioner Sr. Zenaida S. Mofada, OP (Mofada), decided not to renew respondent's
services.
Thus, on July 13, 1995, respondent filed a Complaint 10 for illegal dismissal. He alleged that since
he had served three consecutive school years which is the maximum number of terms allowed for
probationary employment, he should be extended permanent employment. Citing paragraph 75 of the
1970 Manual of Regulations for Private Schools (1970 Manual), respondent asserted that "full-time
teachers who have rendered three (3) consecutive years of satisfactory services shall be considered
permanent.
On the other hand, petitioners argued that respondent knew that his Teacher's Contract for school
year 1994-1995 with CSR would expire on March 31, 1995. 12 Accordingly, respondent was not
dismissed but his probationary contract merely expired and was not renewed. 13 Petitioners also
claimed that the "three years" mentioned in paragraph 75 of the 1970 Manual refer to "36 months,"
not three school years. And since respondent served for only three school years of 10 months each or
30 months, then he had not yet served the "three years" or 36 months mentioned in paragraph 75 of
the 1970 Manual.
LA ruled in favor of the respondent. The decision was affirmed by the NLRC and the CA
respectively on appeal hence this petition before the SC.
Issue: Whether or not teachers on probationary employment also enjoy the protection afforded by

20
Article 281 of the Labor Code
Ruling: Yes. CA decision affirmed. It was ruled that cases dealing with employment on probationary
status of teaching personnel are not governed solely by the Labor Code as the law is supplemented,
with respect to the period of probation, by special rules found in the Manual of Regulations for
Private Schools (the Manual). With regard to the probationary period, Section 92 of the 1992 Manual
provides that subject in all instances to compliance with the Department and school requirements, the
probationary period for academic personnel shall not be more than three (3) consecutive years of
satisfactory service for those in the elementary and secondary levels.
For teachers on probationary employment, in which case a fixed term contract is not specifically
used for the fixed term it offers , it is incumbent upon the school to have not only set reasonable
standards to be followed by said teachers in determining qualification for regular employment, the
same must have also been communicated to the teachers at the start of the probationary period, or at
the very least, at the start of the period when they were to be applied. These terms, in addition to
those expressly provided by the Labor Code, would serve as the just cause for the termination of the
probationary contract. The specific details of this finding of just cause must be communicated to the
affected teachers as a matter of due process. Corollarily, should the teachers not have been apprised
of such reasonable standards at the time specified above, they shall be deemed regular employees
19. Herrera-Manaois vs. St. Scholasticas College, GR No. 188914, December 11, 2013
Legal Principle: Probationary employment refers to the trial stage of a period during which the
employer examines the competency qualification of a job after can and determines whether they are
qualified to be extended permanent employment status. Such an arrangement allows an employer the
ability to scrutinize the fitness and competency of the probationary employee while on the job.
Facts: SSC, situated in the City of Manila, is a private educational institution offering elementary,
secondary, and tertiary education. Manaois graduated from SSC in October 1992 with a degree in
Bachelor of Arts in English. In 1994, she returned to her alma mater as a part-time English teacher.
After taking a leave of absence for one year, she was again rehired by SSC for the same position.
Four years into the service, she was later on recommended by her Department Chairperson to
become a full-time faculty member of the English Department. Manaois applied for a position as
full-time instructor for school year 2000-2001. She mentioned in her application letter that she had
been taking the course Master of Arts in English Studies, Major in CreativeWriting, at the University
of the Philippines, Diliman (UP), that she was completing her master's thesis, and that her oral
defense was scheduled for June 2000. The Dean of Arts and Sciences informed her of the SSC
Administrative Council's approval of her application. She was then advised to maintain the good
performance that she had shown for the past years and to submit the necessary papers pertaining to
her master's degree. Accordingly, SSC hired her as a probationary full-time faculty member with the
assigned rank of instructor for the school year 2000-2001. Her probationary employment continued
for a total of three consecutive years. Throughout her service as a probationary full-time faculty
member with no derogatory record, she was given above-satisfactory ratings by both the Department
Chairperson and the Dean of Arts and Sciences. Because of the forthcoming completion of her third
year of probationary employment, Manaois wrote the Dean of Arts and Sciences requesting an
extension of her teaching load for the school year 2003-2004. She again mentioned in her letter that
she was a candidate for a master's degree in English Studies; that the schedule of her oral defense
may actually materialize anytime within the first academic semester of 2003; and that she intended to

21
fully earn her degree that year. She also furnished the school with a Certification from UP, stating
that she had already finished her coursework in her master's studies. Furthermore, she indicated that
it was her long-term goal to apply for a return to full-time faculty status by then and for SSC to
consider the aforesaid matters. Manaois eventually received a letter from the Dean of College and
Chairperson of the Promotions and Permanency Board officially informing her of the board's
decision not to renew her contract.
LA finds the dismissal of the respondent illegal. NLRC upheld the LA’s decision. CA ruled that the
labor arbiter and the NLRC committed grave abuse of discretion in ruling that petitioner had not
been made aware of the reasonable standards of employment at the time of her engagement. Based
on her own acts, Manaois knew of the necessity of obtaining a master's degree in order to attain
permanent employment status. SSC was thus well within its rights not to renew her employment
contract for her failure to qualify as a permanent full-time faculty member. Consequently, her
complaint was dismissed.
Issue: Whether or not the Completion of a Master’s degree is required in order for a tertiary level
educator to earn the status of permanency in a private educational institution
Ruling: Yes. The mere completion of the three-year probationary period does not guarantee that the
employee will automatically acquire a permanent status. Probationer can only qualify upon
fulfillment of the reasonable standards set for permanent employment as a member of the teaching
personnel Probationary employment refers to the trial stage of a period during which the employer
examines the competency qualification of a job after can and determines whether they are qualified
to be extended permanent employment status. Such an arrangement allows an employer the ability to
scrutinize the fitness and competency of the probationary employee while on the job. Here, Manaois
failed to comply with the stated academic requirements for the position of a permanent full-time
faculty member wonder.
20. Gadia vs. Sykes, GR No. 209499, January 28, 2015
Legal Doctrine: According to jurisprudence, the principal test for determining whether particular
employees are properly characterized as "project[-based] employees" as distinguished from "regular
employees," is whether or not the employees were assigned to carry out a "specific project or
undertaking," the duration (and scope) of which were specified at the time they were engaged for that
project.
Facts: Sykes Asia is a corporation engaged in Business Process Outsourcing (BPO) which provides
support to its international clients from various sectors by carrying on some of their operations,
governed by service contracts that it enters with them. On September 2, 2003, Alltel
Communications, Inc. (Alltel), a United States-based telecommunications firm, contracted Sykes
Asia's services to accommodate the needs and demands of Alltel clients for its postpaid and prepaid
services (Alltel Project). Thus, Sykes Asia hired petitioners as customer service representatives, team
leaders, and trainers for the Alltel Project. Services for the said project went on smoothly until Alltel
sent two (2) letters to Sykes Asia dated August 7, 2009 and September 9, 2009 informing the latter
that it was terminating all support services provided by Sykes Asia related to the Alltel Project. In
view of this development, Sykes Asia sent each of the petitioners end-of-life notices, informing them
of their dismissal from employment due to the termination of the Alltel Project. Petitioners filed
separate complaints for illegal dismissal against respondents Sykes Asia (respondents), praying for
reinstatement, backwages, 13th month pay, service incentive leave pay, night shift differential, moral

22
and exemplary damages, and attorney's fees. In their complaints, petitioners alleged that their
dismissal from service was unjust as the same was effected without substantive and procedural due
process. In their defense, respondents averred that petitioners were not regular employees but merely
project-based employees, and as such, the termination of the Alltel Project served as a valid ground
for their dismissal. In support of their position, respondents noted that it was expressly indicated in
petitioners' respective employment contracts that their positions are "project-based" and thus, "co-
terminus to the project." Respondents further maintained that they complied with the requirements of
procedural due process in dismissing petitioners by furnishing each of them their notices of
termination at least thirty (30) days prior to their respective dates of dismissal.
Labor Arbiter ruled that the complainants were project based employees in respect to their contract.
NLRC ruling that petitioners are regular employees but were validly terminated due to redundancy.
CA reinstated LA’s decision stating petitioners' respective employment contracts readily shows that
they were hired exclusively for the Alltel Project and that it was specifically stated therein that their
employment would be project-based.
Issue: Whether or not the complainants were project based employee perusal to their employment
contract
Ruling: Yes. They are project based employees. Verily, 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. In this case, records reveal that Sykes
Asia adequately informed petitioners of their employment status at the time of their engagement, as
evidenced by the latter's employment contracts which similarly provide that they were hired in
connection with the Alltel Project, and that their positions were "project-based and as such is co-
terminus to the project." In this light, the CA correctly ruled that petitioners were indeed project-
based employees, considering that: (a) they were hired to carry out a specific undertaking, i.e., the
Alltel Project; and (b) the duration and scope of such project were made known to them at the time
of their engagement, i.e., "co-terminus with the project."As regards the second requisite, the CA
correctly stressed that "[t]he law and jurisprudence dictate that 'the duration of the undertaking
begins and ends at determined or determinable times'" while clarifying that "[t]he phrase
'determinable times' simply means capable of being determined or fixed." In this case, Sykes Asia
substantially complied with this requisite when it expressly indicated in petitioners' employment
contracts that their positions were "co-terminus with the project." To the mind of the Court, this
caveat sufficiently apprised petitioners that their security of tenure with Sykes Asia would only last
as long as the Alltel Project was subsisting. In other words, when the Alltel Project was terminated,
petitioners no longer had any project to work on, and hence, Sykes Asia may validly terminate them
from employment. Further, the Court likewise notes the fact that Sykes Asia duly submitted an
Establishment Employment Report and an Establishment Termination Report to the Department of
Labor and Employment Makati-Pasay Field Office regarding the cessation of the Alltel Project and
the list of employees that would be affected by such cessation. As correctly pointed out by the CA,
case law deems such submission as an indication that the employment was indeed project-based. In
sum, respondents have shown by substantial evidence that petitioners were merely project-based
employees, and as such, their services were lawfully terminated upon the cessation of the Alltel
Project.

23
21. Expedition Construction Corp., vs. Africa, GR No. 228671, December 14, 2017
Legal Doctrine: In illegal dismissal cases, the employer has the burden of proving that the
termination was for a valid or authorized cause. However, it is likewise incumbent upon an employee
to first establish by substantial evidence the fact of his dismissal from employment by positive and
overt acts of an employer indicating the intention to dismiss. It must also be stressed that the
evidence must be clear, positive and convincing. Mere allegation is not proof or evidence.
Facts: Petitioner Expedition Construction Corporation (Expedition), is a domestic corporation

engaged in garbage collection/hauling. It engaged the services of respondents as garbage truck
drivers to collect garbage from different cities and transport the same to the designated dumping site.
Respondents filed separate cases (which were later on consolidated) against Expedition for illegal
dismissal; underpayment and non-payment of salaries/wages, and other unpaid benefits. Respondents
alleged that in August 2013, they were illegally terminated from employment when they were
prevented from entering the premises of Expedition without cause or due process. They claimed that
they were regular employees of Expedition; were required to work a minimum of 12 hours a day,
seven days a week, even on holidays, without rest or vacation; and, were not paid the minimum wage,
holiday or premium pay, overtime pay, service incentive leave pay and 13th month pay. That the
costs of repair and maintenance of the garbage trucks were illegally deducted from their salaries.
Expedition, in its Position Paper, countered that respondents were not illegally dismissed. Expedition
denied that respondents were its employees. It claimed that respondents were not part of the
company's payroll but were being paid on a per trip basis. Respondents were not under Expedition's
direct control and supervision as they worked on their own, were not subjected to company rules nor
were required toobserve regular/fixed working hours, and that respondents hired/paid their respective
garbage collectors. As such, respondents' money claims had no legal basis. Labor Arbiter dismissed
the complaint of the respondents. There was no employer-employee relationship between Expedition
and respondents. The LA did not find any substantial proof that respondents were regular employees
of Expedition. The respondents had no fixed salary and were compensated based on the total number
of trips made. Expedition had no power to terminate respondents and they performed their work
independent of Expedition's control.
The LA ruled that respondents were independent contractors, contracted to do a piece of work
according to their own method and without being subjected to the control of Expedition except as to
the results of their work. NLRC similarly found no evidence of an employer-employee relationship
between Expedition and respondents. CA ruled that there exists an employer-employee relationship
between the parties. Because they were hired and paid by Expediation. CA ruled that respondents
were illegally dismissed when Expedition prevented them from working, and consequently, ordered
their reinstatement with full back wages.
Issue: Whether or not the respondents were they illegally dismissed
Ruling: No. Respondents were neither independent contractors nor project employees. There was no
showing that respondents have substantial capital or investment and that they were performing
activities which were not directly related to Expedition's business to be qualified as independent
contractors. There was likewise no written contract that can prove that respondents were project
employees and that the duration and scope of such employment were specified at the time
respondents were engaged.
Therefore, respondents should be accorded the presumption of regular employment pursuant to
Article 280 of the Labor Code which provides that "employees who have rendered at least one year

24
of service, whether such service is continuous or broken x x x shall be considered [as] regular
employees with respect to the activity in which they are employed and their employment shall
continue while such activity exists." Furthermore, the fact that respondents were performing
activities which were directly related to the business of Expedition confirms the conclusion that
respondents were indeed regular employees. However, there was no illegal dismissal. There was no
positive or direct evidence to substantiate respondents' claim that they were dismissed from
employment. Aside from mere assertions, the record is bereft of any indication that respondents were
barred from Expedition's premises. If at all, the evidence on record showed that Expedition intended
to give respondents new assignments as a result of the termination of the garbage hauling contracts
with Quezon City and Caloocan City where respondents were regularly dispatched. Despite the loss
of some clients, Expedition tried to accommodate respondents and offered to engage them in other
garbage hauling projects with other LGUs, a fact which respondents did not refute. However, instead
of returning and waiting for their next assignments, respondents instituted an illegal dismissal case
against Expedition. Note that even during the mandatory conciliation and mediation conference
between the parties, Expedition manifested its willingness to accept respondents back to work.
Unfortunately, it was respondents who no longer wanted to return to work. In fact, in their
complaints, respondents prayed for the payment of separation pay instead of reinstatement.
III. MANAGEMENT PREROGATIVE
22. Dosch vs. NLRC, 123 SCRA 296 (1983)
Legal Doctrine: There is no law that compels an employee to accept a promotion, as a promotion is
in the nature of a gift or a reward, which a person has a right to refuse. When petitioner refused to
accept his promotion to Director of International Sales, he was exercising a right and he cannot be
punished for it as qui jure suo utitur reminem laedit. He who uses his own legal right injures no one.
Facts: Petitioner Dosch, an American citizend and married to a Filipina, was the resident Manager of
Northwest Airlines, Inc. in the Philippines. He served 11 years of continuous service with the
company, including 9 years as Northwest Manager with station at Manila. Petitioner received an
inter-office communication promoting him to the position of Director of International Sales.
However, he will be transferred to Northwest’s General Office in Minneapolis, U.S.A which was
effective on the same day. Petitioner expressed appreciation for the promotion but did not accept the
transfer from the Philippines because of personal reasons and reasons involving his family. Petitioner
also sent a telegrams to Mr. Nightingale, Director for Finance and to Mr. Jenkins, Northwest's Vice
President for Orient Region based in Tokyo clearly stating petitioner's desire to remain as Manager-
Philippines of Northwest. Mr. Jenkins advised petitioner that company considered his letter to be a
resignation without notice. Then, Northwest filed a Report on Resignation of Dosch before the
Department of Labor. The Report was contested by the petitioner and the parties were conciliated but
failed to agree on a settlement.
Issue: Whether or not petitioner’s refusal to be transferred was a valid cause for dismissal
Ruling: No. There is no law that compels an employee to accept a promotion, as a promotion is in
the nature of a gift or a reward, which a person has a right to refuse. When petitioner refused to
accept his promotion to Director of International Sales, he was exercising a right and he cannot be
punished for it as qui jure suo utitur neminem laedit. He who uses his own legal right injures no one.

25
While it may be true that the right to transfer or reassign an employee is an employer's exclusive
right and the prerogative of management, such right is not absolute. The right of an employer to
freely select or discharge his employee is limited by the paramount police power (Phil. Air Lines, Inc.
vs. Phil. Airlines Employees Association, L-24626, June 28, 1974, 57 SCRA 489) for the relations
between capital and labor are not merely contractual but impressed with public interest (Article 1700,
New Civil Code). And neither capital nor labor shall act oppressively against each other (Article
1701, New Civil Code).
23. Duncan Asso. Of Detailman-PTGWO vs. Glaxo Wellcome Phils., G.R. No. 162994, Sept. 17,
2004
Legal Doctrine: Employer may implement policy prohibiting its employees to enter into relationship
with persons employed with its competitor company to guard its trade secrets, manufacturing
formulas, marketing strategies and other confidential programs and information from competitors.
Facts: After undergoing training and orientation, Petitioner Tecson was hired by Respondent Glaxo
as medical representative. Tecson signed a contract of employment which stipulates, among others,
that he agrees to study and abide by existing company rules; to disclose to management any existing
or future relationship by consanguinity or affinity with co-employees or employees of competing
drug companies and should management And that such relationship poses a possible conflict of
interest, to resign from the company. The Employee Code of Conduct of Glaxo similarly provides
that an employee is expected to inform management of any existing or future relationship by
consanguinity or affinity with co-employees or employees of competing drug companies. If
management perceives a conflict of interest or a potential conflict between such relationship and the
employee’s employment with the company, the management and the employee will explore the
possibility of a “transfer to another department in a non-counterchecking position” or preparation for
employment outside the company after six months. Tecson was initially assigned to market Glaxo’s
products in the Camarines Sur-Camarines Norte sales area.
Subsequently, Tecson entered into a romantic relationship with Bettsy who is an employee of Astra
Pharmaceuticals, a competitor of Glaxo. Bettsy was Astra’s Branch Coordinator in Albay. She
supervised the district managers and medical representatives of her company and prepared marketing
strategies for Astra in that area. Tecson received several reminders from his District Manager
regarding the conflict of interest which his relationship with Bettsy may engender. Despite of the
reminders, Tecson married Bettsy. In January 1999, because of his marriage to Bettsy, Tecson’s
superiors told him that he and Bettsy should decide which one of them would decide from their jobs,
they also told Tecson that they wanted to retain him since he is performing his job well. Tecson asked
for time to comply with the policy against entering into a relationship with employee of a competitor
company, explaining Bettsy’s employer, Astra was planning to merge with other drug company. He
said his wife was planning to avail the redundancy package to be offered by Astra. In August 1999,
requested again for more time to resolve the problem.
In September 1999, Tecson applied for a transfer in milk division thinking that because Astro did not
have milk division, the transfer would eliminate the potential conflict of interest. His application was
denied by Glaxo. Instead, Glaxo transferred Tecson to the Butuan City-Surigao City-Agusan del Sur
sales area. Tecson asked for reconsideration of the decision but it was denied. Despite the transfer
order, Tecson continued acting as medical representative in the Camarines Sur- Camarines Norte
sales area. During the pendency of grievance proceedings, Tecson continued to received salary but
samples of products which were competing with similar products manufactured by Astra were not
issued to him and he was also not included in product conferences regarding such products. The

26
parties failed to resolve the issue at the grievance machinery level so they submitted the matter for
voluntary arbitration. Glaxo offered Tecson 1/2 month pay for every year of service or a total of
P50,000 but he declined.
In November 2000, the National Conciliation and Mediation Board (NCMB) declared Glaxo’s policy
as valid affirming the right of respondent to transfer Tecson. Tecson filed a Petition for Review with
the CA assailing the decision of NCMB. CA denied the Petition for Review on the ground that
NCMB did not err in rendering its Decision. Hence, the instant petition.
Issue: Whether or not Glaxo has the right to implement policy prohibiting its employees to enter into
relationship with persons employed with its competitor company
Ruling: Yes. Glaxo has a right to guard its trade secrets, manufacturing formulas, marketing
strategies and other confidential programs and information from competitors, especially so that it and
Astra are rival companies in the highly competitive pharmaceutical industry.
The prohibition against personal or marital relationships with employees of competitor companies
upon Glaxo’s employees is reasonable under the circumstances because relationships of that nature
might compromise the interests of the company. In laying down the assailed company policy, Glaxo
only aims to protect its interests against the possibility that a competitor company will gain access to
its secrets and procedures.
The Court of Appeals also correctly noted that the assailed company policy which forms part of
respondent’s Employee Code of Conduct and of its contracts with its employees, such as that signed
by Tecson, was made known to him prior to his employment. Tecson, therefore, was aware of that
restriction when he signed his employment contract and when he entered into a relationship with
Bettsy. Since Tecson knowingly and voluntarily entered into a contract of employment with Glaxo,
the stipulations therein have the force of law between them and, thus, should be complied with in
good faith.” He is therefore estopped from questioning said policy.
24. PLDT vs. Paquio, G.R. No. 152689, October 12, 2005
Legal Doctrine: While it may be conceded that management is in the best position to know its
operational needs, the exercise of management prerogative cannot be utilized to circumvent the law
and public policy on labor and social justice. That prerogative accorded management should not
defeat the very purpose for which our labor laws exist: to balance the conflicting interests of labor
and management.
Facts: PLDT has 27 Exchanges in its GMM Network. Paguio was the Head of the Garnet Exchange.
In 1994, PLDT assessed the performance of the 27 Exchanges comprising the GMM Network. Upon
receipt of the ratings, Paguio sent Santos, his immediate supervisor and the Assistant VP of the
GMM East Center, a letter criticizing the PLDT criteria for performance ratings as unfair because
they depended on manpower. He also suggested that the criteria failed to recognize that exchanges
with new plants could easily meet the objectives of GMM compared to those with old plants. Despite
Paguio’s criticism, Garnet Exchange, the oldest plant in GMM, obtained the top rating. Still, Paguio
reiterated his letter to Santos and objected to the performance rating because it was based only on the
attainment of objectives, without considering other relevant factors. In 1996, PLDT rebalanced the
manpower of the East Center. Paguio wrote Santos and requested reconsideration, claiming it was
unfair to Garnet Exchange because as the oldest exchange in the East Center, it was not allowed to

27
use contractors for new installations and was not made beneficiary of the cut-over bonus. Santos
denied his request. Thus Paguio elevated the matter to the Ferido, the First VP-GMM Network
Services.
In 1997, Paguio was reassigned as Head for Special Assignment at the Office of the GMM East
Center. Believing that his transfer was a disciplinary action, Paguio requested Ferido for a formal
hearing of the charges against him and asked that his reassignment be effered. As no action was
taken, Paguio elevated the matter to Perez, the Senior Executive VP and Chief Operating Officer of
PLDT. Perez, through a memo, informed Paguio that his transfer was not in the nature of a
disciplinary action that required investigation and that he agreed with the reasons of the transfer.
Issue: Whether or not Paguio’s transfer is valid
Ruling: No. While it may be conceded that management is in the best position to know its
operational needs, the exercise of management prerogative cannot be utilized to circumvent the law
and public policy on labor and social justice. That prerogative accorded management should not
defeat the very purpose for which our labor laws exist: to balance the conflicting interests of labor
and management. By its very nature, management prerogative must be exercised always with the
principles of fair play and justice. In particular, the employer must be able to show that the transfer is
not unreasonable, inconvenient or prejudicial to the employee; nor does it involve a demotion in rank
or a diminution of his salaries, privileges and other benefits. The employer bears the burden of
proving that the transfer of the employee has complied with the foregoing test.
Based on the undisputed facts, Garnet Exchange was doing well and excelled in the performance
rating. In the same way, Paguio's performance was consistently rated as outstanding. There was also
no proof that Paguio refused to comply with any management policy. Patently, his transfer could not
be due to poor performance. Neither was it because he was needed in the new post for the new
assignment was functionless and it was nothing but a title. Paguio's transfer could only be caused by
the management's negative reception of his comments. It is prejudicial to Paguio because it left him
out for a possible promotion as he was assigned to a functionless position with neither office nor
staff.
25. Star Paper Corp., vs. Simbol, G.R. No. 164774, April 12, 2006
Legal Doctrine: A bona fide occupational qualification justifies an employer’s no-spouse rule. There
must be a compelling business necessity for which no alternative exists other than the discriminatory
practice.
Facts: Petitioner are Star Paper Corporation, its Manager of the Personnel and Administration
Department, Ongistc and its Managing Director, Chua. While respondents, Simbol, Comia and
Estrella were all regular employees of the company as shown with the evidence. Simbol was hired by
the company in 1993. He met Dayrit, who is also an employee of the company. In 1998, the two got
married. Prior to the marriage, Ongsitco advised the couple that one of them should resign if they
decide to get married. In pursuant to the company policy. Thus, Simbol resigned. Comia was hired
by the company in 1997. She met a co-employee whom she married in 2000. Ongsitco also reminded
them that one of them must resign. Thus, Comia resigned. Estrella was hired in 1994. She met a co-
worker who was a married man. When Estrella got pregnant, the company alleged that she could be
terminated due to immorality. However, she resigned instead. The respondents signed a Release and
Confirmation Agreement. It was stated in the agreement that they have no accountabilities in the

28
company and that they release the company of any claim or demand of whatever nature.
Respondents filed a complaint for unfair labor practice, constructive dismissal, separation pay and
attorney’s fee. They claimed that the company policy is illegal and in violation to Article 136 of the
Labor Code.
The Labor Arbiter dismissed the complaint for lack of merit. Upon appeal to the NLRC, the
Commission affirmed the decision of the Labor Arbiter. CA reversed the decision of the NLRC.
Issue: Whether or not the policy/regulation is violative of the constitutional rights towards marriage
and the family of employees and of Article 136 of the Labor Code
Ruling: Yes. A bona fide occupational qualification justifies an employer’s no-spouse rule, the
exception is interpreted strictly and narrowly by these state courts. There must be a compelling
business necessity for which no alternative exists other than the discriminatory practice. To justify a
bona fide occupational qualification, the employer must prove two factors: (1) that the employment
qualification is reasonably related to the essential operation of the job involved; and, (2) that there is
a factual basis for believing that all or substantially all persons meeting the qualification would be
unable to properly perform the duties of the job.
The requirement that a company policy must be reasonable under the circumstances to qualify as a
valid exercise of management prerogative was also at issued in the case of Philippine Telegraph and
Telephone Company v. NLRC
The cases of Duncan and PT&T instruct us that the requirement of reasonableness must
be clearly established to uphold the questioned employment policy. The employer has the burden to
prove the existence of a reasonable business necessity.
In the case at bar, reasonable necessity is lacking. Respondents were hired after they were found fit
for the job, but were asked to resign when they married a co-employee. Petitioners failed to show
how the marriage of Simbol, then a Sheeting Machine Operator, to Alma Dayrit, then an employee of
the Repacking Section, could be detrimental to its business operations. Neither did petitioners
explain how this detriment will happen in the case of Wilfreda Comia, then a Production Helper in
the Selecting Department, who married Howard Comia, then a helper in the cutter-machine. The
policy is premised on the mere fear that employees married to each other will be less efficient.
26. Tiu vs. Platinum Plans, Inc. , GR No. 163512, February 28, 2007
Legal Doctrine: A non-involvement clause is not necessarily void for being in restraint of trade as
long as there are reasonable limitations as to time, trade, and place.
Facts: Petitioner Tiu was the Division Marketing Director from 1987 to 1989 of respondent Platinum
Plans Philippines, Inc, a domestic corporation engaged in the pre-need industry. In 1993, respondent
rehired petitioner as Senior Assistant Vice President and Territorial Operations Head in charge of its
Hongkong and Asean operations. The parties executed a contract of employment valid for five years.
In September 1995, petitioner stopped reporting for work and in November, she became the Vice-
President for Sales of Professional Pension Plans, Inc., a corporation also engaged in the pre-need
industry.

29
Thus, respondent sued petitioner for damages before the RTC of Pasig City. Respondent alleged,
among others, that petitioner’s employment with Profession Pension Plans, Inc. Violated the non-
involvement clause in her contract of employment which prohibits petitioner to engage or to be
involved, for the next two years from separation from the company, with any corporation, association
or entity engaged in the same business or belonging to the same pre-need industry as respondent.
Issue: Whether or not the non-involvement clause is valid
Ruling: Yes. A non-involvement clause is not necessarily void for being in restraint of trade as long
as there are reasonable limitations as to time, trade, and place. In this case, the non-involvement
clause has a time limit: two years from the time petitioner's employment with respondent ends. It is
also limited as to trade, since it only prohibits petitioner from engaging in any pre-need business akin
to respondent's. More significantly, since petitioner was the Senior Assistant Vice-President and
Territorial Operations Head in charge of respondent's Hongkong and Asean operations, she had been
privy to confidential and highly sensitive marketing strategies of respondent's business. To allow her
to engage in a rival business soon after she leaves would make respondent's trade secrets vulnerable
especially in a highly competitive marketing environment.
Article 1159 14 of the same Code also provides that obligations arising from contracts have the force
of law between the contracting parties and should be complied with in good faith. Not being
contrary to public policy, the non-involvement clause, which petitioner and respondent freely agreed
upon, has the force of law between them, and thus, should be complied with in good faith.
IV. TERMINATION OF EMPLOYMENT
27. Maria De Leon Transportation Inc., et al., vs. Macuray, GR No. 214940, June 6, 2018
Legal Doctrine: A mere bus dispatcher does not possess the power to fire a driver from work — this
is a prerogative belonging to management.
Facts: Daniel Macuray was employed as a bus driver of petitioner Maria De Leon Transportation Inc.
He alleged that in November 2009, petitioner’s dispatcher did not assign a bus to him, for no
apparent reason. For one month, he continually returned to follow up if a bus had already been
assigned to him. Subsequently, when he returned to the company premises, the bus dispatcher
informed him that he was already considered AWOL (absent without leave). He filed a complaint for
illegal dismissal against the petitioner. That he receives a monthly pay/commission of P20,000.
In petitioner defense, they denied having dismissed respondents from the service. It received
information that the respondent was already engaged in driving his family truck. The bus dispatcher
from whom he inquired about his status had no power to terminate or declare him AWOL. He had
not actually approached management to inquire about his employment status, even though he knew
that the assistant manager, corporate secretary and director of the bus company resided with his
family within the bus company’s station and compound in San Nicolas, Ilocos Norte.
Issue: Whether or not Macuray was illegally dismissed by his employer.

30
Ruling: No. The Court is inclined to believe the petitioner's allegations because the respondent left
his work as bus driver to work for his family’s trucking business. There is no truth to the allegation
that the respondent was dismissed, actually or constructively. He claims that the dispatcher informed
him that he was AWOL. However, a mere bus dispatcher does not possess the power to fire him from
work-this is a prerogative belonging to management.
Respondent failed to show that he met with management to inquire on his status. It also appears that
the assistant manager, corporate secretary and director of the bus company, Elias Dimaya, resided
with his family within the bus company’s station and compound in San Nicolas, Ilocos Norte.
Respondent worked for the company for 18 years, he should have known this fact, and he could have
visited with Elias Dimaya at any time, if his employment was so important that it meant his own
survival and that of his family. Apparently, however, it would appear that this was not the case, for
the simple reason that the respondent had found employment elsewhere.
Therefore, respondent’s failure to show that his follow-ups were properly directed at management
bolsters petitioner’s claim that no follow-ups were made by him. The logical explanation for this is
that he found employment elsewhere and thus opted to stop reporting for work, as was the practice of
other bus drivers working for petitioner.
Also, even assuming that respondent was indeed told by respondent’s bus dispatcher Roger Pasion
that he was awol, this was not tantamount to dismissal, actual or constructive.
V. SUSPENSION OF BUSINESS OPERATIONS
28. Spectrum Security Services Inc, vs. Grave et al., G.R. No. 196650, June 7, 2017
Legal Doctrine: There should be no indefinite lay-offs. After the period of six months, the
employers should either recall the affected security guards to work or consider them permanently
retrenched pursuant to the requirements of the law; otherwise, the employers would be held to have
dismissed them, and would be liable for such dismissals.
Facts: The petitioner is a domestic corporation engaged in the business of providing security
services. Respondents are security guards employed by the petitioner and posted at the premises of
Ibiden Philippines, Inc. The petitioner implemented an action plan as part of its operational and
manpower supervision enhancement program geared towards the gradual replacement of security of
Ibiden. Pursuant to the action plan, respondents was directed to report to the head office and to
update their documents for re-assignment. Respondents filed their complaint against the petitioner
for constructive dismissal in Regional Arbitration Branch of the NLRC claiming that the
implementation of the action plan was a retaliatory measure against them for bringing several
complaints along with other employees to recover unpaid holiday pay and 13th pay.
Issue: Whether or not the respondents were illegally dismissed
Ruling: No. The Labor Arbiter found that such insistence was unsupported by any factual foundation
because there was no evidence showing that they had been dismissed. The notices sent to them

31
contained nothing from which to justly infer their having been terminated from their employment.
Moreover, their complaint for illegal dismissal was even prematurely filed on August 14, 2008
because the notices were sent to each of them only in the period from July 3, 2008 to August 2,
2008. In illegal dismissal cases, the general rule is that the employer has the burden of proving that
the dismissal was legal. To discharge this burden, the employee must first prove, by substantial
evidence, that he had been dismissed from employment. In this case, respondents failed to properly
establish that they were dismissed by the petitioner. Aside from the respondents' plain allegation that
they were illegally dismissed by the petitioner, no other evidence was presented by the respondents
to support their contentions.
Furthermore, assuming arguendo that when respondents reported to the human resource office and
the company did not provide them with new assignments at that time, the six-month period had not
yet lapsed. Note that the position paper submitted by the respondents to the NLRC was only received
by the NLRC on December 11, 2008. The reckoning of the end of the six-month period from the
supposed termination (i.e., July and August 2008, the period when they were each given the "Notice
to Return to Unit") would only be in January or February 2009.
Respondents intended to sever their employer-employee relationship with the petitioner because they
applied for and obtained employment with other security agencies while they were on reserved status.
Their having done so constituted a clear and unequivocal intent to abandon and sever their
employment with the petitioner.
VI. DISEASE AS GROUND FOR TERMINATION
29. Sy vs. Court of Appeals, G.R. No. 142293, February 27, 2003
Legal Doctrine: The requirement for a medical certificate under Article 284 of the Labor Code
cannot be dispensed with. Otherwise, it would sanction the unilateral and arbitrary determination by
the employer of the gravity or extent of the employee's illness and thus defeat the public policy in the
protection of labor.
Facts: Private respondent Sahot started working as a truck helper for petitioner’s family-owned
trucking business in 1958. For 36 years, Sahot continuously served the trucking business of
petitioners. When Sahot was already 59 years old, he had been incurring absences because he was
suffering from various ailments. Particularly causing him pain was his left thigh which greatly
affected the performance of his task as a driver. When he inquired about his medical and retirement
benefits with the SSS, he discovered that his premium payments had not been remitted by his
employer. Sahot filed a week-long leave. He was medically examined and treated for various
ailments. On this ground, he extended his leave for a whole month. Petitioners allegedly threatened
to terminate Sahot’s employment should he refuse to go back to work. Eventually, he was dismissed
from work. He ended up sick, jobless and penniless. Sahot filed with NLRC a complaint for illegal
dismissal.
Issue: Whether or not there was valid dismissal
Ruling: No. Article 284 of the Labor Code authorizes an employer to terminate an employee on the
ground of disease. However, in order to validly terminate employment on this ground, Book VI, Rule
I, Section 8 of the Omnibus Implementing Rules of the Labor Code requires where the employee
suffers from a disease and his continued employment is prohibited by law or prejudicial to his health

32
or to the health of his co employees, the employer shall not terminate his employment unless there is
a certification by competent public health authority that the disease is of such nature or at such a
stage that it cannot be cured within a period of six (6) months even with proper medical treatment.
As ruled in Triple Eight Integrated Services, Inc. vs. NLRC, the requirement for a medical certificate
under Article 284 of the Labor Code cannot be dispensed with. Otherwise, it would sanction the
unilateral and arbitrary determination by the employer of the gravity or extent of the employee's
illness and thus defeat the public policy in the protection of labor. In the case at bar, the employer
clearly did not comply with the medical certificate requirement before Sahot's dismissal was effected.
In case of Sevillana vs. I. T. (International) Corp., the Court also ruled that since the burden of
proving the validity of the dismissal of the employee rests on the employer, the latter should likewise
bear the burden of showing that the requisites for a valid dismissal due to a disease have been
complied with. In the absence of the required certification by a competent public health authority, the
Court has ruled against the validity of the employee's dismissal.
30. Duterte vs. Kingswood Trading Co., G.R. No. 160325, October 4, 2007
Legal Doctrine: Where the employee suffers from a disease and his continued employment is
prohibited by law or prejudicial to his health or to the health of his co-employees, the employer shall
not terminate his employment unless there is a certification by a competent public health authority
that the disease is of such nature or at such a stage that it cannot be cured within a period of six (6)
months even with proper medical treatment. If the disease or ailment can be cured within the period,
the employer shall not terminate the employee but shall ask the employee to take a leave. The
employer shall reinstate such employee to his former position immediately upon the restoration of
his normal health. (Book VI, Rule 1, Sec. 8 of the Implementing Rules)
Facts: Petitioner was hired as truck/trailer driver by respondent Kingswood Trading Company, Inc.
(KTC) of which co-respondent Filemon Lim is the President. When not driving, petitioner was
assigned to clean and maintain respondent KTC’s equipment and vehicles. In 1998, petitioner had his
first heart attack and was confined for two weeks at the Philippine Heart Center (PHC). This was
confirmed by respondent KTC which admitted that the petitioner was declared on sick leave with
corresponding notification. A month later, petitioner returned to work armed with a medical
certificate signed by his attending physician at the PHC, attesting to petitioner’s fitness to work.
However, said certificate was not honored by the respondents who refused to allow the petitioner to
work. In 1999, petitioner suffered a second heart attack and was again confined at the PHC.
Petitioner attempted to report back to work but was told to look for another job because he was unfit.
Respondents refused to declare petitioner fit to work unless physically examined by the company
physician. Respondents’ promise to pay petitioner his separation pay turned out to be an empty one.
Instead, the petitioner was presented, for his signature, a document as proof of his receipt of the
amount of P14,375.00 as the first installment of his SSS benefits. Petitioner filed against his
employer a complaint for illegal dismissal and damages. The LA ruled for the petitioner in
accordance with Article 284 on Disease as ground for termination. The NLRC set aside the labor
arbiter’s decision, ruling that Article 284 of the Labor Code has no application to this case, there
being "no illegal dismissal to speak of." This was upheld the NLRC resolution.
Issue: Whether or not the termination of the petitioner was valid
Ruling: Yes. The Supreme Court ruled that the law is unequivocal. The employer, before it can
legally dismiss its employee on the ground of disease, must adduce a certification from a competent
public authority that the disease of which its employee is suffering is of such nature or at such a stage

33
that it cannot be cured within a period of six months even with proper treatment.
In the instant case, the record does not contain the required certification. And when the respondents
asked the petitioner to look for another job because he was unfit to work, such unilateral declaration,
even if backed up by the findings of its company doctors, did not meet the quantum requirement
mandated by the law, i.e., there must be a certification by a competent public authority.
The court is not unmindful of the connection between the nature of petitioner’s disease and his job as
a truck/trailer driver. It is also fully aware that petitioner’s job places at stake the safety of the public.
However, the Supreme Court does not agree with the NLRC that petitioner was validly dismissed
because his continued employment was prohibited by the basic legal mandate that reasonable
diligence must be exercised to prevent prejudice to the public, which justified respondents in
refusing work to petitioner. Petitioner could have been admitted back to work performing other tasks,
such as cleaning and maintaining respondent company’s machine and transportation assets.
VII. OTHER CAUSES OF SEVERANCE OF EMPLOYMENT RELATION
31. Cercado vs. Uniprom, Inc. G.R. No. 188154, October 13, 2010
Legal Doctrine: Acceptance by the employees of an early retirement age option must be explicit,
voluntary, free, and uncompelled. While an employer may unilaterally retire an employee earlier than
the legally permissible ages under the Labor Code, this prerogative must be exercised pursuant to a
mutually instituted early retirement plan.
Facts: Petitioner Cercado was an employee of UNIPROM Inc. for 22 years since December 1978.
She started working as a ticket seller and later on she was promoted as cashier and then as clerk
typist. Respondent came up with a retirement plan, sometime in 1980 and then amended in 2001,
which 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
amounting to P171, 982.90 but Cercado rejected the offer. UNIPROM exercised its option under the
retirement plan and decided to retire petitioner effective February 15, 2001 so she was no longer
given any work assignment after the said date. This prompted the petitioner to file 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. Respondent averred that Cercado
was automatically 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: Whether or not the petitioner was validly retired pursuant to the retirement plan
Ruling: No. Acceptance by the employees of an early retirement age option must be explicit,
voluntary, free, and uncompelled. While an employer may unilaterally retire an employee earlier than
the legally permissible ages under the Labor Code, this prerogative must be exercised pursuant to a
mutually instituted early retirement plan. In other words, only the implementation and execution of
the option may be unilateral, but not the adoption and institution of the retirement plan containing
such option. For the option to be valid, the retirement plan containing it must be voluntarily assented
to by the employees or at least by a majority of them through a bargaining representative.
The retirement plan is not part of petitioner's employment contract with respondent. It must be
underscored that petitioner was hired in 1978 or 2 years before the institution of UNIPROM's

34
retirement plan in 1980. Logically, her employment contract did not include the retirement plan,
much less the early retirement age option contained therein.
The Court also cannot subscribe to respondent's submission that petitioner's consent to the
retirement plan may be inferred from her signature in the personnel action forms containing the
phrase: "Employee hereby expressly acknowledges receipt of and undertakes to abide by the
provisions of his/her Job Description, Company Code of Conduct and such other policies, guidelines,
rules and regulations the company may prescribe."
It should be noted that the personnel action forms relate to the increase in petitioner's salary at
various periodic intervals. To conclude that her acceptance of the salary increases was also,
simultaneously, a concurrence to the retirement plan would be tantamount to compelling her to agree
to the latter. Moreover, voluntary and equivocal acceptance by an employee of an early retirement age
option in a retirement plan necessarily connotes that her consent specifically refers to the plan or that
she has at least read the same when she affixed her conformity thereto.
32. Goodyear Philippines Inc. vs. Angus, GR No. 185449, November 12, 2014
Legal Doctrine: In the absence of an express or implied prohibition against it, collection of both
retirement bene4ts and separation pay upon severance from employment is allowed. This is grounded
on the social justice policy that doubts should always be resolved in favor of labor rights.
Facts: In September 2001, she received a letter from the Company’s HR department informing her of
her termination since the company was adopting cost-saving measures which included streamlining
of its workforce. Since Angus has rendered 34.92 years of service to the Company and has reached
minimum age of 55 to qualify for early retirement, Management has granted Angus an early
retirement benefit at 47 days per year of service. Angus replied and conditionally accepted the
company’s offer and suggested that she be given a premium of additional 3 days for every year of
service which is only 6.3% or a total of 50 days as it is, she reasoned, an industry’s practice to give
premium to encourage employees to avail of the early retirement benefit. On November 2001, Angus
accepted the checks issued by the company computed at 47 days per year of service. She annotated in
the acknowledgment receipt that she received it under protest and that she will be claiming her
separation pay aside from her early retirement benefit. Ramos wrote a letter explaining that the
company has already offered her the most favorable separation benefits due to redundancy which is
47 days per year instead of 45 days. Later on, Angus finally accepted a check worth P1.9 million for
all the termination benefit and likewise executed a release and quitclaim.
Angus filed with LA for illegal dismissal with separation pay, damages, and attorney’s fees against
petitioners. The Labor Arbiter upheld the validity of Angus’ termination from employment. It
dismissed the case for lack of merit. The NLRC affirmed the Labor Arbiter’s decision. On appeal, CA
decided that Angus is entitled to both retirement benefit and separation pay in view of the absence of
any provision in the CBA prohibiting the payment of both.
Issue: Whether or not Angus is entitled to retirement benefits even though she has not reached 60
years old
Ruling: Yes. Petitioners further argue that Angus is not entitled to retirement pay because she does
not meet the requirements enumerated in the Retirement Plan provision of the CBA. The Court
disagrees. While it is obvious that Angus is not entitled to compulsory retirement as she has not yet

35
reached the age of 60, there is no denying, however, that she is qualified for early retirement. Under
the provision of the Retirement Plan of the CBA as earlier quoted, a worker who is at least 50 years
old and with at least 15 years of service, and who has been recommended by the President of the
Union for early retirement and duly approved by the Human Resources Director, shall be entitled to
lump sum retirement benefits. At the time of her termination, Angus was already 57 years of age and
had been in the service for more than 34 years. The exchange of correspondence between Angus and
Ramos also shows that the latter, as Goodyear's Human Resources Director, offered, recommended
and approved the grant of early retirement in favor of the former. Clearly, all the requirements for
Angus' availment of early retirement under the Retirement Plan of CBA were substantially complied
with. The Court also agrees with Angus that the CBA does not contain any restriction on the
availment of benefits under the company's Retirement Plan and of separation pay. In the absence of
an express or implied prohibition against it, collection of both retirement benefits and separation pay
upon severance from employment is allowed.
VIII. PRESCRIPTION OF CLAIMS
33. Degamo vs. Avant Lard Shipping Lines, G.R. No. 154460, November 22, 2005
Legal Doctrine: Article 291 provides that all money claims arising from employer-employee
relations shall be filed within three years from the time the cause of action accrued, otherwise, these
shall be forever barred.
Facts: On November 8, 1994, respondent Avantgarde Shipping Corporation, acting in behalf of its
foreign principal, respondent Sembawang Johnson Management, Pte., Ltd., hired petitioner Degamo
as Oiler of the vessel Nippon Reefer. While working in the vessel’s engine room, a spanner dropped
and hit petitioner on his right thigh. He required surgery and hospitalization. He was repatriated to
the Philippines on March 4, 1995. Petitioner was again operated and Avantgarde paid all his hospital
bills and promised to work out his sickness benefit with Sembawang as soon as he was declared fit to
work. On September 11, 1997, petitioner was declared fit to work. On December 24, 1997, petitioner
asked Avantgarde to pay his sickness benefits. On January 6, 1998, Avantgarde replied that it could
no longer act on petitioner’s claim as he had deviated from the legal procedure and, should he wish,
he could personally follow-up with Sembawang. On March 4, 1998 and May 5, 1998, petitioner
wrote a letter to Sembawang regarding his claim. Sembawang did not reply. On March 2, 2001,
petitioner lodged a complaint for payment of disability benefits and other money claims against the
respondents. The labor arbiter dismissed the case without prejudice, stating that the action had
already prescribed. On appeal, the National Labor Relations Commission (NLRC) likewise ruled that
petitioner’s cause of action had prescribed.
Petitioner, citing Article 1155 of the New Civil Code, contends that his cause of action had not
prescribed as the running of the prescriptive period was tolled by his extrajudicial demand for unpaid
sickness benefits on December 24, 1997. Respondents counter that the Civil Code provision on
extinctive prescription applies only to obligations that are intrinsically civil in nature and is
inapplicable to labor cases. Respondents assert that petitioner’s demand was made more than one
year from his date of arrival in the Philippines, contrary to what is prescribed in Section 28 of the
Philippine Overseas Employment Administration (POEA) Memorandum Circular No. 55, Series of
1996. They add that the institution of the action was beyond the three-year period prescribed in
Article 291 of the Labor Code as his employment with the respondents’ ended on March 4, 1995 but
the complaint was filed only on March 2, 2001.

36
Issue: Whether or not petitioner’s cause of action had already prescribed
Ruling: Yes. We note that POEA Circular No. 55, Series of 1996 became effective only on January 1,
1997 while the employment contract between the parties was entered earlier on November 8, 1994.
The earlier standard employment contract issued by the POEA did not have a provision on
prescription of claims. Hence, the applicable provision in this case is Article 291 of the Labor Code
which we shall now discuss. In Cadalin v. POEA’s Administrator, we held that Article 291 covers all
money claims from employer-employee relationship and is broader in scope than claims arising from
a specific law. It is not limited to money claims recoverable under the Labor Code, but applies also to
claims of overseas contract workers. Article 291 provides that all money claims arising from
employer-employee relations shall be filed within three years from the time the cause of action
accrued, otherwise, these shall be forever barred. A cause of action accrues upon the categorical
denial of claim. Petitioner’s cause of action accrued only on January 6, 1998, when Avantgarde
denied his claim and so breached its obligation to petitioner. Petitioner could not have a cause of
action prior to this because his earlier requests were warded off by indefinite promises. The
complaint filed on March 2, 2001 is beyond the three-year period mandated by the Labor Code.
34. Victory Liner vs. Race, G.R. No. 164820, March 28, 2007
Legal Doctrine: The four-year prescriptive period shall commence to run only upon the accrual of a
cause of action of the worker. It is settled that in illegal dismissal cases, the cause of action accrues
from the time the employment of the worker was unjustly terminated. Thus, the four-year
prescriptive period shall be counted and computed from the date of the employee’s dismissal up to
the date of the filing of complaint for unlawful termination of employment.
Facts: In June 1993, respondent was employed by the petitioner as a bus driver. On the night of 24
August 1994, the bus he was driving was bumped by a Dagupan-bound bus. As a consequence
thereof, respondent suffered a fractured left leg and was rushed to the Country Medical and Trauma
Center in Tarlac City where he was operated on and confined from 24 August 1994 up to 10 October
1994. One month after his release from the said hospital, the respondent was confined again for
further treatment of his fractured left leg at the Specialist Group Hospital in Dagupan City. His
confinement therein lasted a month. Petitioner shouldered the doctor’s professional fee and the
operation, medication and hospital expenses of the respondent in the aforestated hospitals. In January
1998, the respondent, still limping heavily, went to the petitioner’s office to report for work. He was,
however, informed by the petitioner that he was considered resigned from his job. Respondent
refused to accede and insisted on having a dialogue with the petitioner’s officer named Yolanda
Montes. During their meeting, Montes told him that he was deemed to have resigned from his work
and to accept a consideration of P50,000.00. Respondent rejected the explanation and offer.
Thereafter, before Christmas of 1998, he again conversed with Montes who reiterated to him that he
was regarded as resigned but raised the consideration therein to P100,000.00. Respondent rebuffed
the increased offer. On 30 June 1999, respondent, through his counsel, sent a letter to the petitioner
demanding employment-related money claims. There being no response from the petitioner, the
respondent filed before the Labor Arbiter on 1 September 1999 a complaint for (1) unfair labor
practice; (2) illegal dismissal; (3) underpayment of wages; (4) nonpayment of overtime and holiday
premium, service incentive leave pay, vacation and sick leave benefits, 13th month pay; (5)
excessive deduction of withholding tax and SSS premium; and (6) moral and exemplary damages
and attorney’s fees. In its Position Paper dated 27 March 2000, petitioner claimed that the
respondent’s cause of action against petitioner had already prescribed because when the former
instituted the aforesaid complaint on 1 September 1999, more than five years had already lapsed

37
from the accrual of his cause of action on 24 August 1994.
Issue: Whether or not the cause of action of respondent has already prescribed
Ruling: No. In illegal dismissal cases, the employee concerned is given a period of four years from
the time of his dismissal within which to institute a complaint. This is based on Article 1146 of the
New Civil Code which states that actions based upon an injury to the rights of the plaintiff must be
brought within four years. The four-year prescriptive period shall commence to run only upon the
accrual of a cause of action of the worker. It is settled that in illegal dismissal cases, the cause of
action accrues from the time the employment of the worker was unjustly terminated. Thus, the four-
year prescriptive period shall be counted and computed from the date of the employee’s dismissal up
to the date of the filing of complaint for unlawful termination of employment. Proceeding therefrom,
we shall now discuss and determine when the respondent’s cause of action accrued in order to
ascertain whether the same had already prescribed.
It is an error to conclude that the employment of the respondent was unjustly terminated on 10
November 1994 because he was, at that time, still confined at the Specialist Group Hospital,
Dagupan City, for further treatment of his fractured left leg. He must be considered as merely on sick
leave at such time. Likewise, the respondent cannot also be deemed as illegally dismissed from work
upon his release from the said hospital in December 1994 up to December 1997 since the records
show that the respondent still reported for work to the petitioner and was granted sick and disability
leave by the petitioner during the same period. The respondent must be considered as unjustly
terminated from work in January 1998 since this was the first time he was informed by the petitioner
that he was deemed resigned from his work. During that same occasion, the petitioner, in fact, tried
to convince the respondent to accept an amount of P50,000.00 as a consolation for his dismissal but
the latter rejected it. Thus, it was only at this time that the respondent’s cause of action accrued.
Consequently, the respondent’s filing of complaint for illegal dismissal on 1 September 1999 was
well within the four year prescriptive period. It is also significant to note that from 10 November
1994 up to December 1997, the petitioner never formally informed the respondent of the fact of his
dismissal either through a written notice or hearing. Indeed, it cannot be gainfully said that
respondent was unlawfully dismissed on 10 November 1994 and that the cause of action accrued on
that date.
35. J.K Mercado & Sons Agricultural Enterprises vs. Hon. Sto. Tomas, G.R. No. 158084.
August 29, 2008
Legal Doctrine: A claimant has three years to press a money claim. Once judgment is rendered in
her favor, she has five years to ask for execution of the judgment, counted from its finality. This is
consistent with the rule on statutory construction that a general provision should yield to a specific
one and with the mandate of social justice that doubts should be resolved in favor of labor.
Facts: On December 3, 1993, the Regional Tripartite Wages and Productivity Board, Region XI,
issued Wage Order No. RTWPB-XI-03, granting a COLA to covered workers. On January 28, 1994,
petitioner filed an application for exemption from the coverage of the aforesaid wage order. However,
it was denied by the regional wage board. Notwithstanding, private respondents were not given
the benefits due them under the Wage Order. On July 10, 1998, private respondents filed an Urgent
Motion for Writ of Execution, and Writ of Garnishment in the case seeking the enforcement of
subject wage order against several entities including herein petitioner. On October 7, 1998, the OIC-
Regional Director, Region XI, issued a Writ of Execution for the enforcement of the Order.

38
Petitioner filed a Motion to Quash the Writ of Execution and a Supplemental Motion to the Motion
to Quash. Petitioner argued that herein private respondents' right had already prescribed due to their
failure to move for the execution of the April 11, 1994 Order within the period provided under
Article 291 of the Labor Code, as amended, or within three (3) years from the finality of the said
order.
Issue: Whether or not the respondent’s right had already prescribed
Ruling: No. Art. 291 of the Labor Code applies to money claims in general and provides for a 3-year
prescriptive period to file them. On the other hand, respondent employees' money claims in this case
had been reduced to a judgment, in the form of a Wage Order, which has become final and executory.
The prescription applicable, therefore, is not the general one that applies to money claims, but the
specific one applying to judgments. Thus, the right to enforce the judgment, having been exercised
within five years, has not yet prescribed.
36. PLDT vs. Pingol, GR No. 182622, Sept. 8, 2010
Legal Doctrine: The prescription of an action is interrupted by (a) the filing of an action, (b) a
written extrajudicial demand by the creditor, and (c) a written acknowledgment of the debt by the
debtor.
Facts: Respondent Roberto Pingol was hired by petitioner PLDT in 1979, as a maintenance
technician. While still under the employ of PLDT, Pingol was admitted at the hospital for ―paranoid
personality disorder due to financial and marital problems. Thereafter, he reported for work after he
was discharged but frequently absented himself due to his poor mental condition. Pingol was absent
from work without official leave from September 16, 1999 to December 31, 1999. PLDT sent him
notices with a stern warning that he would be dismissed from employment if he continued to be
absent without official leave ―pursuant to PLDT Systems Practice A-007 which provides that
Absence without authorized leaves for seven (7) consecutive days is subject to termination from the
service. January 1, 2000, PLDT terminated his services on the grounds of unauthorized absences and
abandonment of office. Four years later, Pingol filed a Complaint for Constructive Dismissal and
Monetary Claims against PLDT. He alleged that he was hastily dismissed from his employment on
January 1, 2000. PLDT filed a motion to dismiss claiming that respondent’s cause of action had
already prescribed as the complaint was filed 4 years and 3 months after his dismissal.
Labor Arbiter granted petitioner‘s Motion to Dismiss on the ground of prescription. As correctly
cited by (PLDT), as ruled by the Supreme Court in the case of Callanta vs. Carnation Phils., 145
SCRA 268, the complaint for illegal dismissal must be filed within four 4 years from and after the
date of dismissal.
The NLRC reversed the LA’s resolution and favored Pingol. Case REMANDED to LA for further
proceedings.
Issue: Whether or not Pingol filed his complaint for constructive dismissal and money claims within
the prescriptive period of 4 years as provided in Article 1146 of the Civil Code and 3 years as
provided in Article 291 of the Labor Code
Ruling: No. Judicial admissions made by parties in the pleadings are conclusive and so does not
require further evidence to prove them. The Labor Code has no specific provision on when a claim

39
for illegal dismissal or a monetary claim accrues. Thus, the general law on prescription applies.
Article 1150 of the Civil Code states that the time for prescription for all kinds of actions, when there
is no special provision which ordains otherwise, shall be counted from the day they may be brought.
The day the action may be brought is the day a claim starts as a legal possibility.
In the present case, January 1, 2000 was the date that respondent Pingol was not allowed to perform
his usual and regular job as a maintenance technician. Respondent Pingol cited the same date of
dismissal in his complaint before the LA. As, thus, correctly ruled by the LA, the complaint filed had
already prescribed. The rule in this regard is covered by Article 1155 of the Civil Code. Its
applicability in labor cases was upheld in the case of International Broadcasting Corporation v.
Panganiban where it was written: Like other causes of action, the prescriptive period for money
claims is subject to interruption, and in the absence of an equivalent Labor Code provision for
determining whether the said period may be interrupted, Article 1155 of the Civil Code may be
applied.
Thus, the prescription of an action is interrupted by (a) the filing of an action, (b) a written
extrajudicial demand by the creditor, and (c) a written acknowledgment of the debt by the debtor.
Pingol never made any written extrajudicial demand. Neither did petitioner make any written
acknowledgment of its alleged obligation. Thus, the claimed ―follow-ups could not have validly
tolled the running of the prescriptive period. It is worthy to note that respondent never presented any
proof to substantiate his allegation of follow-ups. Unfortunately, respondent Pingol has no one but
himself to blame for his own predicament. By his own allegations in his complaint, he has barred his
remedy and extinguished his right of action.
37. Medline Management Inc. vs. Roslinda, GR No. 168715, Sept. 15, 2010
Legal Doctrine: The applicable provision is Article 291 of the Labor Code, it being more favorable
to the seafarers and more in accord with the State's declared policy to afford full protection to labor.
The prescriptive period in the present case is thus three years from the time the cause of action
accrues."
Facts: Petitioner Medline Management, Inc. (MMI), on behalf of its foreign principal, petitioner
Grecomar Shipping Agency (GSA), hired Juliano Roslinda (Juliano) to work on board the vessel MV
"Victory." Juliano was previously employed by the petitioners under two successive separate
employment contracts of varying durations. His latest contract was approved by the POEA for a
duration of nine months. In accordance with which, he boarded the vessel MV "Victory" on October
25, 1998 as an oiler and, after several months of extension, was discharged on January 20, 2000.
Months after his repatriation, Juliano consulted Dr. Lloren of Metropolitan Hospital. He complained
about abdominal distention which is the medical term for a patient who vomits previously ingested
foods. From March 8 to August 24, 2000, Juliano has undergone Hemodialysis, a method of
removing waste products such as creatinine and urea, as well as freeing water from the blood, when
the kidneys are in renal failure. On August 27, 2001, Juliano died. On September 4, 2003, his wife
Gliceria Roslinda and son Ariel Roslinda, respondents herein, filed a complaint against MMI and
GSA for payment of death compensation, reimbursement of medical expenses, damages, and
attorney's fees before the Labor Arbitration Branch of the NLRC. Instead of filing an answer, they
filed a Motion to Dismiss on the grounds of prescription, lack of jurisdiction and prematurity.
Petitioners contended that the action has already prescribed because it was filed three years, seven
months and 22 days from the time the deceased seafarer reached the point of hire.

40
Issue: Whether or not the claim is not yet barred by prescription despite the fact that it was filed
beyond the one-year prescriptive period provided by the POEA Standard Employment Contract
Ruling: Yes. The employment contract signed by Juliano stated that "Upon approval, the same shall
be deemed an integral part of the Standard Employment Contract (SEC) for seafarers." Section 28 of
the POEA SEC states:
SECTION 28. JURISDICTION Recognizing the peculiar nature of overseas shipboard employment,
the employer and the seafarer agree that all claims arising from this contract shall be made within
one (1) year from the date of the seafarer's return to the point of hire.
On the other hand, the Labor Code states:
ART. 291.Money claims. — All money claims arising from employer-employee relations accruing
during the effectivity of this Code shall be filed within three (3) years from the time the cause of
action accrued; otherwise they shall forever be barred.
In Southeastern Shipping v. Navarra, Jr., we ruled that "Article 291 is the law governing the
prescription of money claims of seafarers, a class of overseas contract workers. This law prevails
over Section 28 of the Standard Employment Contract for Seafarers which provides for claims to be
brought only within one year from the date of the seafarer's return to the point of hire." We further
declared that "for the guidance of all, Section 28 of the Standard Employment Contract for Seafarers,
insofar as it limits the prescriptive period within which the seafarers may file their money claims, is
hereby declared null and void. The applicable provision is Article 291 of the Labor Code, it being
more favorable to the seafarers and more in accord with the State's declared policy to afford full
protection to labor. The prescriptive period in the present case is thus three years from the time the
cause of action accrues."
In the present case, the cause of action accrued on August 27, 2001 when Juliano died. Hence, the
claim has not yet prescribed, since the complaint was filed with the arbitration branch of the NLRC
on September 4, 2003.
IX. JURISDICTION OF THE LABOR ARBITER
38. Yusen Air & Sea Service Phils vs. Villamor, G.R. No. 154942, August 16, 2005
Legal Doctrine: Jurisprudence has evolved the rule that claims for damages under paragraph 4 of
Article 217, to be cognizable by the Labor Arbiter, must have a reasonable causal connection with
any of the claims provided for in that article. Only if there is such a connection with the other claims
can a claim for damages be considered as arising from employer-employee relations.
Facts: Petitioner is a corporation engaged in the business of freight forwarding. It is contracted by

clients to pick-up, unpack, consolidate, deliver, transport and distribute all kinds of cargoes or freight.
Petitioner hired respondent as branch manager in its Cebu Office. Later, petitioner reclassified
respondent’s position as Division Manager, which position held by the respondent until his
resignation. Immediately after his resignation, respondent started working for Aspac International, a
corporation engaged in teh same line of business as that of petitioner. Petitioner filed against
respondent a complaint for injunction and damages with prayer for a temporary restraining order in
the RTC. The complaint alleged that the respondent signed an undertaking which provides that no

41
employee may engage in any business or undertaking that is directly or indirectly in competition
with that of the company which is prejudicial to the interests of the company or to the performance
of his/her job or work. This provision will be implemented for a period of 2 years from the date of an
employee’s resignation, termination or separation from the company. Petitioner alleged that
respondent’s employment with Aspac International is a clear violation and breach of his undertaking
and agreement with the policies of petitioner.
Respondent filed against petitioner a case for illegal dismissal before the NLRC. Instead of filing his
answer in the civil case, respondent filed a Motion to Dismiss, arguing that the RTC has no
jurisdiction over the subject matter of the said case because an employer-employee relationship is
involved. The RTC dismissed the petitiner’s complaint for lack of jurisdiction over the subject matter
on the ground that the action was for damages arising from employer-employee relations. Citing
Art.217 of the Labor Code, the trial court ruled that it is the labor arbiter which had jurisdiction over
the complaint.
Issue:Whether or not the labor arbiter has jurisdiction over the complaint
Ruling: No. Jurisprudence has evolved the rule that claims for damages under paragraph 4 of Article
217, to be cognizable by the Labor Arbiter, must have a reasonable causal connection with any of the
claims provided for in that article. Only if there is such a connection with the other claims can a
claim for damages be considered as arising from employer-employee relations. Here, the cause of
action is based on a quasi-delict or tort, which has no reasonable causal connection with any of the
claims provided for in Article 217, jurisdiction over the action is with the regular courts. As it is,
petitioner does not ask for any relief under the Labor Code. It merely seeks to recover damages based
on the parties' contract of employment as redress for respondent's breach thereof. Such cause of
action is within the realm of Civil Law, and jurisdiction over the controversy belongs to the regular
courts. More so must this be in the present case, what with the reality that the stipulation refers to the
post-employment relations of the parties.
39. Atty Garcia vs. Eastern Telecommunications Phils., et al., GR No. 173115 & 173163-64,
April 16, 2009
Legal Doctrine: In a long line of cases, SC has decreed that a corporate officer's dismissal or
removal is always a corporate act and/or an intra-corporate controversy, over which the Securities
and Exchange Commission [SEC] (now the Regional Trial Court) has original and exclusive
jurisdiction.
Facts: Atty. Garcia was the Vice President and Head of Business Support Services and Human
Resource Departments of the Eastern Telecommunications Philippines, Inc. (ETPI). ETPI is a
corporation duly organized and existing under the laws of the Republic of the Philippines. Atty.
Salvador C. Hizon is the President/Chief Executive Officer of ETPI. Atty. Garcia was placed under
preventive suspension based on three complaints for sexual harassment. By reason of said
complaints, Atty. Garcia was placed in preventive suspension. Atty. Hizon advised Atty. Garcia that
his employment with ETPI was, per recommendation of the Committee, terminated effective 16
April 2000.

42
A complaint-affidavit for illegal dismissal was filed by Atty. Garcia against ETPI and Atty. Hizon.
The case was assigned to Labor Arbiter Libo-on. Atty. Garcia filed a Motion to Inhibit, praying that
Labor Arbiter Libo-on inhibit himself from further proceeding with the case, on the ground that he
was a fraternity brother of Atty. Hizon. The NLRC set aside the order of Labor Arbiter Libo-on and
ordered the re-raffling of the case and was re-raffled to Labor Arbiter Ramon Valentin C. Reyes.
Then, ETPI and Atty. Hizon filed a Reply Memorandum, raising for the first time the issue of lack of
jurisdiction. In September 2002, Labor Arbiter Reyes found the preventive suspension and
subsequent dismissal of Atty. Garcia illegal. The NLRC rendered its decision in NLRC NCR CA
Case No. 028901-01 reversing the decision of Labor Arbiter Reyes and dismissing the case for lack
of jurisdiction. The Commission ruled that the dismissal of Atty. Garcia, being ETPI’s Vice President,
partook of the nature of an intra-corporate dispute cognizable by Regional Trial Courts and not by
Labor Arbiters. It added that ETPI and Atty. Hizon was not barred by estoppel from challenging the
jurisdiction of the Labor Arbiter over the instant case.
Issue: Whether or not the question of legality or illegality of the removal or termination of
employment of an officer of a corporation is an intra-corporate controversy that falls under the
exclusive jurisdiction of the RTC
Ruling: Yes. In a long line of cases, SC has decreed that a corporate officer's dismissal or removal
is always a corporate act and/or an intra-corporate controversy, over which the Securities and
Exchange Commission [SEC] (now the Regional Trial Court) has original and exclusive jurisdiction.
Atty. Garcia's ouster as Vice-President, who is a corporate officer of ETPI, partakes of the nature of
an intra corporate controversy, jurisdiction over which is vested in the SEC (now the RTC). The
Labor Arbiter thus erred in assuming jurisdiction over the case filed by Atty. Garcia, because he had
no jurisdiction over the subject matter of the controversy.
40. Okol vs. Slimmer’s World International, et al., G.R. No. 160146, December 11, 2009
Legal Doctrine: The question of remuneration involving a stockholder and officer, not a mere
employee, is not a simple labor problem but a matter that comes within the area of corporate affairs
and management and is a corporate controversy in contemplation of the Corporation Code.
Moreover, under RA 8799 or the Securities Regulation Code, intra-corporate disputes fall within the
jurisdiction of the appropriate Regional Trial Court
Facts: Okol, Director and Vice President of Slimmer’s World (Slimmers for brevity) was dismissed
from service. But before such dismissal, she was preventively suspended due to undervalued
equipments placed under her name. She was required by Slimmers to explain, but it was found
unsatisfactory, hence, her dismissal. So, Okol filed a complaint for illegal suspension, illegal
dismissal, unpaid commissions, reinstatement and back wages before the Arbitration Branch of the
NLRC against Slimmers. Later, the labor arbiter ruled that Okol was the vice-president of Slimmers
World at the time of her dismissal. Since it involved a corporate officer, the dispute was an intra-
corporate controversy falling outside the jurisdiction of the Arbitration branch.
Issue: Whether or not the NLRC has jurisdiction over the case
Ruling: No, being a corporate officer, the charges of illegal suspension, illegal dismissal, unpaid

43
commissions, reinstatement and back wages imputed against Slimmers fall squarely within the ambit
of intra-corporate disputes. A corporate officer's dismissal is always a corporate act, or an intra-
corporate controversy which arises between a stockholder and a corporation. The question of
remuneration involving a stockholder and officer, not a mere employee, is not a simple labor
problem but a matter that comes within the area of corporate affairs and management and is a
corporate controversy in contemplation of the Corporation Code. Moreover, under RA 8799 or the
Securities Regulation Code, intra-corporate disputes fall within the jurisdiction of the appropriate
Regional Trial Court. In this case, NLRC does not have jurisdiction over an intra-corporate dispute
between Okol, a corporate officer, and Slimmers World, a corporation.
41. Portillo vs. Rudolf Lietz, Inc. et al., G.R. No. 196539, October 10, 2012
Legal Doctrine: The primary relief sought is for liquidated damages for breach of a contractual
obligation. The other items demanded are not labor benefits demanded by workers generally taken
cognizance of in labor disputes, such as payment of wages, overtime compensation or separation pay.
The items claimed are the natural consequences flowing from breach of an obligation, intrinsically a
civil dispute. |||
Facts: Potillo was hired in Lietz Co. under the condition that Potillo will not engage in any other
gainful employment by himself or with any other company either directly or indirectly without
written consent of Lietz Inc., otherwise Potillo will be liable for liquidated damages. Upon his
promotion, Potillo signed another letter agreement containing a “Goodwill Clause” stating that:
“…on the termination of his employment and for a period of three (3) years thereafter, he shall not
engage directly or indirectly as employee, manager, proprietor, or solicitor for himself or others in a
similar or competitive business or the same character of work which he was employed by Lietz Inc.
to do and perform. Should he breach this good will clause of this Contract, he shall pay Lietz Inc. as
liquidated damages the amount of 100% of his gross compensation over the last 12 months.”
Three (3) years, Portillo resigned from Lietz Inc. During her exit interview, Portillo declared that she
intended to engage in business rice dealership, selling rice in wholesale. Lietz Inc. accepted Portillos
resignation and reminded her of the "GoodwillClause" in the last letter agreement she had signed.
Subsequently, Lietz Inc. learned that Portillo had been hired by Ed Keller Philippines, Limited to
head its Pharma Raw Material Department. Ed Keller Limited is purportedly a direct competitor of
Lietz Inc.
Meanwhile, Portillos demands from Lietz Inc. for the payment of her remaining salaries and
commissions went unheeded. Lietz Inc. gave Portillo the run around, on the pretext that her salaries
and commissions were still being computed.
Subsequently, Portillo filed a complaint with the National Labor Relations Commission (NLRC) for
non-payment of 1 months salary, two (2) months commission, 13th month pay, plus moral,
exemplary and actual damages and attorneys fees.
In its position paper, Lietz Inc. admitted liability for Portillos money claims in the total amount of

44
P110,662.16. However, Lietz Inc. raised the defense of legal compensation: Portillo's money claims
should be offset against her liability to Lietz Inc. for liquidated damages for Portillos alleged breach
of the "Goodwill Clause" in the employment contract when she became employed with Ed Keller
Philippines, Limited.
Issue: Whether or not NLRC has jurisdiction over the case
Ruling: No. Not all disputes between an employer and his employee(s) fall within the jurisdiction of
the labor tribunals. The Court differentiated between abandonment per se and the manner and
consequent effects of such abandonment and ruled that the first, is a labor case, while the second, is a
civil law case.
Upon the facts and issues involved, jurisdiction over the present controversy must be held to belong
to the civil Courts. While seemingly 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, coupled with the further averment 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.
Clearly, the complaint was anchored not on the abandonment per se 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.
X. 2011 NLRC RULES OF PROCEDURE
42. Calleon vs. HZSC Realty Corp., G.R. No. 228572, January 27, 2020
Legal Doctrine: Section 2, Rule 13 of the Rules of Court (Rules) provides that "[i]f any party has
appeared by counsel, service upon him shall be made upon his counsel or one of them, unless service
upon the party himself is ordered by the court." Thus, even if a party represented by counsel has been
actually notified, said notice is not
considered notice in law.
Facts: Respondents filed complaints for illegal (constructive) dismissal, non-payment of salary, 13th
month pay, and separation pay, as well as payment of moral and exemplary damages and attorney's
fees against HZSC and CAlleon. The complaints were due to HZSC's failure to rehire them after
more than six (6) months from the temporary shutdown of its business operation due to business
losses on January 23, 2015. The LA declared HZSC and petitioner guilty of illegal (constructive)
dismissal. Petitioner appeal to the NLRC was dismissed and denied their motions for reconsideration
as well. Petitioner filed a petition for certiorati before the CA which was dismissed the petition for

45
failure to comply with the required contents thereof, and the documents which should accompany it.
CA denied the motion for reconsideration for having been belatedly filed. Hence, this petition
claiming that petitioner's counsel, Atty. Ariel C. Santos (Atty. Santos), received notice of the
September 23, 2016 Resolution on October 17, 2016, and as such, the motion for reconsideration
was timely filed.
Issue: Whether or not the motion for reconsideration should be dismissed for having been belatedly
filed
Ruling: No. Section 2, Rule 13 of the Rules of Court (Rules) provides that "if any party has
appeared by counsel, service upon him shall be made upon his counsel or one of them, unless service
upon the party himself is ordered by the court." Thus, even if a party represented by counsel has been
actually notified, said notice is not
considered notice in law. "The reason is simple — the parties, generally, have no formal education or
knowledge of the rules of procedure, specifically, the mechanics of an appeal or availment of legal
remedies; thus, they may also be unaware of the rights and duties of a litigant relative to the receipt
of a decision. More importantly, it is best for the courts to deal only with one person in the interest of
orderly procedure — either the lawyer retained by the party or the party him/herself if [he/she] does
not intend to hire a lawyer."
In the case at bar, a copy of the September 23, 2016 Resolution was sent to Atty. Santos at his
registered address in Meycauayan, Bulacan through registered Letter No. BDN-2291. On November
8, 2016, the CA sent a tracer to the Postmaster of Meycauayan, Bulacan directing him to inform the
court of the exact date when the said letter was delivered to and received by the addressee. However,
prior to the receipt of the Postmaster's reply, the CA already issued its assailed November 28, 2016
Resolution denying petitioner's motion for reconsideration for having been belatedly filed,
apparently reckoning the same from petitioner's receipt of his personal notice of the September 23,
2016 Resolution on October 5, 2016.
On December 2, 2016, the CA received the Postmaster's reply to tracer informing the court that Atty.
Santos received registered Letter No. BDN-2291 on October 11, 2016. Consequently, petitioner had
fifteen (15) days from such receipt, 31 or until October 26, 2016, within which to file his motion for
reconsideration. Thus, petitioner's motion for reconsideration was timely filed, contrary to the ruling
of the CA.
XI. RIGHT TO SELF-ORGANIZATION
43. Hijo Resources Corp. Vs. Mejares, G.R. No. 208986, January 13, 2016
Legal Doctrine: To dismiss the illegal dismissal case filed before the Labor Arbiter on the basis of
the pronouncement of the Med Arbiter in the certification election case that there was no employer-
employee relationship between the parties, which the respondent union could not even appeal to the
DOLE Secretary because of the dismissal of its members, would be tantamount to denying due
process to the complainants in the illegal dismissal case.
Facts: Respondents were among the complainants, represented by their labor union named
"Nagkahiusang Mamumuo ng Bit, Djevon, at Raquilla Farms sa Hijo Resources Corporation"
(NAMABDJERA-HRC), who filed with the NLRC an illegal dismissal case against petitioner.

46
Complainants alleged that HRC, formerly known as HPI, is the owner of agricultural lands which
were planted primarily with Cavendish bananas. In 2000, HPI was renamed as HRC. In 2003, HRC’s
application for the conversion of its agricultural lands into agri-industrial use was approved.
Complainants claimed that they were employed by HPI as farm worksers in its plantations occupying
various positions. In 2001, complainants were absorbed by HRC, but they were working under the
contractor-growers. In 2007, complainants formed their union which was registered with the DOLE.
When HRC learned about the formation of the union, the three contractor growers filed with the
DOLE a notice of cessation of business operations. Complainants were terminated from their
employment on the said ground. Complainants, represented by their union, filed a case for unfair
labor practices, illegal dismissal, and illegal deductions with prayer for moral and exemplary
damages and attorney's fees before the NLRC.
Issue: Whether or not the ruling in a certification election case on the existence or non-existence of
an employer-employee relationship operates as res judicata in the illegal dismissal case filed before
the NLRC
Ruling: No. The purpose of a petition for certification election is to determine which organization
will represent the employees in their collective bargaining with the employer. The respondent union,
without its member-employees, was thus stripped of its personality to challenge the Med-Arbiter's
decision in the certification election case. Thus, the members of the respondent union were left with
no option but to pursue their illegal dismissal case filed before the Labor Arbiter. To dismiss the
illegal dismissal case filed before the Labor Arbiter on the basis of the pronouncement of the Med
Arbiter in the certification election case that there was no employer-employee relationship between
the parties, which the respondent union could not even appeal to the DOLE Secretary because of the
dismissal of its members, would be tantamount to denying due process to the complainants in the
illegal dismissal case.
44. Societe Internationale de Telecommunications vs. Huliganga, GR No. 215504, August 20,
2018
Legal Doctrine: Under Article 245 of the Labor Code, managerial employees are not eligible to join,
assist or form any labor organization. To be entitled to the benefits under the CBA, the employees
must be members of the bargaining unit, but not necessarily of the labor organization designated as
the bargaining agent.
Facts: Huliganga was was hired by SITA as Technical Assistant to the Representative-Manager.
Eventually, he became the Country Operating Officer, the highest accountable officer of SITA in the
Philippines and his current position at the time of his retirement. He received his retirement benefits
and other benefits. However, Huliganga filed a Complaint against SITA, SITA, INC. an EQUANT
for unfair labor practices, underpayment of salary/wages, moral and exemplary damages, attorney’s
fees, underpayment of sick and vacation leave and retirement benefits. Huliganga alleged, among
others that the coefficient/payment factor that applies to him should be 2 months and not 1.5 months
for every year of service in accordance with the 2005-2010 CBA. Petitioners counter-argued that
Huliganga has already received from SITA the full amount of his retirement and other monetary
benefits. Thus, his claim for any supposed deficiency has simply no basis.
The LA dismissed the complaint against SITA for lack of merit for lack of employer-employee
relationship between the parties.The NLRC affirmed the decision of the LA. CA partly granted the
petition of Huliganga in ruling that he was able to prove that the new and/or additional economic

47
benefits arising from the CBA as amendments to the Employee Regulations Manual has ripened into
a company practice. However, CA held that Huliganga is not entitled to salaries and emoluments
from SITA, INC. And EQUANT.
Issue: Whether or not Huliganga, a managerial employee, is entitled to retirement benefits

exclusively granted to the rank-and-file employees under the CBA
Ruling: No. It is an indisputable fact that Huliganga was a managerial employee of SITA and, as
such, he is not entitled to retirement benefits exclusively granted to the rank-and-file employees
under the CBA. It must be remembered that under Article 245 of the Labor Code, managerial
employees are not eligible to join, assist or form any labor organization. To be entitled to the benefits
under the CBA, the employees must be members of the bargaining unit, but not necessarily of the
labor organization designated as the bargaining agent. Huliganga, also failed to substantially
establish that there is an established company practice of extending CBA concessions to managerial
employees. Again, to be considered a company practice or policy, the act of extending beneEts of the
CBA to managerial employees must have been practiced for a long period of time and must be
shown to be consistent and deliberate.
XII. RIGHTS OF LEGITIMATE LABOR ORGANIZATION
45. SONEDCO Workers free Labor Union et al., vs. Universal Robina Corp., GR No. 220383,
October 5, 2016 Main & July 5, 2017 Resolution
Legal Doctrine: Generally, a wage increase not included in the Collective Bargaining Agreement is
not demandable. However, if it was withheld by the employer as part of its unfair labor practice
against the union members, this benefit should be granted.
Facts: In 2007, while there was no CBA in effect, SONEDCO offered, among other benefits, a
P16/day wage increase to their employee. But in return, employees had to sign a waiver which
provides that if a subsequent CBA is negotiated between Management and Union, the new CBA shall
only be effective on January 1, 2008. Some of members of SONEDCO Workers Free Labor Union
refused to sign. This arrangement was offered in 2008. Several members of the union did not receive
the wage increase which amounted to P32/day, beginning 2009 because of their refusal to waive their
rights. In 2009, these members of the union filed a complaint for unfair labor practices against
SONEDCO on the ground that the requirement of a waiver prior to the release of the wage increase
constituted interference to the employee’s right to self organization, collective bargaining and
concerted action.
Both NLRC and CA found SONEDCO not guilty of unfair labor practice. While SC found
SONEDCO guilty of unfair labor practice for failing to bargain with the Union in good faith. Thus,
the Court ordered SONEDCO to grant the union members the 2007 and 2008 wage increases but
denied the claim for the 2009 wage increase and ruled that if SONEDCO Workers Free Labor Union
wished to continue receiving the additional wage after 2008, the proper recourse was to include it in
the 2009 Collective Bargaining Agreement. SONEDCO filed a Motion for Reconsideration assailing
the said Decision while petitioners filed a Motion for Partial Reconsideration
Issue: Whether or not whether a P32.00/day wage increase beginning January 1, 2009 to present
should be awarded to petitioners

48
Ruling: Yes. Generally, the Collective Bargaining Agreement controls the relationship between the
parties. Any benefit not included in it is not demandable. However, in light of the peculiar
circumstances in this case, the requested wage increase should be granted.
The wage increase was integrated in the salary of those who signed the waivers. When the affiants
waived their rights, respondent rewarded them with a P32.00/day wage increase that continues to this
day. The respondent company granted this beneAt to its employees to induce them to waive their
collective bargaining rights. This Court has declared this an unfair labor practice. Accordingly, it is
illegal to continue denying the petitioners the wage increase that was granted to employees who
signed the waivers. To rule otherwise will perpetuate the discrimination against petitioners. All the
consequences of the unfair labor practice must be addressed. The grant of the P32.00/day wage
increase is not an additional benefit outside the Collective Bargaining Agreement of 2009. By
granting this increase to petitioners, the Court is eliminating the discrimination against them, which
was a result of respondent's unfair labor practice.
XIII. UNFAIR LABOR PRACTICE
46. San Miguel Foods Inc., vs. San Miguel Corp Employees Union-PTGWO,
G.R. No. 168569, October 5, 2007
Legal Doctrine: ULP case to be cognizable by the Labor Arbiter, and the NLRC to exercise its
appellate jurisdiction, the allegations in the complaint should show prima facie the concurrence of
two things, namely: (1) gross violation of the CBA; AND (2) the violation pertains to the economic
provisions of the CBA.
Facts: San Miguel Corporation Employees Union — PTWGO (the Union), was the sole bargaining
agent of all the monthly paid employees of petitioner SMFI. Some employees of SMFI’s Finance
Department, through the Union brought a grievance against Finance Manager Montesa for unfair
labor practices before SMFI Plant Operations Manager Nava in accordance with Step 1 of the
grievance machinery adopted in the CBA. The Union sought the review, evaluation and upgrading of
all Finance staff and the promotion of Montesa to other SMC affiliates and subsidiaries. At the
grievance meeting, SMFI informed the Union that it planned to address the grievance through a
“work management review” and asked for the attention and cooperaton of finance personnel.
However, the “work management review” was not completed on the promised date which prompted
the Union to elevate the grievance to Step 2. Almost 9 months after the grievance meeting, SMFI
rendered a decision of Step 1 Grievance stating that it was still in the process of completing the
“ work management review” thus, the request could not be granted. The Union filed a complaint
before the NLRC against SMFI for unlabor practice praying that petitioner be ordered to promote the
named employees. Instead of filing a position paper as required by the Labor Arbiter, SMFI filed a
motion to dismiss alleging that the issues raised were grievance issues and therefore must be resolve
in the grievance machinery provided in the CBA of the parties or in the mandated provision of
voluntary arbitration which is also provided in the CBA. The Union opposed the motion to dismiss.
Issue: Whether or not the Labor Arbiter has jurisdiction over the case
Ruling: Yes. On the questioned promotions, the Union did not allege that they were done to
encourage or discourage membership in a labor organization. In fact, those promoted were members
of the complaining Union. The promotions do not thus amount to ULP under Article 248 (e) of the

49
Labor Code. As for the alleged ULP committed under Article 248 (i), for violation of a CBA, this
Article is qualified by Article 261 of the Labor Code. In Silva v. NLRC instructs that for a ULP case
to be cognizable by the Labor Arbiter, and the NLRC to exercise its appellate jurisdiction, the
allegations in the complaint should show prima facie the concurrence of two things, namely: (1)
gross violation of the CBA; AND (2) the violation pertains to the economic provisions of the CBA.
As reflected in the above-quoted allegations of the Union in its Position Paper, the Union charges
SMFI to have violated the grievance machinery provision in the CBA. The grievance machinery
provision in the CBA is not an economic provision, however, hence, the second requirement for a
Labor Arbiter to exercise jurisdiction of a ULP is not present. However, the Union also charges
SMFI to have promoted less senior employees, thus bypassing others who were more senior and
equally or more qualified. It may not be seriously disputed that this charge is a gross or flagrant
violation of the seniority rule under the CBA, a ULP over which the Labor Arbiter has jurisdiction.
47. General Santos Coca-Cola Plant Free Workers Union-TUPAS vs. CCBPI (Gen. Santos City)
et al., G.R. No. 178647, Feb. 13, 2009
Legal Doctrine: 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, even if unfair, are not unfair labor practices.
Facts: Due to the Asian economic crisis in the late 1990s, CCBPI experienced a significant decline
in profitability. To curb the negative effects on the company, it implemented 3 waives of an Early
Retirement Program. Meanwhile, there was an inter-office memorandum sent to all of CCBPI’s Plant
Human Resources Managers/Personnel Officers, including those of the CCBPI Gen San mandating
them to put on hold all requests for hiring to fill in vacancies in both regular and temporaty positions
in the Head Office and the Plants. Several employees availed of the early retirement programs. Thus,
there were vacancies in some departments including the production department of CCBPI Gen San,
where members of petitioner Union worked. This prompted petitioner to negotiate with the Labor
Management Committee for filling up vacancies with permanent employees but no resolution was
reached on the matter. Faced with the “freeze hiring” directive, CCBPI Gen San engaged the services
of JLBP, a company in the business of providing labor and manpower services, including janitorial
services, messengers, and office workers to various private and government offices.
Petitioner filed with the NCMB a Notice of Strike on the ground of alleged unfair labor practice
committed by CCBPI Gen San for contracting-out services regularly performed by union members
(“union busting”). The parties failed to come to an amicable settlement after conciliation and
mediation proceeding before the NCMB. Hence, CCBPI filed a Petition for Assumption of
Jurisdiction with the Office of the Secretary of Labor and Employment. The Secretary of Labor
issued an Order enjoining the threatened strike and certifying the dispute to the NLRC for
compulsory arbitration.
NLRC ruled that CCBPI was not guilty of unfair labor practice, anchoring the ruling on the validity
of the GTM system implemented by the company, which called for reconstructing its selling and
distribution system, leading to the closure of certain sales offices and the elimination of conventional
sales routes. Petitioner filed a motion for reconsideration but it was denied. CA upheld the NLRC’s
finding and also denied the motion for reconsideration by the petitioner.
Issue: Whether or not CCBPI’s contracting-out of jobs to JLBP amounted to unfair labor practice

50
Ruling: No. The company's action to contract-out the services and functions performed by Union
members did not constitute unfair labor practice as this was not directed at the members' right to self
organization. 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, even if unfair, are not unfair labor practices. Petitioner was unable to
prove its charge of unfair labor practice. It was the Union that had the burden of adducing substantial
evidence to support its allegations of unfair labor practice, which burden it failed to discharge.
48. Park Hotel et al., vs. Soriano et al., G.R. No. 17118, September 10, 2012
Legal Doctrine: In order to show that the employer committed unfair labor practice under the Labor
Code, substantial evidence is required to support the claim. Substantial evidence has been defined as
such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.
Facts: Soriano was hired by Park Hotel as Maintenance Electrician in 1990 then transferred to
Burgos, a sister company of Park Hotel, in 1992. Gonzales was employed by Burgos as Doorman
and later promoted as Supervisor while Badilla was a bartender of J’s Playhouse operated by Burgos.
In 1997, Soriano, Gonzales and Badilla were dismissed from work for allegedly stealing company
properties. Consequently, respondents filed complaintss for illegal dismissal, unfair labor practice
and payment of moral and exemplary damages and attorney’s fees, before the LA. Respondents
alleged that the real reason for their dismissal was that they were organizing a union for the
company’s employees. But petitioner alleged that aside from the charge of theft, Soriano and
Gonzales have violated various company rules and regulations contained in several memoranda
issued to them. After dismissing respondents, Burgos filed a case for qualified theft against Soriano
and Gonzales but the case dismissed for insufficiency of evidence.
The LA found that respondents were illegally dismissed because the alleged violations they were
charged with were not reduced in writing and were not made known to them, thus, denying them
due process. The NLRC remanded the case to the arbitration branch of origin for further proceedings.
The LA rendered a new decision which ordered petitioner, among others, to cease and desist from
committing unfair labor practice against the complainant. Upon petitioner’s appeal, the NLRC
affirmed the LA’s decision and denied the motion for reconsideration. CA ruled that petitioners failed
to observe the mandatory requirements provided by law in the conduct of terminating respondents
and also found that petitioner’s primary objective in terminating respondent’s employment was to
suppress their right to self-organization. The motion for Reconsideration was also denied.
Issue: Whether or not Park Hotel can be held solidary liable with Burgos for the illegal dismissal and
unfair labor practice
Ruling: No. Anent the unfair labor practice, Article 248 (a) of the Labor Code 27 considers it an
unfair labor practice when an employer interferes, restrains or coerces employees in the exercise of
their right to self-organization or the right to form an association. In order to show that the employer
committed unfair labor practice under the Labor Code, substantial evidence is required to support the
claim. Substantial evidence has been defined as such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion. In the case at bar, respondents were indeed
unceremoniously dismissed from work by reason of their intent to form and organize a union.

51
As to whether Park Hotel may be held solidarily liable with Burgos, the Court ruled that before a
corporation can be held accountable for the corporate liabilities of another, the veil of corporate
fiction must first be pierced. Thus, before Park Hotel can be held answerable for the obligations of
Burgos to its employees, it must be sufficiently established that the two companies are actually a
single corporate entity, such that the liability of one is the liability of the other. In the case at bar,
respondents utterly failed to prove by competent evidence that Park Hotel was a mere instrumentality,
agency, conduit or adjunct of Burgos, or that its separate corporate veil had been used to cover any
fraud or illegality committed by Burgos against the respondents. Accordingly, Park Hotel and Burgos
cannot be considered as one and the same entity, and Park Hotel cannot be held solidary liable with
Burgos.
XIV. REVISED GUIDELINES OF THE NCMB FOR THE CONDUCT OF VOLUNTARY

ARBITRATION PROCEEDINGS
49. Navarro III vs. Damasco, 246 SCRA 260 [1995]
Legal Doctrine: What are subject of the grievance procedure for adjustment and resolution are
grievances arising from the interpretation or implementation of the collective bargaining agreement.
Facts: Navarro was employed as typist of private respondent on its plant. He visited Baylas, a co-
employee at the ladies’ dormitory inside the compound of private respondent. While he was there,
Baylas avoided him. But Navarro followed Baylas and pulled her towards him. This caused her to
fall on the floor. Navarro then placed himself on top of her. Baylas resisted but failed to free herself.
Armada, the dormitory housekeeper, responded to Bayla’s shouts for help and saw petitioner
embracing and kissing Baylas. Armada asked some help and it was Subong who was able to free
Baylas from Navarro. Petitioner was informed of the complaint against him and was placed under
preventive suspension. Densing, Jr. Who investigated the incident recommended on his report that
the maximum penalty be meted out against petitioner. Thus, petitioner was dismissed from the
service for violation for par.3.B (Conduct and Behaviour) of the Code of Employee Discipline. The
President of the Union, in behalf of petitioner and Javier, Personnel Officer of private respondent
agreed to submit the case of petitioner to voluntary arbitration. Petitioner contends that the grievance
procedure provided for in the Collective Bargaining Agreement was not followed; hence, the
Voluntary Arbitrator exceeded his authority when he took cognizance of the labor case.
Issue: Whether or not the grievance procedure provided for in the CBA should be followed
Ruling: No. The instant case is not a grievance that must be submitted to the grievance machinery.
What are subject of the grievance procedure for adjustment and resolution are grievances arising
from the interpretation or implementation of the collective bargaining agreement. The acts of
petitioner involved a violation of the Code of Employee Discipline, particularly the provision
penalizing the immoral conduct of employees. Consequently, there was no justification for petitioner
to invoke the grievance machinery provisions of the Collective Bargaining Agreement. The case of
petitioner was submitted to voluntary arbitration by agreement of the president of the labor union to
which petitioner belongs, and his employer, through its personnel officer. Petitioner himself
voluntarily submitted to the jurisdiction of the Voluntary Arbitrator when he, through his counsel,
filed his position paper with the Voluntary Arbitrator and even submitted additional documentary
evidence. In addition thereto, during the initial conference on March 27, 1991, the parties manifested
that they were not questioning the authority of the Voluntary Arbitrator.

52
50. Suelo Jr vs. MST Marine Services (Phils) Inc., et al., GR. No. 252914, November 9, 2020
Legal Doctrine: In the recent case of Chin v. Maersk-Filipinas Crewing, Inc., (Chin) citing Guagua
National Colleges v. CA, (Guagua National Colleges) the Court categorically declared that the
correct period to appeal the decision or award of the Voluntary Arbitrators or Panel of Arbitrators to
the CA via a Rule 43 petition for review is the fifteen (15)-day period set forth in Section 4 thereof
reckoned from the notice or receipt of the VA's resolution on the motion for reconsideration, and that
the ten (10)-day period provided in Article 276 of the Labor Code refers to the period within which
an aggrieved party may file said motion for reconsideration,
Facts: Petitioner was hired by MST Marine Services as Second Engineer for 6-month contract on
board the vessel “Janesia Asphalt V”. Petitioner was brought to Singapore General Hospital due to
severe headache, slurring of speech, neck pain and a recent history of loss of consciousness. He was
diagnosed with uncontrolled hypertension. Subsequently, he was given medication, declared unfit for
all marin duties and signed off in Singapore on medical grounds. He went back in the Philippines and
flew to his hometown in Iloilo. When petitioner reported to respondent’s branch office in Iloilo, he
alleged that respondent did not allow him to report to its Manila office and refuse to refer him to a
company-designated physician. Instead, respondent allegedly asked him to seek medical treatment
subject to reimbursement. However, when he submitted his request for reimbursement, respondent
allegedly denied the same. Thus, petitioner filed a complaint for permanent and total disability
benefits, damages and atttorney’s fees before the NCMB. Respondent argued that it was petitioner
who refused to undergo treatment with the company-designated physician, thereby forfeiting his
right to claim disability benefits and sick wages. Moreover, petitioner was not entitled to sickness
allowance, damages, and attorney's fees in the absence of bad faith from respondent's end.
The VA denied petitioner’s claim in a Decision and denied the motion for reconsideration filed by
petitioner on July 12, 2019. Petitioner moved for a 20-day extension to file a petition for review
before the CA or until August 11, 2019. On August 9, 2019, petitioner filed a petition for review
under Rule 43 before the CA.
The CA dismissed the petition because it was filed 2 days late and the affidavit of service was
inaccurate. Petitioner moved for reconsideration which was denied.
Issue:Whether or not the Rule 43 Petition in the CA should be dismissed on procedural grounds
Ruling: No. In the recent case of Chin v. Maersk-Filipinas Crewing, Inc., (Chin) citing Guagua
National Colleges v. CA, (Guagua National Colleges) the Court categorically declared that the
correct period to appeal the decision or award of the Voluntary Arbitrators or Panel of Arbitrators to
the CA via a Rule 43 petition for review is the fifteen (15)-day period set forth in Section 4 thereof
reckoned from the notice or receipt of the VA's resolution on the motion for reconsideration, and that
the ten (10)-day period provided in Article 276 of the Labor Code refers to the period within which
an aggrieved party may file said motion for reconsideration.
Moreover, under Section 4, Rule 43 of the Rules of Court, upon proper motion and the payment of
the full amount of the docket fees before the expiration of the reglementary period, the CA may grant
an additional period of fifteen (15) days only within which to file the petition for review, and no
further extension shall be granted except for the most compelling reason and in no case shall it
exceed fifteen (15) days.
In this case, records reveal that petitioner received a copy of the VA's Decision denying his motion

53
for reconsideration on July 12, 2019. Thus, he had fifteen (15) days therefrom or until July 27, 2019
within which to file the petition, or to move for a 15-day extension of time to file the same.
Assuming that an extension is granted, he had until August 11, 2019, reckoned from the expiration of
the reglementary period on July 27, 2019, within which to file his petition. Indeed, petitioner filed a
motion for extension of time to file his Rule 43 Petition within the allowable period or on July 22,
2019. Although the Rules allow only for a 15-day extension or until August 11, 2019, he was able to
file his petition on August 9, 2019, also clearly within the allowable extended period. Hence, in both
instances, petitioner filed his pleadings on time.
Moreover, petitioner's error in the affidavit of service stating that he served copies of the Rule 43
Petition to the adverse parties through personal service instead of registered mail appears to have
been an honest mistake. In any case, the inaccuracy in the statement of the manner of service appears
inconsequential considering that, after all, he was able to serve copies of the petition to the adverse
parties.

54

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I.

1. Singer Sewing Machine vs. NLRC, 193 SCRA 271…………………………………………………………………… 3

II. RIGHT TO SECURITY OF TENURE

14. ALU-TUCP vs. NLRC, 234 SCRA 678 [1994] ……………………………………………………………………….15

III. MANAGEMENT PREROGATIVE

22. Dosch vs. NLRC, 123 SCRA 296 [1983] ……………………………………………………………………………. 25

IV. TERMINATION OF EMPLOYMENT

V. SUSPENSION OF BUSINESS OPERATIONS

VI. DISEASE AS GROUND FOR TERMINATION

VII. OTHER CAUSES OF SEVERANCE OF EMPLOYMENT RELATION

VIII. PRESCRIPTION OF CLAIMS

REAH SHYNE REFIL EH 309 LABOR RELATIONS

IX. JURISDICTION OF THE LABOR ARBITER

X. 2011 NLRC RULES OF PROCEDURE

XI. RIGHT TO SELF-ORGANIZATION

XII. RIGHTS OF LEGITIMATE LABOR ORGANIZATION

XIII. UNFAIR LABOR PRACTICE

REAH SHYNE REFIL EH 309 LABOR RELATIONS

1. Singer Sewing Machine vs. NLRC, 193 SCRA 271

2. Lazaro vs. Social Security Commission, 435 SCRA 472 [2004]

REAH SHYNE REFIL EH 309 LABOR RELATIONS

Issue: Whether or not Laudato was an employee of Royal Star

3. Phil. Global Communication vs. De Vera, 459 SCRA 260 [2005]

Legal Doctrine: The determination of the existence of an employer-employee relationship is

Facts: Petitioner Philippine Global Communications, Inc. (PhilCom), is a corporation engaged in

REAH SHYNE REFIL EH 309 LABOR RELATIONS

Issue: Whether or not Employer-Employee relationship exists between parties

4. ABS-CBN vs. Nazareno, G.R. No. 164156, Sept. 26, 2006

REAH SHYNE REFIL EH 309 LABOR RELATIONS

Issue: Whether or not the respondents are regular employees

5. Francisco vs. NLRC, 500 SCRA 690 [2006]

REAH SHYNE REFIL EH 309 LABOR RELATIONS

REAH SHYNE REFIL EH 309 LABOR RELATIONS

REAH SHYNE REFIL EH 309 LABOR RELATIONS

REAH SHYNE REFIL EH 309 LABOR RELATIONS

REAH SHYNE REFIL EH 309 LABOR RELATIONS

Issue: Whether or not petitioners are regular employees of Shangri-la

REAH SHYNE REFIL EH 309 LABOR RELATIONS

REAH SHYNE REFIL EH 309 LABOR RELATIONS

Issue: Whether or not petitioners are regular employees of PBA

REAH SHYNE REFIL EH 309 LABOR RELATIONS

REAH SHYNE REFIL EH 309 LABOR RELATIONS

Issue: Whether or not respondent was an employee of petitioner

II. RIGHT TO SECURITY OF TENURE

14. ALU-TUCP vs. NLRC, 234 SCRA 678 (1994)

REAH SHYNE REFIL EH 309 LABOR RELATIONS

Issue: Whether or not petitioners are project employees

REAH SHYNE REFIL EH 309 LABOR RELATIONS

REAH SHYNE REFIL EH 309 LABOR RELATIONS

16. Purefoods vs. NLRC, 283 SCRA 136 [1997]

REAH SHYNE REFIL EH 309 LABOR RELATIONS

Facts: Petitioner Corporation is a government-owned and controlled corporation engaged in the

REAH SHYNE REFIL EH 309 LABOR RELATIONS

REAH SHYNE REFIL EH 309 LABOR RELATIONS

REAH SHYNE REFIL EH 309 LABOR RELATIONS

20. Gadia vs. Sykes, GR No. 209499, January 28, 2015

REAH SHYNE REFIL EH 309 LABOR RELATIONS

REAH SHYNE REFIL EH 309 LABOR RELATIONS

Facts: Petitioner Expedition Construction Corporation (Expedition), is a domestic corporation

Issue: Whether or not the respondents were they illegally dismissed

REAH SHYNE REFIL EH 309 LABOR RELATIONS

III. MANAGEMENT PREROGATIVE

22. Dosch vs. NLRC, 123 SCRA 296 (1983)