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LABOR STANDARDS

Under Article 128 (b) of the Labor Code, as amended by Republic Act (RA) No. 7730, the
Department of Labor and Employment (DOLE) Secretary and her representatives, the
regional directors, have jurisdiction over labor standards violations based on findings
made in the course of inspection of an employer’s premises, which jurisdiction is not
affected by the amount of claim involved, as Republic Act No. 7730 had effectively
removed the jurisdictional limitations found in Articles 129 and 217 of the Labor Code
insofar as inspection cases, pursuant to the visitorial and enforcement powers of the
DOLE Secretary, are concerned.
While it is true that orders issued without jurisdiction are considered null and void and, as a
general rule, may be assailed at any time, the fact of the matter is that in this case, Director
Manalo acted within her jurisdiction. The last sentence of Article 128(b) of the Labor Code
recognizes an exception to the jurisdiction of the DOLE Secretary and her representatives, but
such exception is neither an issue nor applicable here. (Tiger Construction and Development
Corporation vs. Reynaldo Abay, et al., GR No. 164141; February 26, 2010)

Labor-Only Contracting
The law and its implementing rules allow contracting arrangements for the performance of specific
jobs, works or services. Indeed, it is management prerogative to farm out any of its activities,
regardless of whether such activity is peripheral or core in nature. However, in order for such
outsourcing to be valid, it must be made to an independent contractor because the current labor
rules expressly prohibit labor-only contracting. To emphasize, there is labor-only contracting
when the contractor or sub-contractor merely recruits, supplies or places workers to perform a
job, work or service for a principal and any of the following elements are present: i) The contractor
or subcontractor does not have substantial capital or investment which relates to the job, work or
service to be performed and the employees recruited, supplied or placed by such contractor or
subcontractor are performing activities which are directly related to the main business of the
principal; or ii) The contractor does not exercise the right to control over the performance of the
work of the contractual employee. (Joeb M. Aliviado, et al. vs. Procter and Gamble, GR No.
160506; March 9, 2010)

There is labor-only contracting when the contractor or subcontractor merely recruits, supplies or
places workers to perform a job, work or service for a principal. In labor-only contracting, the
following elements are present: (a) The person supplying workers to an employer does not have
substantial capital or investment in the form of tools, equipment, machineries, work premises,
among others; and (b) The workers recruited and placed by such person are performing activities
which are directly related to the principal business of the employer.” (Marialy O. Sy, et al. vs.
Fairland Knitecraft Co., Inc., GR No. 182915; December 12, 2011)

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Suffice it to say that “[t]he presumption is that a contractor is a labor-only contractor unless such
contractor overcomes the burden of proving that it has substantial capital, investment, tools and
the like.” As Susan/Weesan was not able to adduce evidence that Weesan had any substantial
capital, investment or assets to perform the work contracted for, the presumption that Weesan is
a labor-only contractor stands. (Marialy O. Sy, et al. vs. Fairland Knitecraft Co., Inc., GR No.
182915; December 12, 2011)

"Permissible job contracting or subcontracting refers to an arrangement whereby a principal

agrees to farm out with a contractor or subcontractor the performance of a specific job , work, or
service within a definite or predetermined period, regardless of whether such job, work or, service
is to be performed or completed within or outside the premises of the principal. Under this
arrangement, the following conditions must be met: (a) the contractor carries on a distinct and
independent business and undertakes the contract work on his account under his own
responsibility according to his own manner and method, free from the control and direction of his
employer or principal in all matters connected with the performance of his work except as to the
results thereof; (b) the contractor has substantial capital or investment; and (c) the agreement
between the principal and contractor or subcontractor assures the contractual employees’
entitlement to all labor and occupational safety and health standards, free exercise of the right to
self-organization, security of tenure, and social welfare benefits."44 Labor-only contracting, on
the other hand, is a prohibited act, defined as "supplying workers to an employer who does not
have substantial capital or investment in the form of tools, equipment, machineries, work
premises, among others, and the workers recruited and placed by such person are performing
activities which are directly related to the principal business of such employer."45 "[I]n
distinguishing between prohibited labor-only contracting and permissible job contracting, the
totality of the facts and the surrounding circumstances of the case shall be considered ."46
Generally, the contractor is presumed to be a labor-only contractor, unless such contractor
overcomes the burden of proving that it has the substantial capital, investment, tools and the like.
However, where the principal is the one claiming that the contractor is a legitimate contractor, as
in the present case, said principal has the burden of proving that supposed status. A contractor
is presumed to be a labor-only contractor, unless it proves that it has the substantial capital,
investment, tools and the like. However, where the principal is the one claiming that the contractor
is a legitimate contractor, the burden of proving the supposed status of the contractor rests on
the principal. (Avelino S. Alilin, et al. vs. Petron Corporation, GR No. 177592; June 9, 2014)

As defined under Article 106 of the Labor Code, labor-only contracting, a prohibited act, is an
arrangement where the contractor, who does not have substantial capital or investment in the
form of tools, equipment, machineries, work premises, among others, supplies workers to an
employer and the workers recruited are performing activities which are directly related to the
principal. (Petron Corporation vs. Armz Cabarte, et al., GR No. 182255; June 15, 2015)

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Permissible or legitimate job contracting or subcontracting, on the other hand, “refers to an

arrangement whereby a principal agrees to put out or farm out with the contractor or subcontractor
the performance or completion of a specific job, work, or service within a definite or predetermined
period, regardless of whether such job, work, or service is to be performed or completed within
or outside the premises of the principal. A person is considered engaged in legitimate job
contracting or subcontracting if the following conditions concur: (a) the contractor carries on a
distinct and independent business and partakes the contract work on his account under his own
responsibility according to his own manner and method, free from the control and direction of his
employer or principal in all matters connected with the performance of his work except as to the
results thereof; (b) the contractor has substantial capital or investment; and (c) the agreement
between the principal and the contractor or subcontractor assures the contractual employees’
entitlement to all labor and occupational safety and health standards, free exercise of the right to
self-organization, security of tenure, and social welfare benefits.” (Petron Corporation vs. Armz
Cabarte, et al., GR No. 182255; June 15, 2015)

“Substantial capital or investment,” under Section 5, Rule VIII-A, Book III of the Omnibus Rules
Implementing the Labor Code (Implementing Rules), as amended by Department Order No. 18-
02, does not include those which are not actually and directly used in the performance of the job
contracted out.—Anent substantial investment in the form of equipment, tools, implements,
machineries and work premises, Petron likewise failed to show that ABC possessed the same.
Instead, what is evident in the records was that ABC had been renting a forklift from Petron in
order to carry out the job of respondents. This only shows that ABC does not own basic equipment
needed in the performance of respondents’ job. Similarly and again as correctly held by the CA,
the fact that ABC leased a property for the establishment of its Bacolod office is immaterial since
it was not shown that it was used in the performance or completion of the job contracted out .
“Substantial capital or investment,” under Section 5, Rule VIII-A, Book III of the Omnibus
Rulesmplementing the Labor Code (Implementing Rules), as amended by Department Order No.
18-02, does not include those which are not actually and directly used in the performance of the
job contracted out. (Petron Corporation vs. Armz Cabarte, et al., GR No. 182255; June 15,
2015)

Independent Contractors
Where “labor-only” contracting exists, the Labor Code itself establishes an employer-employee
relationship between the employer and the employees of the “labor-only” contractor; The
contractor is considered merely an agent of the principal employer and the latter is responsible to
the employees of the labor-only contractor as if such employees had been directly employed by
the principal employer.—“Where ‘labor-only’ contracting exists, the Labor Code itself establishes
an employer-employee relationship between the employer and the employees of the ‘labor-only’
contractor.” The statute establishes this relationship for a comprehensive purpose: to prevent a
circumvention of labor laws. The contractor is considered merely an agent of the principal

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employer and the latter is responsible to the employees of the labor-only contractor as if such
employees had been directly employed by the principal employer. (Joeb M. Aliviado, et al. vs.
Procter and Gamble, GR No. 160506; March 9, 2010)

Tenancy relationship is a juridical tie which arises between a landowner and a tenant once
they agree, expressly or impliedly, to undertake jointly the cultivation of a land belonging
to the landowner, as a result of which relationship the tenant acquires the right to continue
working on and cultivating the land; The existence of a tenancy relationship cannot be
presumed and allegations that one is a tenant do not automatically give rise to security of
tenure.
For tenancy relationship to exist, the following essential requisites must be present: (1) the parties
are the landowner and the tenant; (2) the subject matter is agricultural land; (3) there is consent
between the parties; (4) the purpose is agricultural production; (5) there is personal cultivation by
the tenant; and, (6) there is sharing of the harvests between the parties. All the requisites must
concur in order to establish the existence of tenancy relationship, and the absence of one or more
requisites is fatal. (Vicente Adriano vs. Alice Tanco et. al., GR No. 168164; July 5 2010)

Non-Diminution of Benefits Rule

The Non-Diminution Rule found in Article 100 of the Labor Code explicitly prohibits employers
from eliminating or reducing the benefits received by their employees. This rule, however, applies
only if the benefit is based on an express policy, a written contract, or has ripened into a practice.
To be considered a practice, it must be consistently and deliberately made by the employer over
a long period of time. An exception to the rule is when “the practice is due to error in the
construction or application of a doubtful or difficult question of law.” The error, however, must be
corrected immediately after its discovery; otherwise, the rule on Non-Diminution of Benefits would
still apply. (Wesleyan University-Philippines vs. Wesleyan University-Philippines Faculty
and Staff Association)

Illegal Recruitment
Appellants’ argument that there was no proof that they received money from the private
complainants deserves no credence. Suffice it to say that money is not material to a prosecution
for illegal recruitment considering that the definition of “illegal recruitment” under the law includes
the phrase “whether for profit or not.” Besides, even if there is no receipt for the money given by
the private complainants to appellants, the former’s respective testimonies and affidavits clearly
narrate the latter’s involvement in the prohibited recruitment. (People of the Philippines vs.
Angel Mateo and Vicenta Lapiz; GR No. 198012; April 22, 2015)

SPECIAL LAWS

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Social Security System Death Compensation Benefits
For a spouse to qualify as a primary beneficiary under paragraph (k) thereof, he/she must not
only be a legitimate spouse but also a dependent as defined under paragraph (e), that is, one
who is dependent upon the member for support. Paragraphs (e) and (k) of Section 8 of RA 1161
are very clear. Hence, we need only apply the law. (Social Security Commission and Social
Security System vs. Teresa G. Favila, GR No. 170195; March 28, 2011)

Three Kinds of Disability Benefits under the Labor Code

There are three kinds of disability benefits under the Labor Code, as amended by P.D. No. 626:
(1) temporary total disability, (2) permanent total disability, and (3) permanent partial disability.
Section 2, Rule VII of the Implementing Rules of Book V of the Labor Code differentiates the
disabilities as follows: Sec. 2. Disability.—(a) A total disability is temporary if as a result of the
injury or sickness the employee is unable to perform any gainful occupation for a continuous
period not exceeding 120 days, except as otherwise provided for in Rule X of these Rules. (b) A
disability is total and permanent if as a result of the injury or sickness the employee is unable to
perform any gainful occupation for a continuous period exceeding 120 days, except as otherwise
provided for in Rule X of these Rules. (c) A disability is partial and permanent if as a result of the
injury or sickness the employee suffers a permanent partial loss of the use of any part of his body.
(Carmelito Valenzona vs. Fair Shipping Corporation and/or Sejin Lines Company Limited,
GR No. 176884; October 19, 2011)

Employees’ Compensation; Seafarers

The 120-day period may be extended up to 240 days, under Rule X, Section 2 of the Amended
Rules on Employees Compensation and pursuant to the pronouncement in Vergara v. Hammonia
Maritime Services, Inc., 567 SCRA 610 (2008), stating that a temporary total disability becomes
permanent when so declared by the company-designated physician within the period allowed, or
upon expiration of the maximum 240-day medical treatment period in case of absence of a
declaration of fitness or permanent disability. (Alpha Ship Management Corporation/Junel M.
Chan and/or Chuo-Kaiun Company, Limited vs. Eleosis V. Calo, GR No. 192034; January
13, 2014)

An employee’s disability becomes permanent and total when so declared by the company-
designated physician, or, in case of absence of such a declaration either of fitness or permanent
total disability, upon the lapse of the 120 or 240-day treatment period, while the employee’s
disability continues and he is unable to engage in gainful employment during such period, and
the company-designated physician fails to arrive at a definite assessment of the employee’s
fitness or disability. This is true “regardless of whether the employee loses the use of any part of
his body.” (Alpha Ship Management Corporation/Junel M. Chan and/or Chuo-Kaiun
Company, Limited vs. Eleosis V. Calo, GR No. 192034; January 13, 2014)

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Regarding the issue of compensability, it has been the Court’s consistent ruling that in disability
compensation, “it is not the injury which is compensated, but rather it is the incapacity to work
resulting in the impairment of one’s earning capacity.” Moreover, “the list of illnesses/diseases in
Section 32-A does not preclude other illnesses/diseases not so listed from being compensable.
The POEA-SEC cannot be presumed to contain all the possible injuries that render a seafarer
unfit for further sea duties.” (Fil-Pride Shipping Company, Inc. et al. vs. Edgar A. Balasta,
GR No. 193047; March 3, 2014)

In several cases, cardiovascular disease, coronary artery disease, as well as other heart ailments
were held to be compensable. Likewise, petitioners failed to refute respondent’s allegations in his
Position Paper that in the performance of his duties as Able Seaman, he inhaled, was exposed
to, and came into direct contact with various injurious and harmful chemicals, dust,
fumes/emissions, and other irritant agents; that he performed strenuous tasks such as lifting,
pulling, pushing and/or moving equipment and materials on board the ship; that he was constantly
exposed to varying temperatures of extreme hot and cold as the ship crossed ocean boundaries;
that he was exposed as well to harsh weather conditions; that in most instances, he was required
to perform overtime work; and that the work of an Able Seaman is both physically and mentally
stressful. It does not require much imagination to realize or conclude that these tasks could very
well cause the illness that respondent, then already 47 years old, suffered from six months into
his employment contract with petitioners. The following pronouncement in a recent case very well
applies to respondent: x x x His constant exposure to hazards such as chemicals and the varying
temperature, like the heat in the kitchen of the vessel and the coldness outside, coupled by
stressful tasks in his employment caused, or at least aggravated, his illness. It is already
recognized that any kind of work or labor produces stress and strain normally resulting in wear
and tear of the human body. Notably, it is “a matter of judicial notice that an overseas worker,
having to ward off homesickness by reason of being physically separated from his family for the
entire duration of his contract, bears a great degree of emotional strain while making an effort to
perform his work well. The strain is even greater in the case of a seaman who is constantly
subjected to the perils of the sea while at work abroad and away from his family.” (Fil-Pride
Shipping Company, Inc. et al. vs. Edgar A. Balasta, GR No. 193047; March 3, 2014)

The company-designated physician must arrive at a definite assessment of the seafarer’s fitness
to work or permanent disability within the period of 120 or 240 days, pursuant to Article 192 (c)(1)
of the Labor Code and Rule X, Section 2 of the Amended Rules on Employees’ Compensation.—
The company-designated physician must arrive at a definite assessment of the seafarer’s fitness
to work or permanent disability within the period of 120 or 240 days, pursuant to Article 192 (c)(1)
of the Labor Code and Rule X, Section 2 of the AREC. If he fails to do so and the seafarer’s
medical condition remains unresolved, the latter shall be deemed totally and permanently

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disabled. (Fil-Pride Shipping Company, Inc. et al. vs. Edgar A. Balasta, GR No. 193047;
March 3, 2014)

Compensable Illness
Two elements must concur for an injury or illness of a seafarer to be compensable. First, the
injury or illness must be work-related; and second, x x x the work-related injury or illness must
have existed during the term of the seafarer’s employment contract. The 2000 POEA-SEC defines
work-related injury and work-related illness as — ‘injuries resulting in disability or death arising
out of and in the course of employment’ and as ‘any sickness resulting to disability or death as a
result of an occupational disease listed under Section 32-A of this contract with the conditions set
therein satisfied.’ Aortic dissection, also called dissecting aneurysm, is a potentially life-
threatening condition in which there is bleeding into and along the wall of the aorta, the major
artery leaving the heart. The condition starts with a tear in the wall of the major artery carrying
blood out of the heart and as the tear extends along the wall of the aorta, blood enters the aortic
wall and “dissects” or separates the layers of the aorta from one another which leads to aortic
rupture or decreased blood flow to the organs. This can then result in heart attacks, strokes,
paralysis, and renal failure among other medical conditions. The ailment’s risk factors, which
include but are not limited to aging, connective tissue and rare genetic disorders, atherosclerosis,
inflammation, trauma, high blood pressure, heart surgery/procedures, and pregnancy, do not
seem to be direct causes of the disease, such that having one makes the chances of getting the
condition higher but does not always lead to aortic dissection. Thus, the exact cause of aortic
dissection is still unknown and remains under investigation. Nonetheless, the progression of this
ailment is oftentimes caused by the increased stress in the aortic wall attributed to strenuous
physical activities. Patients are strongly advised to refrain from strenuous physical exertion and
are often required to undertake lifestyle modification, such as change of occupation to sedentary
jobs, in order to reduce the risk of enlargement of an already weakened aorta that might eventually
lead to rupture, a fatal condition. (Dohle-Philman Manning Agency, Inc. vs. Heirs of Andress
Gazzingan, GR No. 199568, June 17, 2015)

More importantly, the 2000 POEA-SEC has created a presumption of compensability for those
illnesses which are not listed as an occupational disease. Section 20(B), paragraph (4) states
that “those illnesses not listed in Section 32 of this Contract are disputably presumed as work-
related.” Concomitant with this presumption is the burden placed upon the claimant to present
substantial evidence that his work conditions caused or at least increased the risk of contracting
the disease and only a reasonable proof of work-connection, not direct causal relation is required
to establish compensability of illnesses not included in the list of occupational diseases. As
discussed above, a causal link was established between Gazzingan’s employment and his
ailment. In view thereof, the presumption now operates in favor of respondents and the burden
is shifted to the petitioners to overcome the statutory presumption. However, in the case at bench,

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petitioners failed to discharge such burden as will be discussed below. (Dohle-Philman Manning
Agency, Inc. vs. Heirs of Andress Gazzingan, GR No. 199568, June 17, 2015)

It is the company-designated physician’s findings which should form the basis of any disability
claim of the seafarer.—“It is beyond cavil that it is the company-designated physician who is
entrusted with the task of assessing the seaman’s disability.” It is the company-designated
physician’s findings which should form the basis of any disability claim of the seafarer. Such
assessment is arrived at after the seafarer submits himself to the company-designated physician
for a post-employment medical examination within three days from his repatriation. It is significant
to note, however, that courts are not bound by the assessment of the company-designated
physician. While the company-designated physician must declare the nature of a seafarer’s
disability, the former’s declaration is not conclusive and final upon the latter or the court. Its
inherent merit will still be weighed and duly considered. (Dohle-Philman Manning Agency, Inc.
vs. Heirs of Andress Gazzingan, GR No. 199568, June 17, 2015)

LABOR RELATIONS

A series of irregularities when put together may constitute serious misconduct

We have examined the records which indeed show that petitioner’s unauthorized absences as
well as tardiness are habitual despite having been penalized for past infractions. In Gustilo v.
Wyeth Philippines, Inc., 440 SCRA 67 (2004) we held that a series of irregularities when put
together may constitute serious misconduct. We also held that gross neglect of duty becomes
serious in character due to frequency of instances. Serious misconduct is said to be a
transgression of some established and definite rule of action, a forbidden act, a dereliction of
duty, willful in character, and indicative of wrongful intent and not mere error of judgment. Oddly,
petitioner never advanced any valid reason to justify his absences. Petitioner’s intentional and
willful violation of company rules shows his utter disregard of his work and his employer’s interest.
Indeed, there can be no good faith in intentionally and habitually incurring unexcusable absences.
Thus, the CA did not commit grave abuse of discretion amounting to lack or excess of jurisdiction
in equating petitioner’s gross neglect of duty to serious misconduct. (Arsenio S. Quiambao vs.
Manila Electric Railroad, GR No. 171023; December 18, 2009)

Management Prerogative; It is axiomatic that appropriate disciplinary sanctions is within

the purview of management imposition.
The decision to suspend petitioner was rendered after investigation and a finding by respondent
that petitioner has indeed made malicious statements against a co-employee. The suspension
was imposed due to a repeated infraction within a deactivation period set by the company relating
to a previous similar offense committed. It is axiomatic that appropriate disciplinary sanction is
within the purview of management imposition. What should not be overlooked is the prerogative

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of an employer company to prescribe reasonable rules and regulations necessary for the proper
conduct of its business and to provide certain disciplinary measures in order to implement said
rules to assure that the same would be complied with. Respondent then acted within its rights as
an employer when it decided to exercise its management prerogative to impose disciplinary
measure on its erring employee. (Jimmy Areno, Jr. vs. Skycable PCC-Baguio; GR No.
180302; February 5, 2010)

Elements for willful disobedience of the employer’s lawful orders as a just cause for
dismissal
As a just cause for dismissal of an employee under Article 282 of the Labor Code, willful
disobedience of the employer’s lawful orders requires the concurrence of two elements: (1) the
employee’s assailed conduct must have been willful, i.e., characterized by a wrongful and
perverse attitude; and (2) the order violated must have been reasonable, lawful, made known to
the employee, and must pertain to the duties which he had been engaged to discharge. Both
requisites are present in the instant case. (Jimmy Areno, Jr. vs. Skycable PCC-Baguio; GR
No. 180302; February 5, 2010)

A criminal conviction is not necessary to find just cause for employment termination
In Nicolas v. National Labor Relations Commission, 258 SCRA 250 (1996), we held that a criminal
conviction is not necessary to find just cause for employment termination. Otherwise stated, an
employee’s acquittal in a criminal case, especially one that is grounded on the existence of
reasonable doubt, will not preclude a determination in a labor case that he is guilty of acts inimical
to the employer’s interests. (Reno Foods, Inc. vs. NLM-Katipunan; GR No. 164016; March
15, 2010)

Retrenchment
To effect a valid retrenchment, the following elements must be present: (1) the retrenchment is
reasonably necessary and likely to prevent business losses which, if already incurred, are not
merely de minimis, but substantial, serious and real, or only if expected, are reasonably imminent
as perceived objectively and in good faith by the employer; (2) the employer serves written notice
both to the employee/s concerned and the DOLE at least one month before the intended date of
retrenchment; (3) the employer pays the retrenched employee separation pay in an amount
prescribed by the Code; (4) the employer exercises its prerogative to retrench in good faith; and
(5) the employer uses fair and reasonable criteria in ascertaining who would be retrenched or
retained. (Lambert Pawnbrokers and Jewelry Corporation and Lambert Lim vs. Helen
Binamira, GR No. 170464; July 12, 2010)

At any rate, we perused over the financial statements submitted by petitioners and we find no evi
dence at all that the company was suffering from business losses. In fact, in their Position Paper,

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petitioners merely alleged a sharp drop in its income in 1998 from P1 million to only P665,000.00.
This is not the business losses contemplated by the Labor Code that would justify a valid
retrenchment. A mere decline in gross income cannot in any manner be considered as serious
business losses. It should be substantial, sustained and real. (Lambert Pawnbrokers and
Jewelry Corporation and Lambert Lim vs. Helen Binamira, GR No. 170464; July 12, 2010)

Redundancy
Redundancy, on the other hand, exists when the service capability of the workforce is in excess
of what is reasonably needed to meet the demands of the enterprise. A redundant position is one
rendered superfluous by any number of factors, such as over hiring of workers, decreased volume
of business, dropping of a particular product line previously manufactured by the company, or
phasing out of a service activity previously undertaken by the business. Under these conditions,
the employer has no legal obligation to keep in its payroll more employees than are necessary for
the operation of its business. For the implementation of a redundancy program to be valid, the
employer must comply with the following requisites: (1) written notice served on both the
employees and the DOLE at least one month prior to the intended date of termination of
employment; (2) payment of separation pay equivalent to at least one month pay for every year
of service; (3) good faith in abolishing the redundant positions; and (4) fair and reasonable criteria
in ascertaining what positions are to be declared redundant and accordingly abolished. (Lambert
Pawnbrokers and Jewelry Corporation and Lambert Lim vs. Helen Binamira, GR No.
170464; July 12, 2010)

In termination proceedings of employees, procedural due process consists of the twin

requirements of notice and hearing
In termination proceedings of employees, procedural due process consists of the twin
requirements of notice and hearing. The employer must furnish the employee with two written
notices before the termination of employment can be effected: (1) the first apprises the employee
of the particular acts or omissions for which his dismissal is sought; and (2) the second informs
the employee of the employer’s decision to dis miss him. The requirement of a hearing is complied
with as long as there was an opportunity to be heard, and not necessarily that an actual hearing
was conducted. (New Puerto Commercial and Richard Lim vs. Rodel Lopez and Felix
Gavan, G.R. No. 169999; July 26, 2010).

The requisites for a valid dismissal are: (a) the employee must be afforded due process , i.e., he
must be given an opportunity to be heard and defend himself; and (b) the dismissal must be for a
valid cause as provided in Article 282 of the Labor Code or for any of the authorized causes under
Articles 283 and 284 of the same Code.”
Due Process; In employee dismissal cases, the essence of due process is an opportunity to be
heard, or as applied to administrative proceedings, an opportunity to explain one’s side; A formal
or trial type hearing is not at all times and in all instances essential to due process.—It is hornbook

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in employee dismissal cases that “[t]he essence of due process is an opportunity to be heard, or
as applied to administrative proceedings, an opportunity to explain one’s side x x x.” “A formal or
trial type hearing is not at all times and in all instances essential to due process, the requirements
of which are satisfied where the parties are afforded fair and reasonable opportunity to explain
their side of the controversy.” Neither is it necessary that the witnesses be cross-examined by
counsel for the adverse party. “[T]he quantum of proof required in determining the legality of an
employee’s dismissal is only substantial evidence.” In a similar case involving PLDT and another
installer/repairman, this Court held that “[T]the standard of substantial evidence is met where the
employer, as in this case, has reasonable ground to believe that the employee is responsible for
the misconduct and his participation in such misconduct makes him unworthy of the trust and
confidence demanded by his position.” (Philippine Long Distance Telephone Company
(PLDT) vs. Eusebio M. Honrado, G.R. No. 189366; December 8, 2010).

Certification Election
This issue is not new or novel. In Pepsi-Cola Products Philippines, Inc. v. Secretary of Labor,
312 SCRA 104 (1999), we already ruled that: Anent the issue of whether or not the Petition to
cancel/revoke registration is a prejudicial question to the petition for certification election, the
following ruling in the case of Association of the Court of Appeals Employees (ACAE) v. Hon.
Pura Ferrer-Calleja, 203 SCRA 596 (1991), x x x is in point, to wit: x x x At any rate, the Court
applies the established rule correctly followed by the public respondent that an order to hold a
certification election is proper despite the pendency of the petition for cancellation of the
registration certificate of the respondent union. The rationale for this is that at the time the
respondent union filed its petition, it still had the legal personality to perform such act absent an
order directing the cancellation. (Legend International Resorts vs. Kilusang Manggagawa ng
Legenda, GR No. 169754; February 23, 2011)

In Capitol Medical Center, Inc. v. Hon. Trajano, 462 SCRA 457 (2005), we also held that “the
pendency of a petition for cancellation of union registration does not preclude collective
bargaining.” Citing the Secretary of Labor, we held viz.: That there is a pending cancellation
proceedings against the respondent Union is not a bar to set in motion the mechanics of collective
bargaining. If a certification election may still be ordered despite the pendency of a petition to
cancel the union’s registration certificate x x x more so should the collective bargaining process
continue despite its pendency. (Legend International Resorts vs. Kilusang Manggagawa ng
Legenda, GR No. 169754; February 23, 2011)

We agree with the ruling of the Office of the Secretary of DOLE that the legitimacy of the legal
personality of KML cannot be collaterally attacked in a petition for certification election
proceeding. This is in consonance with our ruling in Laguna Autoparts Manufacturing Corporation
v. Office of the Secretary, Department of Labor and Employment, 457 SCRA 730 (2005), that
“such legal personality may not be subject to a collateral attack but only through a separate action

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instituted particularly for the purpose of assailing it.” (Legend International Resorts vs.
Kilusang Manggagawa ng Legenda, GR No. 169754; February 23, 2011)

The legal personality of a legitimate labor organization x x x cannot be subject to a collateral

attack. The law is very clear on this matter. x x x The Implementing Rules stipulate that a labor
organization shall be deemed registered and vested with legal personality on the date of issuance
of its certificate of registration. Once a certificate of registration is issued to a union, its legal
personality cannot be subject to a collateral attack. In may be questioned only in an independent
petition for cancellation in accordance with Section 5 of Rule V, Book V of the Implementing
Rules.” (Legend International Resorts vs. Kilusang Manggagawa ng Legenda, GR No.
169754; February 23, 2011)

Petitioner union correctly argues that its legal personality cannot be collaterally attacked in the
certification election proceedings. As we explained in Kawashima: Except when it is requested to
bargain collectively, an employer is a mere bystander to any petition for certification election; such
proceeding is non-adversarial and merely investigative, for the purpose thereof is to determine
which organization will represent the employees in their collective bargaining with the employer.
The choice of their representative is the exclusive concern of the employees; the employer cannot
have any partisan interest therein; it cannot interfere with, much less oppose, the process by filing
a motion to dismiss or an appeal from it; not even a mere allegation that some employees
participating in a petition for certification election are actually managerial employees will lend an
employer legal personality to block the certification election. The employer’s only right in the
proceeding is to be notified or informed thereof. (SMCC-Super vs. Charter Chemical and
Coating Corp., GR No. 169717; March 16, 2011)

A union’s charter certificate need not be executed under oath

As readily seen, the Sama-samang Pahayag ng Pagsapi at Authorization and Listahan ng mga
Dumalo sa Pangkalahatang Pulong at mga Sumang-ayon at Nagratipika sa Saligang Batas are
not among the documents that need to be submitted to the Regional Office or Bureau of Labor
Relations in order to register a labor organization. As to the charter certificate, the above-quoted
rule indicates that it should be executed under oath. Petitioner union concedes and the records
confirm that its charter certificate was not executed under oath. However, in San Miguel
Corporation (Mandaue Packaging Products Plants) v. Mandaue Packing Products Plants-San
Miguel Corporation Monthlies Rank-and-File Union-FFW (MPPP-SMPP-SMAMRFU-FFW), 467
SCRA 107 (2005), which was decided under the auspices of D.O. No. 9, Series of 1997, we
ruled—In San Miguel Foods-Cebu B-Meg Feed Plant v. Hon. Laguesma, 331 Phil. 356 (1996),
the Court ruled that it was not necessary for the charter certificate to be certified and attested by
the local/chapter officers. Id. While this ruling was based on the interpretation of the previous
Implementing Rules provisions which were supplanted by the 1997 amendments, we believe that
the same doctrine obtains in this case. Considering that the charter certificate is prepared and

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issued by the national union and not the local/chapter, it does not make sense to have the
local/chapter’s officers x x x certify or attest to a document which they had no hand in the
preparation of. (Emphasis supplied) In accordance with this ruling, petitioner union’s charter
certificate need not be executed under oath. Cons quently, it validly acquired the status of a
legitimate labor organization upon submission of (1) its charter certificate, (2) the names of its
officers, their addresses, and its principal office, and (3) its constitution and by-laws—the last two
requirements having been executed under oath by the proper union officials as borne out by the
records. (SMCC-Super vs. Charter Chemical and Coating Corp., GR No. 169717; March 16,
2011)

Constructive Dismissal
Constructive dismissal is quitting because continued employment is rendered impossible,
unreasonable or unlikely, or because of a demotion in rank or a diminution of pay. It exists when
there is a clear act of discrimination, insensibility or disdain by an employer which becomes
unbearable for the employee to continue his employment. (William Barroga vs. Data Center
College of the Philippines; GR No. 174158; June 27, 2011)

Doctrine of Strained Relations

The Court’s Third Division likewise held in its November 15, 2010 Decision in G.R. Nos. 159460
and 159461 that since reinstatement was no longer feasible due to the considerable lapse of time
and the closure of Solidbank, respondents therein were awarded separation pay equivalent to
one-month salary for every year of service. For those employees who executed quitclaims, their
separation pay should be net of the amounts they had already received. (Solidbank Union vs.
Metrobank, GR No. 153799; September 17, 2012)

The Court has held before that the filing of criminal charges by and between the employer and
employee confirms the existence of strained relations between them. In the instant case, Ang is
in danger of being punished for the alleged commission of 41 counts of estafa; worse,
respondents testified against him while they were under his employ, and they join the complainant
in said cases in accusing Ang of irregularities relative to the remittance of their SSS contributions.
Ang could not reasonably be expected to thank respondents for it, yet he may not be allowed to
treat them oppressively either. Nevertheless, the existence of the criminal charges and
respondents’ testifying against petitioner prove that their relations have been strained, and that
respondents’ allegations of oppression and abuse are not without basis. It thus became
incumbent upon Ang to dispute such claims.
Constructive dismissal exists where there is cessation of work because continued employment is
rendered impossible, unreasonable or unlikely, as an offer involving a demotion in rank and a
diminution in pay. “Constructive dismissal exists where there is cessation of work because
continued employment is rendered impossible, unreasonable or unlikely, as an offer involving a

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demotion in rank and a diminution in pay.” It is a “dismissal in disguise or an act amounting to
dismissal but made to appear as if it were not.” Constructive dismissal may likewise exist if an
“act of clear discrimination, insensibility, or disdain by an employer becomes so unbearable on
the part of the employee that it could foreclose any choice by him except to forego his continued
employment.” “Constructive dismissal exists when the employee involuntarily resigns due to the
harsh, hostile, and unfavorable conditions set by the employer.” “The test of constructive
dismissal is whether a reasonable person in the employee’s position would have felt compelled
to give up his position under the circumstances.” (Vicente Ang vs. Ceferino San Joaquin, Jr.;
GR No. 185549; August 7, 2013)

Grievance Procedures
Under Article 260 of the Labor Code, grievances arising from the interpretation or implementation
of the parties’ CBA should be resolved in accordance with the grievance procedure embodied
therein. It also provides that all unsettled grievances shall be automatically referred for voluntary
arbitration as prescribed in the CBA. It is settled that “when parties have validly agreed on a
procedure for resolving grievances and to submit a dispute to voluntary arbitration then that
procedure should be strictly observed.” Moreover, we have held time and again that “before a
party is allowed to seek the intervention of the court, it is a precondition that he should have
availed of all the means of administrative processes afforded him. Hence, if a remedy within the
administrative machinery can still be resorted to by giving the administrative officer concerned
every opportunity to decide on a matter that comes within his jurisdiction[ , then] such remedy
should be exhausted first before the court’s judicial power can be sought. The premature
invocation of [the] court’s judicial intervention is fatal to one’s cause of action.” “The underlying
principle of the rule on exhaustion of administrative remedies rests on the presumption that when
the administrative body, or grievance machinery, is afforded a chance to pass upon the matter,
it will decide the same correctly.” (Carlos Octavio vs. PLDT, GR No. 175492; February 27,
2013)

Retirement Pay; Separation Pay

In Aquino v. National Labor Relations Commission, 206 SCRA 118 (1992), the petitioner
employees were retrenched after their employer Otis Elevator Company (Otis) adopted cost-
cutting measures and streamlined its operations. They were thus given separation pay double
the amount required by the Labor Code. Subsequently, however, the employees filed a claim for
retirement benefits, alleging entitlement thereto by virtue of the Retirement Plan. Otis denied the
claim by asserting that separation pay and retirement benefits are mutually exclusive of each
other; hence, acceptance of one bars recovery of the other. When the case reached its final
review, this Court held that in the absence of specific prohibition in the retirement plan or the
CBA, retirement benefits and separation pay are not mutually exclusive of each other and the
employees whose services were terminated without cause are entitled to both separation pay and

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retirement gratuity. (Zuellig Pharma Corporation vs. Alice M. Sibal, GR No. 173587; July 15,
2013)

Collective Bargaining Agreements

It is a familiar and fundamental doctrine in labor law that the CBA is the law between the parties
and they are obliged to comply with its provisions. In Honda Phils., Inc. v. Samahan ng Malayang
Manggagawa sa Honda, 460 SCRA 186 (2005), this Court elucidated as follows: A collective
bargaining agreement [or CBA] refers to the negotiated contract between a legitimate labor
organization and the employer concerning wages, hours of work and all other terms and
conditions of employment in a bargaining unit. As in all contracts, the parties in a CBA may
establish such stipulations, clauses, terms and conditions as they may deem convenient provided
these are not contrary to law, morals, good customs, public order or public policy. Thus, where
the CBA is clear and unambiguous, it becomes the law between the parties and compliance
therewith is mandated by the express policy of the law. (Zuellig Pharma Corporation vs. Alice
M. Sibal, GR No. 173587; July 15, 2013)

As for the second ground for respondents’ termination, which is loss of trust and
confidence, distinction should be made between managerial and rank and file employees.
“[W]ith respect to rank-and-file personnel, loss of trust and confidence, as ground for valid
dismissal, requires proof of involvement in the alleged events x x x [while for] managerial
employees, the mere existence of a basis for believing that such employee has breached the
trust of his employer would suffice for his dismissal.” Galvez, as the ship captain, is considered
a managerial employee since his duties involve the governance, care and management of the
vessel. Gruta, as chief engineer, is also a managerial employee for he is tasked to take complete
charge of the technical operations of the vessel.—In the case before us, Galvez, as the ship
captain, is considered a managerial employee since his duties involve the governance, care and
management of the vessel. Gruta, as chief engineer, is also a managerial employee for he is
tasked to take complete charge of the technical operations of the vessel. As captain and as chief
engineer, Galvez and Gruta perform functions vested with authority to execute management
policies and thereby hold positions of responsibility over the activities in the vessel. Indeed, their
position requires the full trust and confidence of their employer for they are entrusted with the
custody, handling and care of company property and exercise authority over it. (Grand Asian
Shipping Lines, Inc. vs. Wilfredo Galvez, GR No. 178184; January 29, 2014)

The rule that the employer bears the burden of proof in illegal dismissal cases finds no application
when the employer denies having dismissed the employee. The employee must first establish by
substantial evidence the fact of dismissal before shifting to the employer the burden of proving

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the validity of such dismissal. (Grand Asian Shipping Lines, Inc. vs. Wilfredo Galvez, GR No.
178184; January 29, 2014)

Galvez and Gruta, as managerial employees, are not entitled to their claims for holiday pay,
service incentive leave pay and premium pay for holiday and restday. Article 82 of the Labor Code
specifically excludes managerial employees from the coverage of the law regarding conditions of
employment which include hours of work, weekly rest periods, holidays, service incentive leaves
and service charges.
Article 82 of the Labor Code defines field personnel as referring to “non-agricultural employees
who regularly perform their duties away from the principal place of business or branch office of
the employer and whose actual hours of work in the field cannot be determined with reasonable
certainty.”—Article 82 defines field personnel as referring to “non-agricultural employees who
regularly perform their duties away from the principal place of business or branch office of the
employer and whose actual hours of work in the field cannot be determined with reasonable
certainty.” They are those who perform functions which “cannot be effectively monitored by the
employer or his representative.” Here, respondents, during the entire course of their voyage,
remain on board the vessel. They are not field personnel inasmuch as they were constantly
supervised and under the effective control of the petitioners through the vessel’s ship captain.
(Grand Asian Shipping Lines, Inc. vs. Wilfredo Galvez, GR No. 178184; January 29, 2014)

Call center agents are subjected to conditions that adversely affect their physical , mental
and emotional health
Respondent’s work as a CSR — which is essentially that of a call center agent — is not easy. For
one, she was made to work the graveyard shift — that is, from late at night or midnight until dawn
or early morning. This certainly takes a toll on anyone’s physical health. Indeed, call center agents
are subjected to conditions that adversely affect their physical, mental and emotional health;
exposed to extreme stress and pressure at work by having to address the customers’ needs and
insure their satisfaction, while simultaneously being conscious of the need to insure efficiency at
work by improving productivity and a high level of service; subjected to excessive control and
strict surveillance by management; exposed to verbal abuse from customers; suffer social
alienation precisely because they work the graveyard shift — while family and friends are at rest,
they are working, and when they are at rest, family and friends are up and about; and they work
at a quick-paced environment and under difficult circumstances owing to progressive demands
and ambitious quotas/targets set by management. To top it all, they are not exactly well-paid for
the work they have to do and the conditions they have to endure. Respondent’s written query
about the prizes and incentives is not exactly baseless and frivolous; the least petitioner could
have done was to timely address it, if it cared about its employee’s welfare. By failing to address
respondent’s concerns, petitioner exhibited an indifference and lack of concern for its employees
— qualities that are diametrically antithetical to the spirit of the labor laws, which aim to protect
the welfare of the workingman and foster harmonious relations between capital and labor . By its

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actions, petitioner betrayed the manner it treats its employees. (ICT Marketing Services, Inc.
vs. Mariphil L. Sales, GR No. 202090; September 9, 2015)

Thus, the only conceivable reason why petitioner transferred respondent to another account is
the fact that she openly and bravely complained about the supposed anomalies in the Washington
Mutual account; it is not her “derogatory record” or her “attendance and punctuality issues,” which
are insignificant and thus irrelevant to her overall performance in the Washington Mutual account.
And, as earlier stated, respondent’s “attendance and punctuality issues” were attributable to
petitioner’s indifference, inaction, and lack of sensitivity in failing to timely address respondent’s
complaint. It should share the blame for respondent’s resultant delinquencies. Thus, in causing
respondent’s transfer, petitioner clearly acted in bad faith and with discrimination, insensibility
and disdain; the transfer was effected as a form of punishment for her raising a valid grievance
related to her work. Furthermore, said transfer was obviously unreasonable, not to mention
contrary to experience, logic, and good business sense. This being the case, the transfer
amounted to constructive dismissal. (ICT Marketing Services, Inc. vs. Mariphil L. Sales, GR
No. 202090; September 9, 2015)

In placing respondent on “floating status,” petitioner further acted arbitrarily and unfairly, making
life unbearable for her. In so doing, it treated respondent as if she were a new hire; it improperly
disregarded her experience, status, performance, and achievements in the company; and most
importantly, respondent was illegally deprived of her salary and other emoluments. For her single
absence during training for the Bank of America account, she was refused certification, and as a
result, she was placed on floating status and her salary was withheld. Clearly, this was an act of
discrimination and unfairness considering that she was not an inexperienced new hire, but a
promising and award-winning employee who was more than eager to succeed within the
company. This conclusion is not totally baseless, and is rooted in her outstanding performance
at the Washington Mutual account and her complaint regarding the incentives, which only proves
her zeal, positive work attitude, and drive to achieve financial success through hard work. But
instead of rewarding her, petitioner unduly punished her; instead of inspiring her, petitioner
dashed her hopes and dreams; in return for her industry, idealism, positive outlook and fervor,
petitioner left her with a legacy of, and awful examples in, office politicking, intrigue, and
internecine schemes. The placing of an employee on “floating status” presupposes, among
others, that there is less work than there are employees; but if petitioner continued to hire new
Customer Service Representatives/Technical Support Representatives (CSRs/TSRs), then
surely there is a surplus of work available for its existing employees: there is no need at all to
place respondent on floating status.—As correctly argued by respondent, there is no basis to
place her on “floating status” in the first place since petitioner continued to hire new CSRs/TSRs
during the period, as shown by its paid advertisements and placements in leading newspapers
seeking to hire new CSRs/TSRs and other employees. True enough, the placing of an employee

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on “floating status” presupposes, among others, that there is less work than there are employees;
but if petitioner continued to hire new CSRs/TSRs, then surely there is a surplus of work available
for its existing employees: there is no need at all to place respondent on floating status. If any,
respondent — with her experience, knowledge, familiarity with the workings of the company, and
achievements — should be the first to be given work or posted with new clients/accounts, and
not new hires who have no experience working for petitioner or who have no related experience
at all. Once more, experience, common sense, and logic go against the position of petitioner.
(ICT Marketing Services, Inc. vs. Mariphil L. Sales, GR No. 202090; September 9, 2015)

Labor Law; 2005 NLRC Rules; Appeals

Section 6, Rule III of the 2005 Revised Rules of Procedure of the NLRC (2005 NLRC Rules)
expressly mandates that “(f)or purposes of appeal, the period shall be counted from receipt of
such decisions, resolutions, or orders by the counsel or representative of record.” This procedure
is in line with the established rule that if a party has appeared by counsel, service upon him shall
be made upon his counsel. “The purpose of the rule is to maintain a uniform procedure calculated
to place in competent hands the prosecution of a party’s case.” Thus, Section 9, Rule III of the
NLRC Rules provides that “(a)ttorneys and other representatives of parties shall have authority
to bind their clients in all matters of procedure x x x.” (Emerita Malixi vs. Mexicali Philippines
and/or Francesca Mabanta, GR No. 205061; June 28, 2016)

By affixing his signature upon the Conditional Satisfaction of Judgment, Receipt of

Payment, and Affidavit, petitioner effectively surrendered all his rights and waived all his
claims and causes of action in all jurisdictions, and in exchange for nothing
It may be that in this jurisdiction, petitioner may ultimately be adjudged as not entitled to the
monetary claims he seeks, but in other fora — such as in Panama, Japan, or any other country
— he may be found to be entitled thereto, and to other indemnities as well. Yet by affixing his
signature upon the Conditional Satisfaction of Judgment, Receipt of Payment, and Affidavit,
petitioner effectively surrendered all his rights and waived all his claims and causes of action in
all jurisdictions, and in exchange for nothing. Indeed, in the Affidavit, petitioner even went so far
as to certify and warrant that he will not file any other complaint or prosecute any suit or action
here or in any other country after receiving the settlement amount . (Juan B. Hernandez vs.
Crossworld Marine Services, Inc. Mykonos Sidpping Co., Ltd., and Eleazar Diaz, GR No.
209098; November 14, 2016)

In More Maritime Agencies, Inc. v. NLRC, 307 SCRA 189 (1999), the Court ruled that: The law
does not consider as valid any agreement to receive less compensation than what a worker is
entitled to recover nor prevent him from demanding benefits to which he is entitled. (Juan B.

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Hernandez vs. Crossworld Marine Services, Inc. Mykonos Sidpping Co., Ltd., and Eleazar
Diaz, GR No. 209098; November 14, 2016)

JURISDICTION AND REMEDIES

The Bureau of Labor Relations (BLR) and the Regional Directors of Department of Labor
and Employment (DOLE) have concurrent jurisdiction over inter-union and intra-union
disputes; Such disputes include the conduct or nullification of election of union and
workers’ association officers
Section 226 of the Labor Code clearly provides that the BLR and the Regional Directors of DOLE
have concurrent jurisdiction over inter-union and intra-union disputes. Such disputes include the
conduct or nullification of election of union and workers’ association officers. There is, thus, no
doubt as to the BLR’s jurisdiction over the instant dispute involving member-unions of a federation
arising from disagreement over the provisions of the federation’s constitution and by-laws. (Atty.
Allan S. Montano vs. Atty. Ernesto C. Verceles, GR No. 168583; July 26, 2010)

It is true that under the Implementing Rules, redress must first be sought within the organization
itself in accordance with its constitution and by-laws. However, this requirement is not absolute
but yields to exception under varying circumstances. In the case at bench, Atty. Verceles made
his protest over Atty. Montaño’s candidacy during the plenary session before the holding of the
election proceedings. The FFW COMELEC, notwithstanding its reservation and despite
objections from certain convention delegates, allowed Atty. Montaño’s candidacy and proclaimed
him winner for the position. Under the rules, the committee on election shall endeavor to settle or
resolve all protests during or immediately after the close of election proceedings and any protest
left unresolved shall be resolved by the committee within five days after the close of the election
proceedings. (Atty. Allan S. Montano vs. Atty. Ernesto C. Verceles, GR No. 168583; July
26, 2010)

Even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory
on the part of the employer to reinstate and pay the wages of the dismissed employee
during the period of appeal until reversal by the higher court or tribunal
In view of this, the Court held this stance in Genuino as a stray posture and realigned the proper
course of the prevailing doctrine on reinstatement pending appeal vis-à-vis the effect of a reversal
on appeal, that is, even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it
is obligatory on the part of the employer to reinstate and pay the wages of the dismissed employee
during the period of appeal until reversal by the higher court or tribunal. It likewise settled the view
that the Labor Arbiter’s order of reinstatement is immediately executory and the employer has to
either re-admit them to work under the same terms and conditions prevailing prior to their
dismissal, or to reinstate them in the payroll, and that failing to exercise the options in the

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alternative, employer must pay the employee’s salaries. (Islriz Trading vs. Efren Capada, et.
al., GR No. 168501; January 31, 2011)

After the Labor Arbiter’s decision is reversed by a higher tribunal, the employee may be barred
from collecting the accrued wages, if it is shown that the delay in enforcing the reinstatement
pending appeal was without fault on the part of the employer.—The court went on to declare that
after the Labor Arbiter’s decision is reversed by a higher tribunal, the employee may be barred
from collecting the accrued wages, if it is shown that the delay in enforcing the reinstatement
pending appeal was without fault on the part of the employer. It then provided for the two-fold test
in determining whether an employee is barred from recovering his accrued wages, to wit: (1) there
must be actual delay or that the order of reinstatement pending appeal was not executed prior to
its reversal; and (2) the delay must not be due to the employer’s unjustified act or omission. If the
delay is due to the employer’s unjustified refusal, the employer may still be required to pay the
salaries notwithstanding the reversal of the Labor Arbiter’s Decision. (Islriz Trading vs. Efren
Capada, et. al., GR No. 168501; January 31, 2011)

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