Case Digests Compilation in

LABOR LAW AND SOCIAL LEGISLATION

By:

LBITZ
December 15, 2023

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 EMPLOYER-EMPLOYEE RELATIONSHIP

CASE NO: 1

PEDRO CHAVEZ, petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION, SUPREME PACKAGING, INC. and ALVIN
LEE, Plant Manager, respondents.

G.R. No. 146530 January 17, 2005

FACTS:

The petitioner, Pedro Chavez, was employed by Supreme Packaging, Inc. as a truck driver on
October 25, 1984. He was responsible for delivering the company's products from its factory
in Mariveles, Bataan, to customers in Metro Manila. Chavez initially received a payment of
P350.00 per trip, which was later adjusted to P480.00 per trip, and at the time of his alleged
dismissal, he was receiving P900.00 per trip.

In 1992, Chavez expressed his desire to avail himself of the benefits that regular employees
were receiving, such as overtime pay and 13th month pay, but the company failed to provide
these benefits. Chavez filed a complaint for regularization with the NLRC, but before the case
could be heard, the company terminated his services. Chavez then filed a complaint for illegal
dismissal, unfair labor practice, and non-payment of benefits.

ISSUE:

Whether an employer-employee relationship existed between Supreme Packaging, Inc. and

Pedro Chavez.

RULING:

Yes. The Supreme Court found that an employer-employee relationship existed between
Chavez and Supreme Packaging, Inc. based on the control exercised by the company over
Chavez's work. Chavez performed a service that was necessary and desirable to the
company's business, making him a regular employee. The contract of service invoked by the
company was declared null and void as it was a circumvention of labor laws protecting
employees' rights and security of tenure.

Further, the company failed to provide evidence that Chavez was an independent contractor,
as he did not have substantial capital in the form of tools and machinery, and the truck he
used belonged to the company. Also, the company issued routing slips to Chavez, indicating
that they exercised control over his work by specifying the order, time, and manner of
delivery and also the company provided the necessary equipment and materials for Chavez
to perform his duties as a truck driver.

Petitioner Chavez was paid on a per trip basis, which is a common practice in the trucking
industry, and does not necessarily indicate an independent contractor relationship.

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 CASE NO: 2

ZALDY G. ABELLA and the Members of the PLDT SECURITY PERSONNEL, Petitioners, vs.
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY (PLDT CO.) and PEOPLE'S
SECURITY INC. (PSI), Respondents.

G.R. No. 159469 June 8, 2005

FACTS:

This case involves a group of employees who were employed by the Philippine Long Distance
Telephone Company (PLDT). They were members of the PLDT Employees Union (PLDT EU)
and were covered by a Collective Bargaining Agreement (CBA) with PLDT.

In 1998, PLDT implemented a Voluntary Separation Program (VSP) as part of its

retrenchment program. The VSP offered financial incentives to employees who would
voluntarily resign from their positions. The employees who availed of the VSP were required
to sign a Release and Quitclaim Agreement (RQA), which waived their right to file any claims
against PLDT.

The group of employees mentioned above did not avail of the VSP and continued to work for
PLDT. However, they later filed a complaint before the National Labor Relations Commission
(NLRC) seeking payment of their retirement benefits, alleging that they were constructively
dismissed by PLDT.

The NLRC dismissed the complaint, ruling that the employees were not constructively
dismissed and that they were not entitled to retirement benefits because they did not meet
the age and service requirements under the CBA.

ISSUE:

Whether or not the employees were constructively dismissed by PLDT.

RULING:

No. The Supreme Court ruled that constructive dismissal occurs when there is a clear intent
on the part of the employer to sever the employer-employee relationship, and when the
employee has no choice but to resign due to unbearable working conditions. In this case, the
SC found that the employees voluntarily chose not to avail of the VSP and continued to work
for PLDT. There was no evidence to show that PLDT intended to force the employees to
resign.

Furthermore, there is an employer-employee relationship between the security guards and

People's Security Inc. (PSI), not Philippine Long Distance Telephone Company (PLDT).
Petitioners' logic that the certificates of appreciation and/or commendations for good
performance issued by PLDT to select security guards are proof that the latter are under the
control and supervision of PLDT is indeed non sequitur. As the Labor Arbiter has found,
similar certificates are also issued as a matter of practice to non-PLDT personnel like
members of the Philippine National Police (PNP) and military officers who have rendered
exemplary support and assistance to PLDT.

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 CASE NO: 3

ABS-CBN BROADCASTING CORPORATION, petitioner, vs. MARLYN NAZARENO, MERLOU

GERZON, JENNIFER DEIPARINE, and JOSEPHINE LERASAN, respondents.

G.R. No. 164156 September 26, 2006

FACTS:

The respondents were employed by ABS-CBN as production assistants (PAs) and were
assigned to the news and public affairs department for various radio programs. They were
issued ABS-CBN employees' identification cards and were required to work for a minimum
of eight hours a day, including Sundays and holidays. They performed various tasks such as
preparing and arranging commercial broadcasting, coordinating interviews, and assisting in
program interviews.

The respondents filed a complaint against ABS-CBN for recognition of regular employment
status and underpayment of various benefits. The Labor Arbiter initially dismissed the
complaint for lack of interest to pursue the case, but the respondents filed a motion to refile
the complaint, which was granted. The Labor Arbiter then ruled in favor of the respondents,
declaring them as regular employees and awarding them monetary benefits.

ABS-CBN appealed the decision to the NLRC, arguing that the Labor Arbiter erred in reviving
the case and depriving the company of due process. The NLRC modified the decision of the
Labor Arbiter, but still affirmed that the respondents were regular employees entitled to
monetary benefits.

ISSUE:

Whether or not the respondents should be considered regular employees of ABS-CBN.

RULING:

Yes. The Supreme Court held that the respondents were under the control and supervision of
ABS-CBN, performed tasks essential to its business, and were engaged for a continuous
period of more than five years. The Court applied the test of reasonable connection between
the activities performed by the employee and the usual business or trade of the employer. If
the work performed is necessary or desirable in the usual business or trade of the employer,
the employment is considered regular. The Court also considered the length of time the
respondents had been performing the same activities, which was an average of five years.
This indicated that their work was vital, necessary, and indispensable to ABS-CBN's business.
The Court also noted that ABS-CBN had not reported the termination of the respondents'
employment to the Department of Labor and Employment, which further supported the
finding that they were regular employees.

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 CASE NO: 4

THELMA DUMPIT-MURILLO, petitioner, vs. COURT OF APPEALS, ASSOCIATED

BROADCASTING COMPANY, JOSE JAVIER AND EDWARD TAN, respondents.

G.R. No. 164652 June 8, 2007

FACTS:

Petitioner Thelma Dumpit-Murillo is a newscaster and co-anchor for Balitang-Balita, an early

evening news program of Associated Broadcasting Company (ABC). Dumpit-Murillo was
initially hired under a three-month talent contract, which was subsequently renewed
multiple times. After the expiration of her last contract, Dumpit-Murillo expressed her
interest in renewing her contract with a salary increase. However, when she did not receive
a formal response from ABC, she considered it as a constructive dismissal and stopped
reporting for work. She then filed a complaint against ABC for illegal constructive dismissal
and nonpayment of salaries and benefits.

The Labor Arbiter initially dismissed Dumpit-Murillo's complaint, but the National Labor
Relations Commission (NLRC) reversed the decision and ruled that an employer-employee
relationship existed between Dumpit-Murillo and ABC. The NLRC declared that the talent
contracts were void and that Dumpit-Murillo was a regular employee illegally dismissed. The
NLRC ordered ABC to reinstate Dumpit-Murillo and pay her backwages, benefits, and
damages.

ABC appealed the NLRC's decision to the Court of Appeals, which ruled in favor of ABC. The
Court of Appeals held that Dumpit-Murillo was a fixed-term employee and not a regular
employee. The court reasoned that the talent contracts were voluntarily entered into by
Dumpit-Murillo and that she should not be allowed to renege on the stipulations of the
contracts.

ISSUE:

Whether or not Thelma Dumpit-Murillo is a regular employee.

RULING:

Yes. The primary standard for determining regular employment is the reasonable connection
between the particular activity performed by the employee and the usual trade or business
of the employer. In this case, Dumpit-Murillo's work as a newscaster and co-anchor was
necessary and desirable in ABC's business, which includes news and public information
dissemination. Furthermore, Dumpit-Murillo had been continuously engaged by ABC for a
significant period of time, as her talent contracts were repeatedly renewed. This continuous
engagement is sufficient evidence of the necessity and desirability of her work.

Moreover, the Supreme Court rejected ABC's argument that Dumpit-Murillo was a fixed-term
employee. The Court stated that for a fixed-term employment contract to be valid, it should
be shown that the fixed period was knowingly and voluntarily agreed upon by the parties,
with no force, duress, or improper pressure exerted on the employee. In this case, it was clear
that Dumpit-Murillo did not have equal bargaining power with ABC and was forced to sign
contract renewals under threat of losing her job. The Court also noted that ABC's practice of
repeatedly extending Dumpit-Murillo's talent contracts for a significant period of time was a
circumvention of her acquisition of regular status.

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 CASE NO: 5

REPUBLIC OF THE PHILIPPINES, vs. ASIAPRO COOPERATIVE, respondent.

G.R. NO. 172101 November 23, 2007

FACTS:

Asiapro Cooperative is a multi-purpose cooperative composed of owners-members. The

cooperative entered into service contracts with Stanfilco, a division of DOLE Philippines, Inc.
The owners-members of the cooperative do not receive compensation or wages but instead
receive a share in the service surplus earned by the cooperative. In order to enjoy the benefits
under the Social Security Law, the owners-members requested the services of Stanfilco to
register them with the SSS as self-employed and to remit their contributions. However, the
SSS claimed that Asiapro Cooperative is actually an employer of its owners-members and
should register as such with the SSS.

The SSS filed a petition-complaint against Asiapro Cooperative, seeking to have them register
as an employer and report their owners-members as covered employees under the
compulsory coverage of SSS. Asiapro Cooperative argued that there is no employer-employee
relationship between them and their owners-members.

ISSUE:

Whether or not there is an employer-employee relationship between respondent cooperative

and its owners-members.

RULING:

Yes. In determining the existence of an employer-employee relationship, the following

elements are considered: (1) the selection and engagement of the workers; (2) the payment
of wages by whatever means; (3) the power of dismissal; and (4) the power to control the
worker's conduct, with the latter assuming primacy in the overall consideration. The most
important element is the employer's control of the employee's conduct, not only as to the
result of the work to be done, but also as to the means and methods to accomplish. The power
of control refers to the existence of the power and not necessarily to the actual exercise
thereof. It is not essential for the employer to actually supervise the performance of duties of
the employee; it is enough that the employer has the right to wield that power. All the
aforesaid elements are present in this case.

In sum, having declared that there is an employer-employee relationship between the

respondent cooperative and its owners-member, the Supreme Court concluded that the
petitioner SSC has jurisdiction over the petition-complaint filed before it by the petitioner
SSS. This being our conclusion, it is no longer necessary to discuss the issue of whether the
respondent cooperative was estopped from assailing the jurisdiction of the petitioner SSC
when it filed its Answer with Motion to Dismiss.

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 CASE NO: 6

CELIA R. ATIENZA, petitioner, vs. NOEL SACRAMENTO SALUTA, respondent.

G.R. No. 233413 June 17, 2019

FACTS:

This case involves a complaint filed by respondent Noel Sacramento Saluta against petitioner
Celia R. Atienza and CRV Corporation for illegal dismissal, non-payment of wages, overtime
pay, holiday pay, premium pay for work on holidays and rest day, illegal deduction, and
issuance of a certificate of employment.

Saluta alleged that he was hired as a company driver by CRV Corporation and was assigned
to drive for Atienza. He claimed that he was involved in a vehicular accident and was made to
pay for the damages. He also stated that Atienza verbally terminated him when he requested
a day off to claim his driver's license.

The Labor Arbiter dismissed Saluta's complaint, ruling that he failed to prove that he was an
employee of CRV Corporation. However, the NLRC reversed the decision, finding that Saluta
was an employee of the company. The Court of Appeals affirmed the NLRC's decision, stating
that Atienza failed to prove that Saluta was not an employee of CRV Corporation. The CA also
held that Saluta was illegally dismissed and awarded him backwages, separation pay, and
other monetary benefits. Atienza filed a petition for review on certiorari before the Supreme
Court, arguing that Saluta failed to prove the existence of an employer-employee relationship
and that he abandoned his job.

ISSUE:

Whether or not there is an employer-employee relationship exists between the petitioner

and the respondent, and if the respondent was indeed dismissed from employment.

RULING:

To ascertain the existence of an employer-employee relationship, jurisprudence has

invariably 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." Although no particular form of
evidence is required to prove the existence of an employer-employee relationship, and any
competent and relevant evidence to prove the relationship may be admitted, a finding that
the relationship exists must nonetheless rest on substantial evidence, or such amount of
relevant evidence which a reasonable mind might accept as adequate to justify a conclusion.
In this case, a scrutiny of the records will bear out that the respondent failed to substantiate
his claim that he was a company driver of CRV Corporation.

Apart from his staunch insistence that he was a company driver of CRV Corporation,
respondent did not proffer any competent evidence, documentary or otherwise, as would
prove his claimed employment with the company. In the case at bench, the respondent did
not present his employment contract, company identification card, company pay slip or such
other document showing his inclusion in the company payroll that would show that his
services had been engaged by CRV Corporation. His contention that he received his salaries
through the ATM like the other employees of the company, even if true, does not sufficiently
show that his salaries were paid by the company as its employee. Respondent also failed to
present any proof showing how the company wielded the power of dismissal and control over
him. Evidence is wanting that the company monitored the respondent in his work. It had not
been shown that respondent was required by the company to clock in to enable it to check
his work hours and keep track of his absences. On the other hand, the records showed that
petitioner had a say on how he performed his work. It is the petitioner who decides when she

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needed the services of the respondent. As a matter of fact, the respondent had to secure
permission from the petitioner before he can take a leave of absence from work. That
petitioner also enjoyed the power of dismissal is beyond question given that respondent
himself believed that the petitioner verbally terminated him. Because the respondent failed
to establish his employment with CRV Corporation, the Court must necessarily agree with the
Labor Arbiter that respondent was the personal/family driver of the petitioner.

Regarding the issue of dismissal, the Court found that the respondent failed to establish that
he was dismissed from employment. The respondent's bare claim of being verbally
terminated by the petitioner was unsubstantiated by impartial and independent evidence.
The Court emphasized that mere absence or failure to report for work is not tantamount to
abandonment of work. The fact that the respondent filed a case for illegal dismissal is
inconsistent with abandonment of employment.

CASE NO: 7

JOSE Y. SONZA, petitioner, vs. ABS-CBN BROADCASTING CORPORATION, respondent.

G.R. No. 138051 June 10, 2004

FACTS:

In May 1994, respondent ABS-CBN Broadcasting Corporation (“ABS-CBN”) signed an

Agreement (“Agreement”) with the Mel and Jay Management and Development Corporation
(“MJMDC”). ABS-CBN was represented by its corporate officers while MJMDC was
represented by SONZA, as President and General Manager, and Carmela Tiangco
(“TIANGCO”), as EVP and Treasurer. Referred to in the Agreement as “AGENT,” MJMDC
agreed to provide SONZA’s services exclusively to ABS-CBN as talent for radio and television.

On 1 April 1996, SONZA wrote a letter to ABS-CBN’s President, Eugenio Lopez III about the
recent event concerning his program and career, and that the said violation of the company
has breached the agreement, thus, the notice of rescission of the Agreement was sent.

On 30 April 1996, SONZA filed a complaint against ABS-CBN before the Department of Labor
and Employment, National Capital Region in Quezon City. SONZA complained that ABS-CBN
did not pay his salaries, separation pay, service incentive leave pay, 13th month pay, signing
bonus, travel allowance and amounts due under the Employees Stock Option Plan (“ESOP”).

On 10 July 1996, ABS-CBN filed a Motion to Dismiss on the ground that no employer-
employee relationship existed between the parties. SONZA filed an Opposition to the motion
on 19 July 1996.

ISSUE:

Whether or not an employer-employee relationship existed between Sonza and ABS-CBN.

RULING:

The Court applies the control test to determine whether an employer-employee relationship
exists. The control test looks at the extent of control the hirer exercises over the worker. The
greater the supervision and control, the more likely the worker is an employee.

In terms of the selection and engagement of the employee, ABS-CBN engaged Sonza's services
because of his unique skills, talent, and celebrity status. While this is indicative of an
independent contractor relationship, it is not conclusive. The court considers all the
circumstances, with the control test being the most important element.

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Regarding the payment of wages, ABS-CBN directly paid Sonza his talent fees, and no part of
it went to his management company, MJMDC. The court finds that the negotiation of talent
fees and benefits is indicative of an independent contractor relationship. The fact that Sonza's
talent fees were significantly higher than those of ordinary employees further supports this
conclusion.

In terms of the power of dismissal, the court finds that ABS-CBN could not terminate Sonza's
services on grounds other than breach of contract. Even if ABS-CBN suffered business losses,
it remained obligated to pay Sonza's talent fees. This indicates an independent contractual
relationship.

Lastly, the court examines the power of control. ABS-CBN engaged Sonza's services
specifically for co-hosting programs and did not assign any other work to him. Sonza had the
freedom to deliver his lines, appear on television, and discuss topics of his choice, as long as
he did not attack ABS-CBN or its interests. ABS-CBN did not exercise control over the means
and methods of Sonza's performance.

Based on the control test and the analysis of the circumstances, the court concludes that
Sonza is an independent contractor and not an employee of ABS-CBN. The court cites foreign
case law, which supports the classification of television program hosts as independent
contractors. The court emphasizes that the control test is the most important factor in
distinguishing an employee from an independent contractor.

CASE NO: 8

TELEVISION AND PRODUCTION EXPONENTS, INC. and/or ANTONIO P. TUVIERA,

petitioners, vs. ROBERTO C. SERVAÑA, respondent.

G.R. No. 167648 January 28, 2008

FACTS:

This case involves a dispute between Television and Production Exponents, Inc. (TAPE) and
Antonio P. Tuviera. Tuviera worked as a security guard for TAPE from March 1987 until he
was terminated on March 3, 2000. He filed a complaint for illegal dismissal and nonpayment
of benefits, claiming that he was a regular employee and that his dismissal was without due
process. TAPE argued that Tuviera was not an employee but an independent contractor
falling under the talent group category. They claimed that Tuviera was initially employed as
a security guard for Radio Philippines Network (RPN-9) and was later tasked to assist TAPE
during its live productions. TAPE also stated that Tuviera was not prevented from seeking
other employment and that they had started negotiations for the engagement of a
professional security agency.

ISSUE:

Whether or not Tuviera is a regular employee or an independent contractor.

RULING:

The Supreme Court upheld the ruling of the Court of Appeals and the Labor Arbiter, stating
that the evidence supported the finding that Serva was a regular employee. More importantly,
respondent had been continuously under the employ of TAPE from 1995 until his termination
in March 2000, or for a span of 5 years. Regardless of whether or not respondent had been
performing work that is necessary or desirable to the usual business of TAPE, respondent is
still considered a regular employee under Article 280 of the Labor Code.

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As a regular employee, respondent cannot be terminated except for just cause or when
authorized by law. It is clear from the tenor of the 2 March 2000 Memorandum that
respondent's termination was due to redundancy.

However, with respect to the liability of petitioner Tuviera, president of TAPE, absent any
showing that he acted with malice or bad faith in terminating respondent, he cannot be held
solidarily liable with TAPE. Thus, the Court of Appeals ruling on this point has to be modified.

CASE NO: 9

FUJI TELEVISION NETWORK, INC., petitioner, vs. ARLENE S. ESPIRITU, respondent.

G.R. Nos. 204944-45 December 3, 2014

FACTS:

Respondent Arlene was initially engaged by Fuji in 2005 with a one-year employment
contract, which was successively renewed on a yearly basis. In January 2009, Arlene was
diagnosed with lung cancer and informed Fuji about her condition. Fuji expressed difficulty
in renewing her contract due to her illness, but Arlene insisted that she was still fit to work.
Eventually, Arlene and Fuji signed a non-renewal contract, which stated that her contract
would not be renewed after its expiration on May 31, 2009. Arlene received a total amount of
US$18,050.00 as compensation for her services, but she signed the contract "under protest."

Arlene filed a complaint for illegal dismissal and attorney's fees with the NLRC, alleging that
she was forced to sign the non-renewal contract and that her salaries and benefits were
withheld when she refused to sign. The Labor Arbiter dismissed Arlene's complaint, ruling
that she was an independent contractor and not an employee of Fuji. However, the NLRC
reversed the Labor Arbiter's decision, holding that Arlene was a regular employee and
ordering Fuji to pay her backwages.

Fuji filed a petition for review with the Court of Appeals, but it was denied. Hence, Fuji filed a
petition for review on certiorari with the Supreme Court.

ISSUE:

Whether or not Arlene Espiritu is a regular employee, and whether she was illegally
dismissed or not.

RULING:

The Court of Appeals did not err when it relied on the ruling in Dumpit-Murillo
and affirmed the ruling of the National Labor Relations Commission finding that
Arlene was a regular employee.

Arlene was hired by Fuji as a news producer, but there was no showing that she was hired
because of unique skills that would distinguish her from ordinary employees. Neither was
there any showing that she had a celebrity status. Fuji had the power to dismiss Arlene, as
provided for in her professional employment contract. Her contract also indicated
that Fuji had control over her work because she was required to work for eight (8) hours
from Monday to Friday, although on flexible time. On the power to control, Arlene alleged that
Fuji gave her instructions on what to report. Even the mode of transportation in
carrying out her functions was controlled by Fuji.

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 CASE NO: 10

JOSE MEL BERNARTE, petitioner, vs. PHILIPPINE BASKETBALL ASSOCIATION (PBA),

JOSE EMMANUEL M. EALA, and PERRY MARTINEZ, respondents.

G.R. No. 192084 September 14, 2011

FACTS:

Bernarte and Renato Guevarra were invited to join the PBA as referees. They signed contracts
on a year-to-year basis during the leadership of Commissioner Emilio Bernardino. However,
changes were made to their employment terms during the term of Commissioner Eala.
Bernarte was not made to sign a contract during the first conference of the All-Filipino Cup,
but was made to sign a one and a half month contract for the second conference. Guevarra
signed a contract as a trainee in 2001 and signed yearly contracts as a Regular Class C referee
starting in 2002. In 2004, Guevarra was no longer made to sign a contract. The respondents
claimed that the complainants entered into two contracts of retainer with the PBA in 2003,
but the contracts were not renewed after their expiration.

The Labor Arbiter declared Bernarte an employee and ordered his reinstatement and
payment of backwages, damages, and attorney's fees. The NLRC affirmed the Labor Arbiter's
decision. However, the Court of Appeals overturned the decisions of the NLRC and Labor
Arbiter, ruling that Bernarte is an independent contractor.

ISSUE:

Whether or not petitioner Bernarte is an employee of the respondents.

RULING:

The Supreme Court affirmed the decision of the Court of Appeals, ruling that Bernarte is an
independent contractor and not an employee of the respondents.

Bernarte is an independent contractor because the respondents did not exercise control over
the means and methods by which he performed his work. The referees have the freedom to
control the game on the playing court, and the authority to make calls belongs exclusively to
the referees. This indicates that they are not under the control and supervision of the
respondents.

Furthermore, the referees are only required to report for work when PBA games are
scheduled, which is three times a week for an average of 105 playing days a year. They
officiate games for an average of two hours per game. This limited working schedule and
hours further support the classification of the referees as independent contractors.

Additionally, the only deductions from the referees' fees are withholding taxes, unlike regular
employees who have deductions for contributions to social security, health insurance, and
housing funds. This shows that the referees do not receive the same benefits and protections
as regular employees.

Based on these factors and the foreign case law, the Supreme Court concluded that Bernarte
is an independent contractor and not an employee of the respondents. The continuous
rehiring of Bernarte by the respondents does not prove that he is an employee, but rather
signifies the renewal of the contract between the parties. Therefore, the non-renewal of the
contract does not constitute illegal dismissal.

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 CASE NO: 11

MARTICIO SEMBLANTE and DUBRICK PILAR, Petitioners,

vs.
COURT OF APPEALS, GALLERA DE MANDAUE / SPOUSES VICENTE and MARIA LUISA
LOOT, Respondents.

G.R. No. 196426 August 15, 2011

FACTS:

Petitioners assert that they were hired by respondents, as the official masiador and
sentenciador, respectively, of the cockpit sometime in 1993. A masiador 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 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.

For their services as masiador and sentenciador, Semblante receives PhP2,000 per week or a
total of PhP8,000 per month, while Pilar gets PhP3,500 a week or PhP14,000 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. Petitioners had both been issued employees' identification cards that they wear
every time they report for duty. They alleged never having incurred any infraction and/or
violation of the cockpit rules and regulations.

On November 14, 2003, 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. This prompted petitioners to file a complaint for illegal dismissal against
respondents.

ISSUE:

Whether or not there existed an employer-employee relationship between the petitioners

and respondent.

RULING:

Petitioners are NOT employees of respondents, since their relationship fails to pass the four-
fold test of employment. The Court have repeatedly mentioned in countless decisions: (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, which is the most important
element.

As found by both the NLRC and the CA, respondents had no part in petitioners' selection and
management; petitioners' compensation was paid out of the arriba(which is a percentage
deducted from the total bets), not by petitioners; and petitioners performed their functions
as masiador and sentenciador free from the direction and control of respondents. In the
conduct of their work, petitioners relied mainly on their "expertise that is characteristic of
the cockfight gambling," and were never given by respondents any tool needed for the
performance of their work.

Respondents, not being petitioners' employers, could never have dismissed, legally or
illegally, petitioners, since respondents were without power or prerogative to do so in the
first place. The rule on the posting of an appeal bond cannot defeat the substantive rights of

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respondents to be free from an unwarranted burden of answering for an illegal dismissal for
which they were never responsible.

CASE NO: 12

BERNARD A. TENAZAS, JAIME M. FRANCISCO and ISIDRO G. ENDRACA, Petitioners,

vs.
R. VILLEGAS TAXI TRANSPORT and ROMUALDO VILLEGAS, Respondents.

G.R. No. 192998 April 2, 2014

FACTS:

The petitioners alleged that they were hired and subsequently dismissed by the respondents
on different dates. Tenazas claimed that he was fired after reporting a minor accident
involving his taxi unit. Francisco alleged that he was terminated due to the company's
suspicion that he was organizing a labor union. Endraca stated that he was dismissed after
falling short of the required boundary for his taxi unit. The respondents denied Francisco's
employment and claimed that Tenazas and Endraca abandoned their work.

The Labor Arbiter dismissed the consolidated complaints for lack of merit. The NLRC,
however, reversed the decision and held that the additional evidence submitted by the
petitioners established their illegal dismissal. The NLRC ordered the respondents to pay
backwages, separation pay, and attorney's fees. The respondents filed a motion for
reconsideration, which was denied by the NLRC.

The respondents then filed a petition for certiorari with the Court of Appeals (CA). The CA
affirmed the NLRC's decision, but ruled that Francisco failed to prove his employment
relationship with the company. The CA deleted the award of separation pay and ordered the
reinstatement of Tenazas and Endraca. The petitioners filed a motion for reconsideration,
which was denied by the CA.

ISSUE:

Whether there was an employer-employee relationship.

RULING:

It is an oft-repeated rule that in labor cases, as in other administrative and quasi-judicial

proceedings, "the quantum of proof necessary is substantial evidence, or such amount of
relevant evidence which a reasonable mind might accept as adequate to justify a conclusion."
The burden of proof rests upon the party who asserts the affirmative of an issue. As Francisco
was claiming to be an employee of R. Villegas Taxi, it is incumbent upon him to proffer
evidence to prove the existence of the relationship.

In determining the presence or absence of an employer-employee relationship, the Court has

consistently looked for the following incidents, to wit: (a) the selection and engagement of
the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer’s
power to control the employee on the means and methods by which the work is
accomplished. The last element, the so-called control test, is the most important element.

Francisco failed to present substantial evidence to establish the relationship. No

documentary evidence submitted, like an attendance logbook, payroll, SSS record, or any
personnel file that depicts his status as an employee. He could also have at least presented
his social security records stating his contributions, name and address of employer (which

13
Tenazas presented). Another taxi operator, Emmanuel Villegas, also claimed to be his
employer – a fact not denied or questioned by Francisco in any of his pleadings.

CASE NO: 13

GREGORIO V. TONGKO, Petitioner,

vs.
THE MANUFACTURERS LIFE INSURANCE CO. (PHILS.), INC. and RENATO A. VERGEL DE
DIOS, Respondents.

G.R. No. 167622 June 29, 2010

FACTS:

Tongko and Manulife had a contractual relationship under a Career Agent's Agreement.
Tongko agreed to canvass for applications for life insurance and other products offered by
Manulife. The agreement stated that Tongko was an independent contractor and not an
employee of Manulife. Tongko later became a Unit Manager, Branch Manager, and Regional
Sales Manager in Manulife's Sales Agency Organization. Tongko received commissions,
persistency income, and management overrides as his earnings. He consistently declared
himself self-employed in his income tax returns and paid taxes as such.

In 2001, Manulife implemented manpower development programs and expressed concerns

about Tongko's performance in recruiting agents. Tongko was given a letter stating the need
for him to align his directions with management's agency growth policy. Subsequently,
Tongko's services were terminated by Manulife. Tongko filed an illegal dismissal complaint
with the National Labor Relations Commission (NLRC) Arbitration Branch, claiming that he
was an employee of Manulife.

ISSUE:

Whether or not there is an existence of an employment relationship between Tongko and

Manulife.

RULING:

Yes. The Supreme Court found that Manulife had control over Tongko based on his
compliance with Manulife's rules and regulations, performance of administrative duties, and
the fact that he was subject to disciplinary action. The court also considered the fact that
Tongko received fixed annual overrides, which were akin to a fixed salary. The court
emphasized that the existence of control is the most important factor in determining the
existence of an employment relationship.

The SC rejected Manulife's argument that Tongko was an independent contractor because he
received commissions and overrides. The court explained that the receipt of commissions
does not automatically make one an independent contractor, as even regular employees can
receive commissions. The SC also noted that Tongko's commissions were not based on the
actual sales he made, but on the sales made by the agents he recruited and supervised. This
further indicated that Tongko was not engaged in an independent business, but was an
integral part of Manulife's sales organization.

Tongko consistently declared himself as self-employed in his tax returns. However, the court
held that this declaration was not determinative of his employment status, as it was
contradicted by other evidence showing that he was under the control and supervision of
Manulife. The court emphasized that the true nature of the relationship between the parties

14
should be determined based on the totality of the circumstances and not solely on the parties'
characterization of their relationship.

CASE NO: 14

R TRANSPORT CORPORATION, petitioner,

vs.
ROGELIO EJANDRA, respondent.

G.R. No. 148508 May 20, 2004

FACTS:

The respondent, Rogelio Ejandra, worked as a bus driver for the petitioner, R Transport
Corporation, for almost six years. On January 31, 1996, his license was confiscated by an
officer of the Land Transportation Office (LTO) for obstruction of traffic. He reported the
incident to his manager and was given money to redeem his license. However, it took him a
week to retrieve his license from the LTO. When he reported back to work, he was told to
wait until his services were needed again. Feeling dismissed, he filed a complaint for illegal
dismissal.

The labor arbiter ruled in favor of the respondent, finding the dismissal to be without just
cause and ordering the petitioner to reinstate him and pay backwages. The NLRC affirmed
this decision. The Court of Appeals also affirmed the decision, stating that the findings of fact
of the labor arbiter were supported by substantial evidence.

ISSUE:

Whether the respondent was illegally dismissed by the petitioner and whether or not there
is an existence of employer-employee relationship.

RULING:

Yes. Denying the existence of an employer-employee relationship, petitioner insists that the
parties' agreement was for a contract of lease of services. The Supreme Court disagreed.
Petitioner is barred to negate the existence of an employer-employee relationship. In its
petition filed before this Court, petitioner invoked the rulings on the right of an employer to
dismiss an employee for just cause. Petitioner maintained that private respondent was
justifiably dismissed due to abandonment of work. By adopting said rulings, petitioner
impliedly admitted that it was in fact the employer of private respondent. According to the
control test, the power to dismiss an employee is one of the indications of an employer-
employee relationship. Petitioner's claim that private respondent was legally dismissed for
abandonment was in fact a negative pregnant: an acknowledgment that there was no mutual
termination of the alleged contract of lease and that private respondent was its employee.
The fact that petitioner paid private respondent on commission basis did not rule out the
presence of an employee-employer relationship.

15
 CASE NO: 15

NELLY ACTA MARTINEZ, petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION, et al., respondents.

G.R. No. 117495 May 29, 1997

FACTS:

Raul Martinez owned and operated two taxicab units under the business name PAMPA TX
and two additional units under the name P. J. TIGER TX. Private respondents Dominador
Corro, Pastor Corro, Celestino Corro, Luis Corro, Ereberto Corro, Jaime Cruz, Wenceslao
Delvo, Gregorio Delvo, Hermejias Colibao, Jose Ogana, and Alonso Albao worked as drivers
for him. After Raul Martinez's death, his mother, Nelly Acta Martinez, took over the
management and operation of the business. Private respondents filed a complaint against
Raul Martinez and Nelly Acta Martinez for violation of P.D. 851 (requiring employers to pay
their employees a 13th month pay) and illegal dismissal. They claimed that they were regular
drivers for Raul Martinez and had not received a 13th month pay. Petitioner Nelly Acta
Martinez denied the existence of labor contracts between her son and the private
respondents and argued that the relationship between her son and the private respondents
was that of lessor-lessee, not employer-employee.

ISSUE:

Whether or not the relationship between Raul Martinez and the private respondents was that
of employer-employee or lessor-lessee.

RULING:

The relationship between Raul Martinez and the private respondents was that of employer-
employee. The Court found that the private respondents were regular drivers for Raul
Martinez, as evidenced by their continuous employment and the fact that they were under
the control and supervision of Raul Martinez.

The Supreme Court ruled that the relationship between jeepney owners/operators on one
hand and jeepney drivers on the other under the boundary system is that of employer-
employee and not of lessor-lessee. In the lease of chattels the lessor loses complete control
over the chattel leased although the lessee cannot be reckless in the use thereof, otherwise
he would be responsible for the damages to the lessor. In the case of jeepney
owners/operators and jeepney drivers, the former exercise supervision and control over the
latter. The fact that the drivers do not receive fixed wages but get only that in excess of the
so-called "boundary" they pay to the owner/operator is not sufficient to withdraw the
relationship between them from that of employer and employee. The doctrine is applicable
by analogy to the present case. Thus, private respondents were employees of Raul Martinez
because they had been engaged to perform activities which were usually necessary or
desirable in the usual business or trade of the employer. The records show that private
respondents had been employed since 20 October 1989 except for Ogana, the Delvos, Albao
and Colibao who were employed on later dates.

16
 CASE NO: 16

PAGUIO TRANSPORT CORPORATION, petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION and WILFREDO MELCHOR, respondents.

G.R. No. 119500 August 28, 1998

FACTS:

This case involves a petition filed by Paguio Transport Corporation (petitioner) against the
National Labor Relations Commission (NLRC) and Wilfredo Melchor (respondents). The
NLRC affirmed the decision of the labor arbiter that there was an existing employer-employee
relationship between the petitioner and the private respondent and that the private
respondent was illegally dismissed.

The facts of the case are as follows: Private respondent Wilfredo Melchor was hired by
petitioner Paguio Transport Corporation as a taxi driver on December 25, 1992, under the
"boundary system." He was assigned to drive a taxi unit on a 24-hour schedule every two
days and earned an average income of P500 to P700 per trip, excluding the P650 boundary
and other deductions. On November 24, 1993, Melchor was involved in a vehicular accident
and was advised by the petitioner to stop working and rest. After several days, when he
reported for work, he was informed that his services were no longer needed. Melchor then
filed a complaint for illegal dismissal.

ISSUE:

Whether or not there was an employer-employee relationship between the petitioner and
the private respondent.

RULING:

Yes. Boundary system is that of employer-employee and not of lessor-lessee. Under the
“boundary system” the drivers do not receive fixed wages; all the excess in the amount of
boundary was considered his income but it is not sufficient to withdraw the relationship
between them from that of employer and employee. Private respondents were employees
because they had been engaged to perform activities which were usually necessary or
desirable in the usual trade or business of the employer

CASE NO: 17

CALAMBA MEDICAL CENTER, INC., petitioner

vs.
NATIONAL LABOR RELATIONS COMMISSION, RONALDO LANZANAS AND
MERCEDITHA* LANZANAS, respondents.

G.R. No. 176484 November 25, 2008

FACTS:

In March 1998, one of the respondents overheard a telephone conversation between the
other respondent and a fellow employee discussing the low number of patients admitted to
the hospital. The medical director issued a memorandum to the respondent involved in the

17
conversation, placing him under preventive suspension pending an investigation. However,
the petitioner did not give any work schedule to the other respondent, who was not involved
in the incident.

Subsequently, the rank-and-file employees of the petitioner went on strike due to unresolved
grievances. The respondents filed complaints for illegal suspension and illegal dismissal
before the National Labor Relations Commission (NLRC). The Department of Labor and
Employment (DOLE) certified the labor dispute to the NLRC for compulsory arbitration and
issued a return-to-work order to the striking employees.

The petitioner later terminated the employment of the respondent involved in the telephone
conversation for failure to report back to work and alleged participation in union activities.
The other respondent was dismissed based on the presumption that her sympathies were
with her husband. The NLRC ruled in favor of the respondents, ordering the petitioner to pay
backwages, separation pay, moral damages, exemplary damages, and attorney's fees.

The petitioner appealed to the Court of Appeals, which initially granted the petition but later
reinstated the NLRC decision with reduced damages.

ISSUE:

Whether or not an employer-employee relationship exists.

RULING:

Yes. 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.

Where a person who works for another does so more or less at his own pleasure and is not
subject to definite hours or conditions of work, and is compensated according to the result of
his efforts and not the amount thereof, the element of control is absent.

As priorly stated, private respondents maintained specific work-schedules, as determined by

petitioner through its medical director, which consisted of 24-hour shifts totaling forty-eight
hours each week and which were strictly to be observed under pain of administrative
sanctions.

That petitioner exercised control over respondents gains light from the undisputed fact that
in the emergency room, the operating room, or any department or ward for that matter,
respondents' work is monitored through its nursing supervisors, charge nurses and
orderlies. Without the approval or consent of petitioner or its medical director, no operations
can 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.

18
 CASE NO: 18

UERM MEMORIAL MEDICAL CENTER RESIDENT DOCTOR’S UNION, petitioner vs.

LAGUESMA, respondent.

G.R. Nos. 125425-26 November 24, 1993

FACTS:

The existence of an employer-employee relationship between the resident physicians of the

University of the East Ramon Magsaysay Medical Center and the hospital became the crux of
the matter in its petition for certification. The resident physicians formed a union called the
UERMMC-Resident Doctors Union and filed the petition for certification so that it will be
recognized as the exclusive bargaining agent of all the resident physicians in the hospital for
purposes of collective bargaining. The petition for certification was dismissed by the
Undersecretary, acting under the authority of the Secretary of Labor on the ground that there
exists no employer-employee relationship between the resident doctors and the hospital.

ISSUE:

Whether or not the doctors were employees of the hospital.

RULING:

It is clear that physicians undergo residency training in order to hone their skills and develop
or improve their knowledge in a specialized medical field or discipline. Hence, residency is
basically and simply a continuation of their medical course. However, they are not required
or mandated under any law to further undergo a residence training program. Having passed
the medical board examinations, they are already licensed physicians and could very well
engage in the general practice of medicine. It is for the practice of highly specialized medical
disciplines which necessitates further on-the-job training thereon.

Viewed from this perspective, residency training clearly amounting to a pursuit of further
education on a specific discipline. Thus, the relationship between the teaching/training
hospital may simply be likened to a medical school/university, but in this instance, the
emphasis is on the practical application and training of its students, the resident doctors.”

CASE NO: 19

FARLEY FULACHE, et al., Petitioners,

vs.
ABS-CBN BROADCASTING CORPORATION, Respondent.

G.R. No. 183810 January 21, 2010

FACTS:

This case involves a group of drivers who were previously employed by ABS-CBN
Broadcasting Corporation (ABS-CBN). The drivers filed a petition seeking recognition as
regular employees and entitlement to the benefits and privileges under the collective
bargaining agreement (CBA). The labor arbiter ruled in favor of the drivers, declaring them
regular employees entitled to CBA benefits. ABS-CBN appealed the decision, but in the
meantime, terminated the drivers' services claiming redundancy. The drivers refused to sign

19
resignation letters and join a contracting agency, arguing that they should not be dismissed
after being declared regular employees. The National Labor Relations Commission (NLRC)
initially ruled that the drivers were illegally terminated due to bad faith on the part of ABS-
CBN. However, the NLRC later reversed its decision and reinstated the labor arbiter's
decision. The Court of Appeals (CA) affirmed the NLRC's decision.

ISSUES:

1. Whether or not the drivers are regular employees.

2. Whether or not the drivers were illegally dismissed.

RULING:

1. Yes. The Supreme Court held that as regular employees, the drivers are members of the
bargaining unit and are entitled to CBA benefits. The inclusion or exclusion of new job
classifications into the bargaining unit shall be subject of discussion between the COMPANY
and the UNION.

Under these terms, the petitioners are members of the appropriate bargaining unit because
they are regular rank and-file employees and do not belong to any of the excluded categories.
Specifically, nothing in the records shows that they are supervisory or confidential
employees; neither are they casual nor probationary employees. Most importantly, the labor
arbiter’s decision of January 17, 2002 – affirmed all the way up to the CA level – ruled against
ABS-CBN’s submission that they are independent contractors. Thus, as regular rank-and-file
employees, they fall within CBA coverage under the CBA’s express terms and are entitled to
its benefits.

2. Their dismissal was not only unjust and in bad faith as the above discussions abundantly
show. The bad faith in ABS-CBN’s move toward its illegitimate goal was not even hidden; it
dismissed the petitioners – already recognized as regular employees – for refusing to sign up
with its service contractor. Thus, from every perspective, the petitioners were illegally
dismissed.

By law, illegally dismissed employees are entitled to reinstatement without loss of seniority
rights and other privileges and to full backwages, inclusive of allowances, and to other
benefits or their monetary equivalent from the time their compensation was withheld from
them.

CASE NO: 20

NELSON V. BEGINO, et al., petitioners, vs. ABS-CBN CORPORATION (FORMERLY, ABS-

CBN BROADCASTING CORPORATION) AND AMALIA VILLAFUERTE, respondents.

G.R. No. 199166 April 20, 2015

FACTS:

The petitioners were engaged by ABS-CBN as cameramen/editors and reporters for TV

broadcasting. They were given Talent Contracts and Project Assignment Forms which
detailed the duration of their projects and their daily technical requirements. They were
tasked with covering news items for the TV Patrol Bicol Program. The Talent Contracts stated
that there was no employer-employee relationship between the parties, but included
provisions on the talent's performance of work in accordance with ABS-CBN's standards and
compliance with policies and guidelines.

20
ISSUE:

Whether or not there is existence of an employer-employee relationship between the parties.

RULING:

Yes. The Supreme Court stated that the test to determine whether employment is regular or
not is the reasonable connection between the activity performed by the employee and the
business or trade of the employer. In this case, the employees were performing functions
necessary and essential to ABS-CBN's business of broadcasting television and radio content.
The fact that their services were engaged for specified periods and that they were paid
according to the budget allocated for the program did not change their status as regular
employees. The court also noted that the employees were continuously re-hired by ABS-CBN,
which indicated that they were regular employees.

If an employee has been performing a job for at least one year, even if the performance is not
continuous or intermittent, the law deems the repeated or continuing performance as
sufficient evidence of the necessity of that activity in the business. The court also stated that
fixed-term contracts imposed to preclude the acquisition of tenurial security by the employee
are contrary to public policy.

The SC also considered the control and supervision exercised by ABS-CBN over the
employees. The employees were subject to ABS-CBN's control and supervision, and ABS-CBN
provided them with the necessary equipment for their work. The SC found that the terms and
conditions of the employees' contracts demonstrated ABS-CBN's control over them.

CASE NO: 21

COCA COLA BOTTLERS (PHILS.), INC./ERIC MONTINOLA, Manager, Petitioners,

vs.
DR. DEAN N. CLIMACO, Respondent.

G.R. No. 146881 February 5, 2007

FACTS:

Respondent Dr. Climaco was hired by Coca Cola as a company doctor under a Retainer
Agreement. The agreement stated that it would be valid for one year, with either party having
the right to terminate it with a 30-day written notice. The agreement also specified the
compensation to be paid to Dr. Climaco and outlined his duties and responsibilities as the
company doctor. Despite the non-renewal of the Retainer Agreement, Dr. Climaco continued
to work for Coca Cola until he received a letter terminating their agreement.

Dr. Climaco then filed a complaint before the National Labor Relations Commission (NLRC)
seeking recognition as a regular employee and payment of benefits. The Labor Arbiter
dismissed his complaint, finding that there was no employer-employee relationship between
the parties. The NLRC affirmed the decision of the Labor Arbiter. However, the Court of
Appeals reversed the NLRC's decision, ruling that an employer-employee relationship existed
between Coca Cola and Dr. Climaco and that his dismissal was illegal.

ISSUE:

Whether or not an employer-employee relationship exists between Coca Cola and Dr.
Climaco.

21
RULING:

No. Under 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 Supreme 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 petitioner company lacked the
power of control over the performance by respondent 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.”

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
respondent performed his assigned tasks. 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.

An employee is required to stay in the employer’s workplace or proximately close thereto

that he cannot utilize his time effectively and gainfully for his own purpose. Such is not the
prevailing situation here. 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 SC also notes that the Retainership Agreement granted to both parties the power to
terminate their relationship upon giving a 30-day notice. Hence, petitioner company did not
wield the sole power of dismissal or termination.

Considering that there is no employer-employee relationship between the parties, the

termination of the Retainership Agreement, which is in accordance with the provisions of the
Agreement, does not constitute illegal dismissal of respondent.

CASE NO: 22

MARVIN O. DAGUINOD, Petitioner

vs.
SOUTHGATE FOODS, INC., RESOURCE SERVICE AND MULTIPURPOSE COOPERATIVE:
represented by RESTY CRUZ, Respondents

G.R. No. 227795 February 20, 2019

FACTS:

Daguinod alleges that on April 10, 2011, he was accused of theft by the manager on duty, Jane
Geling, after an audit revealed an overage of cash in the register. He was brought to a function
room and accused of theft. Daguinod claims that he did not commit theft as there was an
overage of cash. He was given two Notices to Explain (NTE) and was instructed to write a
confession. He was then brought to the police station and put in jail. He eventually wrote a
confession letter in exchange for his release. Daguinod claims that his employment was
terminated on May 13, 2011.

22
Generation One admitted that Daguinod was its employee and Southgate asserted that
Daguinod was an employee of Generation One. Both Generation One and Southgate denied
that Daguinod was coerced into signing the confession. They also argued that Generation One
is a legitimate labor contractor and that the Service Agreement between Generation One and
Southgate is valid.

The labor tribunals, including the Labor Arbiter (LA) and the National Labor Relations
Commission (NLRC), ruled in favor of Generation One and Southgate, stating that Generation
One is a legitimate labor contractor and that Daguinod was constructively dismissed.

ISSUE:

Whether or not petitioner Daguinod is a regular employee of Southgate or a contractual

employee of Generation One.

RULING:

Yes. The Supreme Court ruled that Daguinod is a regular employee of Southgate and that
Generation One is a labor-only contractor. The court based its ruling on several factors,
including the nature of Daguinod's job, the control and supervision exercised by Southgate,
and the fact that the tasks performed by Daguinod were necessary and desirable to the
business of a fast food restaurant.

The SC also found that Generation One did not have substantial capital to be considered a
legitimate labor contractor. The court rejected the submission of one Income Tax Return as
insufficient evidence of substantial capital and held that the registration with the Department
of Labor and Employment (DOLE) as an independent contractor is not conclusive evidence of
legitimate status.

Furthermore, the SC found that there was non-compliance with procedural due process in
the dismissal of Daguinod. The notices given to Daguinod did not contain the specific
information required by law, and he was not given a reasonable opportunity to submit his
written explanation. The court concluded that Daguinod was constructively dismissed and
awarded him full backwages, separation pay, moral and exemplary damages, and attorney's
fees.

CASE NO: 23

RICHARD N. WAHING, RONALD L. CALAGO AND PABLO P. MAIT, PETITIONERS, VS.

SPOUSES AMADOR DAGUIO AND ESING DAGUIO, RESPONDENTS.

G.R. No. 219755 April 18, 2022

FACTS:

This case involves a Petition for Review on Certiorari filed by Richard N. Wahing, Ronald L.
Calago, and Pablo P. Mait (collectively referred to as Wahing, et al.) against the spouses
Amador Daguio and Esing Daguio (the Daguio Spouses). Wahing, et al. worked as rubber tree
tappers for the Daguio Spouses until they were ordered to stop working. They then filed a
complaint for illegal dismissal, among other claims, which was initially dismissed by the
Labor Arbiter on the ground that the relationship between the parties was that of a landlord
and tenant, not employer-employee. However, the National Labor Relations Commission
(NLRC) later vacated the dismissal and ordered the Labor Arbiter to decide the complaint on
the merits.

23
ISSUE:

Whether or not an employer-employee relationship existed between Wahing, et al. and the
Daguio Spouses.

RULING:

Yes. The Supreme Court applied the four-fold test for determining the existence of an
employer-employee relationship, which includes the power to hire, payment of wages, power
to dismiss, and power to control. The Court found that the Daguio Spouses exercised control
over Wahing, et al. by supervising their work, setting their work hours, and having the ability
to dismiss them for violating work standards.

The Supreme Court also considered the economic realities of the relationship, applying a two-
tiered test that looks at the employer's control over the means and methods of work and the
economic dependence of the worker on the employer. It was found that Wahing, et al. were
economically dependent on the Daguio Spouses for their livelihood and performed services
integral to the Daguio Spouses' business.

Based on the evidence presented, including testimonies from both parties, the Supreme Court
concluded that an employer-employee relationship existed between Wahing, et al. and the
Daguio Spouses. As a result, the Daguio Spouses' termination of Wahing, et al.'s employment
without just or authorized cause was deemed illegal. The Supreme Court ordered the
reinstatement of Wahing, et al., as well as the payment of back wages and labor standards
benefits. If reinstatement is not possible, the Daguio Spouses were ordered to pay separation
pay.

CASE NO: 24

EDITA SANTOS DEGAMO, petitioner, vs. MY CITIHOMES (CITIHOMES BUILDER &

DEVELOPMENT CORPORATION), JOHN WANG, and ROSIE WANG, respondents.

G.R. No. 249737 September 15, 2021

FACTS:

Petitioner filed a complaint against Citihomes for non-payment of commission fees. She
alleged that she was hired by Citihomes as an agent and later promoted to sales manager, but
was not paid her commission fees for the properties she sold.

Citihomes argued that petitioner was not its employee but a sales agent of Ms. Evelyn Abapo,
a licensed broker who had the power to hire and terminate petitioner. Citihomes claimed that
it did not exercise control over petitioner's work and that the fees of sales agents came from
commissions paid to Ms. Abapo.

The Labor Arbiter initially ruled in favor of petitioner, finding that an employer-employee
relationship existed between Citihomes and petitioner. However, the NLRC reversed this
decision, stating that there was no employer-employee relationship. The NLRC found that
petitioner failed to present evidence that she was hired by Citihomes as its employee and that
Citihomes did not exercise control over her work. The CA affirmed the NLRC's ruling, stating
that there was no employer-employee relationship between the parties.

ISSUE:

Whether or not there was an employer-employee relationship between Citihomes and

petitioner.

24
RULING:

The Court held that the NLRC and the CA correctly determined that the four elements of an
employer-employee relationship were not present in this case. The Court applied the four-
fold test, which includes the selection and engagement of the employee, payment of wages,
power of dismissal, and power to control the employee's conduct. The Court found that
petitioner failed to provide sufficient evidence to prove the existence of an employer-
employee relationship.

The Court emphasized that the power of the employer to control the work of the employee is
the most significant determinant of an employer-employee relationship. In this case,
Citihomes did not exercise control over petitioner's work. Petitioner's allegations that
Citihomes required her to maintain a monthly sales quota and closely monitored her work
were not enough to establish control. The Court also considered the fact that petitioner was
hired and terminated by Ms. Abapo, not Citihomes. Furthermore, the fees of sales agents were
paid by commissions received by Ms. Abapo, not directly by Citihomes. These factors
indicated that petitioner was not an employee of Citihomes.

CASE NO: 25

WILHELMINA S. OROZCO, petitioner,

vs.
THE FIFTH DIVISION OF THE HONORABLE COURT OF APPEALS, PHILIPPINE DAILY
INQUIRER, and LETICIA JIMENEZ MAGSANOC, respondents.

G.R. No. 155207 August 13, 2008

FACTS:

This case involves a petition for review filed by Wilhelmina Orozco against the Fifth Division
of the Court of Appeals, Philippine Daily Inquirer (PDI), and Leticia Jimenez Magsanoc. Orozco
worked as a columnist for PDI, writing the column "Feminist Reflections" in the Lifestyle
Section. In November 1992, PDI decided to terminate Orozco's column due to a reduction in
the number of columnists. Orozco filed a complaint against PDI and Magsanoc for illegal
dismissal, underpayment, non-payment of allowances, and other claims.

ISSUE:

Whether or not Orozco, a newspaper columnist, is an employee of PDI.

RULING:

Yes. Under Article 223 of the Labor Code: ART. 223. Appeal. – Decisions, awards or orders of
the Labor Arbiter are final and executory unless appealed to the Commission by any or both
parties within ten (10) calendar days from receipt of such decisions, awards, or orders. In
case of a judgment involving a monetary award, an appeal by the employer may be perfected
only upon the posting of a cash or surety bond issued by a reputable bonding company duly
accredited by the Commission in the amount equivalent to the monetary award in the
judgment appealed from. The requirement that the employer post a cash or surety bond to
perfect its/his appeal is apparently intended to assure the workers that if they prevail in the
case, they will receive the money judgment in their favor upon the dismissal of the employer’s
appeal. It was intended to discourage employers from using an appeal to delay, or even evade,
their obligation to satisfy their employees’ just and lawful claims. But in this case, this
principle is relaxed by the Supreme Court considering the fact that the Labor Arbiter, in ruling
that the Orozco is entitled to backwages, did not provide any computation.

25
The case is then remanded to the Labor Arbiter for the computation. This necessarily pended
the resolution of the other issue of whether or not there exists an employer employee
relationship between PDI and Orozco

CASE NO: 26

COCA-COLA BOTTLERS PHILIPPINES, INC., petitioner, vs. RICKY E. DELA CRUZ, et. al.,
respondents.

G.R. No. 184977 December 7, 2009

FACTS:

The respondents filed complaints for regularization with money claims against the petitioner,
alleging that they were route helpers assigned to work in the petitioner's trucks but were not
given the full remuneration, benefits, and privileges of regular employees. The petitioner
argued that it had contracts of services with Peerless Integrated Service, Inc. and Excellent
Partners Cooperative, Inc. to provide allied services, and that there was no employer-
employee relationship between the company and the respondents.

The Labor Arbiter dismissed the complaints for lack of jurisdiction, finding that the
respondents were employees of Peerless or Excellent. The respondents appealed to the
National Labor Relations Commission (NLRC), but their appeal was denied. They then filed a
petition for certiorari before the Court of Appeals (CA), which ruled in their favor. The CA
found that Peerless and Excellent were engaged in labor-only contracting, a prohibited
undertaking, and ordered the petitioner to reinstate the respondents as regular employees
with full benefits.

The petitioner filed the present appeal, arguing that the CA erred in giving due course to the
petition despite the respondents' failure to comply with the rules on notarial practice, in
excluding the contractors as necessary parties, and in refusing to follow established
jurisprudence.

ISSUE:

Whether or not the respondents were employees of the petitioner or if there was a legitimate
contracting relationship between the petitioner and the contractors.

RULING:

The Supreme Court held that Peerless and Excellent were mere suppliers of labor and did not
have the required capitalization and control over their contracted workers. The contracted
personnel were engaged in component functions in the main business of the company and
were under the company's supervision and control.

The main provision of the Labor Code that applies to contracting and subcontracting is Article
106, which states that employees of the contractor and subcontractor should be paid in
accordance with the provisions of the Code. The Secretary of Labor has the authority to
restrict or prohibit labor contracting to protect the rights of workers. Labor-only contracting
is defined as a situation where the person supplying workers to an employer does not have
substantial capital or investment and the workers are performing activities directly related
to the principal business of the employer. The Department of Labor and Employment
implements this provision through its Department Order No. 18-02 (D.O. 18-02), which
prohibits labor-only contracting.

26
 CASE NO: 27

PHILIPPINE AIRLINES, INC., petitioner,

vs.
ENRIQUE LIGAN, EMELITO SOCO, et al., respondents.

G.R. No. 146408 February 29, 2008

FACTS:

This case involves a dispute between Philippine Airlines, Inc. (petitioner) and several
employees (respondents) who were previously employed by Synergy Services Corporation
(Synergy), a labor-only contractor. The respondents filed complaints against the petitioner
for regularization and underpayment of benefits. The court found that Synergy was a labor-
only contractor and declared the respondents as regular employees of the petitioner. The
court ordered the petitioner to accept the respondents as regular employees in their same or
substantially equivalent positions and pay them the wages and benefits due to regular
employees. The court also ordered the petitioner to pay salary differentials to the
respondents corresponding to the difference between their wages and benefits and those
granted to other regular employees of the same rank. The case was remanded to the Labor
Arbiter to determine the monetary liabilities of the petitioner.

ISSUE:

Whether or not the respondents should be recognized as regular employees of the petitioner.

RULING:

Yes. The Supreme Court found that Synergy was a labor-only contractor and that the
respondents were performing work that was directly related to the petitioner's business. The
SC also held that the petitioner failed to establish economic losses that would justify the
termination of the respondents.

The SC clarified that its ruling on the regular status of the respondents did not prejudice the
resolution of the issue of illegal dismissal, which was pending before the appellate court. If an
authorized cause for dismissal is later found to exist, the petitioner would still have to pay
the respondents their corresponding benefits and salary differential. If there is a finding of
illegal dismissal, an order for reinstatement with full backwages would not conflict with the
court's declaration of the regular employee status of the respondents.

CASE NO: 28

DOLE PHILIPPINES, INC., Petitioner,

vs.
MEDEL ESTEVA, et. al, Respondents.

G.R. No. 161115 November 30, 2006

FACTS:

Petitioner is a corporation duly organized and existing in accordance with Philippine laws,
engaged principally in the production and processing of pineapple for the export market. Its
plantation is located in Polomolok, South Cotabato.

27
Respondents are members of the Cannery Multi-Purpose Cooperative (CAMPCO). CAMPCO
was organized in accordance with Republic Act No. 6938, otherwise known as the
Cooperative Code of the Philippines, and duly-registered with the Cooperative Development
Authority (CDA) on 6 January 1993. Members of CAMPCO live in communities surrounding
petitioner's plantation and are relatives of petitioner's employees. On 17 August 1993,
petitioner and CAMPCO entered into a Service Contract. The Service Contract referred to
petitioner as "the Company," while CAMPCO was "the Contractor."

Pursuant to the foregoing Service Contract, CAMPCO members rendered services to

petitioner. The number of CAMPCO members that report for work and the type of service
they performed depended on the needs of petitioner at any given time.

Respondents thus argued that they should be considered regular employees of petitioner
given that: (1) they were performing jobs that were usually necessary and desirable in the
usual business of petitioner; (2) petitioner exercised control over respondents, not only as to
the results, but also as to the manner by which they performed their assigned tasks; and (3)
CAMPCO, a labor-only contractor, was merely a conduit of petitioner. As regular employees
of petitioner, respondents asserted that they were entitled to security of tenure and those
placed on "stay home status" for more than six months had been constructively and illegally
dismissed. Respondents further claimed entitlement to wage differential, moral damages, and
attorney's fees.

ISSUE:

Whether or not the workers should be considered regular employees of Dolefil.

RULING:

In the event that the contractor or subcontractor fails to pay the wages of his employees in
accordance with this Code, the employer shall be jointly and severally liable with his
contractor or subcontractor to such employees to the extent of the work performed under
the contract, in the same manner and extent that he is liable to employees directly employed
by him.

The Secretary of Labor may, by appropriate regulations, restrict or prohibit the contracting
out of labor to protect the rights of workers established under this Code. In so prohibiting or
restricting, he may make appropriate distinctions between labor-only contracting and job
contracting as well as differentiations within these types of contracting and determine who
among the parties involved shall be considered the employer for purposes of this Code, to
prevent any violation or circumvention of any provision of this Code.

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

To implement the foregoing provision of the Labor Code, as amended, Sections 8 and 9, Rule
VIII, Book III of the implementing rules, in force since 1976 and prior to their amendment by
DOLE Department Order No. 10, series of 1997.

Since these statutory and regulatory provisions were the ones in force during the years in
question, then it was in consideration of the same that DOLE Regional Director Parel and
DOLE Undersecretary Trajano issued their Orders on 19 September 1993 and 15 September
1994, respectively, both finding that CAMPCO was engaged in labor-only contracting.
Petitioner, in its third assignment of error, questions the weight that the Court of Appeals
gave these orders in its Decision, dated 20 May 2002, and Amended Decision, dated 27
November 2003.

28
 CASE NO: 29

OSCAR S. ORTIZ, Petitioner, v. FOREVER RICHSONS TRADING CORPORATION,

CHARVERSON WOOD INDUSTRY CORPORATION, and ADAN CO, Respondents.

G.R. No. 238289 January 20, 2021

FACTS:

The case involves a complaint for illegal dismissal and monetary claims filed by petitioner
Oscar S. Ortiz against Forever Richsons Trading Corporation (now Charverson Wood
Industry Corporation), and Adan Co. Oscar alleged that he was hired by Forever Richsons in
June 2011 and continued to work for them even after his 5-month employment contract
expired. However, when news spread that previous employees had won their case against
the company, the workers were required to sign new employment contracts, blank papers,
and vouchers. Petitioner Oscar and a few others refused to sign. He claimed that he was a
regular employee of the company and was illegally dismissed when he refused to sign the
new contract. He also alleged that he was not paid the mandated minimum wage and other
benefits. Petitioner sought reinstatement, backwages, damages, and attorney's fees.

The respondents argued that the petitioner was not their employee but was hired by
Workpool Manpower Services, a legitimate job contractor certified by the Department of
Labor and Employment (DOLE). They claimed that Oscar's employment was terminated due
to the expiration of his contract with Workpool Manpower. They argued that since petitioner
was not their employee, they could not dismiss him or be held liable for monetary benefits.

The Labor Arbiter (LA) dismissed petitioner's complaint for his failure to implead Workpool
Manpower as an indispensable party. The LA ruled that petitioner became a regular employee
of Workpool Manpower after the expiration of his contract and that Workpool Manpower
was a legitimate labor contractor. The National Labor Relations Commission (NLRC) and the
Court of Appeals (CA) affirmed the LA's ruling, stating that Workpool Manpower was an
indispensable party and that petitioner was its employee.

ISSUE:

Whether or not petitioner Oscar was illegally dismissed.

RULING:

Yes. The Supreme Court held that regular employees can only be terminated for just or
authorized cause, and the burden of proof is on the employer. In this case, the respondents
failed to provide proof of a valid cause for petitioner Oscar's termination. Since Oscar was a
regular employee, his dismissal cannot be based on the expiration of his contract. Therefore,
the respondents were ordered to reinstate Oscar to his former position without loss of
seniority rights and other privileges, and to pay him backwages and other benefits.

The Supreme Court explained that in a labor-only contracting situation, the contractor
becomes an agent of the principal, and the principal controls both the results and the means
and manner of achieving those results. This results in an employer-employee relationship
between the principal and the contracted employees. In this case, the respondents had
control and supervision over Oscar, making him their employee. As a regular employee, Oscar
can only be terminated for just or authorized cause, and the burden of proof is on the
employer. Since the respondents failed to provide proof of a valid cause for Oscar's
termination, his dismissal was deemed illegal.

29
 CASE NO: 30

SAN MIGUEL FOODS, INC., petitioner, vs. HANNIVAL V. RIVERA, et al., respondents.

G.R. No. 220103 January 31, 2018

FACTS:

The case involves a dispute between San Miguel Foods, Inc. (SMFI) and a group of employees
who were hired by IMSHR Corporate Support, Inc. (ICSI) to perform invoicing services for
SMFI. The employees filed complaints against SMFI for constructive dismissal, regularization,
underpayment of salaries and benefits, and other monetary claims. The Labor Arbiter (LA)
dismissed the complaints, ruling that ICSI is a legitimate service contractor and the
employees are not directly employed by SMFI. The National Labor Relations Commission
(NLRC) affirmed the LA's decision. However, the Court of Appeals (CA) reversed the NLRC's
decision, holding that an employer-employee relationship exists between SMFI and the
employees. The CA ordered SMFI to reinstate the employees with full status and rights of
regular employees and to grant them all benefits provided by law or any existing collective
bargaining agreement (CBA).

ISSUE:

Whether or not an employer-employee relationship exists between SMFI and the employees.

RULING:

No. The Supreme Court ruled in favor of SMFI and held that ICSI is a legitimate job contractor.
The Court emphasized that ICSI had substantial capital and investment to carry out its
business independently and had the right to control the performance of its employees. The
SC also found that ICSI was responsible for paying the employees' salaries and benefits and
had the authority to subject them to disciplinary action.

SMFI did not exercise direct supervision and control over the employees. While SMFI issued
instructions to the employees on how to perform their tasks, these instructions were
considered mere guidelines to achieve the desired result and did not control the manner and
means of performing the work. The SC also noted that the employees reported to ICSI's base
controller and only reported to SMFI's account managers in exceptional cases.

Based on these findings, the Supreme Court held that SMFI cannot be held liable for the
employees' claims and dismissed the complaints. The SC also emphasized that the existence
of an employer-employee relationship is determined by the presence of control, not the
actual exercise of control. In this case, the Court found that ICSI had control over the
employees and was responsible for their employment, making it a legitimate job contractor.

CASE NO: 31

SERVFLEX, INC., PETITIONER, VS. LOVELYNN* M. URERA, SHERRYL I. CABRERA,

PRECIOUS** C. PALANCA AND JOCO JIM L. SEVILLA, RESPONDENTS

G.R. No. 246369 March 29, 2022

30
FACTS:

This case involves a complaint for regularization of employment and nonpayment of benefits
filed by Lovelynn M. Urera, Sherryl I. Cabrera, Precious C. Palanca, and Joco Jim L. Sevilla
against Philippine Long Distance Telephone Company (PLDT), Servflex, Inc., and their
respective officers. PLDT engaged Servflex to provide labor, particularly Database Engineers,
to support its network facility build-up. The respondents alleged that they applied at PLDT
but were referred to Servflex, and that they were actually employees of PLDT and not
Servflex. On the other hand, PLDT and Servflex argued that the respondents were regular
employees of Servflex and not of PLDT.

ISSUE:

Whether or not the respondents are employees of PLDT.

RULING:

The Supreme Court held that labor-only contracting exists when a person or entity supplies
workers to an employer without substantial capital or investment and the workers perform
tasks directly related to the employer's principal business. In this case, the SC found that
Servflex did not possess substantial capital or investment and the respondents performed
tasks central and necessary to the business of PLDT. The SC also noted that there was no clear
showing that Servflex had control over the respondents.

The SC further clarified that a certificate of registration with the Department of Labor and
Employment (DOLE) is not conclusive proof of legitimacy as a manpower provider. The
contract between Servflex and PLDT, which stated that Servflex had the right of control over
the respondents, was not sufficient evidence to establish that Servflex was an independent
contractor.

CASE NO: 32

SMART COMMUNICATIONS, INC., petitioner,

vs.
REGINA M. ASTORGA, respondent.

G.R. No. 148132 January 28, 2008

FACTS:

Astorga was employed by Smart as District Sales Manager of the Corporate Sales Marketing
Group/ Fixed Services Division. SMART launched an organizational realignment to achieve
more efficient operations. Part of the reorganization was the outsourcing of the marketing
and sales force. Thus, SMART formed SMART-NTT Multimedia, Incorporated (SNMI). Since
SNMI was formed to do the sales and marketing work, SMART abolished the CSMG/FSD,
Astorga’s division.

SNMI agreed to absorb the CSMG personnel who would be recommended by SMART. Astorga
landed last in the performance evaluation, thus, she was not recommended by SMART.
SMART, nonetheless, offered her a supervisory position in the Customer Care Department,
but she refused the offer because the position carried lower salary rank and rate.

Astorga continued reporting for work. SMART issued a memorandum advising Astorga of the
termination of her employment on ground of redundancy,

31
Astorga filed a Complaint for illegal dismissal, non-payment of salaries and other benefits
with prayer for moral and exemplary damages against SMART.

In the meantime, SMART sent a letter to Astorga demanding that she pay the current market
value of the Honda Civic Sedan which was given to her under the company’s car plan program,
or to surrender the same to the company for proper disposition.

Astorga, however, failed and refused to do either, thus prompting SMART to file a suit for
replevin before the RTC which was subsequently denied.

Astorga elevated the denial of her motion via certiorari to the CA, which, in its February 28,
2000 Decision,19 reversed the RTC ruling. Granting the petition and, consequently,
dismissing the replevin case, the CA held that the case is intertwined with Astorga’s complaint
for illegal dismissal; thus, it is the labor tribunal that has rightful jurisdiction over the
complaint. SMART’s motion for reconsideration having been denied.

On the other hand, the labor arbiter held that Astorga’s dismissal from employment illegal.
While recognizing SMART’s right to abolish any of its departments, the Labor Arbiter held
that such right should be exercised in good faith and for causes beyond its control. The Arbiter
found the abolition of CSMG done neither in good faith nor for causes beyond the control of
SMART, but a ploy to terminate Astorga’s employment. The Arbiter also ruled that
contracting out the functions performed by Astorga to an in-house agency like SNMI was
illegal.

SMART also appealed the unfavorable ruling of the Labor Arbiter in the illegal dismissal case
to the NLRC which declared the abolition of CSMG and the creation of SNMI to do the sales
and marketing services for SMART a valid organizational action.

ISSUE:

Whether or not Astorga’s dismissal was valid.

RULING:

Astorga was terminated due to redundancy, which is one of the authorized causes for the
dismissal of an employee.

The Supreme Court held that redundancy, for purposes of the Labor Code, exists where the
services of an employee are in excess of what is reasonably demanded by the actual
requirements of the enterprise. Succinctly put, a position is redundant where it is
superfluous, and superfluity of a position or positions may be the outcome of a number of
factors, such as overhiring of workers, decreased volume of business, or dropping of a
particular product line or service activity previously manufactured or undertaken by the
enterprise. However, as aptly found by the CA, SMART failed to comply with the mandated
one month notice prior to termination.

Article 283 of the Labor Code clearly provides:

Art. 283. Closure of establishment and reduction of personnel. — The employer may also
terminate the employment of any employee due to the installation of labor saving devices,
redundancy, retrenchment to prevent losses or the closing or cessation of operation of the
establishment or undertaking unless the closing is for the purpose of circumventing the
provisions of this Title, by serving a written notice on the workers and the Ministry of Labor
and Employment at least one (1) month before the intended date thereof x x x.

SMART’s assertion that Astorga cannot complain of lack of notice because the organizational
realignment was made known to all the employees as early as February 1998 fails to
persuade.

32
Astorga’s actual knowledge of the reorganization cannot replace the formal and written
notice required by the law. In the written notice, the employees are informed of the specific
date of the termination, at least a month prior to the effectivity of such termination, to give
them sufficient time to find other suitable employment or to make whatever arrangements
are needed to cushion the impact of termination.

Smart gave her a formal notice of termination barely two (2) weeks before the effective date
of termination, a period very much shorter than that required by law. This procedural
infirmity, however, would not render the termination of Astorga’s employment illegal. The
validity of termination can exist independently of the procedural infirmity of the dismissal.

The award of backwages to Astorga by the CA should be deleted for lack of basis. Backwages
is a relief given to an illegally dismissed employee. Thus, before backwages may be granted,
there must be a finding of unjust or illegal dismissal from work.The Labor Arbiter ruled that
Astorga was illegally dismissed. But on appeal, the NLRC reversed the Labor Arbiter’s ruling
and categorically declared Astorga’s dismissal valid. This ruling was affirmed by the CA in its
assailed Decision. Since Astorga’s dismissal is for an authorized cause, she is not entitled to
backwages.

CLASSES OF EMPLOYEES

CASE NO: 33

MAGIS YOUNG ACHIEVERS' LEARNING CENTER and MRS. VIOLETA T. CARIÑO,

Petitioners,

vs. ADELAIDA P. MANALO, Respondent.

G.R. No. 178835 February 13, 2009

FACTS:

On April 18, 2002, respondent Adelaida P. Manalo was hired as a teacher and acting principal
of petitioner Magis Young Achievers’ Learning Center.

Respondent wrote a letter of resignation which should have expressly effective on April 1,
2003 addressed to Violeta T. Cariño, directress of petitioner. Then, respondent received a
letter of termination from petitioner stating therein her termination of contract which will
expire on March 31, 2003.

Respondent instituted against petitioner a Complaint for illegal dismissal and non-payment
of 13th month pay, with a prayer for reinstatement, award of full backwages and moral and
exemplary damages.

Respondent claimed that her termination violated the provisions of her employment
contract, and that the alleged abolition of the position of Principal was not among the grounds
for termination by an employer under Article 282 of the Labor Code.

She further asserted that petitioner infringed Article 283 of the Labor Code, as the required
30-day notice to the Department of Labor and Employment (DOLE) and to her as the
employee, and the payment of her separation pay were not complied with. She also claimed

33
that she was terminated from service for the alleged expiration of her employment, but that
her contract did not provide for a fixed term or period.

Petitioner, in its position paper, countered that respondent was legally terminated because
the one-year probationary period, from April 1, 2002 to March 3, 2003, had already lapsed
and she failed to meet the criteria set by the school pursuant to the Manual of Regulation for
Private Schools, adopted by the then Department of Education, Culture and Sports (DECS),
paragraph 75.

Labor Arbiter (LA) Renell Joseph R. dela Cruz rendered a Decision dismissing the complaint
for illegal dismissal, including the other claims of respondent, for lack of merit, except that it
ordered the payment of her 13th month pay.

Respondent Manalo appealed to the National Labor Relations Commission (NLRC) which
reversed the decision of the LA. Petitioner’s motion for reconsideration was also denied in
the NLRC’s Resolution.

Petitioner appealed to CA which affirmed the NLRC decision and dismissed the petition.

ISSUE:

1. Whether or not the probationary appointment of the respondent was for a fixed period of
one (1) year, or without a fixed term, inasmuch as the parties presented different versions of
the employment agreement.

2. Whether or not respondent, even as a probationary employee, was illegally dismissed.

RULING:

1. "Academic personnel" in private schools, colleges and universities, probationary

employment is governed by Section 92 of the 1992 Manual of Regulations for Private Schools
(Manual). This was supplemented by DOLE-DECS-CHED-TESDA Order No. 1 dated February
7, 1996, which provides that the probationary period for academic personnel shall not be
more than three (3) consecutive school years of satisfactory service for those in the
elementary and secondary levels.

Thus, for academic personnel in private elementary and secondary schools, it is only after
one has satisfactorily completed the probationary period of three (3) school years and is
rehired that he acquires full tenure as a regular or permanent employee.

The SC is confronted with two (2) copies of an agreement, one with a negative period and one
provided for a one (1) year period for its effectivity. Ironically, none among the parties offered
corroborative evidence as to which of the two (2) discrepancies is the correct one that must
be given effect

Following Article 1702 of the Civil Code that all doubts regarding labor contracts should be
construed in favor of labor, then it should be respondent’s copy which did not provide for an
express period which should be upheld, especially when there are circumstances that render
the version of petitioner suspect. This is in line with the State policy of affording protection
to labor, such that the lowly laborer, who is usually at the mercy of the employer, must look
up to the law to place him on equal footing with his employer.

In addition, the employment agreement may be likened into a contract of adhesion

considering that it is petitioner who insists that there existed an express period of one year
from April 1, 2002 to March 31, 2003, using as proof its own copy of the agreement. While
contracts of adhesion are valid and binding, in cases of doubt which will cause a great
imbalance of rights against one of the parties, the contract shall be construed against the
party who drafted the same. Hence, in this case, where the very employment of respondent
is at stake, the doubt as to the period of employment must be construed in her favor.

34
2. YES. Respondent was hired as a probationary teacher and, as such, it was incumbent upon
petitioner to show by competent evidence that she did not meet the standards set by the
school. This requirement, petitioner failed to discharge. To note, the termination of
respondent was effected by that letter stating that she was being relieved from employment
because the school authorities allegedly decided, as a cost-cutting measure, that the position
of "Principal" was to be abolished. Nowhere in that letter was respondent informed that her
performance as a school teacher was less than satisfactory.

In the absence of an express period of probation for private school teachers, the three-year
probationary period provided by the Manual of Regulations for Private Schools must apply
likewise to the case of respondent. In other words, absent any concrete and competent proof
that her performance as a teacher was unsatisfactory from her hiring on April 18, 2002 up to
March 31, 2003, respondent is entitled to continue her three-year period of probationary
period, such that from March 31, 2003, her probationary employment is deemed renewed for
the following two school years.

CASE NO: 34

PIER 8 ARRASTRE & STEVEDORING SERVICES, INC. and/ or ELIODORO C. CRUZ,

Petitioners, vs. JEFF B. BOCLOT, Respondent.
G.R. No. 173849 September 28, 2007

FACTS:
Petitioner Pier 8 Arrastre and Stevedoring Services, Inc. (PASSI) is a domestic corporation
engaged in the business of providing arrastre and stevedoring services at Pier 8 in the Manila
North Harbor. PASSI has been rendering arrastre and stevedoring services at the port area
since 1974 and employs stevedores who assist in the loading and unloading of cargoes to and
from the vessels.
Petitioner Eliodoro C. Cruz is its Vice-President and General Manager. Respondent Jeff B.
Boclot was hired by PASSI to perform the functions of a stevedore starting 20 September
1999.
On 15 April 2000, the Philippine Ports Authority (PPA) seized the facilities and took over the
operations of PASSI through its Special Takeover Unit, absorbing PASSI workers as well as
their relievers. By virtue of a Decision dated 9 January 2001 of the Court of Appeals,
petitioners were able to regain control of their arrastre and stevedoring operations at Pier 8
on 12 March 2001.
On 9 May 2003, respondent filed a Complaint with the Labor Arbiter of the NLRC, claiming
regularization; payment of service incentive leave and 13th month pays; moral, exemplary
and actual damages; and attorney’s fees. He argued on the basis of Articles 2809 and 28110
of the Labor Code. He maintains that under paragraph 2 of Article 280, he should be deemed
a regular employee having rendered at least one year of service with the company.
In opposition thereto, petitioners alleged that respondent was hired as a mere "reliever"
stevedore and could thus not become a regular employee.
NLRC Labor Arbiter Felipe P. Pati dismissed respondent’s complaint stating that there is no
factual or legal basis for the regularization of respondent.
Respondent appealed to the NLRC in which the NLRC modifies the Labor Arbiter’s Decision.
Petitioners filed a Motion for Reconsideration but was subsequently denied.
The petitioners appealed to the CA but dismissed the petition and affirmed the resolutions of
the NLRC finding the respondent to be a regular employee.

35
ISSUE:
Whether or not respondent has attained regular status as PASSI’s employee.
RULING:
YES. The Supreme Court has arrived at the same conclusion as those of the NLRC and the
Court of Appeals that respondent is a regular employee.
The standards for determining whether an employee is a regular employee or a casual or
project employee have been delineated in Article 280 of the Labor Code.
The primary standard, therefore, of determining a regular employment is the reasonable
connection between the particular activity performed by the employee in relation to the usual
business or trade of the employer. The test is whether the former is usually necessary or
desirable in the usual business or trade of the employer. The connection can be determined
by considering the nature of the work performed and its relation to the scheme of the
particular business or trade in its entirety. Also, if the employee has been performing the job
for at least one year, even if the performance is not continuous or merely intermittent, the
law deems the repeated and continuing need for its performance as sufficient evidence of the
necessity if not indispensability of that activity to the business. Hence, the employment is also
considered regular, but only with respect to such activity and while such activity exists.
Respondent’s employment is subject to the availability of work, depending on the absences
of the regular stevedores. The situation of respondent is akin to that of a seasonal or project
or term employee, albeit on a daily basis.
Not qualifying under any of the kinds of employees covered by the first paragraph of Article
280 of the Labor Code, then respondent is a casual employee under the second paragraph of
the same provision.
Respondent, who has performed actual stevedoring services for petitioners only for an
accumulated period of 228.5 days does not fall under the classification of a casual turned
regular employee after rendering at least one year of service, whether continuous or
intermittent.
The Supreme Court still finds respondent to be a regular employee on the basis of pertinent
provisions under the Collective Bargaining Agreement (CBA) between PASSI and its Workers’
union.

CASE NO: 35
THE PENINSULA MANILA, ROLF PFISTERER AND BENILDA QUEVEDO-SANTOS,
petitioners, vs. ELAINE M. ALIPIO, respondent.
G.R. No. 167310 June 17, 2008

FACTS:

Petitioner, The Peninsula Manila, is a corporation engaged in the hotel business. Co-
petitioners Rolf Pfisterer and Benilda Quevedo-Santos were the general manager and human
resources manager, respectively, of the hotel at the time of the controversy.

Respondent Elaine M. Alipio was hired as a reliever nurse. However, she had been performing
the usual tasks and functions of a regular nurse since the start of her employment on
December 11, 1993. Hence, after about four years of employment in the hotel, she inquired
why she was not receiving her 13th month pay.

36
After requiring her to submit a summary of her tour duty from years 1993-1997, she was
paid for a 13th month pay only on the year 1997. When respondent Alipio met with petitioner
Santos on December 21, 1998, respondent Alipio was informed that she was allegedly not
entitled to get copies of her payslip vouchers and was directed not to report for work
anymore.

Respondent Alipio filed a complaint for illegal dismissal against the petitioners.

The Labor Arbiter dismissed the complaint for lack of merit, but directed that Peninsula pay
Alipio separation pay amounting to P20,000. On appeal, the NLRC affirmed with modification
the Labor Arbiter's decision deleting the award for separation pay.

The Court of Appeals reversed the decision of the NLRC and the Labor Arbiter. Petitioners
moved for reconsideration but their motion was denied.

ISSUE:

Whether or not respondent is a regular employee of petitioner Peninsula.

RULING:

Yes. The conclusions reached by the NLRC and the Labor Arbiter, that Alipio was not a regular
employee of the hotel and that she was validly dismissed, are not supported by law and
evidence on record. As provided under Article 280 of the Labor Code, the Supreme Court held
that an employment is deemed regular when the activities performed by the employee are
usually necessary or desirable in the usual business of the employer. However, any employee
who has rendered at least one year of service, even though intermittent, is deemed regular
with respect to the activity performed and while such activity actually exists

Here, Respondent Alipio’s services as a reliever nurse were undoubtedly necessary and
desirable in the hotel's business of providing comfortable accommodation to its guests. In
any case, since she had rendered more than one year of intermittent service as a reliever
nurse at the hotel, she had become a regular employee as early as December 12, 1994. Lastly,
per the hotel's own Certification dated April 22, 1997, she was already a "regular staff nurse"
until her dismissal.

Being a regular employee, Alipio enjoys security of tenure. Her services may be terminated
only upon compliance with the substantive and procedural requisites for a valid dismissal:
(1) the dismissal must be for any of the causes provided in Article 282 of the Labor Code; and
(2) the employee must be given an opportunity to be heard and to defend himself.

In this case, petitioners’ ground of dismissal of serious misconduct against Alipio is

unmeritorious and thus was not based on a just cause. Likewise, Alipio was deprived of
procedural due process by not given an opportunity for her to be heard and defend herself
when she was dismissed.

CASE NO: 36

ABS-CBN BROADCASTING CORPORATION, petitioner,

vs.
MARLYN NAZARENO, MERLOU GERZON, JENNIFER DEIPARINE, and JOSEPHINE
LERASAN, respondents.

G.R. No. 164156 September 26, 2006

37
FACTS:

This case involves a petition for review on certiorari filed by ABS-CBN Broadcasting
Corporation (ABS-CBN) against Marlyn Nazareno, Merlou Gerzon, Jennifer Deiparine, and
Josephine Lerasan. The Court of Appeals (CA) affirmed the decision of the National Labor
Relations Commission (NLRC) which declared the respondents as regular employees.

The respondents were employed by ABS-CBN as production assistants (PAs) and were
assigned to the news and public affairs department for various radio programs. They were
issued ABS-CBN employees' identification cards and were required to work for a minimum
of eight hours a day, including Sundays and holidays. They performed various tasks such as
preparing and arranging commercial broadcasting, coordinating interviews, and assisting in
program interviews.

The respondents filed a complaint against ABS-CBN for recognition of regular employment
status and underpayment of various benefits. The Labor Arbiter initially dismissed the
complaint for lack of interest to pursue the case, but the respondents filed a motion to refile
the complaint, which was granted. The Labor Arbiter then ruled in favor of the respondents,
declaring them as regular employees and awarding them monetary benefits.

ABS-CBN appealed the decision to the NLRC, arguing that the Labor Arbiter erred in reviving
the case and depriving the company of due process. The NLRC modified the decision of the
Labor Arbiter, but still affirmed that the respondents were regular employees entitled to
monetary benefits.

ISSUE:

Whether or not the respondents should be considered regular employees of ABS-CBN.

RULING:

Yes. The Supreme Court held that the respondents were under the control and supervision of
ABS-CBN, performed tasks essential to its business, and were engaged for a continuous
period of more than five years. The SC applied the test of reasonable connection between the
activities performed by the employee and the usual business or trade of the employer. If the
work performed is necessary or desirable in the usual business or trade of the employer, the
employment is considered regular. The SC also considered the length of time the respondents
had been performing the same activities, which was an average of five years. This indicated
that their work was vital, necessary, and indispensable to ABS-CBN's business. The SC also
noted that ABS-CBN had not reported the termination of the respondents' employment to the
Department of Labor and Employment, which further supported the finding that they were
regular employees.

The SC rejected ABS-CBN's argument that the respondents should be considered independent
contractors based on the Sonza case. The SC distinguished the Sonza case, which involved a
well-known television and radio personality with unique skills and talent, from the present
case where the respondents were ordinary production assistants. The SC found that the
respondents were selected and engaged through ABS-CBN's personnel department, received
talent fees corresponding to wages, were subject to the control and supervision of ABS-CBN,
and were highly dependent on ABS-CBN for continued work. These factors indicated an
employer-employee relationship.

38
 CASE NO: 37

MANILA HOTEL COMPANY, petitioner, vs.

COURT OF INDUSTRIAL RELATIONS, ET AL., respondents.
G.R. No. L-18873 September 30, 1963

FACTS:
The Pines Hotel Employees Association filed on February 24, 1960 before the Court of
Industrial Relations a petition praying that its employees who were working at the Pines
Hotel be paid additional compensation for overtime service rendered due to the exigencies
of the business, as well as additional compensation for Sunday, legal holiday and nighttime
work.
The petitioner Manila Hotel denied the allegations of the Pines Hotel Employees Association
stating that the overtime services were unauthorized and have been rendered voluntarily by
the employees because of “tips”.
The Trial Court ruled that the employees were entitled to the additional compensation
demanded, including that for overtime work. Petitioner Manila Hotel filed a motion for
reconsideration but was subsequently denied.
The Examining Division of the Court of Industrial Relations submitted a report that the
amount due which the employees should be paid as additional compensation for overtime
and night services which was rendered from January to December 31, 1958 was P32,950.69.
The management of the Manila Hotel filed its objection stating that it included 22 names of
employees who were not employees of the Pines Hotel at the time the petition was filed. And
that insofar as said employees are concerned, the petition merely involves a money claim
which comes under the jurisdiction of the regular courts.
The trial judge ruled that while the 22 employees were actually not in the service at the time
of the filing of the petition, they were however subsequently employed even during the
pendency of the incident, hence, their claim comes within the jurisdiction of the Court of
Industrial Relations.

ISSUE:

Whether or not the 22 employees are considered as regular employees of the petitioner.

RULING:

Yes. The Supreme Court affirmed that although the 22 employees were not actually in the
service at the time the instant petition was filed, they were still subject for reemployment.

Their status is that of regular seasonal employees who are called to work from time to time,
mostly during summer season. The nature of their relationship with the hotel is such that
during off season they are temporarily laid off but during summer season they are re-
employed, or when their services may be needed.

They are not strictly speaking separated from the service but are merely considered as on
leave of absence without pay until they are re-employed. Their employment relationship is
never severed but only suspended. As such, these employees can be considered as in the
regular employment of the hotel.

39
 CASE NO: 38

FILIPINAS PRE-FABRICATED BUILDING SYSTEMS (FILSYSTEMS), INC., and FELIPE A.

CRUZ JR., Petitioners, vs. ROGER D. PUENTE, Respondent
G.R. No. 153832 March 18, 2005

FACTS:

Respondent Roger Puente avers that he started working as an ‘installer’ and later on
promoted to “mobile crane operator” and was stationed at the company premises, with
petitioner Filsystems, Inc., a corporation engaged in construction business. Since his work
was not dependent on the completion or termination of any project, his employment with the
petitioner-company was continuous and without interruption for the past ten (10) years. On
October 1, 1999, he was dismissed from his employment allegedly because he was a project
employee. He filed a pro forma complaint for illegal dismissal against the petitioner-company.

The petitioner-company however claims that complainant-respondent was hired as a project

employee in the company’s various projects; that his employment contracts showed that he
was a project worker with specific project assignments; that after completion of each project
assignment, his employment was likewise terminated and the same was correspondingly
reported to the DOLE.

Labor Arbiter Guerrero dismissed the complaint for illegal dismissal for lack of merit.

Respondent appealed to the NLRC but was dismissed as well as the subsequent motion for
reconsideration.

The Court of Appeals reversed the decisions of the NLRC and the Labor Arbiter. The CA
concluded that respondent was a regular employee of petitioners.

ISSUES:

1. Whether or not private respondent is a project employee.

2. Whether or not private respondent was legally dismissed.

RULING:

1. Yes. Respondent Puente is a project employee with particular reference to the construction
industry, to which Petitioner Filsystems belongs, Department (of Labor and Employment)
Order No. 19,11 Series of 1993 as well as the definition which Article 280 of the Labor Code
provides.

In the present case, the contracts of employment of Puente attest to the fact that he was hired
for specific projects. His employment was coterminous with the completion of the projects
for which he had been hired. Those contracts expressly provided that his tenure of
employment depended on the duration of any phase of the project or on the completion of
the construction projects. Furthermore, petitioners regularly submitted to the labor
department reports of the termination of services of project workers. Such compliance with
the reportorial requirement confirms that respondent was a project employee.

Respondent’s employment with Petitioner Filsystems for ten years in various projects did not
ipso facto make him a regular employee, considering that the definition of regular
employment in Article 280 of the Labor Code makes a specific exception with respect to
project employment. The mere rehiring of respondent on a project-to-project basis did not
confer upon him regular employment status. "The practice was dictated by the practical

40
consideration that experienced construction workers are more preferred." It did not change
his status as a project employee.

2. No. The inescapable presumption is that respondent’s services were terminated for no
valid cause prior to the expiration of the period of his employment; hence, the termination
was illegal.

However, if indeed the World Finance Plaza project has already been completed during the
pendency of this suit, then respondent -- being a project employee -- can no longer be
reinstated. Instead, he shall be entitled to the payment of his salary and other benefits
corresponding to the unexpired portion of his employment, specifically from the time of the
termination of his employment on October 1, 1999, until the date of the completion of the
World Finance Plaza project.

CASE NO: 39

SAINT MARY’S UNIVERSITY, represented by its President REV. JESSIE M. HECHANOVA,

CICM, Petitioners,
vs.
COURT OF APPEALS (Former Special Twelfth Division), NATIONAL LABOR RELATIONS
COMMISSION (Second Division) and MARCELO A. DONELO, Respondents.

G.R. No. 157788 March 08, 2005

FACTS:

Respondent Marcelo Donelo started teaching on a contractual basis at St. Mary’s University
in 1992. In 1995, he was issued an appointment as an Assistant Professor I. Later on, he was
promoted to Assistant Professor III. He taught until the first semester of school year 1999-
2000 when the school discontinued giving him teaching assignments. For this, respondent
filed a complaint for illegal dismissal against the university.

In its defense, petitioner St. Mary’s University showed that respondent was merely a part-
time instructor and argued that respondent never attained permanent or regular status for
he was not a full-time teacher. Petitioner also alleged that respondent did not respond to
inquiries relative to the investigation for giving grades to students who did not attend classes.

The Labor Arbiter ruled that respondent was lawfully dismissed because he had not attained
permanent or regular status pursuant to the Manual of Regulations for Private Schools. On
appeal by respondent, the National Labor Relations Commission (NLRC) reversed the
Decision of the Labor Arbiter.

Petitioner sought for reconsideration and pointed out that respondent was also working for
the Provincial Government of Nueva Vizcaya from 1993 to 1996. Nevertheless, the NLRC
denied petitioner’s Motion for Reconsideration. Aggrieved, petitioner elevated the matter to
the Court of Appeals, which affirmed the Decision of the NLRC.

ISSUE:

Whether or not respondent is a full-time teacher of the petitioner.

RULING:

No. Section 93 of the 1992 Manual of Regulations for Private Schools, provides that full-time
teachers who have satisfactorily completed their probationary period shall be considered
regular or permanent. Furthermore, the probationary period shall not be more than six

41
consecutive regular semesters of satisfactory service for those in the tertiary level. Thus, the
following requisites must concur before a private school teacher acquires permanent status:
(1) the teacher is a full-time teacher; (2) the teacher must have rendered three consecutive
years of service; and (3) such service must have been satisfactory. All teaching personnel who
do not meet the foregoing qualifications under Section 45 of the 1992 Manual of Regulations
for Private Schools are considered part-time.

The evidence on record reveals that, except for four non-consecutive terms, respondent
generally carried a load of twelve units or less from 1992 to 1999. There is also no evidence
that he performed other functions for the school when not teaching. These give the
impression that he was merely a part-time teacher. Although this is not conclusive since there
are full-time teachers who are allowed by the university to take fewer load, in this case,
respondent did not show that he belonged to the latter group, even after the university
presented his teaching record. With a teaching load of twelve units or less, he could not claim
he worked for the number of hours daily as prescribed by Section 45 of the Manual.
Furthermore, the records also indubitably show he was employed elsewhere from 1993 to
1996.

A part-time employee does not attain permanent status no matter how long he has served the
school. And as a part-timer, his services could be terminated by the school without being held
liable for illegal dismissal.

Further, the contract of employment of the respondent was not presented. However, judicial
notice may be taken that contracts of employment of part-time teachers are generally on a
per semester or term basis. In the absence of a specific agreement on the period of the
contract of employment, it is presumed to be for a term or semester. After the end of each
term or semester, the school does not have any obligation to give teaching load to each and
every part-time teacher. That petitioner did not give any teaching assignment to the
respondent during a given term or semester, even if factually true, did not amount to an
actionable violation of respondent’s rights. It did not amount to illegal dismissal of the part-
time teacher.

CASE NO: 40

POSEIDON FISHING/TERRY DE JESUS, petitioners,

vs.
NATIONAL LABOR RELATIONS COMMISSION and JIMMY S. ESTOQUIA, Respondents.

G.R. No. 168052 February 20, 2006

FACTS:

Petitioner Poseidon Fishing is a fishing company engaged in the deep-sea fishing industry.
Petitioner Terry de Jesus is the manager of petitioner company.

Private respondent Jimmy Estoquia was employed by Poseidon Fishing in January 1988 as
Chief Mate. After five years, he was promoted to Boat Captain. In 1999, petitioners, without
reason, demoted respondent from Boat Captain to Radio Operator of petitioner Poseidon.

There happened to be an oversight incident wherein respondent Estoquia failed to record a

radio call in one of the logbooks. On July 4, 2000, Poseidon’s secretary, namely Nenita
Laderas, summoned private respondent to get his separation pay amounting to Fifty-Five
Thousand Pesos (₱55,000.00). However, he refused to accept the amount as he believed
that he did nothing illegal to warrant his immediate discharge from work

42
Private respondent filed a complaint for illegal dismissal with the Labor Arbiter. Petitioners
Poseidon and Terry de Jesus strongly asserted that private respondent was a contractual or
a casual employee whose services could be terminated at the end of the contract even
without a just or authorized cause in view of Article 280 of the Labor Code. Petitioners
further posited that when the private respondent was engaged, it was made clear to him
that he was being employed only on a "por viaje" or per trip basis and that his employment
would be terminated at the end of the trip for which he was being hired.

The Labor Arbiter decided in favor of private respondent.

The petitioners filed their Memorandum of Appeal with the NLRC but the latter affirmed the
decision of the Labor Arbiter with the modification. Petitioners moved for the
reconsideration of the NLRC decision, but were also denied.

Petitioners filed a Petition for Certiorari with the Court of Appeals, imputing grave abuse of
discretion, but the Court of Appeals denied the same.

ISSUE:

Whether or not private respondent is a regular employee at the time his employment was
terminated.

RULING:

Yes. The Supreme Court held that asserting their right to terminate the contract with private
respondent per the "Kasunduan" with him, petitioners pointed to the provision thereof
stating that he was being employed only on a ‘’por viaje’’ basis and that his employment
would be terminated at the end of the trip for which he was being hired.

However, that agreement has such an objective - to frustrate the security of tenure of private
respondent- and fittingly, must be nullified. In this case, petitioners’ intent to evade the
application of Article 280 of the Labor Code is unmistakable. In a span of 12 years, private
respondent worked for petitioner company first as a Chief Mate, then Boat Captain, and later
as Radio Operator. His job was directly related to the deep-sea fishing business of petitioner
Poseidon. His work was, therefore, necessary and important to the business of his employer.
Such being the scenario involved, private respondent is considered a regular employee of
petitioner under Article 280 of the Labor Code.

On the other hand, to prove his claim that he had continuously worked for petitioners from
1988 to 2000, private respondent submitted a copy of his payroll and a copy of his SSS
Employees Contributions. These documents were submitted by private respondent in order
to benchmark his claim of 12 years of service. Petitioners, however, failed to submit the
pertinent employee files, payrolls, records, remittances and other similar documents which
would show that private respondent’s work was not continuous and for less than 12 years.
Hence, private respondent was hired in 1988 and had been continuously in its employ since
then.

In fine, inasmuch as private respondent’s functions are "usually necessary or desirable in the
usual business or trade" of petitioner fishing company and he was hired continuously for 12
years for the same nature of tasks, we are constrained to say that he belongs to the ilk of
regular employee. Being one, private respondent’s dismissal without valid cause was illegal.
And, where illegal dismissal is proven, the worker is entitled to back wages and other similar
benefits without deductions or conditions.

43
 CASE NO: 41

YOLANDA M. MERCADO, CHARITO S. DE LEON, DIANA R. LACHICA, MARGARITO M.

ALBA, JR., and FELIX A. TONOG, Petitioners,
vs.
AMA COMPUTER COLLEGE-PARAÑAQUE CITY, INC. , Respondent.

G.R. No. 183572 April 13, 2010

FACTS:

AMACC is an educational institution engaged in computer-based education in the country.

The petitioners were faculty members who started teaching at AMACC on May 25, 1998. The
petitioners executed individual Teacher’s Contracts for each of the trimesters that they were
engaged to teach.

The stipulation in the contract stated a non-tenured appointment to work in the College. The
performance standards under the new screening guidelines (Guidelines on the
Implementation of AMACC Faculty Plantilla) were also used to determine the present faculty
members’ entitlement to salary increases. The petitioners failed to obtain a passing rating
based on the performance standards; hence AMACC did not give them any salary increase.
Because of this, petitioners filed a complaint with the Arbitration Branch of the NLRC.

On September 7, 2000, the petitioners individually received a memorandum from AMACC,

through Human Resources Supervisor Mary Grace Beronia, informing them that with the
expiration of their contract to teach, their contract would no longer be renewed.

The petitioners amended their labor arbitration complaint to include the charge of illegal
dismissal against AMACC. They contended that AMACC failed to give them adequate notice;
hence, their dismissal was ineffectual.

AMACC contended in response that the petitioners worked under a contracted term under a
non-tenured appointment and were still within the three-year probationary period for
teachers. Their contracts were not renewed for the following term because they failed to pass
the Performance Appraisal System for Teachers (PAST) while others failed to comply with
the other requirements for regularization, promotion, or increase in salary.

The Labor Arbiter ruled in favor of the petitioners. The respondent appealed to the NLRC but
the same was denied for lack of merit and affirmed the decision of the LA.

AMACC elevated the case to the CA and the latter dismissed the petitioners’ complaint for
illegal dismissal.

ISSUE:

Whether or not the employment of the petitioners is on a probationary period or a fixed-term

contract.

RULING:

The Supreme Court held that it is important that the contract of probationary employment
specify the period or term of its effectivity. The failure to stipulate its precise duration could
lead to the inference that the contract is binding for the full three-year probationary period.

The fixed-term character of employment essentially refers to the period agreed upon
between the employer and the employee; employment exists only for the duration of the term
and ends on its own when the term expires. In a sense, employment on probationary status
also refers to a period because of the technical meaning "probation" carries in Philippine

44
labor law – a maximum period of six months, or in the academe, a period of three years for
those engaged in teaching jobs.

The school, however, cannot forget that its system of fixed-term contract is a system that
operates during the probationary period and for this reason is subject to the terms of Article
281 of the Labor Code. Unless this reconciliation is made, the requirements of this Article on
probationary status would be fully negated as the school may freely choose not to renew
contracts simply because their terms have expired.

If the school were to apply the probationary standards (as in fact it says it did in the present
case), these standards must not only be reasonable but 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. As explained above, the details of this finding of just cause must be communicated
to the affected teachers as a matter of due process.

The standards were duly communicated to the petitioners and could be applied beginning
the 1st trimester of the school year 2000-2001, glaring and very basic gaps in the school’s
evidence still exist. The exact terms of the standards were never introduced as evidence;
neither does the evidence show how these standards were applied to the petitioners. Without
these pieces of evidence (effectively, the finding of just cause for the non-renewal of the
petitioners’ contracts), the SC have nothing to consider and pass upon as valid or invalid for
each of the petitioners. Inevitably, the non-renewal (or effectively, the termination of
employment of employees on probationary status) lacks the supporting finding of just cause
that the law requires and, hence, is illegal.

CASE NO: 42

BRENT SCHOOL, INC., and REV. GABRIEL DIMACHE, petitioners,

vs.
RONALDO ZAMORA, the Presidential Assistant for Legal Affairs, Office of the
President, and DOROTEO R. ALEGRE, respondents.

G.R. No. L-48494 February 5, 1990

FACTS:

Respondent Doroteo R. Alegre was engaged as athletic director by Brent School, Inc, which
has fixed a specific term of five (5) years for its existence, from July 18, 1971, the date of
execution of the agreement, to July 17, 1976.

Three months before the expiration of the stipulated period, on April 20,1976, respondent
Alegre was given a copy of the report filed by Brent School with the Department of Labor
advising of the termination of his services effective on July 16, 1976. The stated ground for
the termination was "completion of contract, expiration of the definite period of
employment."

Respondent Alegre protested and argued that although his contract did stipulate that the
same would terminate on July 17, 1976, since his services were necessary and desirable in
the usual business of his employer, and his employment had lasted for five years, he had
acquired the status of a regular employee and could not be removed except for valid cause.

The Regional Director considered Brent School's report as an application for clearance to
terminate employment (not a report of termination), and accepting the recommendation of

45
the Labor Conciliator, refused to give such clearance and instead required the reinstatement
of Alegre, as a "permanent employee".

Brent School filed a motion for reconsideration which was denied by the Regional Director
and forwarded the case to the Secretary of Labor for review who sustained the decision.

Brent appealed to the Office of the President but was dismissed and affirmed the Labor
Secretary's decision, ruling that Alegre was a permanent employee who could not be
dismissed except for just cause, and expiration of the employment contract was not one of
the just causes provided in the Labor Code for termination of services.

ISSUE:

Whether or not the provisions of the Labor Code, as amended, have anathematized "fixed
period employment" or employment for a term.

RULING:

The Supreme Court held that it is plain then that when the employment contract was signed
between Brent School and Alegre on July 18, 1971, it was perfectly legitimate for them to
include in it a stipulation fixing the duration thereof Stipulations for a term were explicitly
recognized as valid by the Supreme Court.

"Activities which are usually necessary or desirable in the usual business or trade of the
employer the" does not necessarily follow that the employer and employee should be
forbidden to stipulate any period of time for the performance of those activities. There is
nothing essentially contradictory between a definite period of an employment contract and
the nature of the employee's duties set down in that contract as being "usually necessary or
desirable in the usual business or trade of the employer." The concept of the employee's
duties as being "usually necessary or desirable in the usual business or trade of the employer"
is not synonymous with or identical to employment with a fixed term. Logically, the decisive
determinant in term employment should not be the activities that the employee is called upon
to perform, but the day certain agreed upon by the parties for the commencement and
termination of their employment relationship, a day certain being understood to be "that
which must necessarily come, although it may not be known when." Seasonal employment,
and employment for a particular project are merely instances employment in which a period,
where not expressly set down, necessarily implied.

Of course, the term — period has a definite and settled signification. It means, "Length of
existence; duration. A point of time marking a termination as of a cause or an activity; an end,
a limit, a bound; conclusion; termination. It should be apparent that this settled and familiar
notion of a period, in the context of a contract of employment, takes no account at all of the
nature of the duties of the employee; it has absolutely no relevance to the character of his
duties as being "usually necessary or desirable to the usual business of the employer," or not.

Accordingly, and since the entire purpose behind the development of legislation culminating
in the present Article 280 of the Labor Code clearly appears to have been, as already
observed, to prevent circumvention of the employee's right to be secure in his tenure, the
clause in said article indiscriminately and completely ruling out all written or oral
agreements conflicting with the concept of regular employment as defined therein should be
construed to refer to the substantive evil that the Code itself has singled out: agreements
entered into precisely to circumvent security of tenure. It should have no application to
instances where a fixed period of employment was agreed upon knowingly and voluntarily
by the parties, without any force, duress or improper pressure being brought to bear upon
the employee and absent any other circumstances vitiating his consent, or where it
satisfactorily appears that the employer and employee dealt with each other on more or less
equal terms with no moral dominance whatever being exercised by the former over the latter.
Unless thus limited in its purview, the law would be made to apply to purposes other than
those explicitly stated by its framers; it thus becomes pointless and arbitrary, unjust in its
effects and apt to lead to absurd and unintended consequences.

46
The public respondent's Decision complained of is REVERSED and SET ASIDE. Respondent
Alegre's contract of employment with Brent School having lawfully terminated with and by
reason of the expiration of the agreed term of period thereof, he is declared not entitled to
reinstatement and the other relief awarded and confirmed on appeal in the proceedings.

CASE NO: 43

UNIVERSAL ROBINA SUGAR MILLING CORPORATION,* Petitioner, v. NAGKAHIUSANG

MAMUMUO SA URSUMCO-NATIONAL FEDERATION OF LABOR (NAMA-URSUMCO-
NFL), Respondent.

G.R. No. 224558 November 28, 2018

FACTS:

Petitioner Universal Robina Sugar Milling Corporation (URSUMCO) is a registered domestic

corporation in the sugar milling business. Respondent Nagkahiusang Mamumuo sa
URSUMCO-National Federation of Labor (NAMA-URSUMCO-NFL) is a legitimate labor
organization acting as the sole and exclusive bargaining representative of all regular monthly
paid and daily paid rank-and-file employees of URSUMCO.

A Collective Bargaining Agreement (CBA) was entered into by the two parties valid from
January 1, 2010 to December 31, 2014. Article VI, Section 2 of the CBA enumerated the
employment classification in URSUMCO, i.e., Permanent or Regular Employees and Regular
Seasonal Employees.

From August to September 2011, respondent NAMA-URSUMCO-NFL filed grievances for 78

regular seasonal employees, seeking to change their status from regular seasonal to
permanent regular and for the leveling of the salaries. After the grievance machinery failed
to resolve the issue, respondent NAMA-URSUMCO-NFL requested that the employees'
concerns be submitted to voluntary arbitration. The VA required the parties to submit their
respective position papers.

Respondent alleged that permanent or regular employees practically performed the same
work as the regular seasonal employees during milling season; some regular seasonal
employees would perform skilled jobs during the off-milling season, while regular or
permanent employees would be assigned to utility jobs; regular seasonal employees acted as
leadmen, while regular permanent or regular employees were the helpers; longer tenured
employees were stuck as regular seasonal employees, while new hires were given regular or
permanent status; and regular seasonal employees received lower salaries than regular or
permanent employees even if they performed the same functions.

Petitioner URSUMCO on the other hand contended that NAMA-URSUMCO-NFL was estopped
from questioning the classification of employees agreed upon by the parties in the CBA.

VA sided with NAMA-URSUMCO-NFL and held that petitioner URSUMCO’s act of providing
work to regular seasonal employees for several years is deemed a waiver on the effects of the
CBA.

CA affirmed VA decision adding that the tasked performed to repair and up-keep works were
necessary to ensure the smooth and continuous operation of petitioner’s machines and
equipment during milling season.

ISSUE:

Whether or not the regular seasonal employees are all permanent or regular employees.

47
RULING:

YES. SC upheld the VA and CA’s decision. The employees are permanent or regular employees
as they performed tasks that are necessary and desirable to URSUMCO’s sugar milling
business.

Generally, the parties to a CBA is given a wide latitude to negotiate and agree the conditions
concerning wages, hours of work, and all other terms and conditions of employment.
However, the employment status cannot be bargained away with as it is already defined by
law. Thus, URSUMCO’s contention that NAMA-URSUMCONFL is estopped from questioning
the classification agreed upon in the CBA cannot hold water as the Labor Code already defines
the different kind of employment status.

Under Article 295 of the Labor Code, as amended, four types of employment status are
enumerated: (a) regular employees; (b) project employees; (c) seasonal employees; and (d)
casual employees. Meanwhile, the landmark case of Brent School, Inc. v. Zamora identified
fixed-term employment as another valid type of employment.

In the case at bar, the concerned URSUMCO employees are performing work for URSUMCO
even during the off-milling season as they are repeatedly engaged to conduct repairs on the
machineries and equipment. Strictly speaking, they cannot be classified either as regular
seasonal employees or seasonal employees as their work extended even beyond the milling
season. The nature of the activities performed by the employees, considering the employer's
nature of business, and the duration and scope of work to be done factor heavily in
determining the nature of employment.

The primary standard of determining a regular employment is the reasonable connection

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

A reading of the CBA between URSUMCO and NAMA-URSUMCO-NFL would show that the
definition of a regular employee is not limited to those whose functions are related only to
the milling operation of URSUMCO, but to its regular operation. The concerned employees
were repeatedly hired in the off-milling season to conduct repairs on URSUMCO's
machineries. Thus, it could be seen that the conduct of repairs is part of URSUMCO's regular
operation — even if done only after the milling season. URSUMCO's regular operations should
not be confined to its milling operation because to do so would minimize an otherwise
integral part of its business. The repairs made on the machineries and equipment used in the
milling season are necessary for their upkeep and maintenance so that any damage or
concern brought about by ordinary wear and tear of the machines will not be a problem once
the milling season comes back.

Thus, the concerned employees cannot be categorized as regular seasonal employees as

defined under the law, jurisprudence or even the parties' CBA. First, they perform work for
URSUMCO even during the off-milling season and there is no showing that they were free to
work for another during the same period. Second, the tasks done are reasonably necessary
and desirable in URSUMCO's regular operation or business.

48
 CASE NO: 44

ZENAIDA PAZ, Petitioner,

vs.
NORTHERN TOBACCO REDRYING CO., INC., AND/OR ANGELO ANG, Respondents.

G.R. No. 199554 February 18, 2015

FACTS:

This case involves Zenaida Paz, a seasonal sorter employed by Northern Tobacco Redrying
Co., Inc. (NTRCI), a business engaged in the flue-curing and redrying of tobacco leaves. Paz
was hired by NTRCI in 1974 and was regularly rehired every tobacco season since then. In
2003, when Paz was 63 years old, NTRCI informed her that she was considered retired under
company policy. A year later, NTRCI offered her a retirement pay of P12,000. Dissatisfied with
the amount, Paz filed a complaint for illegal dismissal and payment of retirement benefits
against NTRCI. The Labor Arbiter confirmed the retirement pay of P12,487.50 as computed
by NTRCI. However, the National Labor Relations Commission modified the decision and
ruled that Paz's retirement pay should be computed based on the number of years she
worked for NTRCI. The Court of Appeals dismissed Paz's petition and modified the National
Labor Relations Commission's decision by awarding her financial assistance in the amount of
P60,356.25. Paz appealed to the Supreme Court, arguing that NTRCI failed to prove its
company policy on compulsory retirement and that she was entitled to retirement pay based
on Article 287 of the Labor Code. NTRCI argued that the retirement pay should be computed
based on the six-month rule to avoid giving seasonal workers an advantage over regular
employees. The Supreme Court affirmed the decision of the Court of Appeals, ruling that Paz
was a regular seasonal employee entitled to retirement pay. The court also found that there
was illegal dismissal and awarded backwages to Paz.

ISSUE:

Whether or not petitioner Paz was illegally dismissed or voluntarily retired.

RULING:

The court ruled that petitioner Paz was illegally dismissed as she did not clearly establish her
intent to retire and her retirement was involuntary. retirement is a voluntary agreement
between the employer and the employee, and if the intent to retire is not clearly established
or if the retirement is involuntary, it is to be treated as a discharge. In cases of illegal dismissal,
the employee is entitled to reinstatement and full backwages.

In addition to full backwages, the court awarded petitioner Paz P30,000.00 as nominal
damages for the employer's non-compliance with statutory due process.

Regarding retirement pay, the court applied Article 287 of the Labor Code, which provides
for retirement benefits in the absence of a retirement plan or agreement. The court found
that petitioner Paz worked for at least six months in 1995, which qualifies her for retirement
benefits. The court rejected NTRCI's argument that the retirement pay should be computed
based on the six-month rule to avoid giving seasonal workers an advantage over regular
employees. The court held that Paz was a regular seasonal employee and should be entitled
to retirement pay based on the number of years she worked for NTRCI.

49
 CASE NO: 45

MARBY FOOD VENTURES CORPORATION, et al., PETITIONERS, VS. ROLAND DELA

CRUZ, et al., RESPONDENTS.

G.R. No. 244629 July 28, 2020

FACTS:

The case involves a complaint filed by Roland dela Cruz, Gabriel dela Cruz, Jose Paulo Anzures,
Efren Tadeo, Bongbong Santos, Marlon de Rafael, Cris Santiago, Elmer Marano, Armando
Rivera, and Louie Balmes against Marby Food Ventures Corporation (Marby) and its officers
Mario Valderrama and Emelita Valderrama. The complainants, who were employed as
drivers and a salesman, alleged underpayment of wages, non-payment of benefits, illegal
deductions, and other labor violations. The Labor Arbiter initially dismissed the case, ruling
that the complainants were not entitled to their claims. However, the National Labor
Relations Commission (NLRC) partially reversed the decision, ordering Marby to pay wage
differentials and 13th month pay to the complainants. Both parties filed motions for
reconsideration, which were denied by the NLRC.

ISSUE:

Whether or not the respondents are entitled to receive minimum wage pay differentials, 13th
month pay differentials, reimbursements of deductions, and attorney's fees.

RULING:

The court's ruling is based on several factors. Firstly, it is established that the burden of proof
for the payment of monetary claims rests on the employer, as they have custody and control
over the necessary documents to prove payment. In this case, the petitioners failed to present
any proof of payment for the contested benefits. Therefore, the respondents are entitled to
minimum wage pay differentials and salary differentials.

Furthermore, the respondents are also entitled to 13th month pay differentials because their
salaries were below the minimum wage, resulting in an inaccurate computation of their 13th
month pay.

Regarding the reimbursements of deductions, the court emphasizes that employers can only
make deductions from employees' wages if authorized by law or with the written consent of
the employees. In this case, the petitioners confirmed the deductions but failed to provide
any written authorization from the respondents. Therefore, the illegal deductions should be
reimbursed to the respondents.

Lastly, the SC awards attorney's fees to the respondents based on Article 2208 of the New
Civil Code, which allows for the recovery of attorney's fees in certain cases, including when
the defendant's act or omission has compelled the plaintiff to litigate. In this case, the failure
of the petitioners to pay minimum wage and labor standards benefits compelled the
respondents to litigate, thus justifying the award of attorney's fees.

However, the SC modifies the CA's ruling by deleting the penalty for double indemnity. It
explains that the petitioners cannot be held liable for double indemnity because there was no
order from any competent authority advising them to pay unpaid employee benefits with
sanctions for double indemnity in case of refusal or delay.

50
 WAGES

CASE NO: 46

PHILIPPINE SPRING WATER RESOURCES INC. /DANILO Y. LUA, Petitioners,

vs.
COURT OF APPEALS and JUVENSTEIN B. MAHILUM, Respondents.

G.R. No. 205278 June 11, 2014

FACTS:

Petitioner Philippine Spring Water Resources, Inc. (PSWRI), engaged in the business of
manufacturing, selling and distributing bottled mineral water, hired Mahilum as Vice-
President for Sales and Marketing for the Bulacan-South Luzon Area. In an inagural speech
supposedly headed by Mahilum. Mahilum was required to explain why Lua, President and
Chief Executive Officer (CEO), to Bulacan plant, was not recognized and made to deliver his
speech. At the same time, he was placed under preventive suspension for thirty (30) days.
When his 30-day suspension ended, Mahilum reported for work but was prevented from
entering the workplace. Sometime in the first week of March 2005, he received a copy of the
Memorandum, dated January 31, 2005, terminating his services effective the next day or on
February 1, 2005. On February 9, 2005, a clearance certificate was issued to Mahilum.

Mahilum filed a complaint for illegal dismissal with prayer for reinstatement, payment of
back wages and damages. He argued that he was illegally suspended and, thereafter,
dismissed constructively from the service. He also claimed that he was forced to sign the
waiver.

ISSUE:

Whether or not Mahilum was a regular employee and was illegally dismissed from the
service.

RULING:

Mahilum is a contractual employee and the period of probation depended on the stipulation
of the Memorandum of Agreement entered into by the parties. Mahilum was a regular
employee having been hired in June 2004, he must be considered to have already served the
company for eight (8) months at the time of his dismissal on February 1, 2005. This fact calls
for the application of Article 281 of the Labor Code:

Probationary employment shall not exceed six (6) months from the date the employee started
working, unless it is covered by an apprenticeship agreement stipulating a longer period. The
services of an employee who has been engaged on a probationary basis may be terminated
for a just cause or when he fails to qualify as a regular employee in accordance with
reasonable standards made known by the employer to the employee at the time of his
engagement. An employee who is allowed to work after a probationary period shall be
considered a regular employee.

A probationary employee, like a regular employee, enjoys security of tenure. In cases of

probationary employment, however, aside from just or authorized causes of termination, an
additional ground is provided under Article 281 of the Labor Code, that is, the probationary
employee may also be terminated for failure to qualify as a regular employee in accordance
with reasonable standards made known by the employer to the employee at the time of the
engagement. Thus, the services of an employee who has been engaged on probationary basis

51
may be terminated for any of the following: (1) a just or (2) an authorized cause and (3) when
he fails to qualify as a regular employee in accordance with reasonable standards prescribed
by the employer

As applied to the petitioner’s arguments, it would seem that PSWRI and Lua now invoke the
first and third ground for Mahilum’s termination. The Court, however, cannot subscribe to
the premise that Mahilum failed to qualify as a regular employee when he failed to perform
at par with the standards made known by the company to him. In this case, it is clear that the
primary cause of Mahilum’s dismissal from his employment was borne out of his alleged
lapses as chairman for the inauguration of the Bulacan plant company’s Christmas party. In
fact, the termination letter to him cited "loss of trust and confidence" as a ground for his
dismissal. Under the circumstances, the petitioners may not be permitted to belatedly harp
on its choice extend his alleged probationary status to regular employment as a ground for
his dismissal. Besides, having been allowed to work after the lapse of the probationary period,
Mahilum became a regular employee. He was hired in June 2004 and was dismissed on
February 5,2005. Thus, he served the company for eight (8) months.

CASE NO: 47

OUR HAUS REALTY DEVELOPMENT CORPORATION, Petitioner,

vs.
ALEXANDER PARIAN, JAY C. ERINCO, ALEXANDER CANLAS, BERNARD TENEDERO and
JERRY SABULAO, Respondents.

G.R. No. 204651 August 6, 2014

FACTS:

Respondents were all laborers working for petitioner Our Haus Realty Development
Corporation, a company engaged in the construction business.

Sometime in May 2010, Our Haus experienced financial distress. To alleviate its condition,
Our Haus suspended some of its construction projects and asked the affected workers,
including the respondents, to take vacation leaves.

Eventually, respondents were asked to report back to work but instead of doing so, they filed
a complaint for underpayment of their daily wages with the LA. They claimed that except for
Tenedoro, their wages were below the prescribed minimum rates.

Our Haus argued that the respondents’ wages complied with the law’s minimum
requirement. In determining the total amount of the respondents’ daily wages, the petitioner
considered the value of the benefits that respondents also enjoy -- their subsidized meals and
their free lodging. Our Haus also rejected the respondents’ other monetary claims for lack of
proof that they were entitled to it.

On the other hand, respondents argued that the value of their meals should not be considered
in determining their wages’ total amount since the requirements set under Sec. 4 of DOLE
Memorandum Circular No. 2 were not complied with. The respondents pointed out that Our
Haus never presented any proof that they agreed in writing to the inclusion of their meals’
value in their wages. Also, Our Haus failed to prove that the value of the facilities it furnished
was fair and reasonable. Finally, instead of deducting the maximum amount of 70% of the
value of the meals, Our Haus actually withheld its full value.

The LA ruled in favor of Our Haus. He held that if the reasonable values of the board and
lodging would be taken into account, the respondents’ daily wages would meet the minimum

52
wage rate. As to the other benefits, the LA found that the respondents were not able to
substantiate their claims for it.

The NLRC, in turn, reversed the LA’s decision. The NLRC noted that the respondents did not
authorize Our Haus in writing to charge the values of their board and lodging to their wages.
Thus, it cannot be credited. The NLRC also ruled that respondents are entitled 13th month
payments and SIL payments. However, it sustained the LA’s ruling that the respondents were
not entitled to overtime pay since the exact dates and times when they rendered overtime
work had not been proven.

Our Haus moved for reconsideration and submitted 5 kasunduans as new evidence to show
that the respondents authorized Our Haus in writing to charge the values of their meals and
lodging to their wages. The NLRC denied Our Haus’ motion, thus it appealed to the CA.

In its petition, Our Haus made a distinction between deduction and charging. According to
them, a written authorization is only necessary if the facility’s value will be deducted and will
not be needed if it will merely be charged or included in the computation of wages. Our Haus
claimed that it did not actually deduct the values of the meals and housing benefits. It only
considered these in computing the total amount of wages paid to the respondents for
purposes of compliance with the minimum wage law. Hence, the written authorization
requirement should not apply.

The CA affirmed in toto the NLRC’s rulings. It found no real distinction between deduction
and charging and ruled that the legal requirements before any deduction or charging can be
made, apply to both. Our Haus, however, failed to prove that it complied with any of the
requirements laid down in Mabeza v. National Labor Relations Commission. Accordingly, it
cannot consider the values of its meal and housing facilities in the computation of the
respondents’ total wages.

ISSUE:

Whether or not the respondents are entitled to underpayment of daily wages and other
monetary claims.

RULING:

The Supreme Cout ruled in favor of the respondents, stating that their wages were indeed
below the minimum rates prescribed in the wage orders. The court applied the purpose test,
which looks at the nature of the employer's business in relation to the work performed by the
employees. In this case, the court found that the respondents' wages were not in compliance
with the minimum requirement.

The court also ruled that the respondents were entitled to their respective proportionate
13th month payments for the year 2010 and SIL payments for at least three years. However,
the court upheld the labor arbiter's ruling that the respondents were not entitled to overtime
pay.

The court further ruled that the value of the meals and lodging provided by Our Haus should
be considered as supplements and not facilities. The court applied the purpose test and found
that the meals and lodging were primarily provided for the convenience and advantage of
Our Haus, as it ensured the physical strength and efficiency of its laborers. Therefore, the
value of the meals and lodging cannot be deducted from the employees' wages.

The court also ruled that the deduction of facilities from wages must be voluntarily accepted
in writing by the employee. Our Haus failed to provide any written authorization from the
employees for the deduction of the value of the meals and lodging.

Furthermore, the court found that Our Haus did not provide sufficient evidence to support
the fair and reasonable value of the meals and lodging. Without relevant documents such as

53
receipts and company records, the court could not consider the deduction as fair and
reasonable.

The court also addressed the issue of the employees' entitlement to other monetary benefits
such as 13th month pay, holiday pay, and service incentive leave pay. Our Haus failed to
provide credible documents to prove that these benefits were paid to the employees.

Lastly, the court affirmed that the employees are entitled to attorney's fees, despite receiving
free legal services from the Public Attorney's Office (PAO). The attorney's fees awarded will
be paid to the PAO as compensation for their services.

CASE NO: 48

FRANCISCO GUICO, JR., petitioner,

vs.
THE HON. SECRETARY OF LABOR & EMPLOYMENT LEONARDO A. QUISUMBING, THE
OFFICE OF REGIONAL DIRECTOR OF REGION I, DEP'T. OF LABOR & EMPLOYMENT,
ROSALINA CARRERA, ET. AL., respondents.

G.R. No. 131750 November 16, 1998

FACTS:
This case involves a petition for certiorari filed by Francisco Guico, Jr., doing business under
the name and style of Copylandia Services Trading, against the Hon. Secretary of Labor and
Employment Leonardo A. Quisumbing, the Office of Regional Director of Region I, Dept. of
Labor and Employment, and Rosalina Carrera, et. al. The case revolves around violations of
labor standards laws committed by Copylandia Services Trading.
The Office of the Regional Director, Department of Labor and Employment (DOLE), received
a letter-complaint requesting an investigation of Copylandia Services Trading for violation of
labor standards laws. Inspections were conducted and violations were found, including
underpayment of wages, underpayment of 13th month pay, and no service incentive leave
with pay.
The Regional Director issued an order directing Copylandia Services Trading to pay the
employees the amount of P1,081,756.70 representing their backwages. Petitioner filed a
notice of appeal and a memorandum of appeal, questioning the jurisdiction of the Regional
Director and disputing the computation of the monetary award. Petitioner also filed a motion
to reduce the amount of the appeal bond.
The Regional Director informed petitioner that his appeal could not be given due course since
the appeal bond posted fell short of the amount due to four employees who did not participate
in the settlement of the case. Petitioner filed a motion for reconsideration to reduce the
amount of the appeal bond, but it was denied by the respondent Secretary.

ISSUE:

Whether or not there was a valid dismissal.

RULING:

The Supreme Court ruled in favor of the respondent Secretary, upholding his jurisdiction over
the case. The court cited the amendment to Article 128(b) of the Labor Code, which grants
the Secretary of Labor and Employment or his authorized representatives the power to issue
compliance orders based on the findings of labor employment and enforcement officers. The

54
SC also held that the appeal bond posted by petitioner was insufficient, thus his appeal was
not perfected.

The court upheld the jurisdiction of the respondent Secretary based on the amendment to
Article 128(b) of the Labor Code. The court explained that the amendment grants the
Secretary of Labor and Employment or his authorized representatives the power to issue
compliance orders and enforce labor standards provisions, regardless of the amount of
individual claims. Therefore, the Regional Director had the authority to issue the order
directing Copylandia Services Trading to pay the employees their backwages.

Regarding the appeal bond, the court held that the petitioner failed to post the required
amount, rendering his appeal not perfected. Article 128(b) of the Labor Code requires the
posting of an appeal bond equivalent to the monetary award in the order appealed from. Since
the petitioner did not comply with this requirement, his appeal was deemed invalid.

CASE NO: 49

EJR CRAFTS CORPORATION, Petitioner,

vs.
HON. COURT OF APPEALS, DIRECTOR BARTOLOME C. AMOGUIS, et al., Respondents.

G.R. No. 154101 March 10, 2006

FACTS:

The case involves a Petition for Review on Certiorari filed by EJR Crafts Corporation
(petitioner) against the Hon. Court of Appeals, Director Bartolome C. Amoguis, National
Capital Region, Department of Labor and Employment, Undersecretary Jose M. Espa ol, Jr.,
and several individual respondents. The petitioner seeks to annul the Resolutions of the
Undersecretary of Labor affirming the Order of the Regional Director, National Capital
Region, which found the petitioner liable to the private respondents for underpayment of
wages, regular holiday pay, overtime pay, nonpayment of 13th month pay, and service
incentive leave pay.

In 1997, the private respondents filed a complaint against the petitioner for various labor
violations. An inspection was conducted, and violations of labor standards law were
discovered, including nonpresentation of employment records, underpayment of wages,
regular holiday pay, and overtime pay, and nonpayment of 13th month pay and service
incentive leave pay. The Regional Director issued an order for the petitioner to pay the private
respondents the total amount of P1,382,332.80 within ten days. The petitioner filed a Motion
for Reconsideration, arguing that the Regional Director had no jurisdiction over the case and
that the petitioner was denied due process. The motion was treated as an appeal, and the
petitioner was directed to file an appeal bond. The petitioner filed a supplemental motion for
reconsideration and a motion for reduction of bond, which were denied. The Undersecretary
of Labor affirmed the Regional Director's order with modification, and the petitioner's motion
for reconsideration was denied. The petitioner then filed a Petition for Certiorari before the
Court of Appeals, which was dismissed.

ISSUE:

Whether or not the public respondents denied the petitioner its right to due process of law.

RULING:

No. The records showed that petitioner corporation's manager was served a copy of the
inspection report and it was explained to him on the same day of the inspection. Petitioner

55
corporation failed to object to the findings of the Labor Enforcement Officer and also failed to
attend the summary investigation when given the opportunity. It was only after the Regional
Director issued an unfavorable order that petitioner corporation questioned the jurisdiction
of the Regional Director. The Court concluded that petitioner corporation was never denied
its right to due process, but rather chose not to participate in the proceedings until an
unfavorable order was issued.

The Court based its decision on the fact that petitioner corporation was served a copy of the
inspection report and had the opportunity to contest the findings of the Labor Enforcement
Officer. By affixing his signature on the report, petitioner corporation's manager
acknowledged receipt and understanding of its contents. Petitioner corporation also failed to
attend the summary investigation when summoned. The Court emphasized that due process
is not a mere formality but an opportunity to be heard and present evidence. In this case,
petitioner corporation had multiple opportunities to contest the findings but chose not to
participate until an unfavorable order was issued. Therefore, the Court concluded that
petitioner corporation was not denied due process.

CASE NO: 50

PEOPLE'S BROADCASTING SERVICE (BOMBO RADYO PHILS., INC.), Petitioner,

vs.
THE SECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT, THE
REGIONAL DIRECTOR, DOLE REGION VII, and JANDELEON JUEZAN, Respondents.

G.R. No. 179652 March 6, 2012

FACTS:

The DOLE Regional Office No. VII conducted an inspection of Bombo Radyo‟s premises in
response to Juezan‟s money claims against the broadcasting company, as a result, an order
for Bombo Radyo to rectify/restitute the labor standards violations discovered during the
inspection. Bombo Radyo failed to make any rectification or restitution, prompting the DOLE
to conduct a summary investigation. Bombo Radyo reiterated its position, made during the
inspection, that Juezan was not its employee. Both parties submitted evidence to support
their respective positions.

DOLE Director Rodolfo M. Sabulao found Juezan to be an employee of Bombo Radyo.

Consequently, Director Sabulao ordered Bombo Radyo to pay Juezan P203, 726.30
representing his demanded money claims. Bombo Radyo moved for reconsideration and
submitted additional evidence, but Director Sabulao denied the motion. Bombo Radyo then
appealed to the DOLE Secretary, insisting that Juezan was not its employee as he was a drama
talent hired on a per drama basis. The Acting DOLE Secretary dismissed the appeal for non-
perfection due to Bombo Radyo‟s failure to put a cash or surety bond, as required by Article
128(b) of the Labor Code.

Bombo Radyo went to the Court of Appeals (CA) through a petition for certiorari under Rule
65 of the Rules of Court. But was dismissed for lack of merit, hence this appeal. The Court
found that there was no employer-employee relationship between petitioner and private
respondent. It was held that while the DOLE may make a determination of the existence of
an employer-employee relationship, this function could not be co-extensive with the
visitorial and enforcement power provided in Art. 128(b) of the Labor Code, as amended by
RA 7730. The NLRC was held to be the primary agency in determining the existence of an
employer-employee relationship. This was the interpretation of the Court of the clause “in
cases where the relationship of employer-employee still exists” in Art. 128(b).

56
ISSUE:

Whether or not the DOLE can determine the existence of EE-ER relationship.

RULING:

YES. No limitation in the law was placed upon the power of the DOLE to determine the
existence of an employer-employee relationship. No procedure was laid down where the
DOLE would only make a preliminary finding, that the power was primarily held by the NLRC.
The law did not say that the DOLE would first seek the NLRC’s determination of the existence
of an employer-employee relationship, or that should the existence of the employer-
employee relationship be disputed, the DOLE would refer the matter to the NLRC. The DOLE
must have the power to determine whether or not an employer-employee relationship exists,
and from there to decide whether or not to issue compliance orders in accordance with Art.
128(b) of the Labor Code, as amended by RA 7730.

The DOLE, in determining the existence of an employer-employee relationship, has a ready

set of guidelines to follow, the same guide the courts themselves use. The elements to
determine the existence of an employment relationship are: (1) the selection and engagement
of the employee; (2) the payment of wages; (3) the power of dismissal; (4) the employer’s
power to control the employee’s conduct. The use of this test is not solely limited to the NLRC.
The DOLE Secretary, or his or her representatives, can utilize the same test, even in the course
of inspection, making use of the same evidence that would have been presented before the
NLRC.

The present Resolution now recognizes that the determination of the existence of an
employer-employee relationship by the DOLE, in the exercise of its visitorial and enforcement
power under Article 128(b) of the Labor Code, is entitled to full respect and must be fully
supported. This means that the DOLE has the full power to determine the existence of an
employer-employee relationship in cases brought to it under Article 128(b) of the Labor
Code. This power is parallel and not subordinate to that of the NLRC.

The Court, at the same time, confirms its previous finding that no employer-employee
relationship exists between Juezan and Bombo Radyo based on the evidence presented and
that a Deed of Assignment of Bank Deposits can be a substitute for a cash or surety bond in
perfecting an appeal to the Labor Secretary.

CASE NO: 51

SOUTH COTABATO COMMUNICATIONS CORPORATION and GAUVAIN J. BENZONAN,

petitioners, vs. HON. PATRICIA STO. TOMAS, SECRETARY OF LABOR AND
EMPLOYMENT, ROLANDO FABRIGAR, MERLYN VELARDE, VINCE LAMBOC, FELIPE
GALINDO, LEONARDO MIGUEL, JULIUS RUBIN, EDEL RODEROS, MERLYN COLIAO, and
EDGAR JOPSON, respondents.

G.R. No. 217575 June 15, 2016

FACTS:

This case involves a Petition for Review on Certiorari filed by South Cotabato
Communications Corporation and Gauvain J. Benzonan (petitioners) against the Secretary of
Labor and Employment, Rolando Fabrigar, Merlyn Velarde, Vince Lamboc, Felipe Galindo,
Leonardo Miguel, Julius Rubin, Edel Roderos, Merlyn Coliao, and Edgar Jopson (respondents).
The case originated from a Complaint Inspection conducted by the Department of Labor and
Employment (DOLE) at the premises of DXCP Radio Station, owned by South Cotabato
Communications Corporation. The inspection revealed violations of labor standards

57
provisions of the Labor Code involving the nine private respondents, including
underpayment of wages, non-payment of benefits, and non-remittance of SSS contributions.
The DOLE issued a Notice of Inspection Result directing the petitioners to rectify the
violations within five days. However, the petitioners failed to comply, leading to a Summary
Investigation scheduled by the DOLE. The petitioners failed to appear at the investigation,
and subsequent hearings were also missed. As a result, the DOLE Regional Director issued an
Order directing the petitioners to pay the total amount of P759,752 to the private
respondents. The petitioners appealed to the Secretary of Labor, arguing denial of due
process and lack of factual and legal basis for the Order. The Secretary of Labor affirmed the
findings of the DOLE Regional Director, stating that the petitioners failed to question the
violations or provide evidence of compliance. The Secretary of Labor also upheld the
monetary claims of the private respondents. The petitioners' motion for reconsideration was
denied.

ISSUE:

Whether or not the DOLE has jurisdiction to determine the existence of an employer-
employee relationship and to issue compliance orders for labor standards violations.

RULING:

The Supreme Court ruled that the DOLE does have the power to determine the existence of
an employer-employee relationship and to issue compliance orders. However, the court
emphasized that the existence of an employer-employee relationship is a prerequisite for the
exercise of the DOLE's jurisdiction. Without such relationship, the DOLE cannot determine
labor standards violations or issue compliance orders.

The court based its ruling on the provisions of the Labor Code, which grants the DOLE the
authority to enforce labor standards and regulations. The court noted that the DOLE has the
power to determine the existence of an employer-employee relationship and to issue
compliance orders for labor standards violations. This power is necessary to protect the
rights and welfare of workers and ensure compliance with labor laws.

However, the court also emphasized that the DOLE's jurisdiction is limited to cases where an
employer-employee relationship exists. The court stated that the DOLE cannot determine
labor standards violations or issue compliance orders if there is no employer-employee
relationship. This limitation is based on the principle that labor laws are intended to protect
workers in the context of an employment relationship.

In this case, the court found that the orders issued by the Regional Director and the Secretary
of Labor did not provide a clear and distinct factual basis for the jurisdiction of the DOLE and
the monetary awards to the employees. The court emphasized that decisions should clearly
and distinctly state the facts and the law on which they are based, in compliance with the
Constitution. The court found that the orders failed to demonstrate the existence of an
employer-employee relationship and the violations committed by the company.

58
 CASE NO: 52

ARIEL L. DAVID, doing business under the name and style "YIELS HOG
DEALER," Petitioner,
vs.
JOHN G. MACASIO, Respondent

G.R. No. 195466 July 2, 2014

FACTS:

This case involves a dispute between Ariel L. David, doing business as "Yiels Hog Dealer," and
John G. Macasio regarding Macasio's entitlement to overtime pay, holiday pay, 13th month
pay, and other monetary claims. Macasio filed a complaint against David before the Labor
Arbiter (LA) alleging that he had been working as a butcher for David since 1995 and that
David exercised control and supervision over his work. David, on the other hand, claimed that
Macasio was hired on a "pakyaw" or task basis and was not entitled to the benefits he claimed.

The LA dismissed Macasio's complaint, finding that he was engaged on a task basis and
therefore not entitled to the benefits. The National Labor Relations Commission (NLRC)
affirmed the LA's decision. However, the Court of Appeals (CA) reversed the NLRC's ruling,
finding that Macasio was entitled to the benefits based on the doctrine laid down in Serrano
v. Severino Santos Transit. The CA awarded Macasio's claim for holiday, service incentive
leave (SIL), and 13th month pay for three years.

ISSUE:

Whether or not Macasio was engaged on pakyaw or task basis therefore entitling him to
overtime, holiday, SIL and 13th month pay

RULING:

Yes. The Supreme Court applied the four-fold test to determine the existence of an employer-
employee relationship between David and Macasio. The four-fold test includes the selection
and engagement of the employee, payment of wages, power to control the employee's work
schedule, and the power to control and supervise the employee's work. The court found that
all these elements were present in the relationship between David and Macasio, establishing
an employer-employee relationship.

The court also addressed the issue of whether Macasio, who was engaged on a "pakyaw" or
task basis, is entitled to holiday, 13th month, and SIL pay. The lower tribunals dismissed
Macasio's claims based on the exemption of workers paid on "pakyaw" or task basis from the
coverage of holiday, SIL, and 13th month pay. However, the Court of Appeals (CA) reversed
this ruling, stating that the exemption only applies to "field personnel." The court explained
that the payment on a task basis alone is insufficient to exclude an employee from the
coverage of holiday and SIL pay. The employee must also qualify as "field personnel" to be
exempted. The court relied on previous rulings that interpreted the phrase "engaged on task
or contract basis" as being related to "field personnel." Therefore, the court concluded that
Macasio, who was engaged on a task basis, is entitled to holiday, 13th month, and SIL pay.

59
 CASE NO: 53

NASIPIT LUMBER COMPANY, INC., and PHILIPPINE WALLBOARD

CORPORATION, petitioners,
vs.
NATIONAL WAGES AND PRODUCTIVITY COMMISSION, WESTERN AGUSAN WORKERS
UNION (WAWU-ULGWP LOCAL 101), TUNGAO LUMBER WORKERS UNION (TULWU-
ULGWP LOCAL 102) and UNITED WORKERS UNION (UWU-ULGWP LOCAL
103), respondents.

G.R. No. 113097 April 27, 1998

FACTS:

This case involves a petition filed by Nasipit Lumber Company, Inc. (NALCO) and Philippine
Wallboard Corporation (PWC) against the National Wages and Productivity Commission
(NWPC) and various workers unions. The case revolves around the issue of whether the
petitioners should be exempted from implementing Wage Orders Nos. RX-01 and RX-01-A.

The Regional Tripartite Wages and Productivity Board (RTWPB) issued Guidelines No. 3,
which set criteria for determining distressed firms that can be exempted from implementing
the wage orders. NALCO, PWC, and Anakan Lumber Co. (ALCO) jointly filed an application for
exemption, claiming to be distressed establishments. The RTWPB approved their application,
citing liquidity problems and a business decline in the wood-processing industry.

However, the NWPC reversed the applications of NALCO and PWC, stating that Guidelines No.
3 cannot be used as a valid basis for granting exemptions. The NWPC argued that only ALCO
met the criterion set by the NWPC, which required an accumulated loss of 25% on the last
full accounting period preceding the application for exemption.

ISSUE:

Whether or not Guidelines No. 3 can be used as a valid basis for granting exemptions from
the wage orders.

RULING:

The ruling of the court is that Guidelines No. 3 is void because it lacks NWPC approval and
contains an arbitrarily inserted exemption. The court also argues that the guidelines are
inconsistent with the state policies protective of labor.

The court explains that the NWPC has the power to prescribe rules and guidelines for
determining minimum wages and productivity measures. The RTWPB, on the other hand, has
the power to issue wage orders but is subject to the guidelines prescribed by the NWPC. The
NWPC also has the power to issue exemptions from wage orders, subject to its review and
approval.

In this case, the NWPC did not approve Guidelines No. 3, making it inoperative and unable to
be used by the RTWPB in deciding on the applications for exemption. The court emphasizes
that administrative agencies can only exercise the powers conferred upon them by the
Constitution and the law. Guidelines No. 3, being inconsistent with the state policies
protective of labor, cannot be given effect.

60
 CASE NO: 54

THE NATIONAL WAGES AND PRODUCTIVITY COMMISSION (NWPC) and THE

REGIONAL TRIPARTITE WAGES AND PRODUCTIVITY BOARD (RTWPB)-
NCR, Petitioners,
vs.
THE ALLIANCE OF PROGRESSIVE LABOR (APL) and THE TUNAY NA NAGKAKAISANG
MANGGAGAwA SA ROYAL (TNMR-APL), Respondents.

G.R. No. 150326 March 12, 2014

FACTS:

This case involves the authority of the National Wages and Productivity Commission (NWPC)
and the Regional Tripartite Wages and Productivity Board (RTWPB) to issue wage orders and
grant exemptions from prescribed wage rates. The petitioners, NWPC and RTWPB-NCR,
appeal the decision of the Court of Appeals (CA) which declared certain provisions of Wage
Order No. NCR-07 null and void.

The case originated from the enactment of Republic Act No. 6727, also known as the Wage
Rationalization Act, which created the NWPC and RTWPBs in order to rationalize wages
throughout the Philippines. The NWPC was empowered to formulate policies and guidelines
on wages, while the RTWPBs were tasked to determine and fix minimum wage rates in their
respective regions. The RTWPBs were also authorized to issue wage orders and grant
exemptions from the prescribed wage rates.

In this case, the RTWPB-NCR issued Wage Order No. NCR-07, which imposed an increase in
wages for private sector workers in the National Capital Region (NCR). However, certain
sectors and industries were exempted from the wage increase. The Alliance of Progressive
Labor (APL) and the Tunay na Nagkakaisang Manggagawa sa Royal (TNMR) filed an appeal
with the NWPC, arguing that the NWPC and RTWPB-NCR did not have the authority to expand
the non-coverage and exemptible categories under the wage order.

The NWPC upheld the validity of the disputed provisions in Wage Order No. NCR-07, stating
that the RTWPB-NCR had the authority to determine exemptible categories and had valid
reasons for including them in the wage order. The CA, however, granted the petition for
certiorari filed by APL and TNMR, declaring the disputed provisions null and void. The CA
held that the powers and functions of the NWPC and RTWPB-NCR did not include the power
to grant additional exemptions from the adjusted minimum wage.

The NWPC and RTWPB-NCR appealed the CA's decision, arguing that Republic Act No. 6727
authorized them to provide additional exemptions in wage orders and that the CA erred in
declaring the disputed provisions null and void.

ISSUE:

Whether or not the NWPC and RTWPB-NCR have the authority to issue wage orders and grant
exemptions from prescribed wage rates, specifically in relation to the disputed provisions of
Wage Order No. NCR-07.

RULING:

Yes. The court based its decision on the provisions of Republic Act No. 6727, which created
the NWPC and RTWPBs and defined their powers and functions. The court emphasized that
the RTWPBs have the competence to determine the applicable minimum wages and the
industries and sectors to exempt from the coverage of their wage orders. Congress intended
for the RTWPBs to be creative in resolving the annual question of wages, and they are guided
by statutory standards and the rules and guidelines prescribed by the NWPC.

61
The court also noted that the NWPC had already given the necessary legal approval to the
wage order when it upheld the validity of the disputed provisions in its previous decisions.
The court held that the requisite review and approval had been complied with, and therefore,
the exemption provisions of Wage Order No. NCR-07 were valid.

CASE NO: 55

SERVFLEX, INC., PETITIONER, VS. LOVELYNN* M. URERA, SHERRYL I. CABRERA,

PRECIOUS** C. PALANCA AND JOCO JIM L. SEVILLA, RESPONDENTS

G.R. No. 246369 March 29, 2022

FACTS:

This case involves a complaint for regularization of employment and nonpayment of benefits
filed by Lovelynn M. Urera, Sherryl I. Cabrera, Precious C. Palanca, and Joco Jim L. Sevilla
against Philippine Long Distance Telephone Company (PLDT), Servflex, Inc., and their
respective officers. PLDT engaged Servflex to provide labor, particularly Database Engineers,
to support its network facility build-up. The respondents alleged that they applied at PLDT
but were referred to Servflex, and that they were actually employees of PLDT and not
Servflex. On the other hand, PLDT and Servflex argued that the respondents were regular
employees of Servflex and not of PLDT.

ISSUE:

Whether or not the respondents are employees of PLDT.

RULING:

The Supreme Court held that labor-only contracting exists when a person or entity supplies
workers to an employer without substantial capital or investment and the workers perform
tasks directly related to the employer's principal business. In this case, the SC found that
Servflex did not possess substantial capital or investment and the respondents performed
tasks central and necessary to the business of PLDT. The SC also noted that there was no clear
showing that Servflex had control over the respondents.

The SC further clarified that a certificate of registration with the Department of Labor and
Employment (DOLE) is not conclusive proof of legitimacy as a manpower provider. The
contract between Servflex and PLDT, which stated that Servflex had the right of control over
the respondents, was not sufficient evidence to establish that Servflex was an independent
contractor.

62
 CASE NO: 56

ARCO METAL PRODUCTS, CO., INC., and MRS. SALVADOR UY, petitioners,
vs.
SAMAHAN NG MGA MANGGAGAWA SA ARCO METAL-NAFLU (SAMARM-
NAFLU), respondent.

G.R. No. 170734 May 14, 2008

FACTS:

The case involves a dispute between Arco Metal Products, Co., Inc. and the labor union
Samahan ng mga Manggagawa sa Arco Metal-NAFLU (SAMARM-NAFLU) regarding the
payment of 13th month pay, vacation leave, and sick leave conversion to cash. Arco Metal
Products is a company engaged in the manufacture of metal products, while SAMARM-NAFLU
is the labor union representing the company's rank and file employees.

In December 2003, Arco Metal Products paid the 13th month pay, bonus, and leave
encashment of three union members in amounts proportional to the service they actually
rendered in a year, which was less than a full twelve months. SAMARM-NAFLU protested this
prorated scheme, claiming that the company had not prorated the payment of the same
benefits to other employees in the past. They argued that this prorated payment violated the
rule against diminution of benefits under Article 100 of the Labor Code.

The case was submitted for voluntary arbitration, and the arbitrator ruled in favor of Arco
Metal Products, stating that the giving of the contested benefits in full, regardless of the actual
service rendered within one year, had not ripened into a practice. The arbitrator interpreted
the relevant provisions of the collective bargaining agreement (CBA) to mean that an
employee must have rendered one year of service to be entitled to the full benefits provided.

Unsatisfied with the decision, SAMARM-NAFLU filed a petition for review before the Court of
Appeals. The Court of Appeals ruled that the CBA did not intend to foreclose the application
of prorated payments of benefits. The court held that the prorated payment of benefits was a
valid exercise of management prerogative, as long as it was not done in a discriminatory
manner.

ISSUE:

Whether or not the prorated payment of benefits, specifically the 13th month pay, vacation
leave, and sick leave conversion to cash, violates the rule against diminution of benefits under
Article 100 of the Labor Code.

RULING:

The court ruled in favor of SAMARM-NAFLU, stating that the prorated payment of benefits
violated the rule against diminution of benefits under Article 100 of the Labor Code. The court
held that the company's prorated scheme was not in accordance with the established practice
of providing full benefits to employees, regardless of the actual service rendered within one
year. The court emphasized that the rule against diminution of benefits is a protection for
employees and should be strictly construed in their favor.

The court based its decision on the rule against diminution of benefits under Article 100 of
the Labor Code. It explained that this rule prohibits employers from reducing or eliminating
benefits that have already been granted to employees. The court emphasized that the rule
should be strictly construed in favor of employees, as it is a protection for their rights and

63
welfare. The court also considered the principle of non-diminution of benefits as a form of
social legislation that aims to promote stability and security in the employment relationship.

In interpreting the relevant provisions of the CBA, the court held that the prorated payment
of benefits was not intended by the parties to be a permanent arrangement. The court noted
that the CBA did not explicitly provide for prorated payments and that the company's
prorated scheme was not consistent with the past practice of providing full benefits to
employees. The court concluded that the prorated payment of benefits violated the rule
against diminution of benefits and should be deemed invalid.

CASE NO: 57

GLOBE MACKAY CABLE AND RADIO CORPORATION, FREDERICK WHITE and JESUS
SANTIAGO, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, FFW-GLOBE MACKAY EMPLOYEES
UNION and EDA CONCEPCION, respondents.

G.R. No. 74156 June 29, 1988

FACTS:

On October 30, 1984 Wage Order No. 6 mandated an increased in the cost-of-living allowance
of non-agricultural workers in the private sector for P3.00. The order was complied by the
petitioner Corporation by multiplying the same by 22 days, equivalent to the number of
working days in the company.

Respondent union alleges that instead of multiplying the COLA by 22 it should be multiplied
by 30 representing the number of days in a month, as what the corporation's normal practice
prior to the said Wage Order. Thus the union filed a complaint against the Corporation for for
illegal deduction, underpayment, unpaid allowances, and violation of Wage Order No. 6.

ISSUE:

Whether or not COLA under Wage Order No. 6 should be multiplied by 22 or 30 representing
the number of working days in a month.

RULING:

The Supreme Court, in its ruling, reversed the decision of the NLRC. The Court held that the
payment of COLA is mandated only for the days that employees are paid their basic wage,
even if said days are unworked. Therefore, if monthly-paid employees receive their basic
wage for all the days in a month, they should be entitled to their COLA on those days "even if
unworked." In this case, the petitioner observed a 5-day work week, and the monthly basic
pay was computed based on 22 days. Therefore, the COLA should be computed based on 22
days. The Court also ruled that the payment in full by the petitioner of the COLA before the
execution of the CBA and in compliance with previous Wage Orders should not be considered
a voluntary employer practice that cannot be unilaterally withdrawn. The Court stated that
for a practice to be considered voluntary employer practice, it should have been practiced
over a long period of time and shown to be consistent and deliberate. In this case, there was
no adequate proof of such practice. The Court also noted that there were no clear
administrative guidelines for the implementation of the Wage Orders before Wage Order No.
4, and the petitioner cannot be faulted for an erroneous application of the law.

The Court's decision was based on the following arguments and legal basis:

64
 1. The payment of COLA is mandated only for the days that employees are paid their
basic wage, even if said days are unworked. This means that if monthly-paid
employees receive their basic wage for all the days in a month, they should be entitled
to their COLA on those days "even if unworked."
2. The petitioner observed a 5-day work week, and the monthly basic pay was computed
based on 22 days. Therefore, the COLA should be computed based on 22 days.
3. The payment in full by the petitioner of the COLA before the execution of the CBA and
in compliance with previous Wage Orders should not be considered a voluntary
employer practice that cannot be unilaterally withdrawn. For a practice to be
considered voluntary employer practice, it should have been practiced over a long
period of time and shown to be consistent and deliberate. In this case, there was no
adequate proof of such practice.
4. There were no clear administrative guidelines for the implementation of the Wage
Orders before Wage Order No. 4, and the petitioner cannot be faulted for an
erroneous application of the law.

CASE NO: 58

COCA-COLA BOTTLERS PHILIPPINES, INC., petitioner, vs. ILOILO COCA-COLA PLANT

EMPLOYEES LABOR UNION (ICCPELU), as represented by WILFREDO L. AGUIRRE,
respondent.

G.R. No. 195297 December 5, 2018

FACTS:

This case involves a dispute between Coca-Cola Bottlers Philippines, Inc. (CCBPI) and the
Iloilo Coca-Cola Plant Employees Labor Union (ICCPELU) regarding the scheduling of
Saturday work. CCBPI operates a manufacturing plant in Iloilo City, where the employees
represented by ICCPELU worked as regular route drivers and helpers. The conflict arose
when CCBPI informed the employees that Saturday work would no longer be scheduled
starting July 2, 2005, citing operational necessity and the need to save on operating expenses.
ICCPELU argued that this decision violated the provisions of the Collective Bargaining
Agreement (CBA) between the parties, which stated that management had the sole option to
schedule work on Saturdays based on operational necessity. ICCPELU filed a grievance with
CCBPI and requested a meeting to discuss the issue, but CCBPI refused to change its decision.
The case was then brought to the National Conciliation and Mediation Board (NCMB) for
voluntary arbitration. The Panel of Arbitrators ruled in favor of CCBPI, stating that the
employees were not entitled to receive their basic pay during Saturdays if they did not report
for work, and that CCBPI could not be compelled to provide work on Saturdays. ICCPELU
appealed the decision to the Court of Appeals (CA), which reversed the decision of the Panel
of Arbitrators. The CA ruled that CCBPI was obligated to schedule Saturday work for its
employees and ordered CCBPI to comply with the CBA provisions.

ISSUE:

Whether or not CCBPI is obligated to schedule Saturday work for its employees based on the
provisions of the Collective Bargaining Agreement (CBA) between the parties.

RULING:

No. The Supreme Court ruled that the CBA clearly states that management has the option to
schedule work on Saturdays based on operational necessity. The Court interpreted this
provision to mean that Saturday work is optional for CCBPI's employees. The Court reasoned
that if Saturday work was mandatory, there would be no need to provide additional
compensation to employees who report to work on that day. The Court also noted that the

65
phrase "schedule work on Saturdays based on operational necessity" gives CCBPI the
management prerogative to provide its employees with Saturday work depending on the
exigencies of the business.

The Court also addressed the argument that the previous practice of instituting Saturday
work by CCBPI had ripened into a company practice covered by Article 100 of the Labor Code,
which prohibits the diminution of benefits. The Court ruled that the benefit involved in this
case is the premium pay given for Saturday work, and not the grant of Saturday work itself.
The Court stated that CCBPI's withdrawal of Saturday work did not diminish the premium
pay given to employees who report for work on that day. Therefore, Article 100 of the Labor
Code does not apply in this case.

CASE NO: 59

YUSHI KONDO, PETITIONER, VS. TOYOTA BOSHOKU (PHILS.) CORPORATION,

MAMORU MATSUNAGA, KAZUKI MIURA, AND JOSELITO LEDESMA, RESPONDENTS.

G.R. No. 201396 September 11, 2019

FACTS:

Yushi Kondo (petitioner), a Japanese citizen, applied with and was hired by respondent
Toyota Boshoku Philippines Corporation (Toyota) on September 26, 2007 as Assistant
General Manager for Marketing, Procurement and Accounting. His net monthly salary was
P90,000.00, to be increased to P100,000.00 after six months.2 He was assured of other
benefits such as 13th month bonus, financial assistance to be given before Christmas, and 15
days each of sick leave and vacation leave per year. Petitioner was also provided a service car
and a local driver by Toyota’s President at the time, Fuhimiko Ito (Ito). After working for three
months, petitioner was subjected to a performance evaluation, the result of which was
“perfect.” Two months later, he was again subjected to another performance evaluation. This
time, his performance rating was only slightly above average. Petitioner protested the result
of this evaluation, reasoning that it was impossible to get that rating after only two months
from the initial evaluation. Petitioner was thereafter allegedly assigned the oldest company
car and prevented from using other company cars tor business travels. He was also prevented
from further using his Caltex card tor gasoline expenses, and instructed to pay for gas
expenses with his own money, subject to reimbursement. He was restrained by Toyota’s
security personnel from going out of the office even if it were for the purpose of performing
his official duty, and prevented from attending the meeting for the evaluation of employees.

When respondent Mamoru Matsunaga (Matsunaga) took over as President of Toyota,

petitioner was transferred to the Production Control, Technical Development and Special
Project department as Assistant Manager. Respondent Kazuki Miura (Miura) took over his
former post. Petitioner allegedly objected to the transfer on the ground that it is in violation
of the terms of his AEP, and admitted having no knowledge, skills, and experience in
production control and technical development. Nonetheless, petitioner assumed his new post
on July 1, 2008.

On September 1, 2008, petitioner was notified that his service car and driver will be
withdrawn.11 He pleaded with Matsunaga for the benefits to be retained since he would be
helpless without them. Nonetheless, Matsunaga allegedly brushed aside his plea and told him
that he must shoulder his own transportation expenses.

On October 13, 2008, Toyota terminated the services of petitioner’s driver. Since petitioner
could not report for work, he considered himself constructively dismissed.On the same day,
he filed a complaint with the NLRC tor constructive dismissal. illegal diminution of benefits,
illegal transfer of department, harassment, and discrimination against Toyota, Matsunaga,

66
Miura, and Joseph Ledesma (Ledesma), corporate officers of Toyota (collectively,
respondents). He filed the complaint of constructive dismissal with the Labor Arbiter. The
latter gave credence to the allegations made by the petitioner. The NLRC reversed the
decision of the LA, alleging that there was no constructive dismissal, that the claims of the
petitioner as to the benefits, were not ripened into company practice, his alleged transfer of
job position was based on management prerogative, and his non report of duty was based on
his own volition and as a matter of fact, there was demand sent by the respondent to the
petitioner to report for duty, but to no avail. The petitioner filed a petition for certiorari under
rule 65 with the CA. but it was dismissed alleging that it was an improper remedy sought by
the petitioner

ISSUE:

Whether or not the Labor Arbiter (LA) committed grave abuse of discretion in ruling that
Kondo was constructively dismissed based on the withholding of his car and driver benefits.

RULING:

The court ruled in favor of Toyota, stating that constructive dismissal exists when there is a
cessation of work because continued employment is rendered impossible or unreasonable.
Kondo claimed that he was forced to resign, but he failed to prove that his resignation was
involuntary and that it was actually a case of constructive dismissal. The court agreed with
the National Labor Relations Commission (NLRC) that Kondo voluntarily terminated his
employment by not reporting for work despite receiving notices to do so. The withdrawal of
certain benefits, such as the car and driver benefits, was found to be justified and not a ground
for constructive dismissal.

The court explained that constructive dismissal requires a showing that the employer
deliberately made the working conditions so difficult or unpleasant that the employee was
compelled to resign. In this case, Kondo failed to establish that his resignation was
involuntary and that he was forced to resign due to the actions of Toyota. The court also
emphasized that the withdrawal of certain benefits, such as the car and driver benefits, does
not automatically amount to constructive dismissal. The employer has the right to manage its
business and make reasonable decisions regarding the allocation of resources and benefits.
As long as the withdrawal of benefits is justified and not done in bad faith or as a form of
punishment, it does not constitute constructive dismissal.

CASE NO: 60

HOME CREDIT MUTUAL BUILDING AND LOAN ASSOCIATION AND/OR RONNIE B.

ALCANTARA, PETITIONERS, VS. MA. ROLLETTE G. PRUDENTE, RESPONDENT.

G.R. No. 200010 August 27, 2020

FACTS:

The case involves Home Credit Mutual Building and Loan Association and its employee, Ma.
Rollette G. Prudente. In 1997, Home Credit provided Prudente with her first service vehicle,
which she later purchased from the company at its depreciated value. In 2003, Home Credit
granted Prudente's request for a second service vehicle, but required her to pay for additional
equity in excess of the maximum limit. In 2008, Prudente purchased the second vehicle at its
depreciated value. In 2009, Prudente applied for a third service vehicle, but Home Credit
informed her that she must pay more than P550,000.00 in equity and adopt a cost-sharing
scheme where she must shoulder 40% of the acquisition price. Prudente filed a complaint
against Home Credit for violation of Article 100 of the Labor Code on non-diminution of
benefits before the Labor Arbiter (LA). The LA dismissed the complaint, stating that the

67
specific details of the grant of transportation facility may vary as it calls for the exercise of
management prerogative. The National Labor Relations Commission (NLRC) affirmed the
LA's decision. However, the Court of Appeals (CA) reversed the decision, stating that the car
plan at full company cost had evolved into a company practice and could not be unilaterally
withdrawn or reduced by the employer.

ISSUE:

Whether or not Home Credit violated the rule on non-diminution of benefits when it adopted
a cost-sharing scheme in its car plan for employees.

RULING:

The Supreme Court ruled in favor of Home Credit. The Court held that the car plan at full
company cost had not ripened into a company practice and that Prudente's claim that it was
part of her hiring package was unsubstantiated. The Court emphasized that the non-
diminution rule applies only if the benefit is based on an express policy, a written contract,
or has ripened into a practice. In this case, there was no substantial evidence to prove that
the car plan at full company cost had ripened into a company practice. The Court also
recognized the employer's right to exercise management prerogatives, such as adopting a
new car plan with a reduced maximum limit and cost-sharing scheme. The Court reinstated
the NLRC's decision dismissing Prudente's complaint.

The non-diminution rule applies only if the benefit is based on an express policy, a written
contract, or has ripened into a practice. In this case, there was no evidence to prove that the
car plan at full company cost had ripened into a company practice. The employer has the right
to exercise management prerogatives, such as adopting a new car plan with a reduced
maximum limit and cost-sharing scheme. The Court emphasized the need to balance the
protection of employee rights and the employer's right to conduct its business affairs.

CASE NO: 61

DEVELOPMENT BANK OF THE PHILIPPINES, petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER ISABEL P.
ORTIGUERRA, and LABOR ALLIANCE FOR NATIONAL DEVELOPMENT, respondents.

G.R. Nos. 82763-64 March 19, 1990

FACTS:

The case involves a petition for certiorari filed by the Development Bank of the Philippines
(DBP) against the National Labor Relations Commission (NLRC), Labor Arbiter Isabel P.
Ortiguerra, and the Labor Alliance for National Development (LAND). The complainants were
former employees of Lirag Textile Mills, Inc. (LIRAG), which was a mortgage debtor of DBP.
LIRAG started terminating the services of its employees in September 1981, and by December
of that year, 180 employees had been separated from the service. LIRAG eventually ceased
operations due to financial difficulties. Two cases were filed before the NLRC by the
complainants. One case was for illegal dismissal filed by Joselito Albay, and the other case was
filed by LAND on behalf of the dismissed employees seeking various monetary claims. The
cases were consolidated and heard jointly by the NLRC. In July 1982, the Labor Arbiter
ordered LIRAG to pay the individual complainants, and this decision was affirmed by the
NLRC. In April 1983, a writ of execution was issued, but DBP extrajudicially foreclosed the
mortgaged properties of LIRAG on the same day. DBP acquired the properties as the sole
bidder at the foreclosure sale. The writ of execution remained unsatisfied due to the
foreclosure.

68
ISSUE:

Whether or not the NLRC gravely abused its discretion in directing DBP to remit a sum of
money from the proceeds of foreclosed properties to satisfy a judgment in favor of the
complainants.

RULING:

Yes. The court argued that the workers' claims for unpaid wages cannot be given preference
over other creditors without a formal declaration of bankruptcy or judicial liquidation of the
employer's business. The court interpreted the amendment to Article 110 of the Labor Code,
which gives preference to workers' claims, to require a formal declaration of bankruptcy or
liquidation in order for the preference to be enforced. The court also noted that the
amendment to Article 110 did not change the order of preference established by the Civil
Code, which gives absolute preference to taxes and pro rata preference to other special
preferred credits. The court emphasized the need for an orderly settlement of a debtor's
assets and the determination of preferences in the course of judicial proceedings.

CASE NO: 63

PETER ANGELO N. LAGAMAYO, PETITIONER, VS. CULLINAN GROUP, INC., AND RAFAEL
M. FLORENCIO, RESPONDENTS.

G.R. No. 227718 November 11, 2021

FACTS:

This case involves a Petition for Review filed by Peter Angelo N. Lagamayo against Cullinan
Group, Inc. and Rafael M. Florencio. Lagamayo was hired as a workshop supervisor by CGI on
April 2, 2007. In 2011, CGI called Lagamayo's attention regarding several company violations
reported in the workshop under his supervision. Lagamayo was placed under preventive
suspension and was later found guilty of the charges against him. He implored to be allowed
to resign, which CGI agreed to, but without separation pay. Lagamayo filed a complaint for
illegal dismissal, payment of backwages, and separation pay. The Labor Arbiter dismissed the
complaint, and the NLRC affirmed the dismissal but granted Lagamayo payment of wages and
benefits. The CA held that Lagamayo was constructively dismissed but for a just cause, loss of
trust and confidence. Lagamayo appealed, arguing that the criminal complaint against him
cannot be used as a basis for termination since it was dismissed for lack of evidence.

ISSUE:

Whether or not Lagamayo was constructively dismissed and whether he is entitled to

reinstatement and/or separation pay and backwages

RULING:

The Court ruled that the petition is without merit. It clarified that the presence of just cause
for termination is inherently incompatible with the principle underlying constructive
dismissal. The Court also emphasized that the burden of proof lies with the employer to show
that the dismissal is for just cause. In this case, the Court found that Lagamayo was not
illegally terminated and affirmed the dismissal of his complaint.

This case discusses the concept of constructive dismissal and its implications on the rights of
employees. Constructive dismissal is defined as quitting or cessation of work because
continued employment is rendered impossible, unreasonable, or unlikely. It occurs when an
act of clear discrimination, insensibility, or disdain by an employer becomes so unbearable

69
for the employee that it forces them to forego their continued employment. The court held
that constructive dismissal is a form of illegal dismissal and a violation of an employee's
security of tenure.

The court also discussed the concept of management prerogative, which refers to the right of
an employer to regulate all aspects of employment. While management prerogative is
generally not interfered with, it is not absolute and is subject to limitations imposed by law,
collective bargaining agreements, and principles of fair play and justice.

In order to establish constructive dismissal, the employee has the burden of proving the fact
of dismissal by substantial evidence. Bare allegations of constructive dismissal, without
corroborating evidence, cannot be given credence. However, once the employee establishes
a case of constructive dismissal, the burden shifts to the employer to prove that the exercise
of management prerogative is for valid or legitimate grounds, such as genuine business
necessity, and not a mere subterfuge to get rid of an employee.

If the employer fails to prove the existence of a genuine business necessity, they will be found
liable for constructive dismissal. In such cases, the employee is entitled to reinstatement
without loss of seniority rights, full backwages, allowances, and other benefits. However, if
reinstatement is not feasible due to strained relations between the employee and employer,
the court may award separation pay in addition to full backwages and benefits.

WORKING CONDITIONS

CASE NO: 64

PHILIPPINE TELEGRAPH AND TELEPHONE COMPANY, petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION and GRACE DE GUZMAN, respondents.

G.R. No. 118978 May 23, 1997

FACTS:

This case involves the Philippine Telegraph and Telephone Company (PTT) and Grace de
Guzman. PTT had a policy of not accepting or considering any woman worker who contracts
marriage for employment. De Guzman, who had gained regular status at the time of her
dismissal, was terminated from her employment by PTT because she had contracted
marriage during her employment, which was prohibited by the company's policies. De
Guzman argued that she was discriminated against in violation of the law, specifically Article
136 of the Labor Code, which prohibits stipulations against marriage in connection with
employment.

ISSUE:

Whether or not PTT's policy of not accepting married women for employment is
discriminatory and in violation of the law.

RULING:

Yes. The court found that PTT's policy not only goes against the provisions of the Labor Code,
but also assaults good morals and public policy by depriving women of the freedom to choose
their marital status. The court emphasized that the freedom to choose one's marital status is

70
an inherent and inalienable right. The court further argued that PTT's policy could encourage
illicit relationships and undermine the institution of marriage.

The court also found that de Guzman's dismissal was not justified. While loss of confidence is
a valid ground for termination, it should not be simulated and should be based on an actual
breach of duty by the employee. In this case, de Guzman's dismissal was primarily due to
PTT's policy against married women, not her alleged acts of dishonesty. The court also
dismissed PTT's claim that de Guzman misappropriated company funds, as it was not the
basis for her dismissal.

CASE NO: 65

GOYA, INC., Petitioner,

vs.
GOYA, INC. EMPLOYEES UNION-FFW, Respondent.

G.R. No. 170054 January 21, 2013

FACTS:

Goya, Inc., a domestic corporation engaged in the manufacture, importation, and wholesale
of top quality food products, hired contractual employees from PESO Resources Development
Corporation (PESO) to perform temporary and occasional services in its factory in Parang,
Marikina City. This prompted respondent Goya, Inc. Employees Union–FFW (Union) to
request for a grievance conference on the ground that the contractual workers do not belong
to the categories of employees stipulated in the existing CBA. When the matter remained
unresolved, the grievance was referred to the NCMB for voluntary arbitration. They agreed
to submit for resolution the solitary issue of “whether or not the Company is guilty of unfair
labor acts in engaging the services of PESO, a third party service provider, under the existing
CBA, laws, and jurisprudence.”

VA dismissed the Union’s charge of ULP for being purely speculative and for lacking in factual
basis, but the Company was directed to observe and comply with its commitment under the
CBA. The Company immediately filed a petition for review before the Court of Appeals (CA)
under Rule 43 of the Revised Rules of Civil Procedure to set aside the directive to observe and
comply with the CBA commitment pertaining to the hiring of casual employees when
necessitated by business circumstances. Professing that such order was not covered by the
sole issue submitted for voluntary arbitration.

ISSUE:

Whether or not Goya’s engagement of contractual workers from PESO was a valid exercise of
management prerogative.

RULING:

NO. The Company kept on harping that both the VA and the CA conceded that its engagement
of contractual workers from PESO was a valid exercise of management prerogative. It is
confused. To emphasize, declaring that a particular act falls within the concept of
management prerogative is significantly different from acknowledging that such act is a valid
exercise thereof. What the VA and the CA correctly ruled was that the Company’s act of
contracting out/outsourcing is within the purview of management prerogative. Both did not
say, however, that such acts a valid exercise thereof. Obviously, this is due to the recognition
that the CBA provisions agreed upon by the Company and the Union delimit the free exercise
of management prerogative pertaining to the hiring of contractual employees. Indeed, the VA
opined that "the right of the management to outsource parts of its operations is not totally

71
eliminated but is merely limited by the CBA," while the CA held that "this management
prerogative of contracting out services, however, is not without limitation. xx x These
categories of employees particularly with respect to casual employees serve as limitation to
the Company’s prerogative to outsource parts of its operations especially when hiring
contractual employees."

A collective bargaining agreement is the law between the parties. 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. Moreover, if the terms of a contract, as in a CBA,
are clear and leave no doubt upon the intention of the contracting parties, the literal meaning
of their stipulations shall control.

In this case, Section 4, Article I (on categories of employees) of the CBA between the Company
and the Union must be read in conjunction with its Section 1, Article III (on union security).
Both are interconnected and must be given full force and effect. Also, these provisions are
clear and unambiguous. The terms are explicit and the language of the CBA is not susceptible
to any other interpretation. Hence, the literal meaning should prevail. As repeatedly held, the
exercise of management prerogative is not unlimited; it is subject to the limitations found in
law, collective bargaining agreement or the general principles of fair play and justice. To
reiterate, the CBA is the norm of conduct between the parties and compliance therewith is
mandated by the express policy of the law.

CASE NO: 66

ASSOCIATED LABOR UNIONS-TUCP and RENATO FELIZARDO, petitioners,

vs.
NATIONAL LABOR RELATIONS COMMISSION, REPUBLIC FLOUR MILLS, GROUP OF
COMPANIES and/or SELECTA ICE CREAM CORPORATION and BEN T.
MAKIL, respondents.

G.R. No. 120450 February 10, 1999

FACTS:

Renato Felizardo, an employee at Republic Flour Mills-Selecta Ice Cream Corporation, was
caught taking a pair of boots, an aluminum container, and fifteen pieces of hamburger patties
from the company's premises without permission. The company considered this as an act of
dishonesty and theft of company property, and subsequently dismissed Felizardo from
employment. In response, Felizardo, along with the Associated Labor Union-TUCP, filed a
complaint against the company for illegal dismissal, unfair labor practice, and non-payment
of 13th month pay. The case was brought before the Labor Arbiter.

ISSUE:

Whether or not the dismissal of Felizardo from employment was proportionate to the gravity
of the offense he committed.

RULING:

The Court considered several factors in reaching its decision. Firstly, it noted that the articles
taken by Felizardo did have some value, although not enough to warrant dismissal. The Court

72
disagreed with the Labor Arbiter's characterization of the articles as mere scraps. Secondly,
the Court emphasized that Felizardo was not a managerial or confidential employee, and
therefore did not hold a position of trust and confidence in the company. The Court stated
that unfaithful employees in positions of trust pose a greater danger to a company's security
than ordinary employees like Felizardo.

Furthermore, the Court considered the financial consequences of dismissal on Felizardo's

family, especially in a time of high unemployment. It cited previous cases that emphasized
the importance of considering the welfare of the employee and their dependents in labor law
determinations. The Court also noted that Felizardo had not been paid since the company
considered them separated from the service.

The Court cited a similar case where an employee was reinstated despite taking a minimal
amount of property from the employer's premises. It held that in cases like these, where there
is no previous derogatory record and the value of the property taken is minimal, doubts
should be resolved in favor of labor.

The Court concluded that dismissal was not proportionate to the offense committed by
Felizardo and that a suspension would have sufficed as a penalty. However, since Felizardo
had already served a reasonable period of suspension, the Court affirmed the Labor Arbiter's
order of reinstatement without backwages.

CASE NO: 67

UNICORN SAFETY GLASS, INC., LILY YULO and HILARIO YULO, petitioners,
vs.
RODRIGO BASARTE, JAIMELITO FLORES, TEODOLFO LOR, RONNIE DECIO, ELMER
SULTORA and JOSELITO DECIO, respondents.

G.R. No. 154689 November 25, 2004

FACTS:

The case involves a complaint for illegal dismissal filed by the respondents against the
petitioners. The respondents were regular employees of Unicorn Safety Glass Incorporated
and were also officers of the organized union in the company. On March 2, 1998, Hilario Yulo,
as the general manager of Unicorn, issued a memorandum informing the respondents that
their workdays would be reduced due to economic considerations. The respondents
protested this reduction and expressed doubts about the reasons given by the company. On
April 6, 1998, another memorandum was issued, announcing the implementation of a work
rotation schedule that would reduce the respondents' workdays to three days a week.

The respondents filed a complaint against the company for constructive dismissal and unfair
labor practice on April 13, 1998. The Labor Arbiter dismissed the complaint, stating that the
respondents were not constructively terminated and that there was no basis for the charge
of unfair labor practice. However, the Labor Arbiter ordered the company to pay the
respondents' claim for unpaid service incentive leave pay. The case was appealed to the
National Labor Relations Commission (NLRC), which affirmed the decision of the Labor
Arbiter.

The respondents filed a petition for certiorari with the Court of Appeals, which partially
granted their petition. The Court of Appeals ordered the company to reinstate three of the
respondents to their former positions and pay them full backwages. The company filed a
petition for review on certiorari with the Supreme Court, raising two errors.

73
ISSUE:

Whether or not the quitclaims executed by the respondents are valid and binding.

RULING:

No. The Supreme Court ruled that on Article 279 of the Labor Code, which provides that an
employee who is unjustly dismissed is entitled to reinstatement without loss of seniority
rights and other privileges, as well as full backwages and other benefits. If reinstatement is
no longer possible, the employer has the alternative of paying the employee separation pay
in lieu of reinstatement. The Court reasoned that the quitclaims executed by the respondents
were not valid because they were not given adequate consideration for their length of
employment. The Court emphasized that for a quitclaim to be recognized as valid and binding,
the waiver must be executed voluntarily and with full understanding of its consequences.
Additionally, the consideration for the quitclaim must be credible and reasonable. In this case,
the Court found that the considerations received by Basarte and Flores were grossly
inadequate considering their length of employment. Basarte worked for the company for 21
years, while Flores worked for 7 years. Basarte received only P10,000.00 and Flores received
only P3,000.00 as consideration for their quitclaims. In contrast, two other workers who
settled their cases earlier received P16,434.00 each after executing their waivers. Therefore,
the quitclaims were not valid and binding.

CASE NO: 68

ASIAN MARINE TRANSPORT CORPORATION, PETITIONER, VS. ALLEN P. CASERES,

EMILYN O. TUDIO, JESSIE LADICA, AND VERMELYN PALOMARES, RESPONDENTS.

G.R. No. 212082 November 24, 2021

FACTS:

This case involves a dispute between Asian Marine Transport Corporation (Asian Marine)
and its employees, Allen P. Caseres, Emilyn O. Tudio, Jessie Ladica, and Vermelyn Palomares.
Asian Marine hired Caseres and Ladica in 2003 and hired Tudio and Palomares in 2005 and
2006, respectively. The employees were initially assigned to different vessels. However, on
December 8, 2007, Asian Marine transferred the employees to other workstations, effective
December 17, 2007. The employees refused the transfer, claiming that it would lead to
additional living expenses and a reduction in their pay. Asian Marine subsequently dismissed
the employees for abandonment of their duties, prompting them to file complaints for illegal
dismissal.

ISSUE:

Whether or not the transfer of the employees by Asian Marine was a valid exercise of its
management prerogative or if it constituted constructive dismissal.

RULING:

The Supreme Court upheld the decision of the Court of Appeals. It recognized that
management has the prerogative to conduct its business as it sees fit, but this prerogative
must be exercised in good faith and not to defeat or circumvent employee rights. The Court
emphasized that a transfer or assignment of employees is a valid exercise of management
prerogative as long as it is based on sound business judgment, does not involve demotion or
salary reduction, and is not done in bad faith. In this case, the Court found that Asian Marine
failed to justify the transfer as necessary for its business operations.

74
The Court held that the transfer of employees is a valid exercise of management prerogative
as long as it meets certain criteria. First, it must be based on sound business judgment,
meaning that it is necessary for the efficient operation of the company. Second, it must not
involve demotion or salary reduction, as this would be prejudicial to the employees. Third, it
must not be done in bad faith, meaning that it is not intended to defeat or circumvent
employee rights.

In this case, the Court found that Asian Marine failed to meet these criteria. The transfer of
the employees was not justified as necessary for the business operations of the company.
Asian Marine did not provide any valid reason for the transfer and did not show how it would
benefit the company. Additionally, the transfer would result in additional living expenses for
the employees and a reduction in their pay, which constitutes demotion and salary reduction.
Finally, the Court found that the transfer was done in bad faith, as it was intended to punish
the employees for refusing the transfer and to discourage other employees from doing the
same.

CASE NO: 69

CHARLITO PEÑARANDA, Petitioner,

vs.
BAGANGA PLYWOOD CORPORATION and HUDSON CHUA, Respondents.

G.R. No. 159577 May 3, 2006

FACTS:

Charlito Penaranda was hired as an employee of Baganga Corporation with a monthly salary
of P5,000 as Foreman/Boiler Head/ Shift Engineer to take charge of the operations and
maintenance of its steam plant boiler.

He alleges that he was illegally terminated and that his termination was without due process
and valid grounds. Furthermore, he was not paid his OT pay, premium pay for working during
holidays, and night shift differentials. So he filed an action for illegal dismissal.

Hudson Chua, the General Manager of Baganga alleges that Penaranda’s separation was done
pursuant to Art. 238 of the Labor Code. The company was on temporary closure due to repair
and general maintenance and it applied for clearance with the DOLE to shut down and dismiss
employees. He claims that due to the insistence of complainant, he was paid his separation
benefits. But when the company partially re-opened, Penaranda faild to re-apply.

Chua also alleges that since he is a managerial employee, he is not entitled to OT pay and if
ever he rendered services beyond the normal hours of work, there was no office
order/authorization for him to do so.

The Labor Arbiter ruled that there was no illegal dismissal and that Penaranda’s complaint
was premature because he was still employed with Baganga. As regards the benefits, the
Labor Arbiter found petitioner entitled to OT pay, premium pay for working on rest days and
attorney’s fees.

On appeal, NLRC deleted the award of OT pay, premium pay and attorney’s fees. The CA
dismissed Penaranda’s Petition for Certiorari based on procedural failures.

ISSUE:

Whether or not Penaranda is a regular employee entitled to monetary benefits under Art. 82
of the Labor Code.

75
RULING:

NO. Penaranda is part of the managerial staff which takes him out of the coverage of labor
standards. The Implementing Rules define members of a managerial staff as those with its
responsibilities:

Petitioner supervised the engineering section of the steam plant boiler. His work involved
overseeing the operation of the machines and the performance of the workers in the
engineering section. This work necessarily required the use of discretion and independent
judgment to ensure the proper functioning of the steam plant boiler. As supervisor, petitioner
is deemed a member of the managerial staff.

Even Penaranda admitted that he was a supervisor. In his Position Paper, he stated that he
was the foreman responsible for the operation of the boiler. The term foreman implies that
he was the representative of management over the workers and the operation of the
department. His classification as supervisor is further evident from the manner his salary was
paid. He belonged to the 10% of respondent’s 354 employees who were paid on a monthly
basis; the others were paid only on a daily basis.

CASE NO: 70

AUTO BUS TRANSPORT SYSTEMS, INC., petitioner,

vs.
ANTONIO BAUTISTA, respondent.

G.R. No. 156367 May 16, 2005

FACTS:

This case involves a petition for review on certiorari filed by Auto Bus Transport Systems,
Inc. (Autobus) against Antonio Bautista. Bautista filed a complaint for illegal dismissal and
nonpayment of 13th month pay and service incentive leave pay against Autobus. Bautista had
been employed by Autobus as a driver-conductor since May 24, 1995. He was paid on a
commission basis, receiving 7% of the total gross income per travel, twice a month. On
January 3, 2000, while driving Autobus No. 114, Bautista accidentally bumped the rear
portion of Autobus No. 124. He claimed that the accident happened because he was compelled
by management to go back to Roxas, Isabela, despite not having slept for almost 24 hours.
Bautista further alleged that he was not allowed to work until he fully paid the cost of repair
for the damaged buses, and after a month, he was terminated.

The Labor Arbiter dismissed Bautista's complaint for illegal dismissal but ordered Autobus
to pay him his 13th month pay and service incentive leave pay. Autobus appealed the decision
to the National Labor Relations Commission (NLRC), which modified the decision by deleting
the award of 13th month pay. The NLRC ruled that Bautista, being paid on a commission basis,
was not entitled to 13th month pay. However, the NLRC maintained the award of service
incentive leave pay. Autobus sought reconsideration of the decision, but it was denied by the
NLRC. Autobus then filed a petition for review with the Court of Appeals, which affirmed the
NLRC's decision.

ISSUE:

1. Whether or not Bautista is entitled to service incentive leave, and whether or not the three-
year prescriptive period under Article 291 of the Labor Code applies to Bautista's claim of
service incentive leave pay.

76
RULING:

The Court ruled that Bautista is entitled to service incentive leave pay and that the three-year
prescriptive period under Article 291 of the Labor Code applies to his claim. The case at hand
involves the interpretation of Article 291 of the Labor Code in relation to the service incentive
leave. The court concludes that the three-year prescriptive period for claiming the
commutation of service incentive leave pay begins when the employer refuses to pay or upon
termination of the employee's services. This interpretation is based on the principle that the
welfare of the workingman should be the primary consideration in the implementation and
interpretation of labor laws.

In this case, the respondent did not use his service incentive leave or demand its commutation
until his employment was terminated by the petitioner. The petitioner also did not
compensate the respondent for his accumulated service incentive leave pay at the time of his
dismissal. It was only when the respondent filed a complaint for illegal dismissal, one month
after his dismissal, that he demanded the commutation of his accumulated leave credits. The
court determines that the respondent's cause of action to claim the payment of his
accumulated service incentive leave accrued from the time of his dismissal and the failure of
the employer to pay his leave credits.

Therefore, the prescriptive period for the respondent's claim for service incentive leave pay
started when the employer failed to compensate him at the time of his dismissal. Since the
respondent filed his money claim within one month of his dismissal, it falls within the
prescriptive period provided by Article 291 of the Labor Code.

CASE NO: 71

ARIEL L. DAVID, doing business under the name and style "YIELS HOG
DEALER," Petitioner,
vs.
JOHN G. MACASIO, Respondent.

G.R. No. 195466 July 2, 2014

FACTS:

This case involves a dispute between Ariel L. David, doing business as "Yiels Hog Dealer," and
John G. Macasio regarding Macasio's entitlement to overtime pay, holiday pay, 13th month
pay, and other monetary claims. Macasio filed a complaint against David before the Labor
Arbiter (LA) alleging that he had been working as a butcher for David since 1995 and that
David exercised control and supervision over his work. David, on the other hand, claimed that
Macasio was hired on a "pakyaw" or task basis and was not entitled to the benefits he claimed.

The LA dismissed Macasio's complaint, finding that he was engaged on a task basis and
therefore not entitled to the benefits. The National Labor Relations Commission (NLRC)
affirmed the LA's decision. However, the Court of Appeals (CA) reversed the NLRC's ruling,
finding that Macasio was entitled to the benefits based on the doctrine laid down in Serrano
v. Severino Santos Transit. The CA awarded Macasio's claim for holiday, service incentive
leave (SIL), and 13th month pay for three years.

ISSUE:

Whether or not there was a proper application and interpretation of labor law provisions on
holiday, SIL, and 13th month pay to a worker engaged on a task basis.

77
RULING:

The Supreme Court held that Macasio is entitled to holiday pay and SIL pay, but not 13th
month pay. The court applied the four-fold test to determine the existence of an employer-
employee relationship between David and Macasio. The four-fold test includes the selection
and engagement of the employee, payment of wages, power to control the employee's work
schedule, and the power to control and supervise the employee's work. The court found that
all these elements were present in the relationship between David and Macasio, establishing
an employer-employee relationship.

The court also addressed the issue of whether Macasio, who was engaged on a "pakyaw" or
task basis, is entitled to holiday, 13th month, and SIL pay. The lower tribunals dismissed
Macasio's claims based on the exemption of workers paid on "pakyaw" or task basis from the
coverage of holiday, SIL, and 13th month pay. However, the Court of Appeals (CA) reversed
this ruling, stating that the exemption only applies to "field personnel." The court explained
that the payment on a task basis alone is insufficient to exclude an employee from the
coverage of holiday and SIL pay. The employee must also qualify as "field personnel" to be
exempted. The court relied on previous rulings that interpreted the phrase "engaged on task
or contract basis" as being related to "field personnel." Therefore, the court concluded that
Macasio, who was engaged on a task basis, is entitled to holiday, 13th month, and SIL pay.

CASE NO: 72

G.R. No. 126383 November 28, 1997

SAN JUAN DE DIOS HOSPITAL EMPLOYEES ASSOCIATION-AFW/MA. CONSUELO

MACQUILING LEONARDO MARTINEZ, et al., petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, and SAN JUAN DE DIOS
HOSPITAL, respondents.

FACTS:

The San Juan de Dios Hospital Employees Association, along with several employee-union
members, sent a written request to the respondent, San Juan de Dios Hospital, for the
implementation and payment of the "40-Hours/5-Day workweek" with compensable weekly
two days off as provided for by Republic Act 5901 and clarified by the Secretary of Labor's
Policy Instructions No. 54. The hospital did not respond favorably, so the petitioners filed a
complaint regarding their claims for statutory benefits under the mentioned law and policy
issuance. The Labor Arbiter dismissed the complaint, and the petitioners appealed to the
National Labor Relations Commission (NLRC), which affirmed the Labor Arbiter's decision.
The petitioners then filed this petition, alleging grave abuse of discretion on the part of the
NLRC in concluding that Policy Instructions No. 54 "proceeds from a wrong interpretation of
RA 5901" and Article 83 of the Labor Code.

ISSUE:

Whether or not the Policy Instructions No. 54 issued by then Labor Secretary Franklin M.
Drilon is valid or not.

RULING:

The Supreme Court affirmed the decision of the NLRC. Policy Instructions No. 54 is declared
void.

Policy Instruction No. 54 relies on Republic Act No. 5901, which prescribed a 40-hour/5-day
workweek for hospital/clinic personnel. However, Republic Act No. 5901 has been repealed
with the passage of the Labor Code on May 1, 1974. All labor laws not adopted as part of the

78
Labor Code are repealed, and all provisions of existing laws inconsistent with the Labor Code
are likewise repealed.

Article 83 of the Labor Code incorporates the basic provisions of Republic Act No. 5901. It
provides for the regular office hours of eight hours a day, five days per week for health
personnel. If the exigencies of service require health personnel to work for six days or forty-
eight hours, they shall be entitled to additional compensation of at least thirty percent of their
regular wage for work on the sixth day. There is no provision in the law that supports the
Secretary of Labor's assertion that personnel in subject hospitals and clinics are entitled to a
full weekly wage for seven days if they have completed the 40-hour/5-day workweek.

Administrative interpretation of the law is merely advisory, and the Court will strike down
an interpretation that deviates from the provision of the statute.

Even if Republic Act No. 5901 has not been repealed, Policy Instructions No. 54 is still invalid.
The purpose of Republic Act No. 5901 is to shorten the working hours of health personnel,
not to provide two days off with pay. The implementing rules of Republic Act No. 5901 also
do not grant two days off with pay. Policy Instructions No. 54 unduly extended the statute
and is inconsistent with and repugnant to the provisions of the Labor Code and Republic Act
No. 5901.

CASE NO: 73

HILARIO RADA, petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION (Second Division) and PHILNOR
CONSULTANTS AND PLANNERS, INC., respondents.

G.R. No. 96078 January 9, 1992

FACTS:

The petitioner, Hilario Rada, was employed as a driver for the Manila North Expressway
Extension, Second Stage (MNEE Stage 2) project under three separate contracts of
employment for a definite period. The first contract expired in June 1979, but due to the
project's extension, the petitioner's contract was renewed twice. The last extension was from
October 1, 1985, to December 31, 1985. After the completion of the project, the petitioner
applied for personnel clearance and signed a release, waiver, and quitclaim.

ISSUE:

1. Whether or not the petitioner's appeal should be given due course despite the delayed
payment of the supersedeas bond,

2. Whether or not the petitioner is a project employee or a regular employee, and

3. Whether or not the petitioner is entitled to overtime pay.

RULING:

1. Yes. The Supreme Court ruled that the appeal should be given due course despite the
delayed payment of the supersedeas bond in the interest of broader justice. The Court also
emphasized that the rules of evidence prevailing in courts of law or equity are not strictly
applied in labor proceedings. Additionally, the issue of timeliness of the appeal cannot be
raised for the first time on appeal.

79
2. Regarding the employment status of the petitioner, the Court differentiated between
project employees and non-project employees. Project employees are those employed in
connection with a particular construction project and are not entitled to termination pay if
they are terminated due to the completion of the project. On the other hand, non-project
employees are those who are not hired for a specific project and are entitled to security of
tenure.

In this case, the Court found that the petitioner is a project employee. The Court gave greater
credence to the assertions of the respondent, which were supported by documents. The
petitioner was hired for a specific project, and his employment contract was not renewed
after the completion of the project. Therefore, the termination of the petitioner's employment
was valid.

3. Yes. Regarding the issue of overtime pay, the Court ruled that the petitioner is entitled to
overtime compensation for the time spent picking up and dropping off employees. The
transportation arrangement was adopted primarily for the benefit of the employer, and the
assigned task of fetching and delivering employees was indispensable and mandatory.
Therefore, the time spent on these tasks should be considered as overtime work, and the
petitioner should be paid accordingly.

The Court's decision to give due course to the appeal despite the delayed payment of the
supersedeas bond is based on the broader interests of justice and the objective of resolving
controversies on the merits. The Court recognizes that the NLRC has the inherent power to
allow late payment of the bond, especially when the amount of the bond could not be
determined from the labor arbiter's decision. The Court also emphasizes that the rules of
evidence in labor proceedings are not as strict as those in courts of law or equity.

In determining the employment status of the petitioner, the Court applies the distinction
between project employees and non-project employees. Project employees are those hired
for a specific project and are not entitled to termination pay if they are terminated due to the
completion of the project. Non-project employees, on the other hand, are entitled to security
of tenure. In this case, the Court finds that the petitioner is a project employee based on the
evidence presented by the respondent.

The Court's ruling on the entitlement to overtime pay is based on the principle that overtime
work should be compensated. The Court considers the transportation arrangement as
overtime work because it was primarily for the benefit of the employer and the assigned task
was indispensable and mandatory. Therefore, the petitioner should be paid overtime
compensation for the time spent on these tasks.

CASE NO: 74

SIME DARBY PILIPINAS, INC. petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION (2ND DIVISION) and SIME DARBY
SALARIED EMPLOYEES ASSOCIATION (ALU-TUCP), respondents.

G.R. No. 119205 April 15, 1998

FACTS:

All company factory workers of Sime Darby Pilipinas, Inc., manufacturer of automotive tires,
tubes and other rubber products, in Marikina including members of private respondent
union, Sime Darby Salaried Employees Association (ALU-TUCP), worked from 7:45 a.m. to
3:45 p.m. with a 30-minute paid on-call lunch break. On August 14, 1992, the petitioner issued
a memorandum to all factory-based employees advising all its monthly salaried employees in

80
its Marikina Tire Plant a change in work schedule. The new schedule extends to 9 hours with
two 10-minute paid coffee break and 1-hour unpaid and undisturbed lunch break. The
Warehouse and Quality Assurance Department working on shifts, are excluded from this
change in work schedule.

Private respondent, which is an association of monthly salaried employees of petitioner at its

Marikina factory, filed on behalf of its members a complaint with the Labor Arbiter for unfair
labor practice, discrimination and evasion of liability.

The Labor Arbiter dismissed the complaint on the ground that the change in the work
schedule and the elimination of the 30-minute paid lunch break of the factory workers
constituted a valid exercise of management prerogative and that the new work schedule,
break time and one-hour lunch break did not have the effect of diminishing the benefits
granted to factory workers as the working time did not exceed eight (8) hours.

NLRC sustained the decision of Labor Arbiter but upon motion for reconsideration by private
respondent, the NLRC, having two new commissioners, reversed its earlier decision.

ISSUE:

Whether or not the act of management in revising the work schedule of its employees and
eliminating their paid lunch break constitutes unfair labor practice.

RULING:

The Court held that the employer has the right to exercise its management prerogatives.
Management is free to regulate, according to its own discretion and judgment, all aspects of
employment, including hiring, work assignments, working methods, time, place and manner
of work, processes to be followed, supervision of workers, working regulations, transfer of
employees, work supervision, lay off of workers and discipline, dismissal and recall of
workers. Management retains the prerogative, whenever exigencies of the service so require,
to change the working hours of its employees. So long as such prerogative is exercised in good
faith for the advancement of the employers interest and not for the purpose of defeating or
circumventing the rights of the employees under special laws or under valid agreements.

In this case, the new work schedule set by the employer fully complies with the daily work
period of eight (8) hours without violating the Labor Code. Although the old work schedule
included a 30-minute paid lunch break, the employees were on call and could be called upon
to do jobs during lunch break. With the new schedule, they can take one-hour lunch break
without any interruption from their employer.

Moreover, this act was not discriminatory as the new schedule applies to all employees in the
factory similarly situated whether they are union members or not.

CASE NO: 75

PAL EMPLOYEES SAVING AND LOAN ASSOCIATION, INC. (PESALA), petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION AND ANGEL V. ESQUEJO, respondents.

G.R. No. 105963 August 22, 1996

FACTS:

This case involves a dispute between PAL Employees Savings and Loan Association, Inc.
(PESALA) and Angel V. Esquejo regarding the payment of overtime pay. Esquejo filed a

81
complaint against PESALA for non-payment of overtime pay and non-payment of the
statutory minimum wage increase. The case was initially filed with the labor arbiter, and
Esquejo later filed a supplemental complaint for illegal suspension. However, the issue
decided by the National Labor Relations Commission (NLRC) and under review in this
petition only involves Esquejo's claim for overtime pay.

Esquejo alleged that he started working for PESALA in March 1986 as a company guard and
was required to work twelve hours a day. He claimed that he was not paid overtime
compensation for the extra hours worked. PESALA, on the other hand, argued that Esquejo's
appointment memorandum specified a twelve-hour workday and a fixed monthly salary rate,
which they believed covered overtime pay.

The labor arbiter ruled in favor of Esquejo, granting his claim for overtime pay for the period
October 10, 1987, to November 30, 1989. PESALA appealed the decision to the NLRC, but
their appeal was rejected. The NLRC modified the amount of the award but affirmed the
decision in all other respects.

PESALA did not file a motion for reconsideration of the NLRC decision, and the decision
became final. The parties were called to a conference to discuss the possibility of voluntary
compliance with the decision, but no agreement was reached. PESALA then filed a motion to
defer execution and recompute Esquejo's overtime pay, claiming that they had recently
located the employee payroll sheets. However, the motion was denied.

ISSUE:

Whether or not the respondent is entitled to overtime pay for work rendered in excess of the
regular eight-hour day, even if their employment contract specifies a workday of twelve
hours at a fixed monthly rate above the minimum wage.

RULING:

Yes. The court based its decision on the petitioner's own computations, which showed that
the basic salary and emergency allowance given to the private respondent did not include the
overtime pay claimed. The court concluded that the private respondent was shortchanged
and that his claim for overtime pay was valid.

The court also addressed the issue of whether there was a meeting of the minds between the
parties regarding the inclusion of overtime pay in the employment contract. The court agreed
with the NLRC's finding that there was no such agreement and that the contract was vague in
terms of what was covered by the salary stipulated. The court emphasized that even if there
had been a meeting of the minds, the employment contract could not shield the petitioner
from the valid claims of the private respondent.

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 CASE NO: 76

ROMEO LAGATIC, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION,

CITYLAND DEVELOPMENT CORPORATION, STEPHEN ROXAS, JESUS GO, GRACE
LIUSON, and ANDREW LIUSON, respondents.

G.R. No. 121004 January 28, 1998

FACTS:

The case involves the dismissal of petitioner Romeo Lagatic by Cityland Development
Corporation (Cityland) for his failure to comply with the company's policy of submitting cold
call reports. Lagatic was employed by Cityland as a marketing specialist and one of his duties
was to make cold calls and submit daily progress reports on them. Lagatic had previously
been reprimanded and suspended for his failure to submit cold call reports, but he continued
to neglect this responsibility. In February 1993, Lagatic wrote a note expressing his defiance
and disobedience to the company's rules and regulations regarding cold calls. After being
given an opportunity to explain, Cityland found Lagatic guilty of gross insubordination and
dismissed him from the service.

ISSUE:

Whether or not Lagatic's dismissal was valid.

RULING:

The court found that Lagatic's failure to comply with Cityland's policy of requiring cold call
reports was willful and intentional, given the numerous instances of non-submission despite
previous reprimands and suspension. The court also found that Cityland's policy of requiring
cold calls and the corresponding reports was reasonable and lawful, and Lagatic was aware
of this policy. Therefore, there was just cause for his dismissal.

The court further explained that an employer is free to regulate all aspects of employment,
including making reasonable rules and regulations for the conduct of the company's business.
Lagatic's open defiance and disobedience to these rules justified his dismissal. The court also
found that Lagatic's denial of writing the note "TO HELL WITH COLD CALLS! WHO CARES?"
was unsubstantiated and weak, as Cityland presented affidavits from his co-employees
attesting to his authorship of the note.

CASE NO: 77

ERROL RAMIREZ, JULITO APAS, RICKY ROSELO and ESTEBAN MISSION, JR., petitioners,
vs. POLYSON INDUSTRIES, INC. and WILSON S. YU, respondents.

G.R. No. 207898 October 19, 2016

FACTS:

This case involves a labor dispute between petitioners Errol Ramirez, Julito Apas, Ricky
Roselo, and Esteban Mission Jr., who were employees and officers of Obrero Pilipino
(Obrero), the union of Polyson Industries, Inc. (Polyson), a plastic bag manufacturing
company. The dispute arose when Obrero requested to be recognized as the exclusive
bargaining agent of the rank-and-file employees of Polyson, but the company opted for a

83
certification election instead. Furious at the refusal, Obrero officers threatened the
management that the union will show its collective strength. Polyson then received a rush
order for the production of 100,000 plastic bags and requested workers to work overtime.
However, three out of five workers who initially expressed their desire to work overtime did
not do so, resulting in the delay and cancellation of the order. Polyson conducted an
investigation and found that petitioners induced or threatened the workers not to work
overtime. As a result, petitioners were terminated from their employment.

ISSUE:

Whether or not petitioners' dismissal from their employment was valid.

RULING:

Yes. The court explained that due process in labor cases involves both substantive and
procedural aspects. Substantively, the employer must prove that the dismissal was for a just
or authorized cause, while procedurally, the employee must be given notice and an
opportunity to be heard. In this case, the court found that Polyson was able to present
sufficient evidence to establish that petitioners induced or threatened their co-employees not
to render overtime work, resulting in losses to the company. The court also found that
petitioners' dismissal was in conformity with due process requirements.

The court upheld the findings of the National Labor Relations Commission (NLRC) and the
Court of Appeals (CA).

CASE NO: 78

NATIONAL SEMICONDUCTOR (HK) DISTRIBUTION, LTD., petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION (4TH DIVISION) and EDGAR PHILIP C.
SANTOS, respondents.

G.R. No. 123520 June 26, 1998

FACTS:

NSC a foreign corporation licensed to do business in the Phil. manufactures and assembles
electronic parts for export in mactan, lapu-lapu city. Santos was employed by NSC as a
technicioan in its special products group assigned to the graveyard shift from 10pm-6am.

On January 8, 1993 Santos did not report for work on his shift. He resumed his duties as night
shift on January 9. However, at the end of his shift, he made 2 entries in his DTR to make it
appear that he worked on both the 8th and 9th.

His supervisor Limisiaco, received the report that there was no technician in the graveyard
shift on January 8. Limsiaco then checked the DTRs and found out that Santos did not report
on 8th and have found in the DTR the otherwise.

Informal investigation were conducted by management and have required Santos to explain
in writing why no disciplinary action should be taken against him for dishonesty, falsifying
DTR and violation of company rules. Santos explain that he was sick on the 8th and his DTR
was a mere oversight or carelessness on his part.

Not satisfied with the explanation, NSC dismissed Santos for the violations made. Santos then
filed a complaint for illegal dismissal and non-payment of wages and other money claims.

84
Labor arbiter found that Santos was dismissed on legal grounds although he was not afforded
due process, ordering NSC to indemnify him and the unpaid night shift differentials.

NSC appealed to NLRC, but NLRC affirmed the labor arbiter holding that the conclusions were
sufficiently supported by the evidence.

NSC now imputes grave abuse of discretion to NLRC in affirming the labor arbiter. Contending
that the night shift differentials were never raised as an issue nor pusued by Santos; also
denied that Santos was not given due process because he was afforded ample opportunity to
be heard.

ISSUE:

Whether or not Santos entitled for the money claims.

RULING:

The fact that Santos neglected to substantiate his claim for night shift differentials is not
prejudicial to his cause. After all, the burden of proving payment rests on petitioner NSC.
Santos' allegation of non-payment of this benefit, to which he is by law entitled, is a negative
allegation which need not be supported by evidence unless it is an essential part of his cause
of action. It must be noted that his main cause of action is his illegal dismissal, and the claim
for night shift differential is but an incident of the protest against such dismissal. Thus, the
burden of proving that payment of such benefit has been made rests upon the party who will
suffer if no evidence at all is presented by either party. By choosing not to fully and completely
disclose information to prove that it had paid all the night shift differentials due to private
respondent, petitioner failed to discharge the burden of proof.

On the issue of due process, we agree with petitioner that Santos was accorded full
opportunity to be heard before he was dismissed. The essence of due process is simply an
opportunity to be heard, or as applied to administrative proceedings, an opportunity to
explain one's side. In the instant case, petitioner furnished private respondent notice as to
the particular acts which constituted the ground for his dismissal. By requiring him to submit
a written explanation within 48 hours from receipt of the notice, the company gave him the
opportunity to be heard in his defense. Private respondent availed of this chance by
submitting a written explanation. Furthermore, investigations on the incident were actually
conducted.

Finally, private respondent was notified on 14 January 1993 of the management's decision to
terminate his services. Thus, it is clear the minimum requirements of due process have been
fulfilled by petitioner.

CASE NO: 79

BONPACK CORPORATION, PETITIONER, VS. NAGKAKAISANG MANGGAGAWA SA

BONPACK-SOLIDARITY OF UNIONS IN THE PHILIPPINES FOR EMPOWERMENT AND
REFORMS (NMB-SUPER), REPRESENTED BY ITS UNION PRESIDENT, ZOSIMA** BUCIO,
RESPONDENT.

G.R. No. 230041 December 05, 2022

FACTS:

This case involves a dispute between Bonpack Corporation (petitioner) and Nagkakaisang
Manggagawa sa Bonpack-Solidarity of Unions in the Philippines for Empowerment and

85
Reforms (respondent) regarding the implementation of a revised Company Rules and
Regulations (CRR) and the payment of overtime work.

The petitioner is a domestic corporation engaged in the manufacturing of flexible packaging,

while the respondent is a legitimate labor organization representing the rank-and-file
employees of the petitioner. The parties were governed by a Collective Bargaining Agreement
(CBA) from August 2, 2009, to August 1, 2014. On October 17, 2014, they executed a new CBA
with a term of five years. The CBA provided for an eight-hour workday, including a 30-minute
meal break and two 15-minute coffee breaks. It also stated that employees who work in
excess of eight hours in a regular working day shall be entitled to overtime pay. The petitioner
unilaterally revised its CRR to harmonize it with the new CBA. The revised CRR included a
120-minute grace period policy and defined "over break" as an offense with a corresponding
disciplinary action.

The respondent objected to the implementation of the revised CRR, claiming that it was unfair
and discriminatory and that they were not consulted. The respondent also alleged that the
petitioner underpaid overtime pay by deducting the one-hour meal period from the total
working hours. The respondent repeatedly requested the petitioner to organize a labor-
management committee to address their concerns, but the requests were ignored. As a result,
the respondent filed a complaint before the National Conciliation and Mediation Board
(NCMB) questioning the validity of the revised CRR and seeking correct payment of overtime
pay. The case was referred to the Voluntary Arbitrator (VA) for resolution.

ISSUE:

Whether or not the petitioner violated the CBA provisions on hours of work and payment of
overtime premiums and whether it is obligated to consult with the respondent regarding the
adoption and implementation of a revised CRR.

RULING:

Yes. The Court found that the respondent substantially complied with the reglementary
period for filing the petition for review before the Court of Appeals (CA) under Rule 43 of the
Rules of Court. The Court also clarified the conflict between Rule 43 and Article 276 of the
Labor Code regarding the reglementary period and the filing of a motion for reconsideration.
The Court held that the 15-day period under Rule 43 applies to the filing of a petition for
review, while the 10-day period under Article 276 refers to the filing of a motion for
reconsideration before the voluntary arbitrator (VA). Regarding the consultation
requirement, the Court held that the petitioner is obligated to discuss with the respondent
any revision or modification in the CRR, as stated in the CBA provisions.

The Court emphasized that the exercise of management prerogative is not absolute and is
subject to limitations imposed by law, the CBA, and principles of fair play and justice. The
Court found that the petitioner failed to comply with its obligation to consult and discuss with
the respondent regarding the revised CRR, and that the unilateral implementation of the
revised CRR was a violation of the CBA. The Court also ruled that the petitioner underpaid
overtime pay by deducting the one-hour meal period from the total working hours, contrary
to the provisions of the CBA. The Court ordered the petitioner to pay the respondent the
correct amount of overtime pay and to cease and desist from implementing the revised CRR
without proper consultation with the respondent.

The Court based its decision on the provisions of the CBA, the Labor Code, and principles of
fair play and justice. The Court held that the petitioner violated the CBA provisions on hours
of work and payment of overtime premiums by unilaterally revising the CRR without proper
consultation with the respondent. The Court emphasized that the exercise of management
prerogative is not absolute and is subject to limitations imposed by law and the CBA. The
Court also clarified the conflict between Rule 43 and Article 276 of the Labor Code regarding
the reglementary period and the filing of a motion for reconsideration. The Court held that
the 15-day period under Rule 43 applies to the filing of a petition for review, while the 10-
day period under Article 276 refers to the filing of a motion for reconsideration before the

86
voluntary arbitrator (VA). The Court found that the petitioner underpaid overtime pay by
deducting the one-hour meal period from the total working hours, contrary to the provisions
of the CBA. The Court ordered the petitioner to pay the respondent the correct amount of
overtime pay and to cease and desist from implementing the revised CRR without proper
consultation with the respondent.

CASE NO: 80

SAN MIGUEL CORPORATION, petitioner,

vs.
THE HONORABLE COURT OF APPEALS-FORMER THIRTEENTH DIVISION, HON.
UNDERSECRETARY JOSE M. ESPAÑOL, JR., Hon. CRESENCIANO B. TRAJANO, and HON.
REGIONAL DIRECTOR ALLAN M. MACARAYA, respondents.

G.R. No. 146775 January 30, 2002

FACTS:

The case involves San Miguel Corporation (SMC), a company that allegedly failed to pay
Muslim holiday pay to its non-Muslim employees. The Department of Labor and Employment
(DOLE) conducted a routine inspection in SMC's premises and discovered that SMC was
underpaying its employees for regular Muslim holiday pay. SMC failed to provide proof that
it was paying the correct amount for Muslim holiday pay. As a result, the Director of DOLE
issued a compliance order directing SMC to consider Muslim holidays as regular holidays and
to pay both Muslim and non-Muslim employees holiday pay within 30 days. SMC appealed to
the DOLE main office, but its appeal was dismissed for being filed late. The dismissal was later
reconsidered, but the appeal was still dismissed for lack of merit. SMC then filed a petition for
certiorari with the Supreme Court.

ISSUE:

Whether or not the Muslim holiday pay is applicable to employees regardless of faith or
religion.

RULING:

Yes. Although Article 3 of Presidential Decree 1083 (Code of Muslim Personal Laws) provides
that the provisions of the code shall be applicable only to Muslims, on which the petitioner
based its defense, the same article provides further that nothing in the code shall be
construed to the prejudice of non-Muslims. The Supreme Court stated that there should be
no distinction between Muslims and non-Muslims as regards the payment of benefits for
Muslim Holidays. The Court, quoting the Court of Appeals, “assuming that the SMC is correct,
then Muslims throughout the Philippines are also not entitled to holiday pays on Christian
holidays declared by law. The SC must remind (SMC) that wages and other emoluments
granted by law are determined not on the basis of the worker’s faith or religion”, finds against
the petitioner, and dismissed the petition.

87
 CASE NO: 81

NIPPON PAINT PHILIPPINES, INC., PETITIONER, VS. NIPPON PAINT PHILIPPINES

EMPLOYEES ASSOCIATION [NIPPEA], RESPONDENT.

G.R. No. 229396 June 30, 2021

FACTS:

This case involves a dispute between Nippon Paint Philippines, Inc. (petitioner) and the
Nippon Paint Philippines Employees Association (respondent) regarding the payment of
holiday remuneration pay for the celebration of Eidul Adha. In 2007, the petitioner and
respondent entered into a Collective Bargaining Agreement (CBA) which provided for the
payment of holiday remuneration pay for regular holidays. In 2009, Republic Act No. 9849
was enacted, declaring the celebration of Eidul Adha as a regular holiday. The petitioner's
employees received their holiday pay for the regular holidays in 2010 and 2011, including an
additional holiday pay for Eidul Adha. However, when a new CBA was executed in 2012, Eidul
Adha was not mentioned as one of the regular holidays, and the employees were not given
holiday pay for Eidul Adha in that year.

ISSUE:

Whether or not the premium for Eidul Adha, a regular holiday, should continue to be granted
to employees of Nippon Paint Philippines, Inc. (Nippon).

RULING:

The Supreme Court affirmed the decision of the Court of Appeals. The Court held that the
grant of the holiday premium for Eidul Adha had ripened into a company practice and could
no longer be unilaterally withdrawn by Nippon. The Court emphasized that the principle of
non-diminution of benefits should be upheld and that doubts in the interpretation of labor
laws should be resolved in favor of labor.

The Court rejected Nippon's argument that the inclusion of Eidul Adha as a regular holiday in
the 2010 and 2011 holiday pay was an error in its payroll system. The Court noted that the
payment of the additional holiday pay for Eidul Adha had been consistently made for two
years and had become a company practice. The Court held that the payment of the holiday
premium for Eidul Adha had ripened into a contractual obligation and could not be
unilaterally withdrawn by the employer.

The Court also emphasized the principle of non-diminution of benefits, which provides that
any benefit or privilege granted to employees cannot be reduced, diminished, or
discontinued. The Court held that the grant of the holiday premium for Eidul Adha was a
benefit that had been enjoyed by the employees for two years and could not be taken away
without violating the principle of non-diminution of benefits.

Furthermore, the Court stated that doubts in the interpretation of labor laws should be
resolved in favor of labor. In this case, there was a dispute regarding the inclusion of Eidul
Adha as a regular holiday in the CBA. The Court held that any doubts regarding the
interpretation of labor laws should be resolved in favor of labor, as the purpose of labor laws
is to protect the rights and welfare of workers.

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 CASE NO: 82

REGGIE ORBISTA ZONIO, petitioner, vs. 1ST QUANTUM LEAP SECURITY AGENCY, INC.
and ROMULO Q. PAR, respondents.

G.R. No. 224944 May 5, 2021

FACTS:

This case involves a petition for review on certiorari filed by Reggie Orbista Zonio (Zonio)
against 1st Quantum Leap Security Agency, Inc. and Romulo Q. Par (respondents). Zonio, a
security guard, filed a complaint against respondents for various labor violations, including
illegal suspension, underpayment of salary and benefits, non-payment of overtime and
holiday pay, and other monetary claims. The Labor Arbiter ruled in favor of Zonio, but the
National Labor Relations Commission (NLRC) modified the decision and awarded Zonio
overtime and holiday pay, holiday and rest day premiums, and night shift differentials.
Respondents filed a petition for certiorari with the Court of Appeals (CA), which partially
granted the petition and deleted the award of overtime pay, holiday and rest day premiums,
and night shift differentials. Zonio filed a petition for review on certiorari with the Supreme
Court.

ISSUE:

Whether or not Zonio is entitled to overtime pay, holiday and rest day premiums, and night
shift differentials.

RULING:

The Supreme Court partially granted Zonio's petition. It held that a motion for
reconsideration is not required for the filing of a petition for review on certiorari under Rule
45. The Court also emphasized that the burden of proof is on the employer to prove payment
of salary differentials, service incentive leave, holiday pay, and 13th month pay.

The Supreme Court held that a motion for reconsideration is not required for the filing of a
petition for review on certiorari under Rule 45. This means that Zonio's petition is valid even
without filing a motion for reconsideration before the Court of Appeals.

The Court also emphasized that the burden of proof is on the employer to prove payment of
salary differentials, service incentive leave, holiday pay, and 13th month pay. In this case, the
respondents failed to present sufficient evidence to prove that they paid Zonio for the
overtime work, holiday and rest day premiums, and night shift differentials.

The Court also considered the logbook entries presented by Zonio as prima facie evidence of
the hours he worked. The respondents did not present any evidence to rebut these entries or
show that they paid Zonio for the services he rendered during the claimed hours.

The Court further stated that any doubt in the evaluation of evidence should be resolved in
favor of the employee. In this case, since the respondents failed to present evidence to prove
payment, the Court resolved the doubt in favor of Zonio and granted him the overtime pay
and night shift differential he claimed.

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 CASE NO: 83

LOURDES C. RODRIGUEZ, Petitioner

vs
PARK N RIDE INC.NICEST (PHILS) INC./GRAND LEISURE CORP./SPS. VICENTE &
ESTELITA B. JAVIER, Respondents

G.R. No. 222980 March 20, 2017

FACTS:

On January 30,1984, Lourdes Rodriguez was hired by spouses Vicente & Estelita B. Javier as
Restaurant Supervisor for their restaurant at Vicest Phils. Later, when the restaurant closed,
she was transferred to do office work and became an Administrative and Finance assistant to
Estelita Javier.

As the spouses ventured into other businesses, establishing more companies, petitioner’s
duties extended to handling personnel, finance and administrative matters of these
companies without additional compensation. Even substituting as cashier at their Park N
Ride business when the Head Cashier would be on day-off. She was also tasked to take care
of the household concerns of the Javier spouses, such as preparing payrolls for drivers and
helpers, shopping for household needs, and looking after the spouses’ house whenever they
travelled abroad.

She allegedly worked from 8:00 a.m. to 7:00 p.m., Mondays to Saturdays; was on call on
Sundays; and worked during Christmas and other holidays. She was deducted an equivalent
of two (2) days' wage for every day of absence and was not paid any service incentive leave
pay. Tasked with so much duties and responsibilities and unable to bear the spouses’
treatment of her, she filed a resignation letter effective April 25, 2009 however the spouses
did not accept her resignation and convinced her to stay on. However her experience became
worse as Estelita allegedly became more unreasonable, hot-headed and would belittle and
embarrass her in the presence of co-workers.

On September 29, 2009, when she was late in opening the Makati office after going on her
usual “pamalengke” for the spouses, Estelita called her on the phone and scolded her for it,
once again berating her and telling her that if she did not want to continue work, the company
could manage without her. Thus, On September 29, 2009, she wrote a letter to the spouses
expressing her grievances at them. She intimated that they were always finding fault with her
to push her to resign.

On October 6, 2009, the Javier spouses replied to her letter, allegedly accepting her
resignation.

On October 7, 2009, Rodriguez filed a Complaint for constructive illegal dismissal, non-
payment of service incentive leave pay and 13th month pay, including claims for moral and
exemplary damages and attorney's fees against Park N Ride, Vicest Phils., Grand Leisure, and
the Javier Spouses.

The Labor Arbiter dismissed the complaint and deemed her resigned. The NLRC reversed the
ruling of the LA. On appeal, the Court of Appeals reinstated the decision of the Labor Arbiter.

ISSUE:

Whether or not complainant was constructively dismissed.

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RULING:

Affirming the decision of the Court of appeals with modifications, the Supreme Court ruled
that petitioner was not constructively dismissed.

There is constructive dismissal when an employer's act of clear discrimination, insensibility

or disdain becomes so unbearable on the part of the employee so as to foreclose any choice
on his part except to resign from such employment.71 It exists where there is involuntary
resignation because of the harsh, hostile and unfavorable conditions set by the employer.

Strong words may sometimes be exchanged as the employer describes her expectations or as
the employee narrates the conditions of her work environment and the obstacles she
encounters as she accomplishes her assigned tasks. As in every human relationship, there are
bound to be disagreements. However, when these strong words from the employer happen
without palpable reason or are expressed only for the purpose of degrading the dignity of the
employee, then a hostile work environment will be created.

Complainant was not pressured into resigning. It seems that the complainant was not
comfortable anymore with the fact that she was always at the beck and call of the respondent
Javier spouses. Her supervisory and managerial functions appear to be impeding her time
with her family to such extent that she was always complaining of her extended hours with
the company. It is of no moment that respondent spouses in many occasions reprimanded
complainant as long as it was reasonably connected and an offshoot of the work or business
of respondents.

From the representation of petitioner, what triggered her resignation was the incident on
September 22, 2009 when Estelita told her "Kung ayaw mo na ng ginagawa mo, we can
manage! " These words, however, are not sufficient to make the continued employment of
petitioner impossible, unreasonable, or unlikely.

Petitioner was neither terminated on September 22, 2009 nor was she constructively
dismissed. There was no showing of bad faith or malicious design by the respondents that
would make her work conditions unbearable. On the other hand, it is a fact that petitioner
enjoyed the privilege of working closely with the Javier Spouses and having their full trust
and confidence. Spontaneous expressions of an employer do not automatically render a
hostile work atmosphere. The circumstances in this case negate its presence.

It was not shown here that petitioner Rodriguez was enjoying vacation leave with pay of at
least five days while being employed by private respondents Spouses Javier; it was not shown
that private respondents Spouses Javier were merely employing less than 10 employees (on
the contrary, private respondent spouses Javier stated that they were employing less than 15
employees). Hence, the award of service incentive leave pay to petitioner Rodriguez was
proper.

Applying Article 291 of the Labor Code in light of this peculiarity of the service incentive
leave, we can conclude that the three (3)-year prescriptive period commences, not at the end
of the year when the employee becomes entitled to the commutation of his service incentive
leave, but from the time when the employer refuses to pay its monetary equivalent after
demand of commutation or upon termination of the employee's services, as the case may be.

Thus, the prescriptive period with respect to petitioner's claim for her entire service
incentive leave pay commenced only from the time of her resignation or separation from
employment. Since petitioner had filed her complaint on October 7, 2009, or a few days after
her resignation in September 2009, her claim for service incentive leave pay has not
prescribed. Accordingly, petitioner must be awarded service incentive leave pay for her
entire 25 years of service-from 1984 to 2009-and not only three (3) years' worth (2006 to
2009) as determined by the Court of Appeals.

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 CASE NO: 84

FIAMETTE A. RAMIL, PETITIONER, VS. STONELEAF INC. / JOEY DE GUZMAN / MAC

DONES / CRISELDA DONES, RESPONDENTS.

G.R. No. 222416 June 17, 2020

FACTS:

The case involves a dispute between Stoneleaf Spa and Wellness Center (Stoneleaf) and its
employee, Ramil Diones. Ramil worked as a massage therapist at Stoneleaf and claimed that
she was entitled to certain employment benefits. Stoneleaf argued that Ramil was a
managerial employee and therefore not entitled to these benefits. The case was initially filed
with the National Labor Relations Commission (NLRC), which ruled in favor of Ramil.
Stoneleaf appealed the decision to the Court of Appeals, which reversed the NLRC's ruling.
Ramil then filed a petition for review with the Supreme Court.

ISSUE:

Whether or not Ramil is a managerial employee or a rank-and-file employee.

RULING:

The Supreme Court ruled in favor of Ramil and held that she is a rank-and-file employee,
specifically a fiduciary rank-and-file employee. The Court disagreed with Stoneleaf's
argument that Ramil was a managerial employee. It found that Ramil's duties did not involve
independent judgment or the execution of managerial actions. Instead, her functions seemed
to involve the execution of approved and established policies. The Court also noted that Ramil
received commissions for every massage service rendered, which would not be the case if she
were a managerial employee. Therefore, Ramil was entitled to service incentive leave pay,
holiday pay, pro-rated 13th month pay, and attorney's fees.

The Court based its decision on the fact that Ramil regularly handled significant amounts of
money or property in the normal and routine exercise of her functions. She was in charge of
the facilities of the spa, the sales of the spa, and the finances of the spa. This made her a
fiduciary rank-and-file employee, entitled to the aforementioned employment benefits. The
Court also noted that Stoneleaf failed to provide evidence that Ramil was a corporate officer,
despite being listed as an incorporator in the Articles of Incorporation. Stoneleaf was unable
to demonstrate how Ramil recommended managerial actions that would make her a
managerial employee. Therefore, the Court concluded that Ramil was a rank-and-file
employee and entitled to the benefits she claimed

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 CASE NO: 85

NATIONAL UNION OF WORKERS IN HOTEL RESTAURANT AND ALLIED INDUSTRIES

(NUWHRAIN-APL-IUF), PHILIPPINE PLAZA CHAPTER, Petitioner,
vs.
PHILIPPINE PLAZA HOLDINGS, INC., Respondent.

G.R. No. 177524 July 23, 2014

FACTS:

This case involves a dispute between the National Union of Workers in Hotel Restaurant and
Allied Industries (NUWHRAIN-APL-IUF), Philippine Plaza Chapter (Union) and Philippine
Plaza Holdings, Inc. (PPHI) regarding the non-payment of service charges. The Union is the
collective bargaining agent for the rank-and-file employees of PPHI. The parties had a
collective bargaining agreement (CBA) that provided for the collection of a 10% service
charge on certain sales. The Union claimed that PPHI failed to collect and distribute the
service charges as required by the CBA.

The Union presented audit reports to PPHI showing uncollected service charges. PPHI
admitted liability for a portion of the claimed amount but denied the rest, stating that certain
transactions were exempted from the service charge or did not generate revenue. The parties
were unable to reach an agreement and the Union filed a complaint with the Labor Arbiter
(LA) for non-payment of service charges and unfair labor practice.

The LA dismissed the complaint, stating that the Union failed to prove its entitlement to the
payment of service charges for the specified transactions. The LA also rejected the Union's
claim of unfair labor practice, stating that PPHI had the right to refuse payment for
transactions from which it did not collect service charges.

The National Labor Relations Commission (NLRC) reversed the LA's decision and held PPHI
liable for the claimed uncollected service charges. The NLRC found that the specified
transactions were "service chargeable" and that PPHI failed to prove payment or remittance
of the required service charges.

The Court of Appeals (CA) reversed the NLRC's decision and affirmed the LA's decision. The
CA held that the specified transactions either fell under "negotiated contracts" or "special
rates" that were exempted from the service charge, or the transactions did not involve the
sale of food, beverage, rooms, transportation, or laundry, which are the types of transactions
covered by the CBA.

ISSUE:

Whether or not the specified transactions are subject to service charges as provided in the
collective bargaining agreement (CBA) between the Union and PPHI.

RULING:

The Court held that the specified transactions, such as the sale of "Westin Gold Cards" and an
agreement with Maxi-Media, did not involve a sale of food, beverage, rooms, transportation,
or laundry, which are the types of transactions that the CBA contemplates for the collection
of service charges. The Court also found that these transactions fall under the exceptions of
"Negotiated Contracts" and "Special Rates" as stated in Section 68 of the CBA. Additionally,
the Court noted that PPHI had already collected and distributed service charges on other
transactions, such as discounted sales to Westin Gold Card holders and transactions with
external service providers.

93
The Court rejected the Union's argument that the specified transactions should be subject to
service charges based on the provisions of the CBA and Article 96 of the Labor Code. The
Court held that the exceptions of "Negotiated Contracts" and "Special Rates" should not be
limited to airline contracts and that the specified transactions do not fall within the scope of
the CBA.

CASE NO: 86

PULP AND PAPER, INC., petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION AND EPIFANIA ANTONIO, respondents.

G.R. No. 116593 September 24, 1997

FACTS:

The case involves a complaint for illegal dismissal and underpayment of wages filed by
Epifania Antonio against Pulp and Paper, Inc. Antonio was employed as a wrapper on a piece-
rate basis by the petitioner. On November 29, 1991, she was temporarily laid off from work
and was not reemployed within six months. She filed a complaint for illegal dismissal and
underpayment of wages on January 21, 1992. The Labor Arbiter ruled in favor of Antonio and
awarded her separation pay and salary differentials based on the minimum wage. The
National Labor Relations Commission (NLRC) affirmed the decision of the Labor Arbiter.

ISSUE:

Whether or not the separation pay and salary differential of piece-rate workers should be
computed in the absence of prescribed wage rates.

RULING:

The Supreme Court held that in the absence of prescribed wage rates for piece-rate workers,
the ordinary minimum wage rates prescribed by the Regional Tripartite Wages and
Productivity Boards should apply. The Court also ruled that there was constructive dismissal
of Antonio since she was not reemployed within six months. The Court further held that there
was no valid retrenchment as the employer did not serve a written notice on the workers and
the Department of Labor and Employment at least one month before the intended date of
retrenchment.

The Court explained that in the absence of prescribed wage rates for piece-rate workers, the
applicable daily minimum wage determined by the Regional Tripartite Wages and
Productivity Commission should be used. The employer has the responsibility to submit a
proposed wage rate for piece-rate workers based on time and motion studies to the Secretary
of Labor. In this case, the employer failed to discharge this responsibility and did not propose
an appropriate wage rate for its piece-rate workers. Therefore, the labor arbiter correctly
used the prescribed minimum wage rate in the computation of Antonio's separation pay.

The Court also ruled that Antonio was entitled to separation pay since she was constructively
dismissed. However, since she did not appeal the decision of the labor arbiter and only prayed
for the grant of her monetary claims, she is not entitled to any affirmative relief beyond the
separation pay awarded to her.

Regarding the computation of the salary differential, the Court held that the minimum wage
prevailing at the time of the employee's separation should be used. The Court rejected the
employer's argument that the employee's work was seasonal and that she only worked three

94
to four hours a day. The Court upheld the labor arbiter's computation of the salary differential
based on a 26-day month.

WORKING CONDITIONS FOR SPECIAL GROUP OF EMPLOYEES

CASE NO: 87

RE: ANONYMOUS COMPLAINT AGAINST ATTY. CRESENCIO P. CO UNTIAN, JR.,

A.C. No. 5900 April 10, 2019

FACTS:

This case involves an anonymous complaint filed against Atty. Cresencio P. Co Untian, Jr. for
alleged sexual harassment of students at Xavier University in Cagayan de Oro City. The
complaint was made by an individual identifying themselves as a "law practitioner" and
accused the respondent of sexually harassing three students, namely Antoinette Toyco,
Christina Sagarbarria, and Lea Dal.

Toyco claimed that the respondent expressed amorous interest in her by sending her flowers
anonymously and later texting her romantic messages. Sagarbarria alleged that the
respondent showed her a photograph of a naked woman that resembled her and teased her
in front of other students. Dal recounted an incident where the respondent made a sexually
charged remark about her during a class recitation.

The Committee on Decorum and Investigation recommended that the respondent's teaching
contract not be renewed due to the accusations of sexual harassment. The Integrated Bar of
the Philippines-Board of Governors (IBP-BOG) affirmed this recommendation and disbarred
the respondent for gross immoral conduct.

The respondent denied the allegations and claimed that the complaints were made by
disgruntled students who failed their classes. He argued that his actions were misunderstood
or taken out of context.

ISSUE:

Whether or not Atty. Co Untian committed sexual harassment against his students.

RULING:

Yes. The Supreme Court ruled that Atty. Co Untian committed sexual harassment and abused
his position of authority. His actions created a hostile, uncomfortable, and offensive school
environment. He was suspended from the practice of law for five years and from teaching law
for ten years, with a stern warning that a repetition of the same or similar act will be dealt
with more severely.

The court's ratio is that sexual harassment may be committed even without a categorical
demand for a sexual favor. In an educational setting, sexual harassment may be committed
when the acts of the offender create an intimidating, hostile, or offensive environment for the
student. The essence of sexual harassment is the abuse of power over another. Lawyers are
expected to not only be of good moral character but also be seen to be of good moral character

95
and lead lives in accordance with the highest moral standards of the community. Any errant
behavior on the part of a lawyer that shows deficiency in moral character, honesty, probity,
or good demeanor is sufficient to warrant suspension or disbarment.

CASE NO: 88

MA. LOURDES T. DOMINGO, petitioner,

vs.
ROGELIO I. RAYALA, respondent.

G.R. No. 155831 February 18, 2008

FACTS:

This case involves three petitions for review on certiorari filed before the Supreme Court. The
case originated from a complaint for sexual harassment filed by Ma. Lourdes T. Domingo
against Rogelio I. Rayala, who was then the Chairman of the National Labor Relations
Commission (NLRC). Domingo alleged that Rayala made inappropriate comments and
engaged in unwanted physical contact towards her. The complaint was referred to the Office
of the President (OP) for investigation. After conducting a thorough investigation, the OP
found Rayala guilty of disgraceful and immoral conduct and ordered his dismissal from
service.

ISSUE:

Whether or not Rayala should be held liable for sexual harassment and be dismissed from
service.

RULING:

The Supreme Court affirmed the decision of the OP and upheld Rayala's dismissal from
service. The Court found Rayala guilty of disgraceful and immoral conduct, which is a grave
offense. The Court emphasized that sexual harassment is a serious offense that affects the
victim's well-being and hampers their professional growth. As the Chairman of the NLRC,
Rayala should have set an example for his subordinates and maintained a healthy working
environment. His actions were deemed contrary to the standards of integrity and discipline
required of public officials.

The Court based its decision on the evidence presented during the investigation, which
established Rayala's culpability. The Court also considered the principles enshrined in the
Constitution and other laws, which emphasize the importance of public officials upholding
the highest standards of responsibility, integrity, loyalty, and efficiency. The Court concluded
that Rayala's actions were not only a failure to show respect and courtesy to his subordinates
but also a defiance of the basic norms and virtues expected of a government official.
Therefore, his dismissal from service was justified.

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 CASE NO: 89

CATHERINE DELA CRUZ-CAGAMPAN, petitioner, vs. ONE NETWORK BANK, INC., ONE
NETWORK BANK/or ALEX V. BUENAVENTURA, President/MYRNA S. VIADO, HR Head,
respondents.

G.R. No. 217414 June 22, 2022

FACTS:

This case involves a petition for review on certiorari filed by Catherine Dela Cruz-Cagampan
against One Network Bank, Inc. (ONB) and its officers. Catherine was employed by ONB as an
Accounting Specialist, and her co-worker Audie Angelo Cagampan served as a Loan Specialist
in ONB. ONB implemented an "Exogamy Policy" which states that when two employees
working for ONB get married, one must terminate employment immediately after marriage.
Catherine and Audie requested permission to continue working for the bank, but their
request was denied and Catherine's employment was terminated. Catherine filed a complaint
for illegal dismissal, and the Labor Arbiter ruled in her favor, ordering ONB to reinstate her
and pay her backwages. The National Labor Relations Commission (NLRC) affirmed the Labor
Arbiter's ruling, finding ONB's policy to be unreasonable and discriminatory. However, the
Court of Appeals reversed the NLRC's decision, stating that ONB's policy was a valid exercise
of management prerogative. The Court of Appeals ordered ONB to pay Catherine separation
pay and nominal damages for non-compliance with due process. Catherine filed a petition for
review on certiorari before the Supreme Court, arguing that the Court of Appeals erred in its
decision.

ISSUE:

Whether or not ONB's implementation of the "Exogamy Policy" is valid and justifiable.

RULING:

The Supreme Court held that ONB's policy was discriminatory and violated Article 136 of the
Labor Code, which prohibits practices that discriminate against marriage. The Court
emphasized that an employer's dismissal of a female employee solely because of her marriage
is precisely the discrimination that the Labor Code prohibits. The Court also ruled that ONB
failed to establish a reasonable business necessity to justify the enforcement of the policy.
Therefore, the Court granted Catherine's petition for review on certiorari and reversed the
decision of the Court of Appeals.

The Court based its ruling on Article 136 of the Labor Code, which prohibits practices that
discriminate against marriage. The Court emphasized that the Labor Code aims to protect the
rights of workers, including their right to marry and to be free from discrimination based on
their marital status. The Court also cited previous cases, such as Duncan Association of
Detailman-PTGWO and Pedro Tecson v. Glaxo Welcome Philippines, Inc., and Philippine
Telegraph and Telephone Company v. NLRC, which established the requirement of
reasonableness in upholding an employment policy. The Court emphasized that the employer
must clearly establish the reasonableness of the policy and prove a reasonable business
necessity.

In this case, the Court found that ONB's policy was discriminatory because it resulted in the
dismissal of a female employee solely because of her marriage. The Court emphasized that
the policy violated the employee's right to marry and was not reasonably related to the
essential operation of ONB's business. The Court also noted that there was no factual basis to
conclude that all employees who marry each other would be unable to perform their duties.
Therefore, the Court held that ONB failed to establish a reasonable business necessity to
justify the enforcement of the policy.

97
 CASE NO: 90

CHERYLL SANTOS LEUS, Petitioner,

vs.
ST. SCHOLASTICA'S COLLEGE WESTGROVE and/or SR. EDNA QUIAMBAO,
OSB, Respondents.

G.R. No. 187226 January 28, 2015

FACTS:

Cheryll Santos Leus (petitioner) was hired by St. Scholastica’s College Westgrove, a Catholic
educational institution, as a non-teaching personnel. She engaged in pre-marital sexual
relations, got pregnant out of wedlock, married the father of her child, and was dismissed by
SSCW.

In a letter, the petitioner explained that her pregnancy out of wedlock does not amount to
serious misconduct or conduct unbecoming of an employee. She averred that she is unaware
of any school policy stating that being pregnant out of wedlock is considered as a serious
misconduct and, thus, a ground for dismissal. Further, the petitioner requested a copy of
SSW’s policy and guidelines so that she may better respond to the charge against her.

On June 2, 2004, Sr. Quiambao informed the petitioner that, pending the promulgation of a
“Support Staff Handbook,” SSCW follows the 1992 Manual of Regulations for Private Schools
on the causes for termination of employments; that Section 94€ of the 1992 MRPS cites
“disgraceful or immoral conduct” as a ground for dismissal in addition to the just causes for
termination of employment provided under Article 282 of the Labor Code.

ISSUE:

Whether or not the petitioner’s conduct constitutes a ground for dismissal.

RULING:

The court ruled that St. Scholastica’s College Westgrove as guilty of illegal dismissal. The labor
tribunals concluded that the petitioner’s pregnancy out of wedlock, per se, is “disgraceful and
immoral” considering that she is employed in a Catholic educational institution. In arriving at
such conclusion, the labor tribunals merely assessed the fact of the petitioner's pregnancy
vis-à-vis the totality of the circumstances surrounding the same.

However, the court found no substantial evidence to support the aforementioned conclusion
arrived at by the labor tribunals. The fact of the petitioner’s pregnancy out of wedlock,
without more, is not enough to characterize the petitioner’s conduct as disgraceful or
immoral. There must be substantial evidence to establish that pre-marital sexual relations
and, consequently, pregnancy out of wedlock, are indeed considered disgraceful or immoral.

The morality referred to in the law is public and necessarily secular, not religious. “Religious
teachings as expressed in public debate may influence the civil public order but public moral
disputes may be resolved only on grounds articulable in secular terms.”

98
 CASE NO: 91

SAUDI ARABIAN AIRLINES (SAUDIA) and BRENDA J. BETIA, petitioners, vs. MA.
JOPETTE M. REBESENCIO, MONTASSAH B. SACAR-ADIONG, ROUEN RUTH A.
CRISTOBAL and LORAINE S. SCHNEIDER-CRUZ, respondents.

G.R. No. 198587 January 14, 2015

FACTS:

This case involves a Petition for Review on Certiorari filed by Saudi Arabian Airlines (Saudia)
and Brenda J. Betia against Ma. Jopette M. Rebesencio, Montassah B. Sacar-Adiong, Rouen
Ruth A. Cristobal, and Loraine S. Schneider-Cruz. The respondents were recruited and hired
by Saudia as Temporary Flight Attendants and later became Permanent Flight Attendants.
They were terminated from their employment on various dates in 2006, and they claimed
that the termination was illegal and solely because they were pregnant. Saudia based its
disapproval of the maternity leaves and demand for resignation on its "Unified Employment
Contract for Female Cabin Attendants," which stated that the employment of a Flight
Attendant who becomes pregnant is void. The respondents argued that the Unified Contract
took effect after they had filed and had their maternity leaves approved.

ISSUE:

Whether or not the Philippine court should decline jurisdiction based on the doctrine of
forum non conveniens and apply the laws of Saudi Arabia to the dispute.

RULING:

The Supreme Court ruled that the doctrine of forum non conveniens does not apply in this
case and that the Philippine court should retain jurisdiction. The court also held that
Philippine law should apply to the dispute.

The court explained that forum non conveniens is a concept in private international law that
allows a court to decline jurisdiction when another forum is more convenient and
appropriate for the resolution of the dispute. However, the court emphasized that forum non
conveniens relates to the choice of forum, not the choice of governing law. In this case, the
dispute involves the application of Philippine labor laws to the employment relationship
between the cabin attendants and Saudia, and the court held that the Philippine court is the
appropriate forum to decide this issue.

The court also noted that the choice of governing law in contracts involving foreign elements
is determined by the parties' intention, and in the absence of an express choice of law, the
court will apply the law with the closest connection to the transaction. In this case, the cabin
attendant contracts did not specify the governing law, and the court held that Philippine law
should apply because the employment relationship was established and performed in the
Philippines.

The court emphasized the importance of ensuring fundamental equality before the law of
men and women, as stated in the Philippine Constitution and the Convention on the
Elimination of all Forms of Discrimination against Women (CEDAW). The court also noted
that contracts relating to labor and employment are impressed with public interest and
should yield to the common good.

The court rejected Saudia's argument that the case should be dismissed based on forum non
conveniens. It stated that there were no compelling reasons to cede jurisdiction to a foreign
tribunal, as all the parties were based in the Philippines and all the material incidents
transpired in the country. The court also found that Philippine tribunals were in a position to
make an intelligent decision on the law and the facts of the case and to enforce their decisions.

99
Finally, the court ruled that the flight attendants were illegally terminated. It defined
voluntary resignation as a voluntary act of an employee who believes that personal reasons
cannot be sacrificed for the exigency of the service and has no other choice but to dissociate
from employment. It found that the flight attendants did not voluntarily resign but were
constructively dismissed, as their continued employment was rendered impossible or
unreasonable due to Saudia's policy of terminating pregnant employees.

CASE NO: 92

JOSE ROMEO C. ESCANDOR, PETITIONER, VS. PEOPLE OF THE PHILIPPINES,

RESPONDENT.

G.R. No. 211962 July 06, 2020

FACTS:

This case involves the conviction of the accused, Escandor, for sexual harassment under
Republic Act No. 7877. Escandor was the Regional Director of the National Economic and
Development Authority (NEDA) Region 7, while Gamallo was a contractual employee in the
same office. Gamallo testified that Escandor committed several acts of sexual harassment
towards her, including grabbing her hand, kissing her, engaging in improper conversations,
touching her thigh, giving her gifts, and sending her inappropriate messages. These acts made
Gamallo feel disrespected, humiliated, and frightened, creating an intimidating and offensive
work environment for her.

ISSUE:

Whether or not all the elements of sexual harassment, as penalized by Republic Act No. 7877,
are present.

RULING:

Yes. The court held that Escandor had authority over Gamallo and that his acts of sexual
harassment occurred in a work-related environment. It was also established that Escandor
made requests for sexual favors through his actions. The court emphasized that sexual
harassment in the workplace involves the exercise of power by a superior over a subordinate,
which creates an intimidating and offensive environment.

The court based its ruling on the elements of sexual harassment as defined by Republic Act
No. 7877. The law states that sexual harassment includes unwanted sexual advances,
requests for sexual favors, and other verbal or physical conduct of a sexual nature. In this
case, Escandor's actions clearly constituted unwanted sexual advances and requests for
sexual favors. The court also considered the power dynamics between Escandor and Gamallo,
as Escandor was Gamallo's superior. The court emphasized that sexual harassment in the
workplace is not limited to physical acts but also includes verbal conduct that creates an
offensive and intimidating environment.

Escandor raised several arguments to challenge his conviction. He claimed that Gamallo's
testimony was not credible and that she had a motive to falsely accuse him. However, the
court found Gamallo's testimony to be credible, and her account was supported by the
testimonies of three colleagues. The court gave great respect to the factual findings of the trial
court on the credibility of witnesses. Escandor also argued that his constitutional right to be
informed of the nature and cause of the accusation against him was violated because the
information alleged acts of sexual harassment that were not specifically described. However,
the court held that the information was sufficient to inform Escandor of the charges against
him, as it provided a general description of the acts of sexual harassment committed.

100
 CASE NO: 93

DOMINGA P. CABUG-OS, DOING BUSINESS UNDER THE NAME, KEM'S STORE,

PETITIONER, VS. TERESITA JORTA ESPINA, RESPONDENT.

G.R. No. 228719 August 08, 2022

FACTS:

This case involves a dispute between Dominga P. Cabug-os, the owner of Kem's Sarisari Store,
and Teresita Jorta Espina, an employee of the store. Espina filed a complaint for illegal
dismissal, underpayment of salary, and non-payment of benefits with the labor arbiter after
she was allegedly told that her services were no longer needed. The labor arbiter found that
Espina was illegally dismissed and awarded her separation pay but dismissed her other
money claims. On appeal, the National Labor Relations Commission ruled that Espina was
entitled to backwages, reinstatement, salary differentials, 13th month pay, and attorney's
fees. The Court of Appeals affirmed this decision.

ISSUE:

Whether or not Espina was a regular employee of Cabug-os and whether the monetary award
to Espina is excessive.

RULING:

The Labor Arbiter, the National Labor Relations Commission, and the Court of Appeals all
found that Espina was a tindera or saleslady of the store and that she was illegally dismissed.
Therefore, Espina is entitled to backwages and separation pay.

Regarding the monetary award, the Court notes that sarisari stores are small-scale family
businesses that often do not hire non-family members as employees. The profit-earning
capacity of these businesses is minuscule, and they are exempt from the payment of minimum
wage. Therefore, labor tribunals must compute judgment awards in an equitable manner,
taking into consideration the actual salaries received. The Court will re-examine the total
judgment award to ensure it is fair and not excessive.

The Court affirms that Espina was a regular employee of Cabug-os and was illegally
dismissed. She is entitled to backwages and separation pay. However, the Court recognizes
the special status of sari-sari stores as small-scale family businesses exempt from the
payment of minimum wage. The Court emphasizes the need to balance the protection of labor
with the protection of small retail establishments. The Court applies the benefits and
exemptions provided by the Barangay Micro Business Enterprises Act of 2002 to Cabug-os'
sari-sari store.

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 CASE NO: 94

CELIAR. ATIENZA, Petitioner

vs.
NOEL SACRAMENTO SALUTA, Respondent

G.R. No. 233413 June 17, 2019

FACTS:

This case involves a complaint filed by Noel Sacramento Saluta against Celia R. Atienza and
CRV Corporation for illegal dismissal, non-payment of wages, overtime pay, holiday pay,
premium pay for work on holidays and rest day, illegal deduction, and issuance of a certificate
of employment. Saluta alleged that he was hired as a company driver by CRV Corporation and
was assigned to drive for Atienza. He claimed that he was involved in a vehicular accident and
was made to pay for the damages. He also stated that Atienza verbally terminated him when
he requested a day off to claim his driver's license.

The Labor Arbiter dismissed Saluta's complaint, ruling that he failed to prove that he was an
employee of CRV Corporation. However, the NLRC reversed the decision, finding that Saluta
was an employee of the company. The Court of Appeals affirmed the NLRC's decision, stating
that Atienza failed to prove that Saluta was not an employee of CRV Corporation. The CA also
held that Saluta was illegally dismissed and awarded him backwages, separation pay, and
other monetary benefits. Atienza filed a petition for review on certiorari before the Supreme
Court, arguing that Saluta failed to prove the existence of an employer-employee relationship
and that he abandoned his job.

ISSUE:

Whether or not an employer-employee relationship exists between the petitioner and the
respondent, and if the respondent was indeed dismissed from employment.

RULING:

The Supreme Court emphasized that the burden of proof rests upon the party who asserts
the affirmative of an issue, and in this case, it is the respondent who claims to be an employee.
The Court found that the respondent did not present any competent evidence to prove his
claimed employment with the petitioner. The respondent failed to present his employment
contract, company identification card, or any document showing his inclusion in the company
payroll. The Court also noted that the respondent failed to show how the petitioner exercised
the power of dismissal and control over him. On the other hand, the petitioner had control
over the respondent's work schedule and had the power to grant or deny his leave of absence.
Therefore, the Court concluded that the respondent was the personal/family driver of the
petitioner.

Regarding the issue of dismissal, the Court found that the respondent failed to establish that
he was dismissed from employment. The respondent's bare claim of being verbally
terminated by the petitioner was unsubstantiated by impartial and independent evidence.
The Court emphasized that mere absence or failure to report for work is not tantamount to
abandonment of work. The fact that the respondent filed a case for illegal dismissal is
inconsistent with abandonment of employment. Therefore, the Court concluded that there
was no dismissal in this case.

102
 CASE NO: 95

MARITES BERNARDO, et al., petitioners,

vs.
NATIONAL LABOR RELATIONS COMMISSION and FAR EAST BANK AND TRUST
COMPANY, respondents.

G.R. No. 122917 July 12, 1999

FACTS:

The forty-three (43) petitioners are deaf-mutes hired on various periods from 1988 to 1993
by Far East Bank and Trust Company as Money Sorters and Counters through a uniformly
worded agreement called “Employment Contract for Handicapped Workers”.

The uniform employment contracts of the petitioners stipulated that they shall be trained for
a period of one (1) month, after which the employer shall determine whether or not they
should be allowed to finish the six-month term of the contract. Furthermore, the employer
may terminate the contract at any time for a just and reasonable cause. Unless renewed in
writing by the employer, the contract shall automatically expire at the end of the term.
Twenty-seven (27) of the forty-three (43) petitioners worked for more than six (6) months
while the remaining sixteen (16) petitioners worked for only six (6) months.

Far East Bank and Trust Company maintained that these employees are a special class of
workers because they were hired temporarily under a special employment arrangement,
which was a result of overtures made by civic and political personalities to the bank. The bank
adopted the special program to help deaf-mutes do manual work for the bank, in this case –
counting and sorting of bills, which were normally being performed by tellers.

ISSUE:

Whether or not the employees should be considered regular employees under Article 280 of
the Labor Code.

RULING:

Yes. The Court based its decision on the Magna Carta for Disabled Persons, which mandates
that qualified disabled employees should be given the same terms and conditions of
employment as qualified able-bodied persons. Since the employees were qualified disabled
persons, they are covered by Article 280. The Court also emphasized that the task of counting
and sorting bills is necessary to the business of the bank, and the employees have been
performing these tasks for more than six months, except for sixteen of them. Therefore, the
twenty-seven employees should be deemed regular employees entitled to security of tenure.

The Court further ruled that the employees who were deemed regular employees are entitled
to backwages and separation pay because they were illegally dismissed. The bank failed to
show a just and authorized cause for their termination. The other sixteen employees who
worked for only six months are not deemed regular employees and are not entitled to the
same benefits.

The Court also rejected the bank's argument that the employment contract with a fixed term
is valid, citing the Brent School v. Zamora case. The Court held that the contract's term limit
was based on the employees' disability, and the Magna Carta for Disabled Persons grants
them the same rights as qualified able-bodied employees. The Court emphasized that a
contract of employment is impressed with public interest, and the parties cannot insulate
themselves from the impact of labor laws and regulations.

103
 CASE NO: 96

CENTURY CANNING CORPORATION, Petitioner,

vs.
COURT OF APPEALS and GLORIA C. PALAD, Respondents.

G.R. No. 152894 August 17, 2007

FACTS:

The case involves Gloria Palad, an employee of Century Canning Corporation (petitioner),
who was terminated from her employment. Palad was hired by the petitioner as a "fish
cleaner" at their tuna and sardines factory. She signed an apprenticeship agreement with the
petitioner and received an apprentice allowance. However, the petitioner terminated Palad's
employment due to poor performance and habitual tardiness and absences. Palad filed a
complaint for illegal dismissal, underpayment of wages, and non-payment of pro-rated 13th
month pay.

The Labor Arbiter dismissed the complaint but ordered the petitioner to pay Palad her last
salary and pro-rated 13th month pay. The National Labor Relations Commission (NLRC)
affirmed the Labor Arbiter's decision but ordered the petitioner to pay additional backwages.
Palad then filed a special civil action for certiorari with the Court of Appeals.

The Court of Appeals held that the apprenticeship agreement between the petitioner and
Palad was not valid and binding because it was executed before the Technical Education and
Skills Development Authority (TESDA) approved the petitioner's apprenticeship program.
The Court of Appeals also ruled that Palad was illegally dismissed because the petitioner
failed to show that she was properly informed of the required standard of performance and
was not given due process.

ISSUE:

Whether or not the Court of Appeals erred in holding that Palad was not an apprentice and
that the petitioner did not adequately prove a valid cause for termination.

RULING:

The Supreme Court ruled that the apprenticeship agreement was void because it lacked prior
approval from the TESDA. The TESDA's approval of the apprenticeship program is required
before an employer can hire apprentices to ensure the protection of apprentices and prevent
abuse by employers. Since the apprenticeship agreement was enforced before the TESDA's
approval, it was considered invalid and Palad cannot be considered an apprentice.

The Supreme Court also ruled that Palad was illegally dismissed. The petitioner failed to
substantiate its claim that Palad was terminated for valid reasons. The petitioner did not
provide sufficient evidence to prove the authenticity of the performance evaluation and failed
to inform Palad of the performance standards set by the company. Therefore, the court
considered the termination as a case of illegal dismissal. The court also noted that Palad was
not accorded due process as she was not warned of her alleged poor performance and was
not given the opportunity to explain and defend herself.

Under Article 227 of the Labor Code, the burden of proving that the termination was for a
valid or authorized cause rests on the employer. In this case, the petitioner failed to
substantiate its claim that Palad was terminated for valid reasons. The petitioner relied solely
on the performance evaluation, which was not proven to be authentic. Additionally, the
petitioner did not inform Palad of the performance standards set by the company. When a
valid cause for termination is not clearly proven, the law considers it a case of illegal

104
dismissal. Furthermore, Palad was not accorded due process as she was not warned of her
alleged poor performance and was not given the opportunity to explain and defend herself.

CASE NO: 97

ATLANTA INDUSTRIES, INC. and/or ROBERT CHAN, Petitioners,

vs.
APRILITO R. SEBOLINO, KHIM V. COSTALES, ALVIN V. ALMOITE, and JOSEPH S.
SAGUN, Respondents.

G.R. No. 187320 January 26, 2011

FACTS:

This case involves a dispute between Atlanta Industries, Inc. and several employees who filed
complaints for illegal dismissal, regularization, underpayment, nonpayment of wages, and
other money claims. The employees alleged that they had attained regular status and were
illegally dismissed when their apprenticeship agreements expired. Atlanta Industries argued
that the employees were not entitled to regularization and money claims because they were
engaged as apprentices under a government-approved apprenticeship program.

The Labor Arbiter initially dismissed the complaint with respect to some of the employees
but found the termination of service of the remaining employees to be illegal. The National
Labor Relations Commission (NLRC) modified the ruling, withdrawing the illegal dismissal
finding for some employees and approving a compromise agreement for others. The
employees filed a petition for certiorari with the Court of Appeals (CA), which granted the
petition and declared the employees to be regular employees whose dismissals were illegal.
The CA also held that the compromise agreement was not binding on some of the employees
who did not sign it.

Atlanta Industries filed a petition for review on certiorari with the Supreme Court, arguing
that the CA erred in its findings. Atlanta Industries contended that the employees were not
company employees before they were engaged as apprentices and that the apprenticeship
agreements were valid. They also argued that there was no illegal dismissal as the employees'
tenure ended with the expiration of the apprenticeship agreements.

ISSUE:

Whether or not the respondents were illegally dismissed and that the apprenticeship
agreements they entered into were valid.

RULING:

The Court held that the employees were already company employees before they were
engaged as apprentices, as evidenced by company documents. The Court also found that the
apprenticeship agreements were invalid. The compromise agreement was not binding on all
employees as some did not sign it.

The court's ruling is based on several considerations. First, the respondents were already
rendering service to the company as employees before being made to undergo
apprenticeship. This was supported by operational records and production and work
schedules. Second, the Master List of employees, which Atlanta relied on to prove that the
respondents were not employees, was found to be unreliable and contradictory. Third, the
tasks performed by the respondents were necessary and desirable in Atlanta's business,
making them regular employees under the Labor Code. Finally, the compromise agreement

105
entered into by some of the respondents was not binding on all of them as Costales and
Almoite did not sign it.

CASE NO: 98

ANDREW JAMES MCBURNIE, Petitioner,

vs.
EULALIO GANZON, EGI-MANAGERS, INC. and E. GANZON, INC., Respondents.

G.R. Nos. 178034 & 178117 G R. Nos. 186984-85 October 17, 2013

FACTS:

This case involves a petition for review on certiorari filed by Andrew James McBurnie against
Eulalio Ganzon, EGI-Managers, Inc., and E. Ganzon, Inc. The case was brought before the
Supreme Court to question the decision of the Court of Appeals granting the respondents'
motion to reduce the appeal bond and ordering the National Labor Relations Commission
(NLRC) to give due course to their appeal.

On May 11, 1999, petitioner Andrew James McBurnie, an Australian national, signed a five-
year employment contract as Executive Vice-President of respondent EGI Manager's, Inc.
(EGI), through its President respondent Eulalio Ganzon. McBurnie's responsibilities were to
oversee the general management of the company's hotels and resorts within the Philippines.
However, on November 1, 1999, McBurnie was involved in an accident that fractured his skull
and necessitated his confinement at the Makati Medical Center. While recuperating from his
injuries in Australia, McBurnie was informed by Ganzon that his services were no longer
needed since the project had been permanently discontinued. McBurnie then filed a
complaint for illegal dismissal with prayer for the payment of his salary and benefits for the
unexpired term of the contract, damages, and attorney's fees.

In their defense, the respondents argued that there was no employer-employee relationship
between them and McBurnie. They claimed that McBurnie was employed at Pan Pacific Hotel
when he proposed to Ganzon to jointly put up and invest in a company that will professionally
manage hotels. They also argued that the employment contract was executed with the
understanding that it shall be used only for alien work permit and visa applications.

ISSUE:

Whether or not there was an employer-employee relationship between the petitioner and
the respondents, and whether or not the respondents are liable for illegal dismissal and other
claims.

RULING:

The Supreme Court ruled in favor of the petitioner and held that there was an employer-
employee relationship between the petitioner and the respondents. The Court found that the
respondents failed to present sufficient evidence to support their claim that there was no
employer-employee relationship. The Court also held that the respondents are liable for
illegal dismissal and ordered them to pay the petitioner his salary and benefits for the
unexpired term of the contract, damages, and attorney's fees.

The Court based its ruling on the evidence presented by the petitioner, which included the
employment contract signed by the parties. The Court found that the employment contract
clearly established an employer-employee relationship between the petitioner and the
respondents. The Court also noted that the respondents failed to present any evidence to

106
support their claim that the employment contract was only for alien work permit and visa
applications.

The Court emphasized that in determining the existence of an employer-employee

relationship, the following elements must be present: (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. In this case, the Court found that all of these elements were present,
as evidenced by the employment contract and the actions of the parties.

The Court also held that the respondents are liable for illegal dismissal. The Court found that
the respondents terminated the petitioner's employment without just cause and without
following the proper procedure for termination. The Court emphasized that an employer
cannot simply terminate an employee's employment without valid grounds and without
following the due process requirements under the Labor Code.

LABOR RELATIONS

CASE NO: 99

SAMAHANG MANGGAGAWA SA CHARTER CHEMICAL SOLIDARITY OF UNIONS IN THE

PHILIPPINES FOR EMPOWERMENT AND REFORMS (SMCC-SUPER), ZACARRIAS JERRY
VICTORIO-Union President, Petitioner,
vs.
CHARTER CHEMICAL and COATING CORPORATION, Respondent.

G.R. No. 169717 March 16, 2011

FACTS:

This case involves a petition for certification election filed by the Samahang Manggagawa sa
Charter Chemical Solidarity of Unions in the Philippines for Empowerment and Reforms
(SMCC-SUPER), a labor organization representing rank-and-file employees of Charter
Chemical and Coating Corporation. The respondent company filed a motion to dismiss the
petition, arguing that the petitioner union is not a legitimate labor organization due to its
failure to comply with the documentation requirements set by law and the inclusion of
supervisory employees in its membership.

The Med-Arbiter dismissed the petition, ruling that the petitioner union did not comply with
the documentation requirements and that the inclusion of supervisory employees is
prohibited. The Department of Labor and Employment (DOLE) initially dismissed the
petitioner union's appeal, but later reversed its ruling and granted the petition for
certification election. The Court of Appeals (CA) annulled the DOLE's decision, upholding the
Med-Arbiter's findings that the petitioner union failed to comply with the documentation
requirements and that the inclusion of supervisory employees nullifies its legal personality
as a labor organization.

ISSUE:

Whether or not the mixture of rank-and-file and supervisory employees in petitioner union
nullifies its legal personality as a legitimate labor organization.

107
RULING:

NO. The Supreme Court ruled that under R.A. No. 6715, it omitted specifying the exact effect
of any violation of the prohibition (on the co-mingling of supervisory and rank-and-file
employees) would bring about on the legitimacy of a labor organization.

It should be emphasized that the petitions for certification election involved in Toyota and
Dunlop were filed on November 26, 1992 and September 15, 1995, respectively; hence, the
1989 Rules was applied in both cases.

But then, on June 21, 1997, the 1989 Amended Omnibus Rules was further amended by
Department Order No. 9, series of 1997 (1997 Amended Omnibus Rules). Specifically, the
requirement under Sec. 2(c) of the 1989 Amended Omnibus Rules – that the petition for
certification election indicate that the bargaining unit of rank-and-file employees has not
been mingled with supervisory employees – was removed. Instead, what the 1997 Amended
Omnibus Rules requires is a plain description of the bargaining unit

The Court abandoned the view in Toyota and Dunlop and reverted to its pronouncement in
Lopez that while there is a prohibition against the mingling of supervisory and rank-and-file
employees in one labor organization, the Labor Code does not provide for the effects thereof.
Thus, the Court held that after a labor organization has been registered, it may exercise all
the rights and privileges of a legitimate labor organization. Any mingling between
supervisory and rank-and-file employees in its membership cannot affect its legitimacy for
that is not among the grounds for cancellation of its registration, unless such mingling was
brought about by misrepresentation, false statement or fraud under Article 239 of the Labor
Code.

CASE NO: 100

PHILIPPINE BANK OF COMMUNICATIONS EMPLOYEES ASSOCIATION

(PBCEA), PETITIONER, VS. PHILIPPINE BANK OF COMMUNICATIONS, RESPONDENT.

G.R. No. 250839 September 14, 2022

FACTS:

This case involves a petition for certiorari filed by the Philippine International Trading
Corporation (PITC) against the Commission on Audit (COA). The COA denied PITC's request
to amend certain provisions of the 2010 Annual Audit Report (AAR) related to the payment
and accrual of liability for retirement benefits under Section 6 of Executive Order No. 756.

PITC is a government-owned and controlled corporation created under Presidential Decree

No. 252. On December 28, 1981, President Marcos issued Executive Order No. 756, which
authorized the reorganization of PITC and provided for retirement benefits for its employees.
However, the Court ruled in a previous case (G.R. No. 183517) that the retirement benefits
under Section 6 of Executive Order No. 756 were only meant as an incentive for employees
affected by the reorganization and not a permanent retirement law. The Court also held that
PITC is no longer exempt from OCPC rules and regulations under Republic Act No. 6758.

PITC argued that the Decision in G.R. No. 183517 should be applied prospectively from the
date it became final, and that its employees should be allowed to claim their vested rights to
the retirement benefits under Section 6 of Executive Order No. 756. PITC also claimed that
the COA never issued any notice of suspension or disallowance against the grant of retirement
benefits under Section 6.

108
ISSUE:

Whether or not the Decision in G.R. No. 183517, which interpreted the retirement benefits
under Section 6 of Executive Order No. 756, should be applied prospectively or retroactively.

RULING:

The Supreme Court ruled that the Decision in G.R. No. 183517 should be applied retroactively.
The Court explained that judicial decisions, although not laws, are evidence of what the laws
mean and have the same binding force as the laws themselves. The Court cited Article 8 of
the Civil Code, which states that judicial decisions applying or interpreting the laws or the
Constitution form part of the legal system. The Court also referred to Article 4 of the Civil
Code, which enunciates the rule on non-retroactivity of laws, unless the contrary is provided.

The Court further explained that its interpretation of a statute constitutes part of the law as
of the date it was originally passed. This is because the Court's construction merely
establishes the contemporaneous legislative intent that the interpreted law carried into
effect. The Court cited the case of Senarillos v. Hermosisima, where it first declared this
principle. The Court also cited Columbia Pictures, Inc. v. Court of Appeals, which expounded
on the import of the ruling in Senarillos in relation to the rule of non-retroactivity of laws.

Based on these principles, the Court held that the Decision in G.R. No. 183517 retroacts to the
date when Executive Order No. 756 was enacted. The Court rejected PITC's argument that the
retroactive application of the Decision would divest qualified PITC employees of their vested
rights to receive the retirement benefits. The Court emphasized that the grant of retirement
benefits under Section 6 of Executive Order No. 756 was temporary and limited in nature,
and should have been restricted to the six-month period of the mandated reorganization of
PITC.

CASE NO: 101

NEGROS SLASHERS, INC., RODOLFO C. ALVAREZ AND VICENTE TAN, Petitioners,

vs.
ALVIN L. TENG, Respondent.

G.R. No. 187122 February 22, 2012

FACTS:

Respondent Alvin Teng is a professional basketball player who started his career as such in
the Philippine Basketball Association and then later on played in the Metropolitan Basketball
Association (MBA).

Sometime in one of his games, particularly Game Number 4 of the MBA Championship Round
for the year 2000 season, Teng had a below-par playing performance. Because of this, the
coaching staff decided to pull him out of the game. Teng then sat on the bench, untied his
shoelaces and donned his practice jersey. On the following game, Game Number 5 of the
Championship Round, Teng called-in sick and did not play.

On March 16, 2001, because of what happened, the management of Negros Slashers came up
with a decision, and through its General Manager, petitioner Rodolfo Alvarez, wrote Teng
informing him of his termination from the team.

ISSUE:

Whether or not Teng's dismissal was justified.

109
RULING:

Yes. As ruled in Sagales v. Rustan’s Commercial Corporation, while the employer has the
inherent right to discipline, including that of dismissing its employees, this prerogative is
subject to the regulation by the State in the exercise of its police power.

In this regard, it is a hornbook doctrine that infractions committed by an employee should

merit only the corresponding penalty demanded by the circumstance. The penalty must be
commensurate with the act, conduct or omission imputed to the employee and must be
imposed in connection with the disciplinary authority of the employer.

In the case at bar, the penalty handed out by the petitioners was the ultimate penalty of
dismissal. There was no warning or admonition for respondent’s violation of team rules, only
outright termination of his services for an act which could have been punished appropriately
with a severe reprimand or suspension.

CASE NO: 102

COLEGIO DE SAN JUAN DE LETRAN, Petitioner,

vs.
ISIDRA DELA ROSA-MERIS, Respondent.

G.R. No. 178837 September 1, 2014

FACTS:

This case involves a petition for review on certiorari filed by Colegio de San Juan de Letran
(petitioner) against Isidra Dela Rosa-Meris (respondent). The petitioner is a religious
educational institution operated by the Order of Preachers. The respondent was hired as a
probationary trial teacher in January 1971 and eventually became a Master Teacher in June
1982. The respondent resigned in March 1991 but returned to the petitioner as a Junior
Teacher C in the Elementary Department in 1998. She was later hired as a substitute teacher
in October 1999 until her termination on October 3, 2003.

The conflict between the petitioner and respondent started when parents of the Preparatory
pupils under the respondent's class complained about her alleged indifference and
unprofessionalism. They also questioned the computation of the general average. An
investigation conducted by the petitioner revealed discrepancies in the grades recorded in
the respondent's Dirty Record Book compared to the Clean Record Book. There were also
erasures on certain grades in the Clean Records.

The petitioner sent a letter to the respondent, giving her 72 hours to explain the discrepancies
and the parents' complaints. The respondent refused to receive the letter, prompting the
petitioner to send it by registered mail and LBC Express. The respondent claimed that she
never received a written complaint from the parents and was summoned to the Office of Rev.
Fr. Edwin A. Lao, O.P., who accused her of tampering with the grades. The respondent denied
the accusation but was still terminated on October 3, 2003.

The respondent filed a complaint for illegal dismissal and damages before the Labor Arbiter
(LA).

ISSUE:

Whether or not the dismissal of the respondent from her employment was legal.

110
RULING:

No. The Court examined the factual findings of the lower courts and the CA. After a thorough
review, the Court found that the findings of the Labor Arbiter (LA) and the National Labor
Relations Commission (NLRC) were more in accord with the evidence on record. The LA and
the NLRC found that there were discrepancies and alterations in the grades recorded by the
respondent, and these alterations were made after the subject coordinators had already
approved the grades.

The Court emphasized that the grading system should be based on the students' scholastic
record and that any alteration or falsification of grades is a serious misconduct. The
respondent argued that she had the right to give grades based on her assessment of the
students' performance. However, the court ruled that the respondent's actions were a
violation of school rules and regulations, as well as the Manual of Regulation for Private
Schools.

The Court also found that the petitioner had followed the proper procedures in terminating
the respondent's employment. The petitioner gave the respondent written notice and an
opportunity to explain her side. The respondent's refusal to receive the letter and her failure
to provide a satisfactory explanation for the discrepancies and complaints from parents
further justified her dismissal.

CASE NO: 103

CALTEX (PHILIPPINES), INC., WILLIAM P. TIFFANY, E.C. CAVESTANY, and E.M.

CRUZ, Petitioners,
vs.
HERMIE G. AGAD and CALTEX UNITED SUPERVISORS' ASSOCIATION, Respondents.

G.R. No. 162017 April 23, 2010

FACTS:

Agad was initially employed by Caltex on a probationary basis in September 1983 and
became a regular employee in February 1984. He held various positions within the company
and received commendations and bonuses. In May 1992, Agad was transferred to a different
location and hired the services of Alfredo Delda to construct two crates for his belongings.
Agad submitted an official receipt for the payment of P15,500, which Caltex reimbursed him
for.

However, during an audit in April 1993, it was discovered that Delda had issued a false
affidavit stating that he did not provide any crating services to Agad. Further investigations
revealed that another carpenter, Arsenio Asperas, had actually constructed the crates. It was
also discovered that Agad had allegedly authorized the unauthorized withdrawal and sale of
190 pieces of LPG cylinders from the depot.

Caltex conducted an administrative inquiry and subsequently dismissed Agad on the grounds
of serious misconduct and breach of trust and confidence.

ISSUE:

Whether or not Agad's termination from employment was valid based on the alleged fictitious
reimbursement of crating expenses and the unauthorized withdrawal and sale of LPG
cylinders.

111
RULING:

The Supreme Court ruled in favor of Caltex and affirmed the decision of the CA and NLRC. The
termination of Agad's employment was deemed valid due to his serious misconduct and
breach of trust and confidence.

The submission of an official receipt by Agad serves as the best evidence of payment for the
crating expenses. It is presumed regular on its face, and Agad's superiors approved the
reimbursement without any mention of unreasonableness. Agad failed to fully substantiate
the alleged fictitious reimbursement.

Agad's unauthorized withdrawal and sale of LPG cylinders, without complying with company
rules and regulations, constituted serious misconduct and breach of trust and confidence.
Agad's failure to issue RMRDs, order the sale without proper authorization, and account for
the proceeds were clear violations of company policies.

CASE NO: 104

COSMOS BOTTLING CORP., Petitioner,

vs.
WILSON FERMIN, Respondent.

G.R. No. 193676 June 20, 2012

FACTS:

The case involves two consolidated cases, G.R. No. 193676 and G.R. No. 194303, which both
challenge the decision of the Court of Appeals (CA) in favor of Wilson Fermin. Fermin was a
forklift operator at Cosmos Bottling Corporation (COSMOS) and was accused of stealing a
cellphone belonging to his fellow employee, Luis Braga. COSMOS terminated Fermin's
employment based on this accusation. Fermin filed a complaint for illegal dismissal, which
was dismissed by the Labor Arbiter (LA) for lack of merit. The National Labor Relations
Commission (NLRC) affirmed the LA's decision. However, the CA reversed the rulings of the
LA and NLRC and awarded Fermin his full retirement benefits. COSMOS filed a petition for
review, arguing that Fermin's dismissal was justified due to his act of theft. Fermin, on the
other hand, argued that the penalty of dismissal was not proportionate to his offense and that
he should be entitled to backwages.

ISSUE:

Whether or not the imposition of the penalty of dismissal was appropriate.

RULING:

The Supreme Court ruled in favor of COSMOS, stating that theft committed against a co-
employee is considered a case analogous to serious misconduct, which justifies the penalty
of dismissal. The Court also emphasized that previous infractions may be cited as justification
for dismissal if they are related to the subsequent offense. Therefore, the Court reversed the
CA's ruling and reinstated the LA's decision to dismiss Fermin's complaint for illegal
dismissal.

The Court based its ruling on the principle that theft committed against a co-employee is
considered a case analogous to serious misconduct. The Court explained that serious
misconduct is a valid ground for dismissal under Article 282 of the Labor Code. The Court
further stated that the penalty of dismissal is appropriate when the offense is of such a serious
nature that it makes the employee's continued employment untenable. In this case, the Court

112
found that Fermin's act of stealing a cellphone from a co-employee constituted serious
misconduct, as it violated the trust and confidence necessary for a harmonious working
relationship. The Court also considered Fermin's previous infractions, which included
unauthorized absences and tardiness, as relevant in determining the appropriateness of the
penalty of dismissal. The Court concluded that the penalty of dismissal was justified in this
case.

CASE NO: 105

HEAVYLIFT MANILA, INC. and/or JOSEPHINE EVANGELIO, Administrative & Finance

Manager, AND CAPT. ROLANDO* TOLENTINO, Petitioners,
vs.
THE COURT OF APPEALS, MA. DOTTIE GALAY and the NATIONAL LABOR RELATIONS
COMMISSION, Respondents.

G.R. No. 154410 October 20, 2005

FACTS:

Heavylift through a letter signed by Evangelio (Admin and Finance Manager) informed
respondent Galay (Insurance and Provisions Asst) of her low performance rating and
negative feed back from team members re her attitude. The letter also informed her being
relieved of her other functions except the development of the new Access program.

Galay was terminated for loss of confidence so she filed for illegal dismissal. Heavylift averred
the attitude problem of Galay led to decline in company’s efficiency and productivity,
therefore, analogous to loss of trust and confidence. With this, they could no longer make her
in-charge of the confidential Crew Information System which accounts for the personnel,
management and professional records of all the employees of and seamen connected with
the company.

Labor Arbiter found Galay illegally terminated for failure to state what company regulation
she violated and failure to give proper notice.

Petitioner however averred that they sent Galay a letter of notice regarding her low
performance and attitude problem in February. After which they sent a letter of termination
in August. They even waited 6 months for Galay’s counseling before dismissing her. Galay
countered this by sayingthe letter given did not comply with the twin requirement because it
neither informed her of her infraction of any company rule which warrants disciplinary
action.

ISSUE:

Whether or not “attitude problem” was a just cause for termination.

RULING:

Yes. An employee who cannot get along with his co-employees is detrimental to the company
for he can upset and strain the working environment. Without the necessary teamwork and
synergy, the organization cannot function well. Thus, management has the prerogative to
take the necessary action to correct the situation and protect its organization. When personal
differences between employees and management affect the work environment, the peace of
the company is affected. Thus, an employee’s attitude problem is a valid ground for his
termination. It is a situation analogous to loss of trust and confidence that must be duly
proved by the employer. Similarly, compliance with the twin requirement of notice and
hearing must also be proven by the employer.

113
However, in the case, there is no clear and convincing evidence to justify Galay’s termination.
The mere mention of negative feedback from her team members, and the letter dated
February 23, 1999, are not proof of her attitude problem. Likewise, her failure to refute
petitioners’ allegations of her negative attitude does not amount to admission. Technical
rules of procedure are not binding in labor cases. Besides, the burden of proof is not on the
employee but on the employer who must affirmatively show adequate evidence that the
dismissal was for justifiable cause the notices do not meet the twin requirement because it
does not inform her of specific acts complained of and the penalty.

The law requires the employer to give the worker to be dismissed two written notices before
terminating his employment, namely, (1) a notice which apprises the employee of the
particular acts or omissions for which his dismissal is sought; and (2) the subsequent notice
which informs the employee of the employer’s decision to dismiss him.

Additionally, the letter never gave respondent Galay an opportunity to explain herself, hence
denying her due process. Hence, Galay was illegally dismissed.

CASE NO: 106

JERRY E. ALMOGERA, JR., PETITIONER, VS. A & L FISHPOND AND HATCHERY, INC. AND
AUGUSTO TYCANGCO, RESPONDENTS.

G.R. No. 247428 February 17, 2021

FACTS:

This case involves a Petition for Review on Certiorari filed by Jerry E. Almogera, Jr. against A
L Fishpond and Hatchery, Inc. and Augusto Tycangco. The petitioner was hired by A L as an
all-around harvester and requested a leave of absence for 11 days due to a family emergency.
However, upon his return to work, he received a letter requiring him to explain his absences
and was subsequently terminated for violation of the company's Code of Discipline.

The petitioner filed a complaint for illegal dismissal and underpayment/non-payment of

salaries, overtime pay, holiday pay, etc. The Labor Arbiter ruled in favor of the petitioner, but
the NLRC reversed the decision, except for the award of service incentive leave pay. The Court
of Appeals upheld the NLRC's ruling, stating that the petitioner was validly dismissed for
being on AWOL for 11 days.

ISSUE:

Whether or not the petitioner's dismissal was justified based on his willful disobedience of
the company's rules.

RULING:

The court held that the company's rules were reasonable and lawful, and that the petitioner
was aware of these rules as they were discussed and explained to him at the time of his
employment. The court also found that the petitioner's failure to comply with the rules,
including his refusal to appear before the management for a hearing, constituted willful
disobedience, which is a just cause for termination under the Labor Code.

The court further held that the dismissal imposed by the company was not too harsh a
penalty, as it was in line with the company's exercise of its management prerogative and the
Code of Discipline. The court emphasized that an employee's right to security of tenure does
not give him a vested right to his position, and that employers have the right to prescribe
reasonable rules and regulations for the conduct of their business.

114
Regarding the procedural aspect of the case, the court found that the company had complied
with the requirements of procedural due process. The petitioner was given two written
notices, the first informing him of the specific acts or omissions for which his dismissal was
sought, and the second informing him of the company's decision to terminate his
employment. The court held that the requirement of a hearing was complied with as long as
there was an opportunity to be heard.

CASE NO: 107

JR HAULING SERVICES AND OSCAR MAPUE, PETITIONERS, VS. GAVINO L. SOLAMO, et

al., RESPONDENTS.

G.R. No. 214294 September 30, 2020

FACTS:

This case involves a complaint for illegal dismissal and underpayment/non-payment of

salaries/wages, 13th month pay, holiday pay, rest day pay, Service Incentive Leave (SIL) pay,
filed by Gavino L. Solamo, Ramil Jerusalem, Armando Parungao, Rafael Caparos, Jr., Noriel
Solamo, Alfredo Salangsang, Mark Parungao, and Dean V. Calvo against JR Hauling Services
and its manager, Oscar Mapue. The respondents were former drivers/helpers of JR Hauling,
a domestic corporation engaged in the business of hauling and delivery of broiler chickens.
The respondents claimed that they were illegally dismissed without notice and hearing and
were not paid their monetary claims.

ISSUE:

Whether or not the respondents were illegally dismissed from employment and entitled to
their monetary claims.

RULING:

The Supreme Court ruled that the respondents were validly dismissed from employment due
to their involvement in the unauthorized sale of excess broilers and broiler crates, which
constituted serious misconduct and a breach of trust and confidence. The Court also held that
the affidavits presented by the petitioners constituted substantial evidence to prove the
respondents' culpability.

CASE NO: 108

CENTURY CANNING CORPORATION, RICARDO T. PO, JR. and AMANCIO C.

RONQUILLO, Petitioners,
vs.
VICENTE RANDY R. RAMIL, Respondent.

G.R. No. 171630 August 8, 2010

FACTS:

The respondent was employed by Century Canning Corporation as a technical specialist. He

was responsible for preparing purchase requisition (PR) forms and capital expenditure

115
(CAPEX) forms, as well as coordinating with the purchasing department. In March 1999, the
respondent prepared a CAPEX form for external fax modems and terminal server, which was
endorsed to the Secretary of the Executive Vice-President for signature. However, the form
was incomplete and had a questionable signature. The equipment request was put on hold
due to the forged signature. The respondent was asked to explain the incident and was
subsequently suspended. He received a Notice of Termination for loss of trust and confidence.

The respondent filed a complaint for illegal dismissal, non-payment of overtime pay,
separation pay, moral and exemplary damages, and attorney's fees. The Labor Arbiter
dismissed the complaint, but the NLRC reversed the decision and declared the dismissal
illegal. However, the NLRC later reversed itself and upheld the dismissal. The respondent
then filed a petition for certiorari with the CA, which ruled in his favor and reinstated the
NLRC's original decision.

ISSUE:

Whether or not the respondent should be reinstated or awarded separation pay.

RULING:

The Supreme Court, in its decision, upheld the CA's ruling. It found that the NLRC's findings
were not supported by substantial evidence and that the CA correctly ruled in favor of the
respondent. However, the Court modified the decision and instead directed the petitioner to
pay separation pay in lieu of reinstatement.

The Court based its decision on the doctrine of strained relations, which allows for the
payment of separation pay as an alternative to reinstatement when the latter option is no
longer desirable or viable. The Court recognized that the relationship between the petitioner
and respondent had been strained due to the loss of trust and confidence. It would be
impractical to reinstate the employee whom the employer does not trust, especially
considering his task of handling delicate documents.

The Court also cited previous cases that recognized the distinction between separation pay
and backwages. Separation pay is meant to provide the employee with financial support
during the transition period of finding a new job, while backwages compensate for the loss of
earnings during the period of illegal dismissal.

CASE NO: 109

EDNA LUISA B. SIMON, PETITIONER, VS. THE RESULTS COMPANIES AND JOSELITO
SUMCAD, RESPONDENTS.

G.R. Nos. 249351-52 March 29, 2022

FACTS:

This case involves a Petition for Review on Certiorari filed by Edna Luisa B. Simon against
The Results Companies and Joselito Sumcad. Simon filed a complaint against Results for
illegal dismissal, underpayment of salaries, nonpayment of separation pay, and
discrimination. She claimed that she was hired as a Customer Service Representative by
Results but was forced to resign after two months and seven days of employment. Results, on
the other hand, argued that Simon's lack of employment records was due to her short stint in
the company and the delay in filing her complaint.

116
ISSUE:

Whether or not Simon is a regular employee and failed to prove her dismissal.

RULING:

No. The Court, in reviewing the case, stated that it may resolve questions of law when the
factual findings of the CA and the labor tribunals are contradictory. The Court found that the
NLRC's ruling that Simon was a probationary employee was not supported by substantial
evidence and agreed with the CA's finding that she was a regular employee. However, the
Court disagreed with the CA's conclusion that Simon failed to prove her dismissal.

The Court considered the evidence presented by Simon, including her resignation letter and
the testimonies of her co-workers, which supported her claim of forced resignation. The
Court emphasized that the burden of proof in illegal dismissal cases lies with the employer,
and in this case, Results failed to present any evidence to refute Simon's claim. The Court also
noted that the CA's finding that Simon was a regular employee further strengthens her claim
of illegal dismissal, as regular employees are entitled to security of tenure and can only be
dismissed for just or authorized causes.

The Court further explained that the CA erred in requiring Simon to present a notice of
dismissal or termination letter, as the absence of such document does not automatically mean
that there was no dismissal. The Court cited previous cases where it held that the lack of a
written notice does not negate the fact of dismissal if there is sufficient evidence to prove it.
In this case, Simon's resignation letter and the testimonies of her co-workers were sufficient
evidence to establish her forced resignation.

CASE NO: 110

CARISSA E. SANTO, petitioner, vs. UNIVERSITY OF CEBU, respondent.

G.R. No. 232522 August 28, 2019

FACTS:

The petitioner, Carissa E. Santo, was employed as a full-time instructor by the respondent,
University of Cebu, in May 1997. In April 2013, she applied for optional retirement at the age
of 42, having completed 16 years of service. The respondent approved her application and
computed her retirement pay based on its Faculty Manual, which provided for 15 days of pay
for every year of service. However, the petitioner argued that her retirement pay should be
computed based on Article 287 of the Labor Code, which prescribed 22.5 days of pay for every
year of service.

The Labor Arbiter ruled in favor of the petitioner, but the NLRC reversed the decision, stating
that Article 287 was not intended to benefit the petitioner who voluntarily resigned to
practice law. The Court of Appeals affirmed the NLRC's ruling, stating that the retirement
benefits under the Faculty Manual were different from those under Article 287, as they were
intended to help the employee enjoy their remaining years after retirement.

ISSUE:

Whether or not the retirement benefits of the petitioner should be computed based on the
Faculty Manual or Article 287 of the Labor Code.

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RULING:

The Supreme Court ruled in favor of the petitioner and held that her retirement benefits
should be computed based on Article 287 of the Labor Code. The Court also emphasized that
the retirement benefits should not be less than those provided in Article 287.

The Court reasoned that retirement benefits, as labor contracts, are not merely contractual
in nature but are also impressed with public interest. Therefore, if the provisions of a
retirement plan run contrary to law, public morals, or public policy, they may be reviewed
and voided. In this case, the retirement plan of the respondent, as stated in its Faculty Manual,
provided for 15 days of pay for every year of service. However, Article 287 of the Labor Code
prescribed 22.5 days of pay for every year of service. The Court held that the retirement
benefits under the Faculty Manual should be considered as retirement benefits under Article
287, and that the retirement benefits should not be less than those provided in Article 287.

The Court further stated that the retirement benefits under Article 287 should be applied
because they were more advantageous to the petitioner. The Court rejected the argument
that the retirement benefits were not intended to benefit the petitioner who voluntarily
resigned to practice law. The Court emphasized that retirement benefits are meant to provide
financial security to employees who have rendered years of service to their employers,
regardless of the reason for retirement.

CASE NO: 111

CAPITOL WIRELESS, INC., petitioner,

vs.
HONORABLE SECRETARY MA. NIEVES R. CONFESOR and KILUSANG MANGGAGAWA NG
CAPWIRE KMC-NAFLU, respondents.

G.R. No. 117174 November 13, 1996

FACTS:

This case involves a dispute between petitioner Capitol Wireless, Inc. and respondent
Kilusang Manggagawa ng Capwire KMC-NAFLU (Union) regarding the dismissal of eight
couriers who were Union members on the ground of redundancy. The parties had entered
into a Collective Bargaining Agreement (CBA) which was being renegotiated at the time of
the dismissals. The Union filed a notice of strike, and the Secretary of Labor assumed
jurisdiction over the case.

ISSUE:

1. Whether or not the dismissal of the employees violated procedural due process,

2. Whether or not the amount of indemnity to be awarded to the dismissed employees, and

3. Whether or not the retirement benefits granted by the Secretary of Labor.

RULING:

1. The court ruled in favor of the Union, finding that the petitioner failed to accord due process
to the dismissed employees by not providing them with fair and reasonable criteria for the
implementation of the redundancy program. The court cited the principle established in a

118
previous case that in selecting employees to be dismissed, fair and reasonable criteria must
be used, such as less preferred status, efficiency, and seniority. The court also noted that the
redundancy program was implemented during bargaining negotiations, which gave the
impression that it was being used as a bargaining leverage.

2. The court held that the measure of the award depends on the facts of each case and the
gravity of the omission committed by the employer. The court cited previous cases where
different amounts of indemnity were awarded, showing that the amount is subject to the
discretion of the agency making the award.

3. The court addressed the retirement benefits granted by the Secretary of Labor, finding that
they were not in excess of what is required by law. The court clarified that the term "one-half
month salary" means 22.5 days, and the additional days granted for compulsory and optional
retirement were within the discretion of the Secretary of Labor.

The court based its decision on the principle established in a previous case that fair and
reasonable criteria must be used in selecting employees to be dismissed. The court also
considered the timing of the redundancy program, which was implemented during
bargaining negotiations, and concluded that it was being used as a bargaining leverage. In
determining the amount of indemnity to be awarded, the court held that it depends on the
facts of each case and the gravity of the omission committed by the employer. The court cited
previous cases where different amounts of indemnity were awarded, showing that the
amount is subject to the discretion of the agency making the award. In interpreting the
retirement benefits granted by the Secretary of Labor, the court clarified that the term "one-
half month salary" means 22.5 days, which includes various components such as the 13th
month pay and service incentive leave. The court also emphasized that it will not alter,
modify, or reverse the factual findings of the Secretary of Labor unless there are cogent
reasons to do so.

CASE NO: 112

PATRICIA HALAGUEÑA, et al., PETITIONERS, VS. PHILIPPINE AIRLINES, INC.,

RESPONDENT.

G.R. No. 243259 January 10, 2023

FACTS:

On August 29, 1968, ECI filed a complaint for damages against NPC in the Court of First
Instance of Manila, alleging that it suffered damages to its facilities and equipment due to the
improper and careless opening of the spillway gates of Angat Dam by NPC during a typhoon.
On December 23, 1970, the trial court found NPC guilty of gross negligence and rendered a
judgment ordering NPC to pay ECI actual damages, consequential damages, exemplary
damages, and attorney's fees. NPC filed a notice of appeal but before it could perfect its appeal,
ECI moved for and was granted execution pending appeal upon posting a bond. Deputy Sheriff
Restituto R. Quemada garnished the funds due to NPC from MERALCO to cover the judgment
amount.

NPC filed a petition for certiorari with the Court of Appeals to nullify the execution pending
appeal. In its decision, the Court of Appeals granted NPC's petition and set aside the execution
pending appeal. The court held that while the execution of the judgment for actual damages
was valid, the execution for consequential and exemplary damages and attorney's fees should
have been postponed until the merits of the case have been finally determined in the regular
appeal. The Court of Appeals also held ECI, MERALCO, and the sheriff liable to restore the
garnished funds to NPC.

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ISSUE:

Whether or not the petitioners are liable for restitution of the garnished funds.

RULING:

The Supreme Court ruled that the execution pending appeal of the judgment for actual or
compensatory damages in favor of Engineering Construction, Inc. (ECI) is valid, but the
execution for consequential and exemplary damages and attorney's fees should be postponed
until the merits of the case have been finally determined in the regular appeal. The Court also
held that ECI's bond is liable to the National Power Corporation (NPC) for the difference
between the amount finally adjudicated by the Court and the amount originally decreed by
the trial court. However, the Court absolved Manila Electric Company (MERALCO), the
garnishee, from its obligations to NPC and relieved it from the burden of restoring the
garnished funds to NPC.

CASE NO: 113

PERPETUAL HELP CREDIT COOPERATIVE, INC., petitioner,

vs.
BENEDICTO FABURADA, SISINITA VILLAR, IMELDA TAMAYO, HAROLD CATIPAY, and
the NATIONAL LABOR RELATIONS COMMISSION, Fourth Division, Cebu
City, respondents.

G.R. No. 121948 October 8, 2001

FACTS:

The case involves the termination of employment of three employees of the Philippine Health
Care Cooperative, Inc. (PHCCI). Benedicto Faburada, Sisinita Vilar, and Imelda Tamayo were
all regular employees of PHCCI, with Faburada working part-time and Vilar and Tamayo
working full-time. They were all given a memorandum of termination on January 2, 1990,
effective December 29, 1989. The employees filed a complaint for illegal dismissal against
PHCCI.

ISSUE:

Whether or not the employees were regular employees and were illegally dismissed.

RULING:

The court ruled in favor of the employees and held that they were regular employees and
were illegally dismissed. The court affirmed the decision of the National Labor Relations
Commission (NLRC) that the employees were regular employees based on the nature of their
work and the length of time they had been employed by PHCCI.

The court relied on Article 280 of the Labor Code, which provides for three kinds of
employees: regular employees, project employees, and casual employees. Regular employees
are those who have been engaged to perform activities that are usually necessary or desirable
in the usual business or trade of the employer. The court found that the employees were
rendering services necessary to the day-to-day operations of PHCCI, qualifying them as
regular employees.

The court also rejected PHCCI's argument that the employees were mere volunteer workers,
not regular employees. The court emphasized that regularity of employment is not
determined by the number of hours worked but by the nature and length of time in the job.
The fact that Faburada worked part-time did not negate his status as a regular employee.

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Regarding the termination of employment, the court held that the employees were entitled
to security of tenure and could only be terminated for a valid cause with observance of due
process. The court found that the employees were dismissed because PHCCI considered them
to be mere volunteer workers, which was not a valid cause for termination. Furthermore,
PHCCI failed to comply with the requirement of serving two written notices before the
termination of employment.

CASE NO: 114

RAMON C. LOZON, petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION (Second Division) and PHILIPPINE
AIRLINES, INC., respondents.

G.R. No. 107660 January 2, 1995

FACTS:

Petitioner Ramon C. Lozon, a certified public accountant, was a Senior Vice-President-Finance

of Private respondent Philippine Airlines, Inc. (“PAL”), when his services were terminated in
the aftermath of the much-publicized “two-billion-peso PALscam.”

Aggrieved, petitioner, filed with the National Labor Relations Commission (“NLRC”) in Manila
for illegal dismissal and for reinstatement, with backwages and “fringe benefits such as
Vacation leave, Sick leave, 13th month pay, Christmas Bonus, Medical Expenses, car expenses,
trip pass entitlement, etc., plus moral damages of P40 Million, exemplary damages of P10
Million and reasonable attorney’s fees.”

ISSUE:

Whether or not the NLRC has jurisdiction over the illegal dismissal case in a corporation.

RULING:

No. Labor Arbiters have no jurisdiction over termination of corporate officers and
stockholders which, under the law, is considered intra-corporate dispute. It must be
emphasized that a corporate officer’s dismissal is always a corporate act and/or intra-
corporate controversy and that nature is not altered by the reason or wisdom which the
Board of Directors may have in taking such action. The Regional Trial Courts now have
jurisdiction under RA 8799(Securities Regulation Act of 2000). Jurisdiction of RTC includes
adjudication of monetary claims of the corporate officer who was dismissed, such as unpaid
salaries, leaves, 13th month pay, damages and attorney’s fee.

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 CASE NO: 115

ELDEPIO LASCO, et al., petitioner,

vs.
UNITED NATIONS REVOLVING FUND FOR NATURAL RESOURCES EXPLORATION
(UNRFNRE), et al., respondents.

G.R. Nos. 109095-109107 February 23, 1995

FACTS:

This case involves a petition for certiorari filed by Elpepio Lasco and other petitioners against
the United Nations Revolving Fund for Natural Resources Exploration (UNRFNRE) and other
respondents. The petitioners were dismissed from their employment with UNRFNRE, which
is a special fund and subsidiary organ of the United Nations. The petitioners filed complaints
for illegal dismissal and damages with the National Labor Relations Commission (NLRC).
UNRFNRE argued that it enjoyed diplomatic immunity and therefore the NLRC had no
jurisdiction over the case. UNRFNRE provided a letter from the Department of Foreign Affairs
acknowledging its immunity from suit. The Labor Arbiter dismissed the complaints based on
this letter, and the NLRC affirmed the dismissal.

ISSUE:

Whether or not UNRFNRE is entitled to diplomatic immunity.

RULING:

Yes. The Supreme Court ruled that UNRFNRE is a member of the United Nations and a party
to the Convention on the Privileges and Immunities of the Specialized Agencies of the United
Nations. As such, the Philippine Government adheres to the doctrine of immunity granted to
the United Nations and its specialized agencies. The court emphasized that the issue of
diplomatic immunity is a political question, and the determination by the executive branch is
conclusive on the courts and quasi-judicial agencies. The court also noted that the purpose of
granting immunity to international organizations is to secure their legal and practical
independence in fulfilling their duties.

CASE NO: 116

UNITED STATES OF AMERICA, FREDERICK M. SMOUSE AND YVONNE

REEVES, petitioners,
vs.
HON. ELIODORO B. GUINTO, Presiding Judge, Branch LVII, Regional Trial Court,
Angeles City, ROBERTO T. VALENCIA, EMERENCIANA C. TANGLAO, AND PABLO C. DEL
PILAR, respondents.

G.R. No. 76607 February 26, 1990

FACTS:

This case involves multiple petitions filed by the United States of America and its officials
against various judges in the Regional Trial Courts. The first case (G.R. No. 76607) involves
private respondents suing several officers of the U.S. Air Force stationed in Clark Air Base in
connection with a bidding for contracts for barbering services. The private respondents
claimed that the bidding was won by someone who had made a bid for facilities that were not

122
included in the invitation to bid. The second case (G.R. No. 79470) involves a complaint for
damages filed by a private respondent against several officers of the U.S. Air Force stationed
at John Hay Air Station in Baguio City. The private respondent was dismissed from his job as
a cook in the U.S. Air Force Recreation Center for pouring urine into the soup stock. The third
case (G.R. No. 80018) involves a private respondent who was arrested following a buy-bust
operation conducted by officers of the U.S. Air Force. He filed a complaint for damages
claiming that it was because of their acts that he was removed from his employment.

ISSUE:

Whether the United States and its officials are immune from suit in Philippine courts.

RULING:

The Supreme Court ruled that the United States and its officials may be sued in Philippine
courts if they have impliedly waived their non-suability. The court held that the doctrine of
state immunity from suit is a generally accepted principle of international law, which is
embodied in the Philippine Constitution. This principle states that a state may not be sued
without its consent. However, the court clarified that the doctrine of state immunity is not
absolute and does not mean that the state cannot be sued under any circumstance. The state
may be sued if it consents to be sued, either expressly or impliedly. Express consent may be
given through a general or special law, while implied consent may be given through entering
into a contract or commencing litigation.

The court explained that the doctrine of state immunity from suit is based on the justification
that there can be no legal right against the authority that makes the law on which the right
depends. It also serves to maintain the peace among nations by not allowing one state to
assert jurisdiction over another. However, the court clarified that this doctrine is not absolute
and does not mean that the state cannot be sued under any circumstance. The state may be
sued if it consents to be sued, either expressly or impliedly.

In this case, the court held that the United States of America may be deemed to have impliedly
waived its non-suability if it has entered into a contract in its proprietary or private capacity.
However, if the contract involves its sovereign or governmental capacity, no such waiver may
be implied. The court also emphasized that the charges against the individual officials of the
United States must be assessed separately, as they may be held personally liable for their acts
if found guilty.

The court further explained that the doctrine of state immunity does not apply to acts
performed by officials of the state in the discharge of their duties. If a judgment against such
officials requires the state itself to perform an affirmative act, the suit must be regarded as
against the state itself. However, if the officials are sued for personal torts in which the state
is not involved, they alone must satisfy the judgment.

The court also clarified that the doctrine of state immunity does not apply to barbershops
operated by the United States Armed Forces, as these are considered commercial activities
and not governmental functions. Therefore, the United States government cannot claim
immunity from suit in cases involving these barbershops.

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 CASE NO: 117

TANJAY WATER DISTRICT, represented by Engr. JOEL B. BORROMEO,

Manager, petitioner,
vs.
HON. PEDRO GABATON, et al., respondents.

G.R. No. L-63742 April 17, 1989

FACTS:

This case involves two consolidated cases, G.R. No. 63742 and G.R. No. 84300. In G.R. No.
63742, the petitioner, Tanjay Water District, filed a complaint for injunction against the
Municipality of Pamplona and its officials to prevent them from interfering in the
management of the Tanjay Waterworks System. The respondent judge dismissed the
complaint for lack of jurisdiction over the subject matter and parties, stating that the dispute
should have been brought before the National Water Resources Council and administratively
settled in accordance with PD No. 242. In G.R. No. 84300, the petitioner, Josefino Datuin, filed
a complaint for illegal dismissal against Tarlac Water District. The Department of Labor and
Employment (DOLE) initially decided in favor of the petitioner, but the National Labor
Relations Commission (NLRC) reversed the decision, stating that the employees of water
districts belong to the civil service and their separation from office should be governed by
Civil Service Rules and Regulations.

ISSUE:

Whether or not water districts created under PD No. 198, as amended, are private
corporations or government-owned or controlled corporations.

RULING:

The Court ruled in a previous case that water districts are quasi-public corporations whose
employees belong to the civil service. The Court also held that the hiring and firing of
employees of government-owned or controlled corporations are governed by the Civil
Service Law and Civil Service Rules and Regulations. The 1987 Constitution further supports
this, stating that the civil service encompasses government-owned or controlled corporations
with original charters.

In G.R. No. 63742, the respondent judge's dismissal of the complaint was deemed to be
without jurisdiction or with grave abuse of discretion. The Court held that the dispute should
have been brought before the National Water Resources Council, but the court still had
appellate jurisdiction over the case.

In G.R. No. 84300, the NLRC's dismissal of the complaint was upheld, as the employees of
Tarlac Water District belong to the civil service and their separation from office should be
governed by Civil Service Rules and Regulations.

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 CASE NO: 118

EVELYN TOLOSA, petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION, QWANA KAIUN (through its resident-
agent, FUMIO NAKAGAWA), ASIA BULK TRANSPORT PHILS. INC., PEDRO GARATE and
MARIO ASIS, respondents.

G.R. No. 149578 April 10, 2003

FACTS:

This case involves a widow, Evelyn Tolosa, who filed a complaint against Qwana-Kaiun, Asia
Bulk Transport Phils. Inc., Pedro Garate, and Mario Asis for the death of her husband, Captain
Virgilio Tolosa. Captain Tolosa was hired by Qwana-Kaiun to be the master of the vessel M/V
Lady Dona. While in command of the vessel, Captain Tolosa contracted a fever and his health
rapidly deteriorated, resulting in his death.

Evelyn Tolosa filed a complaint with the POEA, which was transferred to the DOLE, NLRC.
The Labor Arbiter ruled in her favor, but the NLRC, affirmed by the Court of Appeals, ruled
that the labor commission had no jurisdiction over the subject matter of the complaint.

ISSUE:

Whether or not the labor arbiter and the NLRC had jurisdiction over Evelyn Tolosa's action.

RULING:

The Court ruled that the labor tribunals do not have jurisdiction over actions based on quasi
delict or torts that do not involve employer-employee relations. Evelyn Tolosa's action was
for recovery of damages based on a quasi delict, as she was suing shipmates Garate and Asis
for gross negligence, and they had no employer-employee relations with Captain Tolosa. The
Court stated that while labor arbiters and the NLRC have jurisdiction to award damages
under the Civil Code, these damages must still be based on an action that has a reasonable
causal connection with labor matters.

Therefore, the Court affirmed the decision of the NLRC and dismissed Evelyn Tolosa's case
for lack of jurisdiction. The Court also noted that the issue of whether the labor arbiter's
monetary award has reached finality cannot be raised in this appeal, as it was not raised in
the lower courts.

The Court explained that the jurisdiction of labor tribunals is limited to disputes arising from
employer-employee relations, which can only be resolved by reference to the Labor Code,
other labor statutes, or collective bargaining agreements. In this case, the relief sought by the
petitioner, which includes loss of earning capacity and blacklisting, does not have a
reasonable causal connection with the Labor Code or other labor statutes. Therefore, the
jurisdiction over the action lies with the regular courts.

The Court also addressed the issue of the finality of the monetary award granted by the labor
arbiter. The petitioner argued that the monetary award has already reached finality because
the private respondents did not file a timely appeal before the NLRC. However, the Court held
that this issue cannot be raised for the first time on appeal and that it is a question of fact that
cannot be entertained in a petition for review. Therefore, the Court did not rule on the finality
of the monetary award.

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 CASE NO: 119

SINGAPORE AIRLINES LIMITED, petitioner,

vs.
HON. ERNANI CRUZ PAÑO as Presiding Judge of Branch XVIII, Court of First Instance
of Rizal, CARLOS E. CRUZ and B. E. VILLANUEVA, respondents.

G.R. No. L-47739 June 22, 1983

FACTS:

Private respondent Carlos E. Cruz was offered employment by petitioner as Engineer Officer
with the opportunity to undergo a B-707 I conversion training course, which he accepted.
Cruz signed the Agreement with his co-respondent, B. E. Villanueva, as surety in case he
leaves the service within the 5 years or being dismissed for misconduct, as liquidated
damages.

Claiming that Cruz had applied for “leave without pay” and had gone on leave without
approval of the application during the second year of the Period of five years, petitioner filed
suit for damages against Cruz and his surety, Villanueva, for violation of the terms and
conditions of the aforesaid Agreement.

ISSUE:

Whether or not cases involving claim for liquidated damages for breach of a contractual
relation are cognizable by the Labor Arbiter.

RULING:

No, this is beyond the jurisdiction of the Labor Arbiter. 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, 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.

Stated differently, petitioner seeks protection under the civil laws and claims no benefits
under the labor Code. 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.

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 CASE NO: 120

THE MANILA HOTEL CORP. AND MANILA HOTEL INTL. LTD., petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, ARBITER CEFERINA J. DIOSANA AND
MARCELO G. SANTOS, respondents.

G.R. No. 120077 October 13, 2000

FACTS:

Private respondent Santos was an overseas worker employed as a printer at the Mazoon
Printing Press, Sultanate of Oman. Subsequently he was directly hired by the Palace Hotel,
Beijing, People’s Republic of China and later terminated due to retrenchment. Petitioners are
the Manila Hotel Corporation (“MHC”) and the Manila Hotel International Company, Limited
(“MHICL”).

When the case was filed in 1990, MHC was still a government-owned and controlled
corporation duly organized and existing under the laws of the Philippines. MHICL is a
corporation duly organized and existing under the laws of Hong Kong. MHC is an
“incorporator” of MHICL, owning 50% of its capital stock.

By virtue of a “management agreement” with the Palace Hotel, MHICL trained the personnel
and staff of the Palace Hotel at Beijing, China.

During his employment with the Mazoon Printing Press, respondent Santos received a letter
from Mr. Shmidt, General Manager, Palace Hotel, Beijing, China. Mr. Schmidt informed
respondent Santos that he was recommended by one Buenio, a friend of his. Mr. Shmidt
offered respondent Santos the same position as printer, but with a higher monthly salary and
increased benefits. Respondent Santos wrote to Mr. Shmidt and signified his acceptance of
the offer.

The Palace Hotel Manager, Mr. Henk mailed a ready to sign employment contract to
respondent Santos. Santos resigned from the Mazoon Printing Press. Santos wrote the Palace
Hotel and acknowledged Mr. Henk’s letter. The employment contract stated that his
employment would be for a period of two years. He then started to work at the Palace Hotel.

After working in the Palace hotel for less than 1 year, the Palace Hotel informed respondent
Santos by letter signed by Mr. Shmidt that his employment at the Palace Hotel print shop
would be terminated due to business reverses brought about by the political upheaval in
China. The Palace Hotel terminated the employment of Santos and paid all benefits due him,
including his plane fare back to the Philippines. Santos was repatriated to the Philippines.

Santos filed a complaint for illegal dismissal with the Arbitration Branch, NCR, NLRC. He
prayed for an award of AD, ED and AF for. The complaint named MHC, MHICL, the Palace
Hotel and Mr. Shmidt as respondents. The Palace Hotel and Mr. Shmidt were not served with
summons and neither participated in the proceedings before the LA.

The LA decided the case against petitioners. Petitioners appealed to the NLRC, arguing that
the POEA, not the NLRC had jurisdiction over the case. The NLRC promulgated a resolution,
stating that the appealed Decision be declared null and void for want of jurisdiction

Santos moved for reconsideration of the afore-quoted resolution. He argued that the case was
not cognizable by the POEA as he was not an “overseas contract worker. The NLRC granted
the motion and reversed itself. The NLRC directed another LA to hear the case on the question
of whether private respondent was retrenched or dismissed. The La found that Santos was
illegally dismissed from employment and recommended that he be paid actual damages
equivalent to his salaries for the unexpired portion of his contract. The NLRC ruled in favor
of private respondent. Petitioners filed an MR arguing that the LA’s recommendation had no
basis in law and in fact, however it was denied. Hence, this petition.

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ISSUE:

Whether or not the NLRC a proper forum to decide this case.

RULING:

NO. The NLRC was a seriously inconvenient forum. The Supreme Court noted that the main
aspects of the case transpired in two foreign jurisdictions and the case involves purely foreign
elements. The only link that the Philippines has with the case is that Santos is a Filipino
citizen. The Palace Hotel and MHICL are foreign corporations. Not all cases involving our
citizens can be tried here.

Under the rule of forum non conveniens, a Philippine court or agency may assume jurisdiction
over the case if it chooses to do so provided: (1) that the Philippine court is one to which the
parties may conveniently resort to; (2) that the Philippine court is in a position to make an
intelligent decision as to the law and the facts; and (3) that the Philippine court has or is likely
to have power to enforce its decision. The conditions are unavailing in the case at bar.

The employment contract was not perfected in the Philippines. Santos signified his
acceptance by writing a letter while he was in the Republic of Oman. This letter was sent to
the Palace Hotel in the People’s Republic of China.

Neither can the NLRC determine the facts surrounding the alleged illegal dismissal as all acts
complained of took place in Beijing, People’s Republic of China. The NLRC was not in a
position to determine whether the Tiannamen Square incident truly adversely affected
operations of the Palace Hotel as to justify Santos’ retrenchment.

Even assuming that a proper decision could be reached by the NLRC, such would not have
any binding effect against the employer, the Palace Hotel. The Palace Hotel is a corporation
incorporated under the laws of China and was not even served with summons. Jurisdiction
over its person was not acquired.

This is not to say that Philippine courts and agencies have no power to solve controversies
involving foreign employers. Neither are we saying that we do not have power over an
employment contract executed in a foreign country. If Santos were an “overseas contract
worker”, a Philippine forum, specifically the POEA, not the NLRC, would protect him. He is
not an “overseas contract worker” a fact which he admits with conviction.

Likewise, there is no evidence to show that the Palace Hotel and MHICL are one and the same
entity. The fact that the Palace Hotel is a member of the “Manila Hotel Group” is not enough
to pierce the corporate veil between MHICL and the Palace Hotel.

Considering that the NLRC was forum non-conveniens and considering further that no
employer-employee relationship existed between MHICL, MHC and Santos, the LA clearly had
no jurisdiction over respondent’s claim in the NLRC case. In all the cases under the exclusive
and original jurisdiction of the LA, an employer-employee relationship is an indispensable
jurisdictional requirement.

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 AGRARIAN LAW

CASE NO: 121

HACIENDA LUISITA, INCORPORATED, Petitioner,

LUISITA INDUSTRIAL PARK CORPORATION and RIZAL COMMERCIAL BANKING
CORPORATION, Petitioners-in-Intervention,
vs.
PRESIDENTIAL AGRARIAN REFORM COUNCIL, et al., Respondents.

G.R. No. 171101 July 5, 2011

FACTS:

This case, G.R. No. 171101, involves Hacienda Luisita, Incorporated (HLI) and the Presidential
Agrarian Reform Council (PARC), among others. The case revolves around the distribution of
land to farmworker-beneficiaries (FWBs) in Hacienda Luisita.

In the main decision rendered on July 5, 2011, the Court upheld PARC Resolution Nos. 2005-
32-01 and 2006-34-01, which revoked HLI's stock distribution plan (SDP). The Court ordered
the cancellation of the shares of the FWBs in HLI acquired through the SDP and the
compulsory coverage of HLI's agricultural land. The remaining land was to be distributed to
qualified FWBs, who would retain all benefits already received. HLI was entitled to just
compensation for the agricultural land that would be transferred to the Department of
Agrarian Reform (DAR).

After the main decision, several incidents arose, including the motion for the payment of just
compensation filed by HLI. The Court appointed a special audit panel to determine the
amount of legitimate corporate expenses incurred by HLI and Centennary Holdings, Inc.
(Centennary) in relation to the land transfers. The panel submitted their findings, which
showed that the legitimate corporate expenses exceeded the total proceeds from the land
transfers, leaving no unspent or unused balance for distribution to the FWBs.

Respondents Mallari and Andaya filed a motion for reconsideration of the 2018 resolution,
arguing that the amount of legitimate corporate expenses should be disallowed for lack of
proof of receipt by the intended recipients. However, the Court denied their motion and
considered the 2011 decision and 2011 resolution as fully complied with.

Another main incident in the case is HLI's entitlement to just compensation in exchange for
the homelots given to the FWBs. HLI filed a motion for just compensation, requesting the DAR
and Land Bank to pay just compensation in accordance with the main decision.

ISSUE:

Whether or not the DAR can use the Agrarian Reform Fund (ARF) to compensate HLI for
residential areas or homelots given to non-qualified FWBs.

RULING:

Yes. The ARF can be used to pay just compensation to HLI for the homelots.

The findings of the Special Audit Panel were based on their examination of the legitimate
corporate expenses and the total proceeds from the land transfers. The Court found no reason
to overturn their findings.

129
HLI is entitled to just compensation for the homelots given to the FWBs as part of the land
distribution. This is in accordance with the main decision and the principle of just
compensation under the Constitution.

The ARF, which is a fund specifically allocated for agrarian reform purposes, can be used to
pay just compensation to HLI for the homelots. This is within the scope of the ARF's purpose
and the Court's authority to determine the proper use of the fund.

The DAR is mandated to issue Certificates of Land Ownership Award (CLOA) to FWBs who
were only given certificates of award for their homelots. This is to ensure that the FWBs have
proper legal ownership of the land awarded to them.

Certified true copies of transfer documents are necessary for the completion of DAR's
validation procedures to ensure the accuracy and validity of the land distribution process.

CASE NO: 122

MILESTONE FARMS, INC., Petitioner,

vs.
OFFICE OF THE PRESIDENT, Respondent.

G.R. No. 182332 February 23, 2011

FACTS:

The petitioner, Milestone Farms, Inc., is a corporation engaged in the raising of cattle, pigs,
and other livestock. In 1993, the petitioner applied for the exemption/exclusion of its
316.0422-hectare property from the coverage of the Comprehensive Agrarian Reform
Program (CARP) under Republic Act No. 6657. The petitioner argued that its property should
be excluded from CARP coverage based on the ruling in Luz Farms v. Secretary of the
Department of Agrarian Reform, which stated that agricultural lands devoted to livestock,
poultry, and swine raising are excluded from CARP.

The Department of Agrarian Reform (DAR) conducted an ocular inspection of the petitioner's
property and recommended its exemption from CARP. The DAR Regional Director issued an
order exempting the property from CARP. However, the Southern Pinugay Farmers Multi-
Purpose Cooperative, Inc. (Pinugay Farmers) filed a motion for reconsideration, which was
denied by the DAR Regional Director. The Pinugay Farmers then filed a letter-petition with
the Office of the President, seeking the reversal of the DAR Regional Director's order.

The Court of Appeals initially ruled in favor of the Pinugay Farmers and set aside the DAR
Regional Director's order exempting the petitioner's property from CARP. The CA held that
the petitioner's property is not exempt from CARP coverage because it is not exclusively
devoted to livestock raising. The CA also held that the petitioner failed to comply with the
requirements for exemption under DAR Administrative Order No. 9.

The petitioner filed a motion for reconsideration, which was denied by the CA. The petitioner
then filed a petition for review on certiorari with the Supreme Court.

ISSUE:

Whether or not the petitioner's property should be exempted from the coverage of the
Comprehensive Agrarian Reform Program (CARP).

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RULING:

Yes. The Supreme Court based its decision on the ruling in Luz Farms v. Secretary of the
Department of Agrarian Reform, which held that agricultural lands devoted to livestock,
poultry, and swine raising are excluded from CARP coverage. The Court emphasized that the
purpose of CARP is to distribute agricultural lands to landless farmers and farmworkers, and
that livestock raising is an industrial activity and not agricultural in nature.

The Supreme Court also noted that the petitioner complied with the requirements for
exemption under DAR Administrative Order No. 9. The SC held that the DAR exceeded its
power in issuing an administrative order that included livestock farms in the coverage of
agrarian reform. The SC cited previous cases that clarified that livestock raising is an
industrial activity and not agricultural, and therefore should be exempted from CARP
coverage.

The SC rejected the argument of the Pinugay Farmers that the petitioner's property is not
exclusively devoted to livestock raising. The SC held that the petitioner's property is primarily
used for livestock raising, and that the presence of other activities such as the planting of
fruit-bearing trees does not change its classification as an exempt property.

131