1

A1LnLC uL uAvAC unlvL8Sl1?

College of Law
uavao ClLy

noLes on 1ermlnaLlon (CcLober 8 2010)
8y A L nazareno

art I n|stor|ca| Note
1lmellne of Lhe Supreme CourL ronouncemenLs on Lhe Legal CharacLerlzaLlon of
lllegal ulsmlssal/1ermlnaLlon
(a) rlor Lo 1989 Lhe rule was LhaL a dlsmlssal or LermlnaLlon was lllegal lf
Lhe employee was noL glven noLlce lllegal dlsmlssal/LermlnaLlon was
consldered a vlolaLlon of Lhe ConsLlLuLlonal 8lghL Lo uue rocess

(b) 1haL rule was reversed by Wenph|| v NLkC 170 SC8A 69 (1989) whlch
held LhaL where Lhe employer had a valld reason Lo dlsmlss an employee
buL dld noL follow Lhe noLlce or due process requlremenL" Lhe dlsmlssal
may be upheld buL Lhe employer shall be penallzed (1000 flne) by way of
paylng an lndemnlLy Lo Lhe employee 1hls rullng ls sald Lo have glven rlse
to the abhorrent pract|ce of 'd|sm|ssnow pay |ater'" whlch was
supposed Lo have been deLerred by Lhe Serrano rullng

(c) Serrano v NLkC n 8onc Mendoza ! 323 SC8A 443 (2000) rullng
changed Lhe exLenL of Lhe sancLlon lL held LhaL whlle Lhe vlolaLlon by Lhe
employer of Lhe noLlce requlremenL ln LermlnaLlon for [usL or auLhorlzed
causes was noL a denlal of due process whlch wlll nulllfy Lhe LermlnaLlon
Lhe dlsmlssal ls lneffecLual and Lhe employer musL pay fu|| backwages from
Lhe Llme of LermlnaLlon unLll lL ls [udlclally declared LhaL Lhe dlsmlssal was
noL for a [usL or auLhorlzed cause 1hls rullng had Lo be correcLed because
lL had Lhe net effect of reward|ng an emp|oyee who |s at fau|t w|th fu||
backwages LhaL many Llmes run lnLo Lhe hundred Lhousands of pesos
2


(d)x x x 1here are three reasons why on Lhe oLher hand vlolaLlon by Lhe
employer of Lhe noLlce requlremenL cannoL be consldered a denlal of due
process resulLlng ln Lhe nulllLy of Lhe employee's dlsmlssal or layoff

1he f|rst ls LhaL Lhe uue rocess Clause of Lhe ConsLlLuLlon ls a
llmlLaLlon on governmenLal powers lL does noL apply Lo Lhe exerclse of
prlvaLe power such as Lhe LermlnaLlon of employmenL under Lhe labor
Code 1hls ls plaln from Lhe LexL of ArL lll 1 of Lhe ConsLlLuLlon vlz no
person shall be deprlved of llfe llberLy or properLy wlLhouL due process of
law " 1he reason ls slmple Cnly Lhe SLaLe has auLhorlLy Lo Lake Lhe llfe
llberLy or properLy of Lhe lndlvldual 1he purpose of Lhe uue rocess Clause
ls Lo ensure LhaL Lhe exerclse of Lhls power ls conslsLenL wlLh whaL are
consldered clvlllzed meLhods

1he second reason ls LhaL noLlce and hearlng are requlred under Lhe
uue rocess Clause before Lhe powers of organlzed socleLy are broughL Lo
bear upon Lhe lndlvldual 1hls ls obvlously noL Lhe case of LermlnaLlon of
employmenL under ArL 283 Pere Lhe employee ls noL faced wlLh an aspecL
of Lhe adversarlal sysLem 1he purpose for requlrlng a 30day wrlLLen noLlce
before an employee ls lald off ls noL Lo afford hlm an opporLunlLy Lo be
heard on any charge agalnsL hlm for Lhere ls none 1he purpose raLher ls Lo
glve hlm Llme Lo prepare for Lhe evenLual loss of hls [ob and Lhe uCLL an
opporLunlLy Lo deLermlne wheLher economlc causes do exlsL [usLlfylng Lhe
LermlnaLlon of hls employmenL (ld aL 468)"

1he th|rd reason why Lhe noLlce requlremenL under ArL 283 cannoL
be consldered a requlremenL of Lhe uue rocess Clause ls LhaL Lhe
employer cannoL really be expecLed Lo be enLlrely an lmparLlal [udge of hls
own cause 1hls ls also Lhe case ln LermlnaLlon of employmenL for a [usL
cause under ArL 282 (le serlous mlsconducL or wlllful dlsobedlence by Lhe
employee of Lhe lawful orders of Lhe employer gross and hablLual neglecL
of duLles fraud or wlllful breach of LrusL of Lhe employer commlsslon of
3

crlme agalnsL Lhe employer or Lhe laLLer's lmmedlaLe famlly or duly
auLhorlzed represenLaLlves or oLher analogous cases) x x x (ld aL 470)

(e) gabon v NLkC n 8onc (86) ?naresSanLlago 442 SC8A 373 (2004)
correcLed Lhe Serrano rullng buL wlLhouL reLurnlng Lo Lhe Wenphll docLrlne
1he courL ruled LhaL ln cases lnvolvlng dlsmlssals where Lhere was [usL
cause buL no observance of Lhe Lwln requlremenLs of noLlce and hearlng
Lhe beLLer rule ls Lo abandon Lhe Serrano docLrlne and Lo follow Lhe
Wenphll docLrlne 1haL means LhaL Lhe dlsmlssal was for a [usL cause buL
Lhe employer was made Lo pay a sLlffer penalLy Lhan Lhe 1000 lmposed by
Wenphll 1he employer was made Lo pay 30000 each Lo Lhe
complalnanLs Agabon spouses

lour posslble slLuaLlons
1 1here ls [usL/auLhorlzed cause + procedural requlremenLs observed
valld dlsmlssal/LermlnaLlon
2 no [usL/auLhorlzed cause + procedural requlremenLs observed lllegal
dlsmlssal/LermlnaLlon
3 no [usL/auLhorlzed cause + no procedural requlremenLs observed
lllegal dlsmlssal/LermlnaLlon
4 1here ls [usL/auLhorlzed cause + due process noL observed employer ls
flned for noncompllance of procedural requlremenLs (ld aL 608609)

(f) Iood rocess|ng Corporat|on v acot eL al n 8onc (113)
Carcla ! 434 SC8A 119 (2003) held LhaL (2) lf Lhe dlsmlssal ls based
on an auLhorlzed cause under ArLlcle 283 buL Lhe employer falled Lo comply
wlLh Lhe noLlce requlremenL Lhe sancLlon should be sLlffer because Lhe
dlsmlssal process was lnlLlaLed by Lhe employer's exerclse of hls
managemenL prerogaLlve (ld aL 123126)" 1he employer was ordered Lo
pay Lhe complalnanL lndemnlLy of 30000

4

(g) erez and Dor|a v 11 et a| 384 SC8A 110 ( Aprll 7 2009) LN 8NC
Corona !
We noLe a marked dlfference ln Lhe sLandards of due process Lo be followed as
prescrlbed ln Lhe Labor Code and lLs lmplemenLlng rules 1he Labor Code (ArL
277b) on Lhe one hand provldes LhaL an employer musL provlde Lhe employee
omp/e opportunity to be heord ond to defend himse/f wlLh Lhe asslsLance of hls
represenLaLlve lf he so deslres x x x 1he omnlbus rules lmplemenLlng Lhe
Labor Code on Lhe oLher hand require o heorinq ond conference durlng whlch
Lhe employee concerned ls glven Lhe opporLunlLy Lo respond Lo Lhe charge
presenL hls evldence or rebuL Lhe evldence presenLed agalnsL hlm (ld aL 120
121)"
x x x 1herefore whlle Lhe phrase ample opporLunlLy Lo be heard" may ln
facL lnclude an acLual hearlng lL ls noL llmlLed Lo a formal hearlng only ln oLher
words Lhe exlsLence of an acLual formal LrlalLype" hearlng alLhough preferred
ls noL absoluLely necessary Lo saLlsfy Lhe employee's rlghL Lo be heard x x x
(ld aL 124)"
ln sum Lhe followlng are Lhe guldlng prlnclples ln connecLlon wlLh Lhe hearlng
requlremenL ln dlsmlssal cases
(a) ample opporLunlLy Lo be heard" means any meanlngful opporLunlLy
(verbal or wrlLLen) glven Lo Lhe employee Lo answer Lhe charges agalnsL hlm and
submlL evldence ln supporL of hls defense wheLher ln a hearlng conference or
some oLher falr [usL and reasonable way
(b) a formal hearlng or conference becomes mandaLory only when
requesLed by Lhe employee ln wrlLlng or subsLanLlal evldenLlary dlspuLes exlsL or a
company rule or pracLlce requlres lL or when slmllar clrcumsLances [usLlfy lL
(c) Lhe ample opporLunlLy Lo be heard" sLandard ln Lhe Labor Code prevalls
over Lhe hearlng or conference" requlremenL ln Lhe lmplemenLlng rules and
regulaLlons (ld aL 127)"
Nota 8ene lL ls surprlslng LhaL Lhe Supreme CourL does noL quoLe from a long
llne of declslons sLarLlng from kabago v NLkC 200 SC8A 138 (1991) kase v
NLkC 237 SC8A 323 (1994 L|bres v NLkC SC8A (1999) 1hose cases and many
more LhereafLer held LhaL personal confronLaLlon and cross examlnaLlon cannoL
be lnvoked as a maLLer of rlghL ln procedural due process of employee dlsmlssal
3

cases ln Manggagawa ng omun|kasyon v NLkC 206 SC8A109 (1992) Lhe
Supreme CourL however conceded LhaL acLual adversarlal proceedlngs may be
necessary for clarlflcaLlon purposes or when Lhere ls need Lo propound searchlng
quesLlons Lo unclear wlLnesses"

(h) Nexus between Serrano ku||ng and erez ku||ng Concurrlng Cplnlon 8rlon !
SeparaLely from Lhe requlremenL of due process when SLaLe acLlon ls lnvolved
Lhe ConsLlLuLlon also guaranLees security of tenure to labor whlch Lhe
Labor Code lmplemenLs by requlrlng LhaL Lhere be a [usL or auLhorlzed cause
before an employer can LermlnaLe Lhe servlces of a worker Ini. i. nc cqvi.vcn o{
vnv .nv .ovv nv.c .vi.{icv 79,78+28:/.9/463-/77 nvv v vc v.ion ccn in.o.cv.
1he equlvalenL of 463-/.96+.9/463-/77ls deLalled under ArLlcle 277 of Lhe
Labor Code hereLofore quoLed whlch requlres noLlce and ample opporLunlLy Lo
be heard boLh of whlch are fleshed ouL ln Lhe lmplemenLlng 8ules of 8ook vl and
ln 8ule xxlll of ueparLmenL Crder no9 Serles of 1997 of Lhe ueparLmenL of
Labor
Inv., {on nc .on.c o{ vvc o.c.. cin v inivion on .vc v.ion, nc .on.c nv. ccn
vicv , .vvc in incncnin nc vvvncc o{ .c.vi, o{ cnvc in nc i.vc .c.o. ln
511nDo :. 1TC we had Lhe occaslon Lo draw Lhe flne dlsLlncLlon beLween
consLlLuLlonal due process LhaL applles Lo governmenLal acLlon and Lhe due
process requlremenL lmposed by a sLaLuLe as a llmlLaLlon on Lhe exerclse of
prlvaLe power Not|ng the d|st|nct|ons between const|tut|ona| due process and
the statutory duty |mposed by the Labor Code the Court thus dec|ded |n
nIoD :. 1TCto treat the effects of fa||ure to comp|y d|fferent|y (ld aL
138"
(|) 1he Latest pp||cat|on of the erez ku||ng
TECHNOL EIGHT PHILIPPINES CORPORATION v. NLRC AND
DENNIS AMULAR, L- 187605, April 13, 2010, 2
nd
Div., Brion, J.

|The case reIers to 2 rank-and-Iile employees mauling a supervisor outside the
workplace, and not within working hours|
6

The labor arbiter ruled that Technol Iailed to aIIord Amular procedural due
process, since he was not able to present his side regarding the incident; at the time
he was called to a hearing, he had already Iiled the illegal dismissal complaint.
The NLRC, on the other hand, held that the memorandum terminating Amular`s
employment was a mere Iormality, an aIterthought designed to evade company
liability since Amular had already Iiled an illegal dismissal case against
Technol.

We disagree with these conclusions. The notice oI preventive
suspension/notice oI discharge served on Amular and Ducay required them to
explain within Iorty-eight (48) hours why no disciplinary action should be taken
against them Ior their involvement in the mauling incident. Amular submitted two
written statements: the Iirst received by the company on May 19, 2002 and the
other received on May 20, 2002. On June 8, 2002, Technol management sent
Amular a memorandum inIorming him oI an administrative hearing on June 14,
2002 at 10:00 a.m., regarding the charges against him. At the bottom leIt hand
corner oI the memorandum, the Iollowing notation appears: 'accept the copy oI
notice but reIused to receive, he will study Iirst. A day beIore the administrative
hearing or on June 13, 2002, Amular Iiled the complaint Ior illegal
suspension/dismissal and did not appear at the administrative hearing. On July 4,
2002, the company sent Amular a notice oI dismissal.
What we see in the records belie Amular`s claim oI denial oI procedural due
process. He chose not to present his side at the administrative hearing. In Iact, he
avoided the investigation into the charges against him by Iiling his illegal dismissal
complaint ahead oI the scheduled investigation. Under these Iacts, he was given
7

the opportunity to be heard and he cannot now come to us protesting that he was
denied this opportunity. To belabor a point the Court has repeatedly made in
employee dismissal cases, the essence oI due process is simply an opportunity to
be heard; it is the denial oI this opportunity that constitutes violation oI due process
oI law.
Underlying realities that have influenced the Court in making this
paradigmatic shift.
1. So-called ~Frictional Unemployment in classical economics has now become
~Structural Unemployment. Economists have long admitted that a policy oI Iull
employment is impossible to attain. 'Frictional unemployment is inevitable simply because the
economy is always changing.Example: Movement Irom earthen pots (colon) to pig-iron
caldrons (caldero) to electric rice cookers to Pyrex specialize cooking and serving ware. The
progress Irom one product improvement to another always leaves a segment oI workers out oI
work because they are not in possession oI the skill required Ior the next improved product. But
now, labor itself (all oI labor) is condemned to accelerated obsolescence, unless it develops a
structural capacity to learn at commensurate speed with developing technology which now
dictates the direction, pace and scope oI the economy. Example: what must architects, engineers,
accountants, doctors, lawyers, proIessors, or even auto or motorcycle mechanics who are in their
50`s today, have to contend with in terms oI ICT (InIormation Communication Technology)?
Unemployment now is not just the tolerable 'Iriction oI a moving economy. It is built into the
economy, part and parcel oI it, and at such signiIicant percentage in proportion to the pace oI
technological advancement. |See N. Gregory Mankiw, Principles oI Economics (Thomas
Learning, Inc. and Harvard University Press: (2001), p. 588|
2. The nature oI WORK has changed. Work can now be broken up, assembled, disassembled,
phases oI which can be done in diIIerent parts oI the world. Work now knows no boundaries, no
nationality, no ethnic loyalty. Work tends to go where the workers have the highest productivity,
eIIiciency and quality. That work always moves this way around the globe is not an exception,
8

but the rule. That work moves is not the result oI evil intentions oI men or women. For, to quote
Paul Krugman, 'economics is not a morality play. It`s not a happy story in which virtue is
rewarded and vice punished. The market economy is a system Ior organizing activity --- a pretty
good system most oI the time, though not always --- with no special moral signiIicance. The rich
don`t necessarily deserve their wealth, and the poor certainly don`t deserve their poverty;
nonetheless, we accept a system with considerable inequality because systems without any
inequality don`t work. Cuba doesn`t work; Sweden works pretty well. (The New York Times,
1he Conscience of a Liberal, Economics is not a Morality Play, September 28, 2010)
3. 'Security oI Tenure, has not Iound a viable home in any post-industrial economic system.
Perhaps, because neither logic nor rationality recommends it. Consider this: II the Iundamental
Iact oI Iiliation does not give rise to 'Security oI Support Ior liIe, demandable against the
parents who were responsible Ior bringing one into this world, why should the mere transactional
Iact oI an employment contract give rise to 'Security oI Tenure indeIinitely. The more viable,
rational ideal should be 'Security oI Employability. Governments should so arrange its
educational system and training programs that their citizens will have multiple skills and career
options. Citizens should take it as their responsibility to develop multiple career possibilities, and
to adopt 'continuous learning as a permanent posture Ior liIe. For Security oI Tenure is a dead
ideal oI a bygone era. And the only viable stance in 21
st
century liIe, iI one is to thrive in it, not
to mention survive it, is 'Security oI Employability! |CI. THE WORLD IS FLAT: A BRIEF
HISTORY OF THE TWENTY-FIRST CENTURY (RELEASE 3.0) BY THOMAS FRIEDMAN
(original publication 2005)|
k Additional Rulings affirming ~Paradigmatic Shift--- Ending of ~Award of
Financial Assistance in the name of Compassionate 1ustice.
Historical Note: CJ Enrique Fernando initiated what he called compassionate
Justice when 'the capital punishment oI dismissal is visited upon an employee
Fernando called this Justice '$ecundum Caritatem.
9

keno Ioods Inc v -oqkokoisonq Lokos nq Monqqoqowo {-LM)kotipunon on
beho/f of its member -enito copor L164016 Motcb 15 2010 2
oJ
ulv uel costlllo I
1here ls no legal or equlLable [usLlflcaLlon for awardlng flnanclal asslsLance Lo an
employee who was dlsmlssed for sLeallng company properLy Soclal [usLlce and equlLy
are noL maglcal formulas Lo erase Lhe un[usL acLs commlLLed by Lhe employee agalnsL
hls employer Whlle compasslon for Lhe poor ls deslrable lL ls noL meanL Lo coddle
Lhose who are unworLhy of such conslderaLlon
In Iact, in the recent case oI %oyota Motors Philippines, Corp. Workers Association
(%MPCWA) v. National Labor Relations Commission(L-158798-99, Oct. 19, 2007, 537
SCRA 171, 219-223) , we ruled that separation pay shall not be granted to all
employees who are dismissed on any of the four grounds provided in Article 282 oI
the Labor Code. Such ruling was reiterated and Iurther explained in Central Philippines
Bandag Retreaders, Inc. v. Diasnes (L-163607, Jul 14, 2008, 558 SCRA 194, at 207):

To reiterate our ruling in %oyota, labor adjudicatory oIIicials and the CA must
demur the award oI separation pay based on social justice when an employee`s dismissal
is based on serious misconduct or willIul disobedience; gross and habitual neglect oI
duty; Iraud or willIul breach oI trust; or commission oI a crime against the person oI the
employer or his immediate Iamily grounds under Art. 282 oI the Labor Code that
sanction dismissals oI employees. They must be most judicious and circumspect in
awarding separation pay or Iinancial assistance as the constitutional policy to provide Iull
protection to labor is not meant to be an instrument to oppress the employers. The
commitment oI the Court to the cause oI labor should not embarrass us Irom sustaining
the employers when they are right, as here. In Iine, we should be more cautious in
awarding Iinancial assistance to the undeserving and those who are unworthy oI the
liberality oI the law.

Capor was acquitted in Criminal Case No. 207-58-MN based on reasonable
doubt. In his Decision, the trial judge entertained doubts regarding the guilt oI Capor
because oI two circumstances: (1) an ensuing labor dispute (though it omitted to state the
parties involved), and (2) the upcoming retirement oI Capor. The trial judge made room
Ior the possibility that these circumstances could have motivated petitioners to plant
10

evidence against Capor so as to avoid paying her retirement beneIits. The trial court did
not categorically rule that the acts imputed to Capor did not occur. It did not Iind
petitioners` version oI the event as Iabricated, baseless, or unreliable. It merely
acknowledged that seeds oI doubt have been planted in the juror`s mind which, in a
criminal case, is enough to acquit an accused based on reasonable doubt. The
pertinent portion oI the trial court`s Decision reads:

uurlng Lhe cross examlnaLlon of Lhe accused she was confronLed wlLh a documenL LhaL
musL be relaLed Lo a labor dlspuLe x x x 1he CourL noLed very clearly from Lhe LranscrlpL of
sLenographlc noLes LhaL lL musL have been submlLLed Lo Lhe nL8C 1hls ls lndlcaLlve of a labor
dlspuLe whlch alLhough noL clalmed dlrecLly by Lhe accused coolJ be one of Lhe reasons why
she losloooteJ LhaL evldence was planLed agalnsL her ln order Lo deprlve her of Lhe subsLanLlal
beneflLs she wlll be recelvlng when she reLlres from Lhe company lncldenLally Lhls documenL
was never lncluded ln Lhe wrlLLen offer of evldence of Lhe prosecuLlon

uoubL has Lherefore crepL lnLo Lhe mlnd of Lhe CourL concernlng Lhe gullL of accused
nenlLa Capor whlch ln Lhls [urlsdlcLlon ls mandaLed Lo be resolved ln favor of her lnnocence

erLlnenL Lo Lhe foregolng doubL belng enLerLalned by Lhls CourL Lhe CourL of Appeals
clLlng leople v 8ocos C8 no 60388 november 21 1991 Lhe phrase 'beyond reasonable
doubL' means noL a slngle loLa of doubL remalns presenL ln Lhe mlnd of a reasonable and
unpre[udlced man LhaL a person ls gullLy of a crlme Where doubL exlsLs even lf only a shred Lhe
CourL musL and should seL Lhe accused free" (leople v lellx CAC8 no 10871 november 24
1992)

WPL8LlC8L premlses consldered [udgmenL ls hereby rendered acqulLLlng accused
nenlLa Capor of Lhe crlme charged agalnsL her ln Lhls case on Lhe ground of reasonable doubL
wlLh cosLs Je oflclo

SC C8uL8Lu

11

In Nicolas v. National Labor Relations Commission, we held that a criminal
conviction is not necessary to Iind just cause Ior employment termination. Otherwise
stated, an employee`s acquittal in a criminal case, especially one that is grounded on the
existence oI reasonable doubt, will not preclude a determination in a labor case that he is
guilty oI acts inimical to the employer`s interests.

Criminal cases require prooI beyond reasonable doubt while labor disputes require
only substantial evidence, which means such relevant evidence as a reasonable
mind might accept as adequate to justiIy a conclusion. The evidence in this case was
reviewed by the appellate court and two labor tribunals endowed with expertise on the
matter the Labor Arbiter and the NLRC. They all Iound substantial evidence to
conclude that Capor had been validly dismissed Ior dishonesty or serious misconduct. It
is settled that Iactual Iindings oI quasi-judicial agencies are generally accorded respect
and Iinality so long as these are supported by substantial evidence. In the instant case, we
Iind no compelling reason to doubt the common Iindings oI the three reviewing bodies.

So||dbank Corporat|on v NLkC 165951 Motcb J0 2010 J
tJ
ulv letolto
I
1he CA awarded flnanclal asslsLance Lo respondenLs 8odolfo 8omblLa
et ol ouL of compasslonaLe [usLlce" desplLe Lhe facL LhaL peLlLloner
Solldbank CorporaLlon had already pald Lhe respondenLs Lhelr separaLlon
pay ln accordance wlLh ArLlcle 283 of Lhe Labor Code roper?
Whlle Lhe CA should noL be faulLed for sympaLhlzlng wlLh Lhe pllghL of
respondenLs as Lhey suddenly losL Lhelr means of llvellhood Lhls CourL holds LhaL
lL ls preclsely because of Lhe sudden loss of employmenL - one LhaL ls beyond Lhe
conLrol of labor - LhaL Lhe law sLaLuLorlly granLs separaLlon pay and dlcLaLes how
Lhe same should be compuLed 1hus any buslness esLabllshmenL LhaL decldes Lo
12

cease lLs operaLlons has Lhe burden of complylng wlLh Lhe law 1hls CourL should
refraln from addlng more Lhan whaL Lhe law requlres as Lhe same ls wlLhln Lhe
realm of Lhe leglslaLure

lL bears Lo sLress however LhaL peLlLloner may as lL has done granL oo o
voloototy ooJ ex qtotlo bosls any amounL more Lhan whaL ls requlred by Lhe law
buL to |ns|st that more f|nanc|a| ass|stance be g|ven |s certa|n|y someth|ng that
th|s Court cannot countenance as the same serves to pena||ze pet|t|oner wh|ch
has a|ready g|ven more than what the |aw requ|res Moreover any award of
addlLlonal flnanclal asslsLance Lo respondenLs would puL Lhem aL an advanLage
and ln a beLLer poslLlon Lhan Lhe resL of Lhelr coemployees who slmllarly losL
Lhelr employmenL because of peLlLloner's declslon Lo cease lLs operaLlons





art II Cther Causes of 1erm|nat|on noL lound ln 8ook vl of Lhe Labor Code
1 Sect|on 66 of the Cmn|bus L|ect|on Code NCC Lnergy Dev Corp v
NLkC 1
sL
ulv narvassa C! 222 SC8A 231 (May 31 1993)

ISSUL wheLher an employee ln a governmenL owned or conLrolled
corporaLlon wlLhouL orlglnal charLer (and Lherefore noL covered by Clvll
13

Servlce Law) neverLheless falls wlLhln Lhe scope of SecLlon 66 of Lhe
Cmnlbus LlecLlon Code

Sect|on 66 CandldaLes holdlng appolnLlve offlce or poslLlon Any person
holdlng a publlc appolnLlve offlce or poslLlon lncludlng acLlve members of
Lhe Armed lorces of Lhe hlllpplnes and offlcers and employees ln
governmenLowned or conLrolled corporaLlons shall be consldered lpso
focto reslgned from hls offlce upon Lhe flllng of hls cerLlflcaLe of candldacy"

ne|d x x x SecLlon 66 of Lhe Cmnlbus LlecLlon Code applles Lo offlcers
and employees ln governmenLowned or conLrolled corporaLlons even lf
Lhey do noL fall under Lhe Clvll Servlce Law buL under Lhe Labor Code ln
oLher words SecLlon 66 consLlLuLes [usL cause for LermlnaLlon of
employmenL ln addlLlon Lo Lhose seL forLh ln Lhe Labor Code as amended
(ld aL 843)"

2 cceptance of |ncompat|b|e off|ce Man||a 8roadcast|ng Co v NLkC
2
nd
ulv Mendoza ! 294 SC8A 486 (1998)

1he Court approved of the company po||cy

WhaL ls lnvolved ln Lhls case ls an unwrlLLen company pollcy conslderlng
any employee who flles a cerLlflcaLe of candldacy for any elecLlve or local
offlce as reslgned from Lhe company AlLhough 11(b) of 8A no 6646 does
noL requlre mass medla commenLaLors and announcers such as prlvaLe
respondenL Lo reslgn from Lhelr radlo or 1v sLaLlons buL only Lo go on leave
for Lhe duraLlon of Lhe campalgn perlod we Lhlnk LhaL Lhe company may
neverLheless valldly requlre Lhem Lo reslgn as a maLLer of pollcy ln Lhls
case Lhe pollcy ls [usLlfled on Lhe followlng grounds

Worklng for Lhe governmenL and Lhe company aL Lhe same Llme ls clearly
dlsadvanLageous and pre[udlclal Lo Lhe rlghLs and lnLeresL noL only of Lhe
14

company buL Lhe publlc as well ln Lhe evenL an employee wlns ln an
elecLlon he cannoL fully serve as he ls expecLed employers obvlously
deLrlmenLal Lo Lhe lnLeresL of boLh Lhe governmenL and Lhe prlvaLe
employer

ln Lhe evenL Lhe employee loses ln Lhe elecLlon Lhe lmparLlallLy and cold
neuLrallLy of an employee as broadcasL personallLy ls suspecL Lhus readlly
erodlng and adversely affecLlng Lhe confldence and LrusL of Lhe llsLenlng
publlc Lo employer's sLaLlon" (peLlLlon rollo p 18)

1hese are va||d reasons for pet|t|oner no law has been clLed by
prlvaLe respondenL prohlblLlng a rule such as LhaL ln quesLlon rlvaLe
respondenL clLes Lhe Local CovernmenL Code #90(b) of whlch provldes LhaL
Sanggunlan members may pracLlce Lhelr professlon engage ln any
occupaLlon or Leach ln schools excepL durlng sesslon hours" 1hls provlslon
however ls merely permlsslve and does noL preclude Lhe adopLlon of a
conLrary rule such as LhaL ln quesLlon 1he company pollcy ls reasonable
and noL conLrary Lo law" (ld aL 490491)

Note 8ecause Lhere was a doubL as Lo wheLher Lhe pollcy was properly
promulgaLed and made know Lo all employees and because he was found
Lo be ln good falLh ln flllng hls cerLlflcaLe of candldacy and noL reslgnlng
afLer dolng so respondenL was ordered relnsLaLed wlLh quallfled
backwages (ld aL 293)

3Un|on Cff|cers who know|ng|y part|c|pate |n an I||ega| Str|ke (rt
264(a))
1ackbilt Industries, Inc. v, 1ackbilt Employees Workers Union, 581
SCRA 291 (March 20, 2009), 1st Div., Corona, J.
Issue: whether or not the Iiling oI a petition with the labor arbiter to declare a
strike illegal is a condition sine qua non Ior the valid termination oI employees
who commit an illegal act in the course oI such strike.
13

|RATIO| 'The principle oI conclusiveness oI judgment, embodied in Section
47(c), Rule 39 oI the rules oI Court, holds that the parties to a case are bound by
the Iindings in a previous judgment with respect to matters actually raised and
adjudged therein.
ArLlcle 264(e) of Lhe Labor Code prohlblLs any person engaged ln plckeLlng from
obsLrucLlng Lhe free lngress Lo and egress from Lhe employer's premlses Slnce
respondenL was found ln Lhe !uly 17 1998 declslon of Lhe nL8C Lo have
prevenLed Lhe free enLry lnLo and exlL of vehlcles from peLlLloner's compound
respondenL's offlcers and employees clearly commlLLed lllegal acLs ln Lhe course
of Lhe March 9 1998 sLrlke
1he use of unlawful means ln Lhe course of a sLrlke renders such sLrlke
lllegal 1herefore pursuanL Lo Lhe prlnclple of concluslveness of [udgmenL Lhe
March 9 1998 sLrlke was lpso focto lllegal 1he flllng of a peLlLlon Lo declare Lhe
sLrlke lllegal was Lhus unnecessary

ConsequenLly we uphold Lhe legallLy of Lhe dlsmlssal of respondenL's offlcers and
employees ArLlcle 264 of Lhe Labor Code furLher provldes LhaL an employer may
LermlnaLe employees found Lo have commlLLed lllegal acLs ln Lhe course of a
sLrlke eLlLloner clearly had Lhe legal rlghL Lo LermlnaLe respondenL's offlcers and
employees (ld aL 299300)"

4Lmp|oyees who know|ng|y v|o|ate the un|on secur|ty c|ause
st|pu|ated |n the C8 (rt 248 (e))
PlsLorlcal noLe ||| v NLkC 217 SC8A 338 (1993)
Sa|unga v CIk 21 SC8A 216 (1967)
Ma|ayang Samahan v kamos 326 SC8A 428 (2000)
Genera| M||||ng Corp v Cas|o et a| 149552 Motcb 10 2010 1
st
ulv
eoootJoJe costto I
ln LermlnaLlng Lhe employmenL of an employee by enforclng Lhe unlon securlLy
clause Lhe employer needs only Lo deLermlne and prove LhaL (1) Lhe unlon
securlLy clause ls appllcable (2) Lhe unlon ls requesLlng for Lhe enforcemenL of
Lhe unlon securlLy provlslon ln Lhe C8A and (3) Lhere ls sufflclenL evldence Lo
16

supporL Lhe declslon of Lhe unlon Lo expel Lhe employee from Lhe unlon 1hese
requlslLes consLlLuLe [usL cause for LermlnaLlng an employee based on Lhe unlon
securlLy provlslon of Lhe C8A
1here ls no quesLlon LhaL ln Lhe presenL case Lhe C8A beLween CMC and
l8MLocal 31 lncluded a malnLenance of membershlp and closed shop clause as
can be gleaned from SecLlons 3 and 6 of ArLlcle ll l8MLocal 31 by wrlLLen
requesL can ask CMC Lo LermlnaLe Lhe employmenL of Lhe employee/worker who
falled Lo malnLaln lLs good sLandlng as a unlon member
lL ls slmllarly undlspuLed LhaL l8MLocal 31 Lhrough Cablana Lhe l8M
8eglonal ulrecLor for vlsayas and Mlndanao Lwlce requesLed CMC ln Lhe leLLers
daLed March 10 and 19 1992 Lo LermlnaLe Lhe employmenL of Caslo et ol as a
necessary consequence of Lhelr expulslon from Lhe unlon
lL ls Lhe Lhlrd requlslLe LhaL Lhere ls sufflclenL evldence Lo supporL Lhe
declslon of l8MLocal 31 Lo expel Caslo et ol whlch appears Lo be lacklng ln Lhls
case x x x
1he fallure of CMC Lo make a deLermlnaLlon of Lhe sufflclency of evldence
supporLlng Lhe declslon of l8MLocal 31 Lo expel Caslo et ol ls a dlrecL
consequence of Lhe nonobservance by CMC of procedural due process ln Lhe
dlsmlssal of employees
As a defense CMC conLends LhaL as an employer lLs only duLy was Lo
ascerLaln LhaL l8MLocal 31 accorded Caslo et ol due process and lL ls Lhe
flndlng of Lhe company LhaL l8MLocal 31 dld glve Caslo et ol Lhe opporLunlLy Lo
answer Lhe charges agalnsL Lhem buL Lhey refused Lo avall Lhemselves of such
opporLunlLy
1hls argumenL ls wlLhouL basls
1he CourL has sLressed Llme and agaln LhaL allegaLlons musL be proven by
sufflclenL evldence because mere allegaLlon ls deflnlLely noL evldence Cnce
more ln Cteot 5ootbeto Motltlme 5etvlces cotpototloo v Acoo Lhe CourL
declared
1lme and agaln we have ruled LhaL ln lllegal dlsmlssal cases llke Lhe presenL one
Lhe ooos of provlng LhaL Lhe employee was noL dlsmlssed or lf dlsmlssed LhaL Lhe
17

dlsmlssal was noL lllegal resLs on Lhe employer and fallure Lo dlscharge Lhe same would
mean LhaL Lhe dlsmlssal ls noL [usLlfled and Lherefore lllegal 1hus pet|t|oners must not
on|y re|y on the weakness of respondents' ev|dence but must stand on the mer|ts of
the|r own defense party a||eg|ng a cr|t|ca| fact must support h|s a||egat|on w|th
substant|a| ev|dence for any dec|s|on based on unsubstant|ated a||egat|on cannot
stand as |t w||| offend due process x x x (Lmphasls supplled)
Latest pp||cat|on of the Genera| M||||ng Doctr|ne
PICOP RESOURCES, INCORPORATED PRI v. TAECA, et. al., L-
160828, August 9, 2010, 2
nd
Div., PERALTA, .
Powever ln LermlnaLlng Lhe employmenL of an employee by enforclng Lhe
unlon securlLy clause Lhe employer needs Lo deLermlne and prove LhaL (1) Lhe
unlon securlLy clause ls appllcable (2) Lhe unlon ls requesLlng for Lhe enforcemenL
of Lhe unlon securlLy provlslon ln Lhe C8A and (3) Lhere ls sufflclenL evldence Lo
supporL Lhe declslon of Lhe unlon Lo expel Lhe employee from Lhe unlon 1hese
requlslLes consLlLuLe [usL cause for LermlnaLlng an employee based on Lhe unlon
securlLy provlslon of Lhe C8A
As to the Iirst requisite, there is no question that the CBA between PRI and
respondents included a union security clause, speciIically, a maintenance oI
membership as stipulated in Sections 6 oI Article II, Union Security and Check-
OII. Following the same provision, PRI, upon written request Irom the Union, can
indeed terminate the employment oI the employee who Iailed to maintain its good
standing as a union member.
Secondly, it is likewise undisputed that NAMAPRI-SPFL, in two (2)
occasions demanded Irom PRI, in their letters dated May 16 and 23, 2000, to
terminate the employment oI respondents due to their acts oI disloyalty to the
Union.
18

However, as to the third requisite, we Iind that there is no sufficient
evidence to support the decision oI PRI to terminate the employment oI the
respondents.

8l alleged LhaL respondenLs were LermlnaLed from employmenL based on
Lhe alleged acLs of dlsloyalLy Lhey commlLLed when Lhey slgned an auLhorlzaLlon
for Lhe lederaLlon of lree Workers (llW) Lo flle a eLlLlon for CerLlflcaLlon
LlecLlon among all rankandflle employees of 8l lL conLends LhaL Lhe acLs of
respondenLs are a vlolaLlon of Lhe unlon SecurlLy Clause as provlded ln Lhelr
CollecLlve 8argalnlng AgreemenL
We are unconvlnced
We are ln consonance wlLh Lhe CourL of Appeals when lL held LhaL Lhe
mere slgnlng of Lhe auLhorlzaLlon ln supporL of Lhe eLlLlon for CerLlflcaLlon
LlecLlon of llW on March 19 20 and 21 or before Lhe freedom perlod" ls noL
sufflclenL ground Lo LermlnaLe Lhe employmenL of respondenLs lnasmuch as Lhe
peLlLlon lLself was acLually flled durlng Lhe freedom perlod noLhlng ln Lhe
records would show LhaL respondenLs falled Lo malnLaln Lhelr membershlp ln
good sLandlng ln Lhe unlon 8espondenLs dld noL reslgn or wlLhdraw Lhelr
membershlp from Lhe unlon Lo whlch Lhey belong 8espondenLs conLlnued Lo pay
Lhelr unlon dues and never [olned Lhe llW
SlgnlflcanLly peLlLloners acL of dlsmlsslng respondenLs sLemmed from Lhe
laLLers acL of slgnlng an auLhorlzaLlon leLLer Lo flle a peLlLlon for cerLlflcaLlon
elecLlon as Lhey slgned lL ouLslde Lhe freedom perlod Powever we are
19

consLralned Lo belleve LhaL an auLhorlzaLlon leLLer Lo flle a peLlLlon for
cerLlflcaLlon elecLlon" ls dlfferenL from an acLual eLlLlon for CerLlflcaLlon
LlecLlon" Llkewlse as per records lL was clear LhaL Lhe acLual eLlLlon for
CerLlflcaLlon LlecLlon of llW was flled only on May 18 2000 1hus lL was wlLhln
Lhe amblL of Lhe freedom perlod whlch commenced from March 21 2000 unLll
May 21 2000 SLrlcLly speaklng whaL ls prohlblLed ls Lhe flllng of a peLlLlon for
cerLlflcaLlon elecLlon ouLslde Lhe 60day freedom perlod 1hls ls noL Lhe slLuaLlon
ln Lhls case lf aL all Lhe slgnlng of Lhe auLhorlzaLlon Lo flle a cerLlflcaLlon elecLlon
was merely preparaLory Lo Lhe flllng of Lhe peLlLlon for cerLlflcaLlon elecLlon or an
exerclse of respondenLs' rlghL Lo selforganlzaLlon
Moreover, PRI anchored their decision to terminate respondents` employment
on Article 253 oI the Labor Code which states that 'it shall be the duty of both
parties to keep the status quo and to continue in full force and effect the terms
and conditions of the existing agreement during the -day period and/or until a
new agreement is reached by the parties." It claimed that they are still bound by
the Union Security Clause oI the CBA even aIter the expiration oI the CBA; hence,
the need to terminate the employment oI respondents.
Petitioner's reliance on Article 253 is misplaced.
The provision oI Article 256 oI the Labor Code is particularly enlightening.
It reads:
ArLlcle 236 epteseototloo lssoe lo otqoolzeJ estobllsbmeots ln organlzed
esLabllshmenLs when a verlfled peLlLlon quesLlonlng Lhe ma[orlLy sLaLus of Lhe
lncumbenL bargalnlng agenL ls flled before Lhe ueparLmenL of Labor and LmploymenL
wlLhln Lhe slxLyday perlod before Lhe explraLlon of a collecLlve bargalnlng agreemenL
Lhe MedArblLer shall auLomaLlcally order an elecLlon by secreL balloL when Lhe verlfled
peLlLlon ls supporLed by Lhe wrlLLen consenL of aL leasL LwenLyflve percenL (23) of all
Lhe employees ln Lhe bargalnlng unlL Lo ascerLaln Lhe wlll of Lhe employees ln Lhe
approprlaLe bargalnlng unlL 1o have a valld elecLlon aL leasL a ma[orlLy of all ellglble
voLers ln Lhe unlL musL have casL Lhelr voLes 1he labor unlon recelvlng Lhe ma[orlLy of
20

Lhe valld voLes casL shall be cerLlfled as Lhe excluslve bargalnlng agenL of all Lhe workers
ln Lhe unlL When an elecLlon whlch provldes for Lhree or more cholces resulLs ln no
cholce recelvlng a ma[orlLy of Lhe valld voLes casL a runoff elecLlon shall be conducLed
beLween Lhe labor unlons recelvlng Lhe Lwo hlghesL number of voLes ltovlJeJ 1haL Lhe
LoLal number of voLes for all conLendlng unlons ls aL leasL flfLy per cenL (30) of Lhe
number of voLes casL
t the expirotion of the freedom period the emp/oyer sho// continue to
recoqnite the mojority stotus of the incumbent borqoininq oqent where no petition for
certificotion e/ection is fi/ed
Applylng Lhe same provlslon lL can be sald LhaL whlle lL ls lncumbenL for
Lhe employer Lo conLlnue Lo recognlze Lhe ma[orlLy sLaLus of Lhe lncumbenL
bargalnlng agenL even afLer Lhe explraLlon of Lhe freedom perlod Lhey could only
do so when no peLlLlon for cerLlflcaLlon elecLlon was flled 1he reason ls wlLh a
pendlng peLlLlon for cerLlflcaLlon any such agreemenL enLered lnLo by
managemenL wlLh a labor organlzaLlon ls fraughL wlLh Lhe rlsk LhaL such a labor
unlon may noL be chosen LhereafLer as Lhe collecLlve bargalnlng represenLaLlve
1he provlslon for stotos poo ls condlLloned on Lhe facL LhaL no cerLlflcaLlon
elecLlon was flled durlng Lhe freedom perlod Any oLher vlew would render
nugaLory Lhe clear sLaLuLory pollcy Lo favor cerLlflcaLlon elecLlon as Lhe means of
ascerLalnlng Lhe Lrue expresslon of Lhe wlll of Lhe workers as Lo whlch labor
organlzaLlon would represenL Lhem
ln Lhe lnsLanL case four (4) peLlLlons were flled as early as May 12 2000 ln
facL a peLlLlon for cerLlflcaLlon elecLlon was already ordered by Lhe MedArblLer
of uCLL Caraga 8eglon on AugusL 23 2000 1herefore followlng ArLlcle 236 aL
Lhe explraLlon of Lhe freedom perlod 8ls obllgaLlon Lo recognlze nAMA8lSlL
as Lhe lncumbenL bargalnlng agenL does noL hold Lrue when peLlLlons for
cerLlflcaLlon elecLlon were flled as ln Lhls case
Moreover Lhe lasL senLence of ArLlcle 233 whlch provldes for auLomaLlc
renewal perLalns only Lo Lhe economlc provlslons of Lhe C8A and does noL
lnclude represenLaLlonal aspecL of Lhe C8A An exlsLlng C8A cannoL consLlLuLe a
21

bar Lo a flllng of a peLlLlon for cerLlflcaLlon elecLlon When Lhere ls a
represenLaLlonal lssue Lhe stotos poo provlslon ln so far as Lhe need Lo awalL Lhe
creaLlon of a new agreemenL wlll noL apply CLherwlse lL wlll creaLe an absurd
slLuaLlon where Lhe unlon members wlll be forced Lo malnLaln membershlp by
vlrLue of Lhe unlon securlLy clause exlsLlng under Lhe C8A and LhereafLer supporL
anoLher unlon when flllng a peLlLlon for cerLlflcaLlon elecLlon lf we apply lL Lhere
wlll always be an lssue of dlsloyalLy whenever Lhe employees exerclse Lhelr rlghL
Lo selforganlzaLlon 1he holdlng of a cerLlflcaLlon elecLlon ls a sLaLuLory pollcy
LhaL should noL be clrcumvenLed or compromlsed
1lme and agaln we have ruled LhaL we adhere Lo Lhe pollcy of enhanclng
Lhe welfare of Lhe workers 1helr freedom Lo choose who should be Lhelr
bargalnlng represenLaLlve ls of paramounL lmporLance 1he facL LhaL Lhere
already exlsLs a bargalnlng represenLaLlve ln Lhe unlL concerned ls of no momenL
as long as Lhe peLlLlon for cerLlflcaLlon elecLlon was flled wlLhln Lhe freedom
perlod WhaL ls lmperaLlve ls LhaL by such a peLlLlon for cerLlflcaLlon elecLlon Lhe
employees are glven Lhe opporLunlLy Lo make known who shall have Lhe rlghL Lo
represenL Lhem LhereafLer noL only some buL all of Lhem should have Lhe rlghL
Lo do so WhaL ls equally lmporLanL ls LhaL everyone be glven a democraLlc space
ln Lhe bargalnlng unlL concerned
We will emphasize anew that the power to dismiss is a normal prerogative oI
the employer. This, however, is not without limitations. The employer is bound to
exercise caution in terminating the services of his employees especially so
when it is made upon the request of a labor union pursuant to the Collective
Bargaining Agreement. Dismissals must not be arbitrary and capricious. Due
process must be observed in dismissing an employee, because it aIIects not only
22

his position but also his means oI livelihood. Employers should, therefore,
respect and protect the rights of their employees, which include the right to
labor.
An employee who is illegally dismissed is entitled to the twin relieIs oI Iull
backwages and reinstatement. II reinstatement is not viable, separation pay is
awarded to the employee. In awarding separation pay to an illegally dismissed
employee, in lieu oI reinstatement, the amount to be awarded shall be equivalent to
one month salary Ior every year oI service. Under Republic Act No. 6715,
employees who are illegally dismissed are entitled to Iull backwages, inclusive oI
allowances and other beneIits, or their monetary equivalent, computed Irom the
time their actual compensation was withheld Irom them up to the time oI their
actual reinstatement. But iI reinstatement is no longer possible, the backwages
shall be computed Irom the time oI their illegal termination up to the Iinality oI the
decision. Moreover, respondents, having been compelled to litigate in order to
seek redress Ior their illegal dismissal, are entitled to the award oI attorney`s Iees
equivalent to 10 oI the total monetary award.

3 C|osure of |antat|on due to Ck (k 66S7) NIL v NLkC 327 SC8A
138 (2000) 2
nd
ulv ue Leon !r !

1he aLalon CoconuL LsLaLe was closed down because a large porLlon of
Lhe sald esLaLe was acqulred by Lhe uA8 pursuanL Lo Lhe CA8 Pence Lhe
closure of Lhe aLalon CoconuL LsLaLe was noL effecLed volunLarlly by
prlvaLe respondenLs who even flled a peLlLlon Lo have sald esLaLe exempLed
from Lhe coverage of 8A 6637 unforLunaLely Lhelr peLlLlon was denled by
Lhe ueparLmenL of Agrarlan 8eform S|nce the c|osure was due to the act
of the government to benef|t the pet|t|oners as members of the ata|on
Lstate grar|an keform ssoc|at|on by mak|ng them agrar|an |ot
23

benef|c|ar|es of sa|d estate the pet|t|oners are not ent|t|ed to separat|on
pay 1he LermlnaLlon of Lhelr employmenL was noL caused by Lhe prlvaLe
respondenLs 1he blame lf any for Lhe LermlnaLlon of peLlLloners'
employmenL can even be lald upon Lhe peLlLloneremployees Lhemselves
lnasmuch as Lhey formed Lhemselves lnLo a cooperaLlve LA8A ulLlmaLely
Lo Lake over as agrarlan loL beneflclarles of prlvaLe respondenLs' landed
esLaLe pursuanL Lo 8A 6637 1he resulLlng closure of Lhe buslness
esLabllshmenL aLalon CoconuL LsLaLe when lL was placed under CA8
occurred Lhrough no faulL of Lhe prlvaLe respondenLs" (ld aL 263266)

6 Lxogamy o||cy Duncan ssn of Deta||men1GWC v G|axoWe|come
438 SC8A 343 2
nd
ulv 1lnga ! (SepL 7 2004)

ISSUL WheLher or noL an Lxogamy ollcy of a pharmaceuLlcal employer
LhaL prohlblLs lLs employees from marrylng employees of a compeLlLor
company ls valld

Def|n|t|on of Lxogamy lL ls a rule requlrlng selecLlon of a marrlage parLner
from ouLslde a parLlcular group

ClaxoWelcome's Lxogamy pollcy as lncorporaLed ln Lhe employmenL
conLracL read "10 ou agree to d|sc|ose to management any ex|st|ng or
future re|at|onsh|p you may have e|ther by consangu|n|ty or aff|n|ty w|th
coemp|oyees or emp|oyees of compet|ng drug compan|es Shou|d |t pose
a poss|b|e conf||ct of |nterest |n management d|scret|on you agree to
res|gn vo|untar||y from the Company as a matter of Company po||cy (ld
aL 331)"

ku||ng

1he prohlblLlon agalnsL personal or marlLal relaLlonshlps wlLh employees
of compeLlLor companles upon Claxo's employees ls reasonable under Lhe
24

clrcumsLances because relaLlonshlps of LhaL naLure mlghL compromlse Lhe
lnLeresLs of Lhe company ln laylng down Lhe assalled company pollcy
Claxo only alms Lo proLecL lLs lnLeresLs agalnsL Lhe posslblllLy LhaL a
compeLlLor company wlll galn access Lo lLs secreLs and procedures (ld aL
333)"

1he CourL of Appeals also correcLly noLed LhaL Lhe assalled company pollcy
whlch forms parL of respondenL's Lmployee Code of ConducL and of lLs
conLracLs wlLh lLs employees such as LhaL slgned by 1ecson was made
known Lo hlm prlor Lo hls employmenL 1ecson Lherefore was aware of
LhaL resLrlcLlon when he slgned hls employmenL conLracL and when he
enLered lnLo a relaLlonshlp wlLh 8eLLsy Slnce 1ecson knowlngly and
volunLarlly enLered lnLo a conLracL of employmenL wlLh Claxo Lhe
sLlpulaLlons Lhereln have Lhe force of law beLween Lhem and Lhus should
be complled wlLh ln good falLh" Pe ls Lherefore sLopped from quesLlonlng
sald pollcy

1he CourL flnds no merlL ln peLlLloners' conLenLlon LhaL 1ecson was
consLrucLlvely dlsmlssed when he was Lransferred from Lhe Camarlnes
norLeCamarlnes Sur sales area Lo Lhe 8uLuan ClLySurlgao ClLyAgusan del
Sur sales area and when he was excluded from aLLendlng Lhe company's
semlnar on new producLs whlch were dlrecLly compeLlng wlLh slmllar
producLs manufacLured by AsLra ConsLrucLlve dlsmlssal ls deflnes as a
qulLLlng an lnvolunLary reslgnaLlon resorLed Lo when conLlnued
employmenL becomes lmposslble unreasonable or unllkely when Lhere ls
a demoLlon ln rank or dlmlnuLlon ln pay or when a clear dlscrlmlnaLlon
lnsenslblllLy or dlsdaln by an employer becomes unbearable Lo Lhe
employee" none of Lhese condlLlons are presenL ln Lhe lnsLanL case (ld aL
333336)"

ln llne wlLh Lhe uuncanClaxoWelcome rullng lL ls relevanL Lo noLe LhaL
Len years earller Lhe CourL approved of an employer's AnLlCompeLlLlon
Clause sLlpulaLed ln an employee's conLracL
23


ln Da|Ch| L|ectron|cs Manufactur|ng Corp v V|||arama r 238 SC8A
267(1994) Lhe AnLlCompeLlLlon Clause read Lhus

@bot fot o petloJ of two (2) yeots oftet tetmlootloo of setvlce ftom
Ml Ml sboll oot lo ooy moooet be coooecteJ ooJ/ot
employeJ be o coosoltoot ooJ/ot be oo lofotmotlve boJy Jltectly ot
loJltectly wltb ooy bosloess fltm eotlty ot ooJettokloq eoqoqeJ lo o
bosloess slmllot to ot lo competltloo wltb tbot of tbe Ml" (ld aL
268)

eLlLloner clalmed LhaL prlvaLe respondenL became an employee of Angel
Sound hlllpplnes CorporaLlon a corporaLlon engaged ln Lhe same llne of
buslness as LhaL of peLlLloner wlLhln Lwo years from !anuary 30 1992 Lhe
daLe of prlvaLe respondenL's reslgnaLlon from peLlLloner's employ
eLlLloner furLher alleged LhaL prlvaLe respondenL ls holdlng Lhe poslLlon of
Pead of Lhe MaLerlal ManagemenL ConLrol ueparLmenL Lhe same poslLlon
he held whlle ln Lhe employ of peLlLloner (ld aL 269)"

Cn Lhe sLrengLh of S|ngapore |r||nes L|m|ted v ano 122 SC8A 671
(1983) Lhe CourL ordered Lhe courL a quo Lo hear and declde Lhe case
rullng LhaL Lhe regular courLs noL Lhe labor arblLer had [urlsdlcLlon over
Lhe employer's clalm for llquldaLed damages (100000)

7 Nospouse Lmp|oyment o||cy Star aper v S|mbo| 487 SC8A 228
(Aprll 12 2006) 2
nd
ulv uno !

lSSuL WPL1PL8 1PL CLlC? Cl 1PL LMLC?L8 8AnnlnC SCuSLS
l8CM WC8klnC ln 1PL SAML CCMAn? vlCLA1LS 1PL 8lCP1S Cl 1PL
LMLC?LL unuL8 1PL CCnS1l1u1lCn Anu 1PL LA8C8 CCuL C8 lS A
vALlu LxL8ClSL Cl MAnACLMLn1 8L8CCA1lvL (ld aL 233)"

26

1he ollcy read 1 new appllcanLs wlll noL be allowed Lo be hlred lf ln case
he/she has a relaLlve up Lo Lhe3
rd
degree of relaLlonshlp already
employed by Lhe company ant|nepot|sm emp|oyment po||cy" (p239)
2 ln case of Lwo of our employees (boLh slngles slc one
male and anoLher female) developed a frlendly relaLlonshlp durlng Lhe
course of Lhelr employmenL and Lhen declded Lo geL marrled one of Lhem
should reslgn Lo preserve Lhe pollcy sLaLed above (ld aL 234)" labeled by
Lhe CourL as nospouse emp|oyment po||cy" (p239)

x x x CourLs also flnd Lhe nospouse employmenL pollcy lnvalld for
fallure of Lhe employer Lo presenL any evldence of bus|ness necess|ty oLher
Lhan Lhe general percepLlon LhaL spouses ln Lhe same workplace mlghL
adversely affecL Lhe buslness 1hey hold LhaL Lhe absence of such a bona
f|de occupat|ona| qua||f|cat|on lnvalldaLes a rule denylng employmenL of
Lhe oLher spouse ln Lhe same offlce x x x (ld aL 242)

We noLe LhaL slnce Lhe flndlng of a bona f|de occupat|ona| qua||f|cat|on
[usLlfles an employer's nospouse rule Lhe excepLlon ls lnLerpreLed sLrlcLly
and narrowly by Lhese sLaLe courLs 1here musL be a compelllng buslness
necesslLy for whlch no alLernaLlve exlsLs oLher Lhan Lhe dlscrlmlnaLory
pracLlce 1o [usLlfy a bona flde occupaLlonal quallflcaLlon Lhe employer
must prove two factors (1) LhaL Lhe employmenL quallflcaLlon ls
reasonably relaLed Lo Lhe essenLlal operaLlon of Lhe [ob lnvolved and (2)
LhaL Lhere ls a facLual basls for bellevlng LhaL all or subsLanLlally all persons
meeLlng Lhe quallflcaLlon would be unable Lo properly perform Lhe duLles
of Lhe [ob (ld aL 242243)"

x x x

ln Lhe recenL case of uoocoo Assoclotloo of uetollmoo l@Cw ooJ leJto
@ecsoo v Cloxo wellcome lblllpploes loc we passed on Lhe valldlLy of Lhe
pollcy of a pharmaceuLlcal company prohlblLlng lLs employees from
marrylng employees of any compeLlLor company We held LhaL Claxo has a
27

r|ght to guard lLs Lrade secreLs manufacLurlng formulas markeLlng
sLraLegles and oLher confldenLlal programs and lnformaLlon from
compeLlLors We consldered Lhe prohlblLlon agalnsL personal or marlLal
relaLlonshlps wlLh employees of compeLlLor companles upon Claxo's
employees reasonable under Lhe clrcumsLances because relaLlonshlps of
LhaL naLure mlghL compromlse Lhe lnLeresLs of Claxo ln laylng down Lhe
assalled company pollcy we recognlzed LhaL Claxo only alms Lo proLecL lLs
lnLeresLs agalnsL Lhe posslblllLy LhaL a compeLlLor company wlll galn access
Lo lLs secreLs and procedures

1he requlremenL LhaL a company pollcy musL be reasonable under Lhe
clrcumsLances Lo quallfy as a valld exerclse of managemenL prerogaLlve was
also aL lssue ln Lhe 1997 case of hlllpplne 1elegraph and 1elephone
Company v nL8C ln sald case Lhe employee was dlsmlssed ln vlolaLlon of
peLlLloner's pollcy of dlsquallfylng from work any woman worker who
conLracLs marrlage We held LhaL Lhe company pollcy vlolaLes Lhe rlghL
agalnsL dlscrlmlnaLlon afforded all women workers under ArLlcle 136 of Lhe
Labor Code x x x (ld aL 243244)

1he cases of uuncan and 1 1 lnsLrucL us LhaL Lhe requlremenL of
reasonableness musL be clearly esLabllshed Lo uphold Lhe quesLloned
employmenL pollcy 1he employer has Lhe burden Lo prove Lhe exlsLence of
a reasonable buslness necesslLy 1he burden was successfully dlscharged ln
uuncan buL noL ln 1 1 We do noL flnd a reasonable buslness necesslLy ln
Lhe case aL bar x x x (ld aL 244)"

8 nt|Sexua| harassment ct of 199S (k 7877) Dom|ngo v kaya|a
346 SC8A 90 (2008) 3
rd
ulv nachura !

lSSuL lor sexual harassmenL Lo be commlLLed ls lL essenLlal LhaL Lhere be a
demand requesL or requlremenL of a sexual favor as a condlLlon for
conLlnued employmenL or for promoLlon Lo a hlgher poslLlon?
28


NC lL ls enough LhaL Lhe acLs of respondenL's (nL8C Chalrman 8ogello l
8ayala) resulL ln creaLlng an lnLlmldaLlng hosLlle or offenslve envlronmenL
for Lhe employee (ld aL 113)"

What then d|d kaya|a do wh|ch const|tuted sexua| harassment?

(8uL) lL ls noL necessary LhaL Lhe demand requesL or requlremenL of a
sexual favor be arLlculaLed ln a caLegorlcal oral or wrlLLen sLaLemenL lL may
be dlscerned wlLh equal cerLlLude from Lhe acLs of Lhe offender Poldlng
and squeezlng uomlngo's shoulders runnlng hls flngers across her neck and
Llckllng her ear havlng lnapproprlaLe conversaLlons wlLh her glvlng her
money allegedly for school expenses wlLh a promlse of fuLure prlvlleges
and maklng sLaLemenLs wlLh unmlsLakable sexual overLones all Lhese acLs
of 8ayala resound wlLh deafenlng clarlLy Lhe unspoken requesL for a sexual
favor (ld aL 114)"

1he Court then d|fferent|ates the case of qu|no v costa 380 SC8A 1
(2002) n 8onc SandovalCuLlerrez ! from that of kaya|a

Whlle ln Aqulno Lhe CourL lnLerpreLed Lhe acLs (of !udge AcosLa) as casual
gesLures of frlendshlp and camaraderle done durlng fesLlve or speclal
occaslons and wlLh oLher people presenL ln Lhe lnsLanL case 8ayala's acLs
of holdlng and squeezlng uomlngo's shoulders runnlng hls flngers across
her neck and Llckllng her ear and Lhe lnapproprlaLe commenLs were all
made ln Lhe conflnes of 8ayala's offlce when no oLher members of hls sLaff
were around More lmporLanLly and a clrcumsLance absenL ln Aqulno
8ayala's acLs as already adverLed Lo above produced a hosLlle work
envlronmenL for uomlngo as shown by her havlng reporLed Lhe maLLer Lo
an offlcemaLe and afLer Lhe lasL lncldenL flllng for a leave of absence and
requesLlng Lransfer Lo anoLher unlL (ld aL 116117)"

29

Nota 8ene 8ayala's case was declded ln dlvlslon AcosLa's case Ln 8anc
Why?


9 Ior Schoo|s lallure of regular faculLy members Lo obLaln a mlnlmum
efflclency raLlng of 83 ln Lwo prevlous school years as requlred by Lhe
school's Leacher manual
Lve|yn ena et a| v NLkC Naga aroch|a| Schoo| 238 SC8A 63 (1996)
2
nd
ulv Mendoza !
We are saLlsfled LhaL peLlLloners' employmenL was LermlnaLed for a [usL
and legal cause 1helr fear LhaL ln Lhe fuLure unachlevable sLandards mlghL
be lmposed by Lhe school as a scheme Lo ease ouL Lenured members of Lhe
faulLy ls unfounded 1he facL ls LhaL Lhe evldence ln Lhls case does noL bear
ouL peLlLloners' mlsglvlngs 1o Lhe conLrary lL appears LhaL only Lhe slx
peLlLloners ouL of Lhe school's 47 Leachers falled Lo obLaln Lhe grade of
83 whlch proves LhaL Lhe raLlng ls nelLher unaLLalnable nor unreallsLlc
(ld aL 69)"

lL ls Lhe prerogaLlve of Lhe school Lo seL hlgh sLandards of efflclency for lLs
Leachers slnce quallLy educaLlon ls a mandaLe of Lhe ConsLlLuLlon (ArL xlv
ar 1) As long as Lhe sLandards flxed are reasonable and noL arblLrary
courLs are noL aL llberLy Lo seL Lhem aslde Schools cannoL be requlred Lo
adopL sLandards whcl barely saLlsfy crlLerla seL for governmenL recognlLlon
(ld aL 67)"

Powever see S1 Mk'S CDLM CI DICLCG CI1 v LCIC L1 L L164913
1
st
D|v de| Cast|||o September 8 2010
ueparLmenL of LducaLlon CulLure and SporLs (uLCS) Memorandum no 10 S 1998
requlred lncumbenL Leachers Lo reglsLer as professlonal Leachers pursuanL Lo SecLlon 27
of 8epubllc AcL (8A) no 7836 oLherwlse known as Lhe hlllpplne 1eachers
30

rofesslonallzaLlon AcL of 1994 1he uLCS Memorandum pursuanL Lo 8C 8esoluLlon
no 600 S 1997 flxed Lhe deadllne for Leachers Lo reglsLer on SepLember 19 2000
eLlLloner however clalmed LhaL lL declded Lo LermlnaLe Lhe servlces of complalnlng
Leachers as early as March 31 2000 because lL would be pre[udlclal Lo Lhe school lf Lhelr
servlces wlll be LermlnaLed ln Lhe mlddle of Lhe school year lssue wheLher or noL Lhere
was lllegal dlsmlssal
Powever lL ls Lo be noLed LhaL Lhe law sLlll allows Lhose who falled Lhe
llcensure examlnaLlon beLween 1996 and 2000 Lo conLlnue Leachlng lf Lhey obLaln
Lemporary or speclal permlLs as paraLeachers ln oLher words as Lhe law has provlded a
speclflc Llmeframe wlLhln whlch respondenLs could comply peLlLloner has no rlghL Lo
deny Lhem of Lhls prlvllege accorded Lo Lhem by law As correcLly polnLed ouL by Lhe
Labor ArblLer and afflrmed by Lhe nL8C and Lhe CA Lhe dlsmlssal from servlce of
respondenLs alaclo Callbod Laqulo SanLander and MonLederamos on March 31 2000
was qulLe premaLure

eLlLloner clalms LhaL lL LermlnaLed respondenLs' employmenL as early as March
2000 because lL would be hlghly dlfflculL Lo hlre professlonal Leachers ln Lhe mlddle of
Lhe school year as replacemenLs for respondenLs wlLhouL compromlslng Lhe operaLlon
of Lhe school and educaLlon of Lhe sLudenLs Also peLlLloner reasons ouL LhaL lL could
noL enLer lnLo wrlLLen conLracLs wlLh respondenLs for Lhe perlod !une 2000 Lo
SepLember 19 2000 wlLhouL vlolaLlng Lhe uLCS's pollcy requlrlng conLracLs of yearly
duraLlon for elemenLary and hlgh school Leachers

31

eLlLloner's conLenLlons are noL Lenable llrsL even lf respondenLs' conLracLs
sLlpulaLe for a perlod of one year ln compllance wlLh uLCS's dlrecLlve such sLlpulaLlon
could noL be glven effecL for belng vlolaLlve of Lhe law rovlslons ln a conLracL musL be
read ln con[uncLlon wlLh sLaLuLory and admlnlsLraLlve regulaLlons 1hls flnds basls on
Lhe prlnclple LhaL an exlsLlng law enLers lnLo and forms parL of a valld conLracL wlLhouL
Lhe need for Lhe parLles expressly maklng reference Lo lL" SeLLled ls Lhe rule LhaL
sLlpulaLlons made upon Lhe convenlence of Lhe parLles are valld only lf Lhey are noL
conLrary Lo law Pence mere rellance on Lhe pollcy of uLCS requlrlng yearly conLracLs
for Leachers should noL prevenL peLlLloner from reLalnlng Lhe servlces of respondenLs
unLll and unless Lhe law provldes for cause for respondenLs' dlsmlssal

eLlLloner's lnLenLlon and deslre noL Lo puL Lhe sLudenLs' educaLlon and school
operaLlon ln [eopardy ls nelLher a declslve conslderaLlon for respondenLs' LermlnaLlon
prlor Lo Lhe deadllne seL by law Agaln by seLLlng a deadllne for reglsLraLlon as
professlonal Leachers Lhe law has allowed lncumbenL Leachers Lo pracLlce Lhelr
Leachlng professlon unLll SepLember 19 2000 desplLe belng unreglsLered and
unllcensed 1he pre[udlce LhaL respondenLs' reLenLlon would cause Lo Lhe school's
operaLlon ls only Lrlvlal lf noL speculaLlve as compared Lo Lhe consequences of
respondenLs' unemploymenL 8ecause of peLlLloner's predlcamenL lL should have
adopLed measures Lo proLecL Lhe lnLeresL of lLs Leachers as regular employees As
correcLly observed by Lhe CA peLlLloner should have earller drawn a conLlngency plan ln
Lhe evenL Lhere ls need Lo LermlnaLe respondenLs' servlces ln Lhe mlddle of Lhe school
year lncldenLally peLlLloner dld noL dlspuLe LhaL lL hlred and reLalned oLher Leachers
who do noL llkewlse possess Lhe quallflcaLlon and ellglblllLy and even allowed Lhem Lo
32

Leach durlng Lhe school year 20002001 1hls lndlcaLes peLlLloner's ulLerlor moLlve ln
hasLlly dlsmlsslng respondenLs
Nota 8ene 1he Supreme Court however d|d not order re|nstatement but
approved the payment of separat|on benef|ts and qua||f|ed "backwages"
eLlLloner quesLlons Lhe amounL of separaLlon pay awarded Lo respondenLs
conLendlng LhaL assumlng respondenLs were lllegally dlsmlssed Lhey are only enLlLled Lo
an amounL compuLed from Lhe Llme of dlsmlssal up Lo SepLember 19 2000 only AfLer
SepLember 19 2000 respondenLs accordlng Lo peLlLloner are already dlsmlsslble for
cause for lack of Lhe necessary llcense Lo Leach

1hls conLenLlon deserves no merlL eLlLloner cannoL posslbly presume LhaL
respondenLs could noL Llmely comply wlLh Lhe requlremenLs of Lhe law AL any raLe we
noLe LhaL peLlLloner only assalled Lhe amounL of backwages for Lhe flrsL Llme ln lLs
moLlon for reconslderaLlon of Lhe ueclslon of Lhe CA 1hus Lhe CourL cannoL enLerLaln
Lhe lssue for belng belaLedly ralsed Pence Lhe award of llmlLed backwages coverlng
Lhe perlod from March 31 2000 Lo SepLember 30 2000 as ruled by Lhe Labor ArblLer
and afflrmed by boLh Lhe nL8C and CA ls ln order

art III updaLes on lmmedlaLe 8elnsLaLemenL"
(a) |oneer 1extur|z|ng Corp v NLkC 343 hll 1037 (1997) esLabllshed Lhe
docLrlne LhaL an order or award for relnsLaLemenL from Lhe Labor ArblLer ls se|f
excutory meanlng LhaL lL does noL requlre a wrlL of execuLlon much less a
moLlon for lLs lssuance (1hls ls Lhe basls of Lhe currenL nL8C 8ules of rocedure
33

LhaL leaves Lhe enforcemenL of Lhe relnsLaLemenL order Lo Lhe employer who ls
glven Lhe duty to subm|t a comp||ance report w|th|n 10 days from rece|pt of the
dec|s|on 1he Labor ArblLer lssues a wrlL of execuLlon only when Lhe employer
dlsobeys Lhe above dlrecLlve or refuses Lo relnsLaLe Lhe dlsmlssed employee 8ule
lx SecLlon 6 of nL8C 8ules)

(c) 1he cases of opoeto v lblllpploe Altlloes (C No 152J29 401 5cA 424
Aptll 22 200J) lotetootloool cootoloet @etmlool 5etvlces loc (lc@5l) v Nc
(C No 115452 J00 5cA JJ5 uecembet 21 1998) ooJ klmbetly clotk (lbll)
loc v locooJo (C No 144885 Ioly 26 2006) ote ootbotltles fot tbe posltloo
tbot ootwltbstooJloq tbe tevetsol by tbe Nc of tbe lobot otbltets otJet of
telostotemeot tbe JlsmlsseJ employee ls stlll eotltleJ to tbe woqes occtoloq
Jotloq tbe peoJeocy of tbe oppeol

(d) Cenulno v nL8C339 SC8A 342 (uec 4 2007) has been exp||c|t|y repea|ed by
Garc|a et a| v L L164836 !an 20 2009 n 8onc CarploMorales !
1he Carcla rullng ls explalned beLLer ln Lhe laLesL case lnvolvlng ulC of uavao ClLy
Co||ege of the Immacu|ate Concept|on v NLkC tty Mar|us I Car|os hD
16756J Motcb 22 2010 J
tJ
ulv letolto I
ln Cotclo v lblllpploe Altlloes loc (!anuary 20 2009 376 SC8A 479) Lhe
CourL made a very enllghLenlng dlscusslon on Lhe aspecL of relnsLaLemenL
pendlng appeal
Cn Lhls score Lhe CourL's aLLenLlon ls drawn Lo seemlngly dlvergenL
declslons concernlng relnsLaLemenL pendlng appeal or parLlcularly Lhe opt|on of
payro|| re|nstatement Cn Lhe one hand ls Lhe [urlsprudenLlal Lrend as expounded
ln a llne of cases lncludlng Alt lblllpploes cotp v 2omoto whlle on Lhe oLher ls
Lhe recenL case of Ceooloo v Notloool obot elotloos commlssloo AL Lhe core of
34

Lhe seemlng dlvergence ls Lhe appllcaLlon of paragraph 3 of ArLlcle 223 of Lhe
Labor Code x x x
The view as maintained in a number oI cases is that:

x x x |E|ven if the order of reinstatement of the Labor Arbiter is
reversed on appeal, it is obligatory on the part of the employer to
reinstate and pay the wages of the dismissed employee during the
period of appeal until reversal by the higher court. On the other
hand, iI the employee has been reinstated during the appeal period and
such reinstatement order is reversed with Iinality, the employee is not
required to reimburse whatever salary he received Ior he is entitled to
such, more so iI he actually rendered services during the period.
(Emphasis in the original; italics and underscoring supplied)

In other words, a dismissed employee whose case was Iavorably
decided by the Labor Arbiter is entitled to receive wages pending
appeal upon reinstatement, which is immediately executory. Unless
there is a restraining order, it is ministerial upon the Labor Arbiter to
implement the order oI reinstatement and it is mandatory on the
employer to comply therewith.

The opposite view is articulated in Genuino which states:

II the decision oI the labor arbiter is later reversed
on appeal upon the Iinding that the ground Ior dismissal
is valid, then the employer has the right to require the
dismissed employee on payroll reinstatement to refund
the salaries he] received while the case was pending
appeal, or it can be deducted Irom the accrued beneIits
that the dismissed employee was entitled to receive Irom
|his| employer under existing laws, collective bargaining
agreement provisions, and company practices. However,
iI the employee was reinstated to work during the
pendency oI the appeal, then the employee is entitled to
the compensation received Ior actual services rendered
without need oI reIund.

33

Considering that Genuino was not
reinstated to work or placed on payroll reinstatement, and
her dismissal is based on a just cause, then she is not
entitled to be paid the salaries stated in item no. 3 oI the
1allo oI the September 3, 1994 NLRC Decision.
(Emphasis, italics and underscoring supplied)

It has thus been advanced that there is no point in releasing the
wages to petitioners since their dismissal was Iound to be valid, and to
do so would constitute unjust enrichment.



Prior to Genuino, there had been no known similar case
containing a dispositive portion where the employee was required to
reIund the salaries received on payroll reinstatement. In Iact, in a
catena oI cases, the Court did not order the reIund oI salaries
garnished or received by payroll-reinstated employees despite a
subsequent reversal oI the reinstatement order.

The dearth oI authority supporting Genuino is not diIIicult to
Iathom Ior it would otherwise render inutile the rationale oI
reinstatement pending appeal.

x x x x

x x x Then, by and pursuant to the same power
(police power), the State may authorize an immediate
implementation, pending appeal, oI a decision reinstating
a dismissed or separated employee since that saving act is
designed to stop, although temporarily since the appeal
may be decided in Iavor oI the appellant, a continuing
threat or danger to the survival or even the liIe oI the
dismissed or separated employee and his Iamily.


In the same case, the Court went on to discuss the illogical and unust
effects of the ~refund doctrine erroneously espoused in Genuino:

36

Even outside the theoretical trappings oI the discussion and
into the mundane realities oI human experience, the 'reIund doctrine
easily demonstrates how a Iavorable decision by the Labor Arbiter
could harm, more than help, a dismissed employee. The employee, to
make both ends meet, would necessarily have to use up the salaries
received during the pendency oI the appeal, only to end up having to
reIund the sum in case oI a Iinal unIavorable decision. It is mirage oI a
stop-gap leading the employee to a risky cliII oI insolvency.

Advisably, the sum is better leIt unspent. It becomes more
logical and practical Ior the employee to reIuse payroll reinstatement
and simply Iind work elsewhere in the interim, iI any is available.
Notably, the option oI payroll reinstatement belongs to the employer,
even iI the employee is able and raring to return to work. Prior to
enuino, it is unthinkable Ior one to reIuse payroll reinstatement. In
the Iace oI the grim possibilities, the rise oI concerned employees
declining payroll reinstatement is on the horizon.

Further, the Genuino ruling not only disregards the social
justice principles behind the rule, but also institutes a scheme unduly
Iavorable to management. Under such scheme, the salaries dispensed
pendente lite merely serve as a bond posted in installment by the
employer. For in the event oI a reversal oI the Labor Arbiter`s
decision ordering reinstatement, the employer gets back the same
amount without having to spend ordinarily Ior bond premiums. This
circumvents, iI not directly contradicts, the proscription that the
'posting oI a bond |even a cash bond| by the employer shall not stay
the execution Ior reinstatement.

In playing down the stray posture in Genuino requiring the
dismissed employee on payroll reinstatement to reIund the salaries in
case a Iinal decision upholds the validity oI the dismissal, the Court
realigns the proper course oI the prevailing doctrine on reinstatement
pending appeal vis-a-vis the eIIect oI a reversal on appeal.

x x x x

The Court reaIIirms the prevailing principle that even iI the
order oI reinstatement oI the Labor Arbiter is reversed on appeal, it is
obligatory on the part oI the employer to reinstate and pay the wages
37

oI the dismissed employee during the period oI appeal until reversal
by the higher court. x x x
1hus Lhe CourL resolved Lhe lmposse by reafflrmlng Lhe prlnclple
earller enunclaLed ln Alt lblllpploes cotpototloo LhaL an employee cannoL
be compelled Lo relmburse Lhe salarles and wages he recelved durlng Lhe
pendency of hls appeal noLwlLhsLandlng Lhe reversal by Lhe nL8C of Lhe
LAs order of relnsLaLemenL ln Lhls case Lhere ls even more reason Lo hold
Lhe employee enLlLled Lo Lhe salarles he recelved pendlng appeal because
Lhe nL8C dld noL reverse Lhe LAs order of relnsLaLemenL buL merely
declared Lhe correcL poslLlon Lo whlch respondenL ls Lo be relnsLaLed le
LhaL of fullLlme professor and noL as uean
eLlLloner (ulC) alleged LhaL due Lo Lhe unreasonable demand of Lhe
respondenL LhaL he be relnsLaLed as a uean lnsLead of a faculLy member
peLlLloner was consLralned Lo relnsLaLe hlm ln Lhe payroll only 1hus peLlLloner
argued LhaL when Lhe respondenL lmposed uncalled for condlLlons for hls
relnsLaLemenL hls clalm for relnsLaLemenL pendlng appeal was effecLlvely
nulllfled We rule LhaL respondenL dld noL lmpose any unreasonable condlLlon on
hls relnsLaLemenL as a uean because he was merely demandlng LhaL he be
relnsLaLed ln Lhe manner seL forLh by Lhe LA ln Lhe wrlL of execuLlon Moreover lL
bears sLresslng LhaL Lhe manner of lmmedlaLe relnsLaLemenL pendlng appeal or
Lhe prompLness Lhereof ls lmmaLerlal as lllusLraLed ln Lhe followlng Lwo
scenarlos
S|tuat|on No 1 (As ln Lhe cases of Alt lblllpploes cotpototloo and
lotetootloool cootoloet @etmlool 5etvlces loc) 1he LA ruled ln favor of Lhe
dlsmlssed employee and ordered hls relnsLaLemenL Powever Lhe employer dld
noL lmmedlaLely comply wlLh Lhe LAs dlrecLlve Cn appeal Lhe nL8C reversed Lhe
38

LA and found LhaL Lhere was no lllegal dlsmlssal ln Lhls scenarlo We ruled LhaL
Lhe employee ls enLlLled Lo paymenL of hls salarles and allowances pendlng
appeal
S|tuat|on No 2 (As ln Lhe presenL case) 1he LA ruled ln favor of Lhe
dlsmlssed employee and ordered Lhe laLLers relnsLaLemenL 1hls Llme Lhe
employer complled by relnsLaLlng Lhe employee ln Lhe payroll Cn appeal Lhe LAs
rullng was reversed flndlng LhaL Lhere was no case of lllegal dlsmlssal buL merely
a Lemporary sancLlon akln Lo a suspenslon Pere We also musL rule LhaL Lhe
employee cannoL be requlred Lo relmburse Lhe salarles he recelved because lf he
was noL relnsLaLed ln Lhe payroll ln Lhe flrsL place Lhe rullng ln slLuaLlon no 1 wlll
apply le Lhe employee ls enLlLled Lo paymenL of hls salarles and allowances
pendlng appeal
1hus elLher way we look aL lL aL Lhe end of Lhe day Lhe employee geLs hls
salarles and allowances pendlng appeal 1he only dlfference lles as Lo Lhe Llme
when Lhe employee geLs lL
(e) Immed|ate ke|nstatement |n rt 263(g) "keturn to Work" Latest Cases
Un|vers|ty of Immacu|ate Concept|on Inc vs Secretary 448 5cA 190
(Ioo14 2005) 1
st
ulv Azcooo I Issue coo tbe 5ectetoty of u opoo
ossomptloo of jotlsJlctloo of o lobot Jlspote (Att 26J(q)) otJet tbe employet to
telostote employees tetmlooteJ by tbe employet eveo lf tbose tetmlooteJ
employees ote oot pott of tbe botqololoq oolt ooJ tbelt tetmlootloo ls coveteJ by
o Jeclsloo of tbe voloototy otblttotot wblcb Jeclsloo bos become flool ooJ
execotot?
39

5 by vlttoe of tbe ovetotcbloq lotetest of tbe stote to testote tbe stotos qvo vnc
cvn (Lhe employees concerned were ordered relnsLaLed payroll wlse)
LD1 vs Manggagawa ng omun|kasyon sa |||p|nas L162783 !uly 14
2003 463 SC8A 418 2
nd
ulv Chlconazarlo ! 1he SecreLary of Labor assumed
[urlsdlcLlon of Lhe dlspuLe (ArL263(g)) and lssued a reLurn Lo work order Lo all
sLrlklng workers excepL Lhose who were LermlnaLed due Lo redundancy" 1he
unlon sLruck on 23 uec 2002 Lo proLesL Lu1's redundancy program Cn uec 31
2002 383 unlon members (Lelephone operaLors) were LermlnaLed pursuanL Lo
Lhe redundancy program MosL of Lhe Lelephone workers had recelved Lhelr
separaLlon beneflLs whlch were ln excess of whaL ArL 283 mandaLed
1he unlon flled a MoLlon for 8econslderaLlon of Lhe SecreLary's 8eLurnLowork
Crder 1he SecreLary cerLlfled Lhe labor dlspuLe Lo Lhe nL8C
Peld 8eLurn Lo work order musL cover ALL Lhe sLrlklng workers 1haL lncludes all
Lhe Lelephone workers even Lhose who had recelved Lhelr LermlnaLlon beneflLs