Usec Jimenez Labor Notes

LATEST SUPREME
COURT DECISIONS
2014 Labor
Jurisprudence
Atty. Josephus B. Jimenez, FPM

PROFESSOR OF LAWS, AUTHOR, ASEAN & INTERNATIONAL SPEAKER and 2014 PMAP
President
Atty. JBJ‘s 23 Years Of Solid
Corporate Experience in Leading,
Teaching and Managing Human
Capital and Private Corporations
Vice President for Human Resources and

Employee Relations Manager
Legal and Corporate Affairs and Senior Labor Attorney
(5 Years) (3 Years)
Director for Employee

and Labor Relations and
Director for Labor and
Industrial Relations
Litigation (12 Years)
Resource Person and Professor of Law (30 Years)

• Undersecretary, DOLE 2002 – 2005
• Labor Attaché II (Malaysia, 2005 – 2008)
• Labor Attaché II (Kuwait, 2008 – 2010)
• Labor Attaché II (Central Taiwan, 2010 – 2011)
Executive Director, National Maritime Polytechnic
• Labor Arbiter, 1977 – 1981

• Chief Information Officer, Chief, Complaints And Action Unit, 1976 – 1977
• Med-Arbiter, Labor Regulation Officer, 1974 - 1976
• Court Interpreter, Cebu City Court, 1970 - 1974
CASES FOR DISCUSSION
1. St. Scholastica’s College (Westgrove)

• Pre Marital Pregnancy of a Non-Teaching
Personnel
• 28 January 205 ( ILLEGAL DISMISSAL )
2. La Consolacion College
• Altercation Between A Dean And A Faculty
Member Inside The Faculty Room
• 08 December 2014 ( ILLEGAL DISMISSAL ) 4
3. Grace Christian High School

• The Teacher Who Refuses To Retire
• 20 August 2014 ( LEGAL RETIREMENT )
4. STI
• Dismissal of School COO, Held ILLEGAL
• 09 July 2014 ( ILLEGAL DISMISSAL )
5
5. Colegio de San Juan de Letran

• Money Related Alleged Misconduct, Held
ILLEGAL
• 09 July 2014, ILLEGAL DISMISSAL
6
6. Ateneo de Manila University

• Illegal Dismissal ; Reinstatement Pending Appeal
• 23 July 2014
7. Wesleyan University
• Dismissal of a University Treasurer
• 30 July 2014 ( LEGAL DISMISSAL )
7
8. UST (USTFU)
• Millions of Faculty Benefits Lost
• 30 July 2014
9. Chang Kai Shek College

• Voluntary Resignation, No Constructive Dismissal
• 08 April 2014 ( LEGAL DISMISSAL )
8
10.Unibersidad de Sta. Isabel

• Probationary Status and Fixed-Term Employment
• 02 April 2014 ( ILLEGAL DISMISSAL )
11. Colegio del Santisimo Rosario

• Standards for Regularization
• 04 September 2013 ( ILLEGAL DISMISSAL )
9
12. Colegio de San Juan de Letran

• Dismissal due to alteration of Grades
• 01 Sept 2014 ( LEGAL DISMISSAL )
13. Colegio de Sta. Rosa, Makati

• School Doctor’s Neglect of Medical Duties
• 06 August 2014 ( LEGAL DISMISSAL )
10
14. International School Manila

• Incompetence in Teaching Filipino
• 05 February 2014 ( Both Sides Won )
15. Immaculate Conception Academy

• Chief Accountant Dismissed Because of Gross
Negligence
• 02 July 2014 ( LEGAL DISMISSAL ) 11
16. University of Pangasinan

• Correct Computation of Benefits
• 12 November 2014 ( Management Lost This One )
17. Wesleyan University

• CBA Benefits ( Can Not Be Diminished Unilaterally
)
12
• 12 March 2014 ( Management Lost This Case Too
18. Holy Child Catholic School

• Bystander Role of Management
• 23 July 2013 ( UNFAIR LABOR PRACTICE )
19. DLSU (Union)

• Unfair Labor Practice
• 23 August 2012 ( Management Lost This Case )
13
20. DLSU (Death)

• Death Benefits
• 18 July 2014 ( Both Parties Lost )
21. University of the East

• Legal Dismissal of College Professor without
Master’s Degree
• 28 November 2012 ( LEGAL DISMISSAL ) 14
FINAL SCORES
1. 8 Cases out of 21 – Won by employers (38%)
2. 11 Cases out of 21 – Won by employees (52.4%)
3. 1 was won by both (0.47%)
4. 1 was lost by both (0.47%)
15
MARITIME CASES
7. THE SC REITERATES THE MEANING OF

PERMANENT TOTAL DISABILITY; STRESSES THE
DUTY OF THE COMPANY-DESIGNATED
PHYSICIAN
MARITIME CASES
“WHILE PERMANENT TOTAL

DISABILITY INVARIABLY RESULTS IN
AN EMPLOYEE’S LOSS OF WORK OR
INABILITY TO PERFORM HIS USUAL
WORK, PERMANENT PARTIAL
U DISABILITY, ON THE OTHER HAND,
OCCURS WHEN AN EMPLOYEE
LOSES THE USE OF ANY
PARTICULAR ANATOMICAL PART OF
HIS BODY WHICH DISABLES HIM TO
CONTINUE WITH HIS FORMER
WORK.”

PHYSICIAN
MARITIME CASES

PHYSICIAN
MARITIME CASES
“THE COMPANY-DESIGNATED PHYSICIAN MUST ARRIVE AT A

DEFINITE ASSESSMENT OF THE SEA-FARER’S FITNESS TO WORK
OR PERMANENT DISABILITY WITHIN THE PERIOD OF 120 OR 240
DAYS, PURSUANT TO ARTICLE 192 (C) (L) OF THE LCP AND RULE
X, SEC. 2 OF THE AMENDED RULES ON EMPLOYEES
COMPENSATION.” U
“IF HE FAILS TO DO SO AND THE SEA-FARER’S MEDICAL

CONDITION REMAINS UNRESOLVED, THE LATTER SHALL BE
DEEMED TOTALLY AND PERMANENTLY DISABLED.”
C. Concur: JBJ
PHYSICIAN
MARITIME CASES
8. PRESUMPTION OF WORK RELATEDNESS AND

COMPENSABILITY
MARITIME CASES

COMPENSABILITY
MARITIME CASES
C. Concur: JBJ

COMPENSABILITY
Avelino S Alilin vs Petron Corp, GR 177592, 09 June 2014
A. FACTS:
1. Petron is a domestic corporation engaged in the oil business. It

owns several bulk plants in the country, for receiving,
storing and distributing its petroleum products.
2. in 1968, Ronaldo D Gindang Contractor started recuiting laborers

for fielding to Petron’s Mandaue Bulk Plant.
3. When Romulado died in 1989, his son Renato D Gindang ( RDG)

took over the business
and contimued to provide manpower services to Petron.
4. Among others, the nine complainants were hired by RDG and

assigned to Petron.
5. The names, Date/Year of Hiring, and the Duties And Responsibilities

of each are stated in the next page.
AVELINO S ALILIN, vs. Petron Corp, GR 177592, 09 June 2014
6. The NAMES, HIRING DATES/YEARS and DUTIES of the following are as
follows:
6.1) Eutiquio Gindand, 1968, Utility, Tanker Reciever, Barge Loader

Warehouseman, Mixer;
6.2) Eugema T Laurente, June 1979, Telephone Operator,

Order Taker:
6.3) Teodoro Calesa, August 1, 1981, Utility, tanker Reciever, Barge Leader,
Sounder, Ganger;
6.4) Rex Gabilan, July 1, 1987, Warehouseman, Forklift Driver, Tanker

Reciever, Barge Loader;
6.5) Charlie T Hindang, September 18, 1990, Utility tanker,

reciever, Barge Loader, sounder, Ganger
Antonio S Alilin vs Petron Corporation, GR 177592, 09 June 2014
6.6) Allan S Sungahid, September 18, 1990, Filler, Sealer,

Painter, Tanker Reciever, utility;
6.7) Maximo S Lee, September 18, 1990, Gasul Filler, Painter,

Utility, carpenter, Driver;
6.8) Jose Gerry M Morato , march 16, 1993, Cylinder Checker, tanker Reciever,
Grass Cutter, Janitor, Utility;
6.9) Avelino S Alilin, July 16, 1992,

Carpenter, Driver.
Avelino S Alilin vs Petron Corp GR 177592, 09 June 2014
7. On June 1, 2000, Petron and RDG entered into a contract for

services for the period from June 1, 2000 to May 31, 2002, whereby
RDG undertook undertook to provide
Petron with:
(a)Janitorial,
(b)Maintenance,
(c)Tanker Receiving,
(d)Packaging, and
(e) Other Utility services
in its Mandaue Bulk Plant.
8. This Contract was extended on July 31, 2002 and further extended
extended until September 30, 2002.
9. Upon expiration thereof, no further renewal of the service contract was done.
10. On November 12, 2002, Alilin, Calesa, Hindang, Gindang,
sungahid, Lee, Morato, and Gabilan filed a Complaint.
10. Specific CAUSES OF ACTION were:
10. 1) Illegal Dismissal,
10.2) Underpayment of Wages,
10.3) Damages, and
10.4) Attorney’s Fees.
11. Laurente filed another complaint for the following CAUSES OF ACTION:
11.1) Illegal Dismissal

11.2) Underpayment of wages,
11.3) Non-Payment of
(a)Overtime Pay,
(b)Holiday Pay,
(c)Premium pay For Holiday,
(d)Rest Day,
(e)Thirteenth Month Pay,
(f)Service Incentive Leave Pay,
(g)allowances,
(h)separation Pay,
(i)Retirement Benefits,
(j)Damages, and
(k)Attorney’s Fees.
12. The two complainants were consolidated.

Avelino S Alilin vs Petron Corp, GR 177592, 09 JUNE 2014
B. CASE HISTORY:
1.LABOR ARBITER: ( 12 June 2003 ) ruled in favor

of the Complainants that:
1.1) That the workers were regular

employees of Petron,
1.2) That their jobs were directly related to Petron’s

business operations,
1.3) That they worked under the supervision

of Petron’s foreman and supervisor,
1.4) That they were using Petron’s tools

and equipment in the performance
of their work,
1.5) That Petron merely used RDG in its attempt to hide the
exixtence of employer-employee relationship between
it and the workers and avoid liability under labor laws.
AVELINO S ALILIN vs Petron, GR 177592, 09 JUNE 2014
1.6) That there being no showing that petitioners’ dismissal

was for JUST or AUTHORIZED CAUSE, the Labor Arbiter
declared the workers to have been illegally
DISMISSED.
1.7) That Petron was thus held solidarily liable with

Romeo d Gindang for the payment of
the workers’ SEPARATION PAY( IN LIEU OF REINSTATEMENT DUE
TO STRAINED RELATIONS with Petron )
fixed at one-month pay for every year of service,
1.8) And BACKWAGES computed on the

basis of the salary rate at the time of dismissal.
AVELINO S ALILIN vs Petron Corp, GR 177592, 09 JUNE 2014
2. N L R C… ( 18 February 2005 ), affirmed the Labor

Arbiter. The NLRC denied the MR filed by Petron. The denialwas
dated 24 August 2005.
3. COURT OF APPEALS: ( 10 May 2006 ) The CA reversed

the Labor Arbiter and the NLRCand found no employer-employee
relationship between Petron and the and the
workers. The CA found RDG to be an independent
contractor. Denial of the workers’ MOTION
FOR RECONSIDERATION was dated 30 March 2007.
C. ISSUES BEFORE THE SUPREME COURT:
1.WAS RDG A LEGITIMATE JOB CONTRACTOR ?
2.2. WAS THERE AN EMPLOYER-EMPLOYEE RELATIONSHIP

BETWEEN PETRON AND THE WORKERS ?
AVELINO S ALILIN VS PETRON CORP, GR 177592, 09 JUNE 2014
D. THE SUPREME COURT RULING:
1. DUE TO CONFLICT IN THE FACTUAL FINDINGS BELOW,

THE SUPREME COURT RECIEWED THE FACTUAL ISSUES:
1.1) As a general rule, the Court does not review errors

that raise factual issues.
( Javier vs Fly Ace Corporation, GR 192558,
15 february 2012, 666 SCRA 382, 394 - 395 )
1.2) Nonetheless, while it is true that the determination

of whether an EMPLOYER-EMPLOYEE RELATIONSHIP
existed betweenthe parties basically involves
a QUESTION OF FACT.
1.3) The conflicting findings of the Labor Arbiter

and the NLRC, on one hand, and of the CA, on the other,
constrains the Court to review and reevaluate such factual findings.
AVELINO S ALILIN VS. PETRON, GR 177592, 09 JUNE 2014
2. THE CONTROLLING LAW:
2.1) The prevailing law on labor-only contracting at the time

Petron and RDG entered into the contract for services in June 2000
is DOLE D.O. 10, SERIES OF 1977. ( Amending the Rules And Regulations
Implementing Books III and VI of the Labor Code,
as amended.
2.2) The pertinent provisions of D. O. 10 reads:
‘’ (f) LABOR-ONLY CONTRACTING, PROHIBITED UNDER THIS RULE

IS ARRANGEMENT WHERE THE CONTRACTOR
OR SUBCONTRACTOR MERELY RECRUITS, SUPPLIES, OR PLACES
WORKERS TO PERFORM A JOB, WORK OR SERVICE
FOR A PRINCIPALAND THE FOLLOWING ELEMENTS ARE PRESENT:
AVELINO S ALILIN VS. PETRON, GR 177592, 09 JUNE 2014
‘’(I) The contractor or subcontractor does not have substantial

capital or investment to actually perform
the job. work or service under
its own account and responsibilities, and
(ii) The employees recruited supplied or placed by

such contractor or such contractor or sub-contractor
are performing activities which are directly
to the main business of the principal.
3. MEANING OF PERMISSIBLE JOB CONTRACTING

OR SUB-CONTRACTING
Permissible job contracting or sub-contracting refers to an arrangement

whereby a principal agrees to farm out with a contractor
or sub-contractor the performance of a specific
job, work, or service within a definite or pre-determined
period, regardless of whether such job, work or service is to be
performed or completed within or outside
the premises of the principal.
AVELINO S ALILIN, VS PETRON GR 177592, 09 JUNE 2014
4. CONDITIONS FOR LEGITIMATE OR PERMISSIBLE JOB

CONTRACTING
Under this arrangement, the following conditions must be met:
(a)The contractor carries on a distinct and independent

business and undertakes the contract work on his account under his own
responsibility, according to his own manner and method
free from the control and direction of the employer
or principal in all matters connected with the performance of his
work, except as to the results thereof.
(b) The contracto has substantial capital or investment,

and
(c) The agreement between the principal and contractor or

sub-contractor assures the contractual employees’
entitlement to:
AVELINO S ALILIN VS PETRON, GR 177592, 09 JUNE 2014
(c.1) All labor and occupational safety and health standards,
(c.2) Free exercise of the right to self-organization,
(c.3) Security of Tenure, and
(c.4) Social Welfare Benefits.
5. WHAT IS LABOR-ONLY CONTRACTING ?
Labor-only contracting is a prohibited act defined as “ supplying workers to an

employer.
AVELINO S ALILIN vs PETRON CORP GR 177592, 09 JUNE 2014
22. ILLEGAL DISMISSAL FOR VIOLATION OF THE LABOR CODE:
(A)RESPONDENTS ARE REGULAR EMPLOYEES.
(B) IN CASES OF REGULAR EMPLOYMENT, AN EMPLOYER MAY TERMINATE
THE SERVICES OF AN EMPLOYEE FOR JUST OR AUTHORIZED CAUSE UNDER
(A)THE LAW ( ARTICLE 279, LABOR CODE OF THE PHIL, as amended )
(C) AS THE REASON GIVEN BY PETRON FOR DISMISSING
THE WORKERS DOES NOT CONSTITUTE JUST OR AUTHORIZED
CAUSE FOR TERMINATION, THE LATTER ARE DECLARED
TO HAVE BEEN ILLEGALLY DISMISSED.
( BABAS VS LORENZO SHIPPING CORP )




AVELINO S ALILIN vs Petron GR 177592, 09 JUNE 2014


AVELINO S ALILIN vs PETRON CORP, GR 177592, 09 June 2014

AVELINO S ALILIN vs Petron Corp GR 177592, 09 June 2014

Avelino S Alilin vs Petron Corp GR 177592, 09 June 2014

Avelino S Alilin vs Petron, GR 177592, 09 June 2014

Avelino s Alilin Vs Petron Corp, GR 177592, 09 June 2014

II… A CASE OF ALLEGED INSUBORDINATION AND MISCONDUCT
ARISING FROM AN ALTERCATION
JOEL N. Montallana GR 208890

versus
La Consolacion College, 08 Dec 2014
Sister Imelda A Mora First Division,
and Albert D. Manalili Perlas-Bernabe, J.
A. FACTS (Part One)
1. A FACULTY MEMBER
Montallana was a faculty member of La Concolacion College of Arts and
Sciences.
2. THE SPECIFIC CHARGE

On 16 Jan 2009, Mrs. Nerissa D. del Fierro-Juan, Asst Dean of the
College of Arts and Sciences and the immediate superior of Montallana,
filed a formal administrative complaint against Montallana charging
him of:
(a) Oral defamation for slander,

48
(b) Disorderly conduct in the school premises; and
(c) Discourteous /indecent behavior or using profane or obscene
language in addressing co-employees superiors, or
anybody within the school premises.
3. THE INCIDENT THAT STARTED IT ALL

The said complaint arose from am incident that occurred in the faculty
room on Jan 12, 2009 while Deans’s Secretary Ann Ruiz and student
Kathlyn Saez were numbering the lockers, pursuant to a policy the
lockers, pursuant to a policy implemented by Jan.
4. A SIMPLE CONVERSATION
At that time, Montallana was conversing with a co-faculty member, Dr.

Beatriz V. Pablito, when the latter asked Ruiz and Sarez that they were
doing.
5. A CRITICAL COMMENT
Upon learning of the realignment of lockers of faculty members, through

drawing of lots, Pabito commented saying: “PARA NAMAN TAYONG BATA
NYAN”, to which Montallana followed suit and, in a loud voice, remarked,49
6. THE ASST DEAN CONFRONTED HIM
Juan heard Montalla’s remark and confronted him, resulting in a heated

alteration that ended with the latter walking out of the room while Juan
was talking to him.
7. FOUND GUILTY OF SERIOUS MISCONDUCT

After due investigation, La Consulacion’s fact-finding committee found
Montallana guilty of SERIOUS MISCONDUCT in making derogatory and
insulting remarks about his superior, aggravated by the fact that he made
remarks about his superior in a loud voice so that juan would hear them.
8. MITIGATED PENALTY
While noting that the foregoing may be considered as a just cause for
Mantallana’s termination, the committee observed that it was his first
offense and stressed on the reformative and redemptive facts of the case.
9. SUSPENSION FOR TWO MONTHS, NO PAY
In fine, Montallana was only meted the penalty of suspension without pay a
period of TWO (2) months and declared him to submit a written public
apology to juan in a tenor satisfactory to her and the La Consulacion HRD.
50
10. REQUEST FOR RECONSIDERATION
In a letter dated 22 April 2009, Montallana sought reconsideration oh his
suspension and explained that a written public apology was inappropriate at
the time in new of the pendency of a criminal complaint for GRAVE ORAL
DEFAMATION filed by juan against him before the City Prosecutors office.
11. APOLOGY WAS CALLED INAPPROPRIATE
He mentioned that his issuance of a written public apology was

inapropriate, while the criminal case was being heard. It might incriminate
himself, adding too that was his lawyer who abused him to invoke his
right against self-incrimination.
12. REQUEST FOR RECONSIDERATION, DENIED
The request having been denied by La Consolacion’s President,

respondent Sr. Imelda A. Mora in her letter dated 12 May 2009,
Montalla filed a complainant for illegal suspension and Unfair
Labor Practice. xxx
13. COMPLAINT FILED AGAINST LCC
“xxx With a prayer for payment of salaries during the period of

suspension, and moral and exemplary damages against51
B. CASE HISTORY: (Part One)
1. Labor Arbiter (15 April 2010): ruled in favor of Montallana and held that
his actions did NOT constitute SERIOUS MISCONDUCT. The Arbiter
dissolved the suspension ILLEGAL and the school was ordered to pay Php
48,000.00, coresponding to his salary for the period of suspension.
2. NLRC (30 September 2010): The NLRC reversed the Labor Arbiter and
decided in favor of La Consolation, holding that Montallana’s acts
constituted SERIOUS MISCONDUCT. The NLRC held that the
suspension was legal.
3. He did not appeal to the CA.
C. FACTS (Part Two)
1. ANOTHER ORDER TO EXPLAIN

On 11 June 2011, La Consulacion, through its HRD Director, respondent
Albert D. Manalili directed Montallana to explain in writing why he should
not be dismissed for failure to submit his written public apology, which
was part of the penalty affirmed by the NLRC. 52
2. REQUEST FOR INDULGENCE
On 09 June 2011, Montallana begged for LCC’s indulgence, explaining
that he had no intention to defy the directive xxx and thay his inability
to employ therewith was only in view of the pendency of the criminal
case against him.
3. ALL THE TIME, HE WAS WILLING
He expressed his willingness to comply with the directive once

the said case was resolved with finality.
4. MONTALLANA WAS DISMISSED

Finding Montallana’s written explanation unsatisfactory, Manalili
termonated him from work on 13 June 2011.
D. CASE HISTORY (Part Two)

1. LABOR ARBITER (14 November 2011): decided that Montallana
committed SERIOUS MISCONDUCT.
2. NLRC (31 July 2012): reversed the Labor Arbiter and ruled that the
dismissal was illegal. The School was ordered to reinstate Montallana53
3. CA (31 May 2013): reversed the NLRC and reinstate the ruling of the LA.
4. SC (08 December 2014)
E. ISSUES
1. Was there a JUST CAUSE to dismiss Montallana?
2. To what remedy, if at all, is he entitled?
3. Should the President and the HR Director be held personally liable?
E. ISSUES
1. No.
2. Reinstatement with full backwages.
3. No.
54
G. SPECIFIC PRONOUNCEMENTS
1. WHAT IS REINSTATEMENT?
(a) “Willful disobedience by the employee of the lawful orders of the

employer, or his representative in connection with his work. In one of the
JUST CAUSES to terminate an employee under Article 296 (a) (formerly
Article 282 (a) of the Labor Code, as renumbered by virtue of RA 10151).
2. REQUIREMENT FOR INVOKING THIS GROUND OF INSUBORDINATION
(a) “In order for this ground to be properly involked, as a just cause for
dismissal, THE CONDUCT MUST BE WILLFUL OR INTENTION,
WILLFULLNESS BEING CHARACTERIZED BY A WRONGFUL AND
PERVERSE MENTAL ATTITUDE. (citing Nissan Motors Phils Inc. versus
Angelo, GR 164181, 14 Sept 2011, 657 SCRA 520, 529-530)
(b) “In Dongon vs. Rapid Movers and Forwarders Co. Inc. (GR 163431, 28
August 2013, 704 SCRA 56).
3. BURDEN OF PROOF
55
substantial evidence, that the aforesaid just cause-or any other
AUTHORIZED CAUSE for that matter-forms the basis of the
employee’s dismissal from work (ONOC-EDC vs. Esrella, GR 197789,
08 July 2013, 700 SCRA 767, 775).
(b) Failing in which the dismissal should be adjudged as ILLEGAL.
4. THE WILLFULNESS OF MONTALLANA’S ACTION WAS NOT PROVED

(a) “In the case at bar, respondents failed to prove, by substantial evidence,
that Montalla’s non-compliance with respondent’s
directive to apologized was “WILLFUL OR
INTENTIONAL”.
(b) The Court finds itself in complete agreement With The NLRC that the
disobedience attributed to Montallana could not be justify
characterized as willful within the contemplation of Article 296 of
the Labor Code xxx.
5. THE REFUSAL TO COMPLY WAS IN GOOD FAITH
(a) Aside from the administrative complaint filed by Juan against Motalllana56
(b) “In the honest relief that issuing a letter of apology would incriminate
him in said criminal case, and upon the adduce of his own
lawyer at that, Montallana wrote to respondents and voluntarily
communicated that he was willing to issue the required
apology, but only had to defer the same in view of his legal predicament.
(c) “As the Court sees to it, the tenor of his letters and the circumstances
under which they were taken, at the very least, exhibited
Montallana’s good faith in dealing with respondents.
(d) “This, therefore , negates the theory that his failure to abide by
respondents’ directive to apologize was attended by
a “wrong and perverse mental attitude rendering the
employee’s act inconsistent with proper subordination.”, which
would warrant his termination from employment.
6. ASSUMING THERE WAS AN INSUBORDINATION, DISMISSAL WAS TOO

SEVERE
(a) Even on the assumption that there was willful disobedience still the
Court finds the penalty of dismissal too harsh.
(b) It bears to stress that not every case of INSUBORDINATION or WILLFUL57

(c) “The penalty to be imposed on an erring employee must be
commensurate with the gravity of his offense. (NLRC vs.
Salgarino 529 Phil 355, 371, 2006).
(d) “To the Court’s mind, the case of an employee who is compelled to
apologize for a previous infraction who fails to do so is not
which would properly warrant his termination, absent any proof
that the refusal was made in brazen disrespect of his
employees.
7. STANDARDS OF BEHAVIOUR FOR TEACHERS AND EDUCATIONAL

INSTITUTIONS
(a) While there is no question that teachers are held to a peculiar standard
of behavior in view of their significant role in the rearing of
hour youth, educational institutes are, in the meantime, held
against legal standard imposed against all employers,
among which, is the reservation of the ultimate penalty of dismissal for
serious infarctions enumerated as just causes under Article 296
of the Labor Code.
58
8. THE FAILURE TO PROVE BY SUBSTANTIAL EVIDENCE
9. ILLEGAL DISMISSAL FOR FAILURE TO PROVE GUILT OF THE EMPLOYEE
(a) Since the failure to prove, by SUBSTANTIAL EVIDENCE, that

Montallana’s dismissal was based on a JUST or AUTHORIZED
cause, under the Labor Code, or was clearly warranted under LCC
Administrative Affairs’ Manual, the Court rules that dismissal was
illegal.
(b) Consequently, REINSTATEMENT with BACKWAGES should be awarded.
10. THE PRESIDENT AND THE HR DIRECTOR SHOULD NOT BE HELD

PERSONALLY LIABLE
“It is a rule that personal liability of corporate directors, trustees or
officers attaches only when:
(a) they assent to a patently unlawful act of the corporation, when they are
guilty of bad faith, or gross negligence in directing its affairs or
when there is a conflict of interest resulting in damages to the
corporation, its stockholders or other persons;
(b) they consent to the issuance of watered down stocks, or having59

(c) they agree to hold themselves personally and solidarily liable with the
cooperation, or
(d) they are made by specific provision of law, personally answerable for
their corporate action.
60
Case 3: THE TEACHER WHO REFUSES TO RETIRE
1. GR 177845, 20 August 2014, Second Div, Perlas Bernabe J

J
Grace Christian High School, et al vs. Filipinas A. Lavandera

FACTS:
1. F.A.L. was employed by the school since June 1977
2. Her monthly salary was P 18,662 as of 31 May 2001
3. On 11 May 2001, she was informed that the school has
decided to exercise its option to retire her under the
SCHOOL ADMINISTRATIVE MANUAL.

FACTS:
4. That decision was based on the School Retirement Plan
which gives the school the option to retire a teacher who
has served for at least 20 years regardless of age.
5. F.A.L objected but the school insisted on its decision. She
filed an illegal dismissal case.

ISSUE:
Was the retirement tantamount to ilegal dismissal?
RULING:
NO
CASE HISTORY:
1. Labor Arbiter: No illegal dismissal (26 May 2002)

Retirement Pay: P 143,717.00
2. NLRC: No illegal dismissal (30 Aug 2002)
Retirement Pay P 27,057.20
3. CA: No illegal dismissal (30 April 2007)
Retirement Pay P 10, 218.00
4. SC: No illegal Dismissal (20 Aug 2014)
Retirement Pay P 68,150 plus 6% interest
SPECIFIC PRONOUNCEMENTS:
1. RA 7641, which was enacted on 09 Dec 1992, amended
Article 287 of the Labor Code
2. Retirement Pay shall be, for every year of service;

15 days
+ 5 days (SIL)
2.5 days (1/13th of 13th month pay)
-----------------------
22.5 days
* Unless the CBA or the Company practice provide higher

Precedent:
a.Eligir vs PAL, GR 181995, 16 July 2012, 676 SCRA 463, 475
b.Enriquez Security Services Inc. vs Cabotaje, 528 Phil 603, 2006

Case No. 4: CONSTRUCTIVE DISMISSAL OF A
SCHOOL COO
1. GR 185100 09 July 2014 Second Division: del Castillo, J
Girly Ico vs. Systems Technology Institute, et al

FACTS:
1. GI, the COO of STI Makati, was removed from her position
on the pretext that her position was abolished.
2. The truth however was that she was replaced by the person
who removed her.
3. She filed a case for constructive dismissal

ISSUE:
Was the dismissal illegal?
RULING:
YES
CASE HISTORY:
1. Labor Arbiter: Illegal Dismissal ( 31 March 2006)

• Reinstatement, Full Backwages, Moral and Exemplary Damages
2. NLRC: Legal Dismissal (31 Oct 2007)
3. CA: Legal Dismissal (27 Oct 2008)

4. SC: Illegal Dismissal:
• Awarded Reinstatement as COO of STI Makati, Full Backwages and
legal interest of 6%
1. When another employee is soon after appointed to a position
which the employer claims had been abolished, while the
employee who had to vacate the same is transferred against her
will to a position which does not exist in the corporate structure,
there is evidently in case of illegal constructive dismissal.

2. CONSTRUCTIVE DISMISSAL
(Based on Morales vs Harbour Center, GR 174208, 25 Jan 2012,
664 SCRA 110, 117 118)
a. “Constructive dismissal exists where there is a cessation of work
because continued employment is rendered impossible,
unreasonable or unlikely, as an offer involving a demotion in rank
or diminution in pay and other benefits.

b. “Apathy called a dismissal in disguise or an act amounting to
dismissal but made to appear as of it were not, constructive
dismissal may, likewise, exist if an act of clear discrimination,
insensibility, or disdain by an employer becomes so unbearable
on the part of the employee that it could foreclose any choice by
him except to forego his continued employment.”
c. “In cases of transfer of an employee, the rule is settled that an
employer is charged with the burden of proving that its conduct
and action are for valid and legitimate grounds, such as genuine
business necessity and that the transfer is not unreasonable,
inconvenient or prejudicial to the employee.

d. “If the employer can not overcome this burden of proof, the
employer’s transfer shall be tantamount to unlawful constructive
dismissal.”
3. SERIES OF HARRASMENTS AND INDIGNITIES AGAINST THE

EMPLOYEE
a. “There is no doubt that petitioner was subjected to indignities and
humiliated by respondents.”

EMPLOYEE
b. “xxx She was bullied, threatened, shouted at and treated

insolently xxx”

EMPLOYEE
c. “xxx on May 20, 2004, STI made a official company-wide

announcement of Jacob’s appointment as STI President and
CEO, Fernandez a new STI Makati COO and Luz as New STI
Makati School Administrator but petitioner’s appointment as the
new Compliance Manager was inconsiderately excluded.”
SPECIFIC PRONOUCEMENTS:
4. HER INDEFINITE LEAVE WAS UNDERSTANDABLE AND

JUSTIFIED
a. “Indeed, petitioner could not be faulted for taking an indefinite

leave of absence, and for altogether failing to report for work
after August 9, 2004.

JUSTIFIED
b. “Human nature dictates that petitioner should subject herself to

further embarrassment and indignities from the respondents and
her colleagues.

JUSTIFIED
c. “All told, petitioner was deemed constructively dismissed as of

May 18, 2004.
LESSONS LEARNED:
Rights of
Employees
Prerogatives of
Employers
Case 5: ILLEGAL SUSPENSION OF AN EMPLOYEE,
SUPPOSEDLY BASED ON MONEY-RELATED MISCONDUCT
1. Gr 190303, 09 July 2014 Second Dov, Perez,J
COLEGIO DE SAN JUAN DE LETRAN

vs
ENGR. DEBORAH P. TADEO
FACTS:
1. Engr. DBT was employed as full-time faculty member of Letran
since 1985.
2. She was elected Union President in 2006.
3. She was suspended in 2008, only because she requested fund
assistance of P 17,000 in connection with her intention to
participate in the 30th National Physics Seminar Workshop in
Siquijor State College.

FACTS:
4. Pre-audit showed that the documents attached to the request
was altered, and certain parts were missing.
5. The request for fund assistance was disapproved because the
amount was allegedly higher compared to the amount requested
by another faculty who was going to attend the same workshop.

FACTS:
6. The said alleged misrepresentation was made a basis for
management to convene the Committee of Disciline to
investigate the matter.
7. The Committee found DBT guilty of dishonesty and meted on
her the penalty of suspension from 19 August 2008 to 20
December 2008.
FACTS:
8. DBT filed a case for ILLEGAL SUSPENSION, which was later
forwarded to the Office of the Voluntary Arbitrator.

ISSUE:
Did the facts warrant the suspensión of DBT?
RULING:
NO
CASE HISTORY:
1. Labor Arbitrator: That the suspension was illegal (05 Jan 2009)
2. Court of Appeals: That the suspension was illegal (31 July 2009)
3. SC: That the suspension was illegal (09 July 2014)

1. Unanimous finding that there was NO serious misconduct
a. “The office of the VA and the CA are one in holding that

respondent was NOT guilty of serious misconduct when she
omitted a portion of the invitation, and in effect declared
respondent’s suspension from employment for one semester
unlawful”
2. The Definition of MISCONDUCT
a. “Misconduct is defined as improper and wrongful conduct. It is

the transgression of some established and definite rule of action,
a forbidden act, a dereliction of duty, willful in character, and
wrongful intent and not mere error in judgement.”
3. Ordinary Misconduct Does NOT Warrant Termination (or

Suspension)
a. “xxx ordinary misconduct would not justify the termination of the

services of an employee.”
b. “The law is explicit that the misconduct should be serious.”
c. It is settled that in order for misconduct to be serious, it must be
of such grave and aggravated character and not merely
unimportant.
d. “As amplified by jurisprudence, the misconduct must:
• Be serious,
• Relate to the performance of the employee’s duties,
• Show that the employee has become unfit to continue-working
for the employer. (Citing PNB vs Veleasco, 586 Phil 444, 461,
2008)
4. THE LABOR CODE PROVISIONS ON ARTICLE 282, LABOR

CODE
a. “Under article 282 of the Labor Code, the MISCONDUCT to be
JUST CAUSE for termination, must be SERIOUS.”
b. “This implies that it must be of such grave and aggravated
character and NOT merely trivial or unimportant


CODE
c. “Examples of serious misconduct justifying termination, as held

in some of our decisions include:
• Sexual harassments (the manager’s act of fondling the hands,
massaging the shoulder and caressing the nape of the secretary)
• Fighting within company premises


CODE
c. “Examples of serious misconduct justifying termination, as held in

some of our decisions include:
• Uttering obscene, offensive or insulting words against a supervisor

• Misrepresenting that a student is his nephew and pressuring and
intimidating a co-teacher to change a student’s failing grade to
passing
5. THE RULE APPLIES TO UNJUSTIFIED SUSPENSION
a. “Although respondent was not terminated from employment, but
was merely suspended from work, for one semester or equivalent
to 101 school days, her infraction should still be measured against
the foregoing standards considering that the charge levelled
against her is serious misconduct.”

6. THE SUPREME COUR RESPECTS AND UPHOLDS THE

FINDINGS OF FACTS OF LOWER BODIES
a. “Well-settled is the rule that the factual findings of the CA are
conclusive on the parties and are not renewable by the SC.”
b. “And they carry even more weight when the CA affirms the factual
findings of a lower fact-finding body, in their case, the VA.


c. “Likewise findings of facts of administrative agencies and quasi-
judicial bodies which have acquired expertise because their
jurisdiction is confirmed to specific matters, are generally accorded
not only great respect but even finality.


d. “They are binding upon This Court unless there is a showing of
grave abuse of discretion or where it is clearly shown that they
were arrived arbitraly or in utter disregard of the evidence on
record. (Sec: Colegio de San Juan de Letran – Calamba vs. Villas,
473 Phil 692, 700, 2003)”

7. LACK OF SUBSTANTIAL EVIDENCE QUALIFYINGTHE ACT AS
SERIOUS MISCONDUCT
a. “xxx There is no substantial evidence to prove that in not including
a portion of the invitation to her fund request, respondent acted in
malicious and contemptuous manner with the intent to cause
damage to the petitioner.”

7. LACK OF SUBSTANTIAL EVIDENCE QUALIFYINGTHE ACT AS
SERIOUS MISCONDUCT
b. “In other words, there is no basis for the allegation that the
respondent’s act constituted SERIOUS MISCONDUCT that
warrants the imposition of penalty of suspension.”

8. LENGTH OF SERVICE AND AMOUNT INVOLED ARE
RELEVANT CIRCUMSTANCES
a. “Indeed, considering the fact that before the act complained of,
respondent has been rendering service untarnished for 23 years
xxx”
b. “xxx It is not easy to conclude that for P 600, respondent would
willfully and for wrongful intention omit portions of the documents
taken from PPS Website.”

c. “In other words, as found by the VA and the CA, there is no
substantial proof of petitioner’s allegation of malicious conduct
against respondent.”
9. THE RIGHT TO DISCIPLINE: SCOPE AND LIMITS
a. “The Court recognizes the right of the employers to discipline its
employees for serious violations of company rules after affording
the latter due process and if the evidence warrants. (The
University of the Immaculate Conception vs NLRC, GR 181146, 26
Jan 2011, 640 SCRA 608, 620)

9. THE RIGHT TO DISCIPLINE: SCOPE AND LIMITS
b. “Such right, however, should be exercised with sound discretion
putting into mind the basic elements of justice and fair play.”
LESSONS LEARNED:
Rights of
Employees
Prerogatives of
Employers
Case 6: REINSTATEMENT PENDING APPEAL
1. GR 175293, 23 July 2014, First Div, Bersamins
CRISANTO F. CASTRO
vs
ATENEO DE MANILA UNIVERSITY
FACTS:
1. CFC was hired as member of the Faculty in the first semester of
1960-61.
2. At the time of his dismissal, he was a regular and full-time faculty
member of the University’s Accountancy Dept in the College of
Commerce with a monthly salary of P 29, 846.20

FACTS:
3. On 31 May 2000, CFC allegedly received a letter from the
university president notifying him that his contract would no
longer be renewed.
4. Not having been given any load, CFC filed a case for illegal
dismissal.
ISSUE:
1. Was the “non-renewal” tantamount to ILLEGAL DISMISSAL?

2. Was QUITCLAIM for retirement benefits enough to dismiss the
entire case?
RULING:
1. YES
2. NO
CASE HISTORY:
1. Labor Arbiter: Dismissal was illegal (03 Sept 2001)
2. Labor Arbiter: Payroll or Actual Reinstatement (10 Oct 2002)
3. Quitclaim: CFC received P 646,828.42 as retirement benefits
(26 June 2004)
4. NLRC: Execution of quitclaim caused dismissal of the case
(31 Aug 2005)
5. SC: What was covered by Quitclaim was only the retirement
benefits (23 July 2014)

1. ONLY RETIREMENT BENEFITS WERE PAID
a. The issue is whether not the petitioner’s claim for the payment of
accrued salaries and benefits for the period that he was not
reinstated was rendered must and academic by (a) his receipt of
the retirement benefits and execution of the corresponding receipt
and quitclaim in favor of respondents; and (b) the dismissal of his
complaint for illegal dismissal by the NLRC. (The answer is NO)
1. ONLY RETIREMENT BENEFITS WERE PAID
b. The Supreme Court held: "The execution of the receipt and
quitclaim was not a settlement of the petitioner’s claim for accrued
salaries.”
2. IT WAS JUST A PARTIAL SETTLEMENT, NOT A TOTAL ONE
a. “The text of the receipt and quitclaim was clear and
straightforward, and it was to the effect that the sum received by
the petitioner represented “FULL PAYMENT OF BENEFITS xxx
PURSUANT TO THE EMPLOYEE’S RETIREMENT PLAN.”

2. IT WAS JUST A PARTIAL SETTLEMENT, NOT A TOTAL ONE
b. “As such, both the NLRC and the CA should have easily seen that
the quitclaim related only to the settlement of the retirement
benefits, which benefits could not be confused with the reliefs
related to the complaint for illegal dismissal”

3. DISTINCTION NETWEEN RETIREMENT BENEFITS AND THE

RELIEFS FOR ILLEGAL DISMISSAL CASES
a. “Worthy to stress is that retirement is of different species from the

reliefs awarded to an illegally dismissed employee.”
b. “Retirement is a form of reward for an employee’s loyalty and
service to the employer, and is intended to help the employee
enjoy the remaining years of his life, and to lessen the burden of
worrying about his financial support.
3. DISTINCTION BETWEEN RETIREMENT BENEFITS AND THE

RELIEFS FOR ILLEGAL DISMISSAL CASES
c. “In contrast, the reliefs awarded to an illegally dismissed employee

are in recognition of the continuing EMPLOYER-EMPLOYEE
relationship that has been severed by the employer without just or
authorized cause or without compliance with due-process.”
4. CLAIMS FOR ACCRUED BENEFITS SHOULD BE SUSTAINED

DESPITE DISMISSAL OF THE PETITIONER’S COMPLAINT
a. “The petitioner argues that according to Roquero vs PAL (GR

152329, 22 April 2003, 401 SCRA 424), the employer is obliged to
reinstate and to pay the wages of the dismissed employee during
the period of appeal until its reversal by the Higher Court;
4. CLAIMS FOR ACCRUED BENEFITS SHOULD BE SUSTAINED

DESPITE DISMISSAL OF THE PETITIONER’S COMPLAINT
b. “And that because he was not reinstated either actually or by

payroll, he should be held entitled to accrued salaries.”
c. “The argument of petitioner is correct.”

5. REMEDIES FOR ILLEGALLY DISMISSED EMPLOYEE
a. “Article 279 of the Labor Code as amended, entitles an illegally
dismissed employee to reinstatement.”
b. “Article 223 of the Labor Code requires the reinstatement to be
immediately executory even pending appeal.”

5. REMEDIES FOR ILLEGALLY DISMISSED EMPLOYEE
c. “With its intent being ostensibly to promote the benefit of the
employee, Article 223 can not be the source of any right of the
employer to remove the employee should he fail to immediately
comply with the order of reinstatement. (Citing Buenviaje vs CA,
GR 147806, 12 Nov 2002, 391 SCRA 440, 451)

6. MINISTERIAL DUTY OF THE LABOR ARBITER TO IMPLEMENT

THE ORDER FOR REINSTATEMENT
a. “In Roquero, the Court ruled that the unjustified refusal of the
employer to reinstate the dismissed employee would entitle the
latter to the payment of his salaries effective from the time when
the employer failed to reinstate him.

6. MINISTERIAL DUTY OF THE LABOR ARBITER TO IMPLEMENT

THE ORDER FOR REINSTATEMENT
b. Thus, it became the ministerial duty of the LA to implement the
order or reinstatement.
7. REINSTATEMENT PENDING APPEAL IS IMMEDIATELY

EXECUTORY EVEN WITHOUT ANY WRIT OF EXECUTION
a. According to TRIAD SECURITY & ALLIED SERVICES vs
ORTEGA, Jr (GR 160871, 06 Feb 2006, 481 SCRA 591, 606), the
law mandates the prompt reinstatement of the dismissed or
separated employee, without need of any writ of execution.


b. “In PIONEER TEXTURIZING vs NLRC (GR 118651, 16 Oct 1997
280 SCRA 806)
• “xxx The provision of Article 223 is clear that an award for
reinstatement shall be immediately executory even pending
appeal.
• “and the posting of a bond by the employer shall not stay the
execution for reinstatement.
• “The legislative intent is quite obvious i.e. to make an award of
REINSTATEMENT immediately, enforceable, even pending
appeal

c. Requiring a writ of execution violates the law on reinstatement
pending appeal.
• “To require the application for and the issuance of a writ of
execution as prerequisites for the execution of a reinstament
award would certainly betray and run counter to the very object
and intent of Article 223, i.e. the immediate execution of a
reinstatement order.”

pending appeal.
• “The reason is simple. An application for a writ of execution and its
issuance could be delayed for numerous reasons.”

pending appeal.
• “A mere continuance of postponement of a scheduled hearing, for
instance, or an inaction on the part of the Labor Arbiter or the
NLRC could easily delay the issuance of the writ, thereby setting at
naught the strict mandate and noble purpose envisioned by Article
223.”

d. The Maranaw Doctrine Has Been Abandoned
• “In other words, if the Requirements of Article 224 were govern, as
so we so declared in Maranaw, then the executory nature of the
reinstatement order or award contemplated by Article 223 will be
unduly circumscribed and rendered ineffectual.


d. The Maranaw Doctrine Has Been Abandoned
• “In enacting the law, the legislature is presumed to have ordained
a valid and sensible law, one which operates no further than may
be necessary to achieve its specific purpose.”


e. An Order For Reinstatement is Self Executory
• “Henceforth, we rule that an award or order for reinstatement is
self-executory.”

e. An Order For Reinstatement is Self Executory
• “After receipt of the decision or resolution ordering the employee’s
reinstatement, the employer has the right to choose whether to
readmit an employee to work under the same terms and conditions
prevailing prior to his dismissal or to reinstate the employee in the
payroll.

f. Notice to the Employee on the Employer’s Choice is Necessary
• “In either instance, the employer has to inform the employee of his
choice.
• “The notification is based on practical consideration for without
notice, the employee has no way of knowing if he has to report for
work or not.
8. IMPACT OF FAILURE TO REINSTATE
• “Hence, for as long as the employer continuously fails to actually
implement the reinstatement aspect of the decision of the LA, the
employer’s obligation to the employee for his accrued backwages
and other benefits continues to accumulate.

9. THE EMPLOYEE IS ENTITLED TO ACCRUED BACKWAGES
a. “The next issue concerns whether or not the petitioner’s claim form
accrued salaries from the time of the issuance of the order of
reinstatement by LA Quinones until his actual reinstatement in Nov
2002 was rendered must and academic by the reversal of the
decision of the LA.

b. “The Court holds that the order of reinstatement of the petitioners
was NOT rendered academic. He remained entitled to accrued
salaries from notice of LA’s order of reinstatement until reversal
thereof.
c. In Islriz Trading vs Capada (GR 168501 31 Jan 2011, 641 SCRA
9) we even classified that the employee could be barred from
claiming accrued salaries only when the failure to reinstate him
was without the fault of the employer.

LESSONS LEARNED:
Prerogatives of
Employer
Rights of
Employees
Case 7: DISMISSAL OF A UNIVERSITY TREASURER
1. GR 208321 30 July 2014, Third Div, Velasco Jr.
WESLEYAN UNIVERSITY PHILIPPINES

vs
NOWELLA REYES
FACTS:
1. Nowella Reyes was appointed University Treasurer on 16 Mar
2004
2. On 27 April 2009, a new Board of Trustees engage the services
of an accounting firm to audit the financial transactions of N.
Reyes.
FACTS:
3. The auditors found various irregularities including the rampant
practice of its Treasury Department of check issued by University
personnel. The checks made payable to the university Treasurer.
4. The Treasurer was ordered to explain which she did on 18 June
2009.
FACTS:
5. The HRD Office conducted an investigation and forthwith
submitted its Report to the University President recommending
the dismissal of the Treasurer.
6. On 09 July 2009, the Treasurer’s employment was terminated.
7. A case of illegal dismissal was filed against her.

ISSUE:
Was the dismissal legal?
RULING:
YES
CASE HISTORY:
1. Labor Arbiter: ILLEGAL DISMISSAL, ordered reinstatement, full
backwages, benefits, moral and exemplary damages and
attorney’s fees. (15 Dec 2010)
2. NLRC: LEGAL DISMISSAL (Loss of trust & confidence) 11 July
2011
3. CA: The dismissal was held illegal, reinstated the arbiter’s decision
(28 Feb 2013)
4. SC: The dismissal was legal (30 July 2014)

1. LOSS OF TRUST AND CONFIDENCE AS A GROUND FOR

TERMINATION
a. The SC made reference to Article 282 of the Labor Code (PD442)
b. This provision consideres it JUST CAUSE of termination when an
employee is found guilty of committing “Fraud or Willful Breach by
the Employee of the trust reposed in him by his employer or his
duly authorized representative.

2. GUIDELINES / REQUISITES FOR A VALID DISMISSAL BASED

ON LOSS OF TRUST AND CONFIDENCE
As explained in M+W Phil Inc vs Enriquez (GR 169173, 05 June 2009,

588 SCRA 590)
a. The first requisite for dismissal on the ground of loss of trust and
confidence is that the employee concerned must be one holding a
position of trust and confidence.
2. GUIDELINES / REQUISITES FOR A VALID DISMISSAL BASED

ON LOSS OF TRUST AND CONFIDENCE
b. The second requisite for termination based on (LOTAC) (Loss of
Trust and Confidence) is that there must be an ACT that would
justify the loss of trust and confidence, which must be willful
breach of trust and founded on clearly established facts.

3. SPECIFICATIONS RE: LOTAC (LOSS OF TRUST AND

CONFIDENCE)
a. “Loss of confidence should not be simulated. It should not be
subterfuge for causes which are improper, illegal, or unjustified.
b. “Loss of confidence may not be arbitrarily asserted in the face of
overwhelming evidence to the contrary.”
c. “It must be genuine, not a mere afterthought to justify earlier action
taken in bad faith.

4. TWO KINDS OF EMPLOYEES COVERED BY LOTAC
a. There are two classes of positions of trust: Managerial employees
and Fiduciary rank-and-file employees.
b. “Managerial employees are defined as those vested with the
powers or prerogatives to lay down management policies and to
hire, transfer, suspend, lay-off, recall, discharge, assign or
discipline employees xxx”

c. “They refer to those whose primary duty consists of the
management of the establishment in which they are employed or
of a department or subdivision thereof and to other officers or
members of the managerial staff.”

d. “Officers and members of the managerial staff perform directly
related to management policies of their employer and customarily
and regularly exercise discretion and independent judjement.
e. “The second class of fiduciary rank-and-file employee consists of
CASHIERS, AUDITORS, PROPERTY CUSTODIANS, etc or those
who in the normal exercise of their functions, regularly handle
significant amount of money or property.

f. “These employees, though rank-and-file are routinely charged with
the care and custody of the employee’s money or property, and
are thus classified as occupying positions of TRUST and
CONFIDENCE
5. SUMMARY OF THE TWO REQUIREMENTS FOR LOTAC TO

APPLY
a. “To summarize, the first requisite is that the employee concerned

must be one holding a position of trust and confidence, thus, one
who is neither:
• A managerial employee;
• A fiduciary rank-and-file employee who in the normal exercise of
his or her functions, regularly handles significant amounts of
money or property of the employer.
5. SUMMARY OF THE TWO REQUIREMENTS FOR LOTAC TO

APPLY
b. “The second requisite is that the loss of confidence must be based

on a willful breach of trust and found on clearly established facts.
6. DEGREE OF PROOF REQUIRED FOR LOTAC TO APPLY IN

DISMISSAL OF MANAGERIAL EMPLOYEES ON THE ONE
HAND, AND DISMISSAL OF FIDUCIARY EMPLOYEES, ON THE
OTHER HAND
a. “In Lima Land Inc vs Cuevas (GR 169523, 16 June 2010, 621
SCRA 36), We discussed the difference between the criteria for
determining the validity of invoking LOTAC as a ground for
terminating a managerial employee on the one hand, and a rank-
and-file on the other hand.”
6. DEGREE OF PROOF REQUIRED FOR LOTAC TO APPLY IN

DISMISSAL OF MANAGERIAL EMPLOYEES ON THE ONE
HAND, AND DISMISSAL OF FIDUCIARY EMPLOYEES, ON THE
OTHER HAND
b. “We held that with respect to rank-and-file personnel, LOTAC, as

ground for valid dismissal requires proof of involvement in the
alleged events in question, and that mere uncorroborated
assertions and accusations by the employer will not suffice
7. RESPONDENT’S EMPLOYMENT CLASSIFICATION IS

IRRELEVANT IN LIGHT OF HER PROVEN WILLFUL BREACH
a. “There is no doubt that respondent held a position of trust, thus,
greater fidelity is expected of her.
b. She was not an ordinary rank-and-file employee but an employee
occupying a very sensitive position.

7. RESPONDENT’S EMPLOYMENT CLASSIFICATION IS

IRRELEVANT IN LIGHT OF HER PROVEN WILLFUL BREACH
c. “As University Treasurer, she handled and supervised all monetary
transactions, and was highest custodian of funds belonging to
WUP.
d. “To be sure, the normal exercise of her functions, she regularly
handled significant amounts of money of her employer and
managed a critical department.

8. THE FIRST AND SECOND REQUISITES FOR LOTAC ARE

PRESENT IN THIS CASE OF WUP
a. “The presence of the first requisite is certain. So is as regards the

second requisite. Indeed, the court finds that petitioner adequately
proved respondent’s dismissal was for just cause, based on a
willful breach of trust an founded on clearly established facts as
required by jurisprudence.
8. THE FIRST AND SECOND REQUISITESFOR LOTAC ARE

PRESENT IN THIS CASE OF WUP
b. “At the end of the day, the question of whether she was a
managerial or rank-and-file employee does not matter in this case
because not only is there basis for believing that she breached the
trust of her employer, her involvement in the irregularities attending
to petitioner’s finances has also been proved.
9. THE SUPREME COURT REVERSES THE COURT OF

APPEAL’S DECISION
a. “We disagree with the CA’s finding that respondent has sufficiently
countered all inculpatory allegations and accusations against her.”
b. “On the contrary, we find that here, there was an admitted, actual
and real breach of duty committed by respondent, which translates
into breach of trust and confidence in her.”

10. AN EMPLOYER IS NOT OBLIGED TO RETAIN AN UNWORTHY

EMPLOYEE
a. “An employer can not be compelled to retain an employee who is
guilty of acts inimical to the interest of the employer.”
b. “A company has the right to dismiss its employees if only as a
measure of self-protection.

EMPLOYEE
c. “This is all the more true in the case of supervisors or personnel
occupying positions of responsibility (See MCG Marine Services vs
NLRC, GR 114313, 29 July 1996, 259 SCRA 664)
d. “In this case, let it be remembered that respondent was not an
ordinary rank-and-file employee as she was no less the treasurer
who was in charge of the coffers of the University.


EMPLOYEE
e. “It would be oppressive to require petitioner to retain in their
management an officer who haw admitted to knowingly and
intentionally committing acts which jeopardized its finances and
who was untrustworthy in the handling and custody of University
funds.”
LESSONS LEARNED:
Rights of
Employers
Rights of
Employees
Case 8: MILLIONS OF FACULTY BENEFITS WERE LOST DUE
TO TECHNICALITIES
1. GR 203957, 30 July 2014, Second Div Carpio, J
UST FACULTY UNION

vs
UST
FACTS:
1. On 06 Feb 2007, the Union demanded from UST the delivery of

P 65 M plus legal interest representing deficiency in its
contribution to the medical and hospitalization fund.
2. The amount was not delivered.
3. More letter were sent to no avail.
4. On 05 Sept 2007, The Union filed a ULP before the Labor Arbiter
and the UST filed a motion to dismiss for lack of jurisdiction.
ISSUE:
Did the Arbiter have jusridiction over the dispute?
RULING:
NO
CASE HISTORY:
1. LA: Denied the UST’s Motion to Dismiss ( 08 Aug 2008)

2. NLRC: Dismissed UST’s appeal and remanded the case to the
LA (02 May 209)
3. LA: Ordered UST to remit to USTFU P 8 M for SY 1996-2001
and P 10 M for SY 2001-2006
4. CA: The LA and the NLRC did not have jurisdiction over the case
(13 July 2012)
5. SC: Case is dismissed for (Prescription, Lack of jurisdiction) 30
July 2014
1. The Labor Arbiter and NLRC did not have any jurisdiction over the
case.
2. Jurisdiction belongs to the voluntary arbitrator
3. The claims have already prescribed.

LESSONS LEARNED:
Employer’s
Prerogatives
Rights of
Employees
Case 9: NO CONSTRUCTIVE DISMISSAL WHEN THERE IS
VOLUNTARY RESIGNATION
1. GR 189456, 02 April 2014, Secod Div, Perez, J
CHANG KAI SHEK COLLEGE

vs
ROSALINDA M. TORRES
FACTS:
1. RMT was a grade teacher of CKSC from July 1970 to 31 May
2003.
2. RMT was charged with leaking a copy of a special quiz given to
grade 5 students.
3. RMT submitted her explanation.
4. The investigation Committee convened and found RMT and
another teacher guilty of committing a grave offense.

FACTS:
5. A letter of termination was already prepared but RMT requested
that the penalty be reduced to suspension.
6. She promised to resign at the end of the school year
7. Accordingly RMT was suspended to October 2002
8. On 14 Feb 2003, RMT’s counsel sent a letter to management
making many demands.

FACTS:
9. The school wrote back that RMT asked for the suspension and
promised to resign
10. On 10 June 2003, RMT filed a case of constructive dismissal.

ISSUE:
Was there constructive dismissal?
RULING:
NO
CASE HISTORY:
1. LA: Dismissed the complaint (03 Feb 2004)
2. NLRC: Affirmed the LA (26 July 2007)
3. CA: Constructive dismissal; ordered payment of separation pay,
retirement benefits and moral and exemplary damages and
attorney’s fees (29 May 2009)
4. SC: No illegal dismissal (02 April 2014)

1. What is resignation?
a. “Resignation is the voluntary act of an employee who is in a
situation where one believes that personal reasons can not be
sacrificed for the favor of employment, and opts to leave rather
than stay employed.”

1. What is resignation?
b. “It is a formal pronouncement or relinquishment of an office, with
the intention of relinquishing office accompanied by the act of
relinquishment. “
c. “As the intent to relinguish must concur with the overt act of
relinguishment, the acts of the employee before and after the
alleged resignation must be considered in determining whether, he
or she in fact, intended to sever his or her employment.
2. ACADEMIC DISHONESTY IS THE WORST OFFENSE A
TEACHER CAN MAKE
a. “Academic dishonesty is the worst offense a teacher can make
because teachers caught committing academic dishonesty lose
their credibility as educators and cease to be role models for their
students.”
2. ACADEMIC DISHONESTY IS THE WORST OFFENSE A
TEACHER CAN MAKE
b. “More so, under the Chang Kai Shek College Faculty Manual,
leaking and selling the test questions is classified as a grave
offense punishable by dismissal / termination”

3. INDICATORS OF RESIGNATION
a. “Before the Investigating Committee could formalize respondent’s
dismissal, respondent handwrote a letter requesting that the
penalty by lowered to suspension in exchange for respondent’s
resignation at the end of the school year.”

3. INDICATORS OF RESIGNATION
b. “We do not find anything irregular with respondent’s handwritten
letter. The letter came about because respondent was faced with
an imminent dismissal and opted for an honorable severance from
employment.”
4. WHEN THERE IS RESIGNATION, THERE CAN BE NO
CONSTRUCTIVE DISMISSAL
a. “Given the indications of voluntary resignation, we rule that there is
no constructive dismissal in this case”
b. “While respondent did not tender her resignation wholeheartedly,
circumstances of her own making did not give her any other
option.
4. WHEN THERE IS RESIGNATION, THERE CAN BE NO
CONSTRUCTIVE DISMISSAL
c. “With due process, she was found to have committed the grave
offense of leaking test questions”
d. “Dismissal from employment was justified equivalent penalty.
Having realized that, she asked for, and was granted, not just a
deferred imposition of, but also an acceptable cover the penalty.

1. THE CASE:
Universidad de Sta Isabel versus Marvin Julian L. Sambajon, Jr. GR
Nos. 196280 and 196286 02 April 2014, I, Villarama, J.
2. THE FACTS:
(2.1) Marvin Julian L. Sambajon, Jr. (MJLSJ) was hired by
Universidad de Sta. Isabel (USI) as full-time college faculty
member with the rank of Asst. Professor on Probationary
status.
2. THE FACTS:
(2.2) The appointment contract dated 01 November 2002 was

effective 01 November 2002 to 30 March. 2003.
(2.3) He was given teaching load and remained a full-time faculty
for the two semester for SY 2003-2004. (01 June 2003 to 31
March 2004)
(2.4) He was given teaching loads for the two of SY 2004-2005
(01 June 2004 to 31 March 2005)
(2.5) In June 2003, upon submission by MJLSJ of documents
showing that he completed his course in MA in Education, major
in Guidance and Counseling, his salary was increased. He was
likewise reranked from Assistant Professor to Associate
Professor.
2. THE FACTS:
(2.6) In his letter to the USI President, MJLSJ vigorously argued that
his salary increase should take effect retroactively to June 2003. He
demanded payment for salary differential.
(2.7) The University replied that the Faculty Manuals’ provision on
re-ranking does not apply to probationary employees which he was
at that point in time
2. THE FACTS:
(2.8) A dialogue was held between MJLSJ and the administrators.
(2.9) On 26 February 2005, MJLSJ received a letter conveying that
his employment was terminated or would not be renewed when it
would have expired on 31 March 2005.
(2.10) MJLSJ filed a case of ILLEGAL DISMISSAL
3. THE CASE HISTORY:
(3.1) Labor Arbiter (22 August 2006): decided that there was
ILLEGAL DISMISSAL supposedly because there was no just cause
to terminate his probationary employment.
The following were awarded by the Arbiter:
(a) Full Backwages covering the period / duration of the 1st
semester of the academic year 2005-2006
(b) Separation Pay (in lieu of reinstatement)
(c) Attorney’s fees of 10% of the total award
(3.2) NLRC (01 August 2008): affirmed the Arbiter’s decision and
held that MJLSJ has acquired a permanent status pursuant to
Sections 91, 92 and 93 of the Manual of Regulations for Private
Schools, in relation to Article 281 (now 287) of the Labor Code
(3.3) CA (25 March 2011): sustained the conclusion of the NLRC
that respondent already acquired permanent status when he was
allowed to continue teaching after expiration of the first
appointment-contract on 30 March 2003.
The CA awarded the following:
(a) Reinstatement
(b) Full backwages from time of withholding of salary to actual
reinstatement
(3.4) Supreme Court (02 April 2014): modified the CA’s decision,
by awarding:
(a) No reinstatement but
(b) Backwages for one semester (First Semester, SY 2005-2006)
(c) Pro-rated Thirteenth Month Pay
4. THE ISSUES:
(a) What was the employment status of MJLSJ?
(b) To what remedies was he entitled?
5. THE RULING:
(a) Fixed-Term Employee
(b) Backwages
6. THE RATIONALE:
6.1 MEANING OF “PROBATIONARY EMPLOYEE”
(a) A probationary employee is one who is on trial by the
employer during which the employer determines whether or not
said employee is qualified for permanent position.
(b) A probationary employment is made to afford the employer an
opportunity to observe the fitness of a probationary employee
while at work, and to ascertain whether he will become a proper
and efficient employee.
(c) The word PROBATIONARY as used to describe the period of
employment implies the purpose of the term or period, but NOT
its length (citing International Catholic Migration Commission, 251
Phil 560, 567, 1969).
6. THE RATIONALE:
6.2 MANAGEMENT PREROGATIVES
(a) It is well-settled that the employer has the right or is at liberty
to choose who will be hired and who will be denied employment.
(b) In that sense, it is within the exercise of the right to select his
employees that the employer may set or fix a probationary period
within which the latter may test and observe the conduct of the
former before hiring him permanently (ICMC vs NLRC, 251 Phil.
567-568)
6. THE RATIONALE:
6.3 LIMITS TO MANAGEMENT PREROGATIVES
(a) The law, however, regulates the exercise of this prerogative

to fix the period of probationary employment.
(b) While there is no statutory cap on the minimum term of
probation, the law sets a maximum “trial period” during which
the employer may test the fitness and efficiency of the
employee. (citing Magis Young Achievers’ Learning Center vs.
Manalo, GR 178835, 13 February 2009, 579 CSRA 421, 432).
6. THE RATIONALE:
6.4 PROBATIONARY EMPLOYMENT OF TEACHERS IN
PRIVATE SCHOOLS
(a) The probationary employment of teachers in private

schools is not governed purely by the Labor Code.
(b) The Labor Code is supplemented with respect to the period
of probation by special rules found in the Manual of
Regulations for Private Schools. (The 1992 Manual of
Regulation is the applicable manual as it embodied the
pertinent rules at the time of the parties’ dispute, but a new
manual.
6. THE RATIONALE:
6.4 PROBATIONARY EMPLOYMENT OF TEACHERS IN
PRIVATE SCHOOLS
(c) On the matter of PROBATIONARY PERIOD, Section 92 of the
1992 Manual of Regulations for Private Schools states:
Section 92: PROBATIONARY PERIOD – subject in all instances to
compliance with the department and school requirements, the
PROBATIONATY PERIOD FOR ACADEMIC PERSONNEL shall not
be more than three (3) consecutive years of SATISFACTORY
SERVICE for those in the tertiary level, and nine (9) consecutive
trimester of SATISFACTORY SERVICE for those in tertiary level
where collegiate courses are offered on a trimester basis.
6. THE RATIONALE:
6.5 THE MANUAL OF REGULATIONS FOR PRIVATE SCHOOLS,
NOT THE LABOR CODE
(a) It is the Manual of Regulations for Private Schools, and not the
Labor Code, that determines whether or not a faculty member in
an educational institution has attained Regular or Permanent
status. (citing Lacuesta vs. ADMU, 513 Phil 329, 335 , 2005).
(b) 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.
6. THE RATIONALE:
6.6 THE COURT’S REVERSIBLE ERROR
(a) Since it was explicitly provided in the above contract that
unless renewed in writing respondents’ appointment
automatically expires at the end of the stipulated period of
employment, the CA erred in concluding that simply because the
word “PROBATIONARY” no longer appears below the designation
xxx, respondent had already become PERMANENT EMPLOYEE.
6. THE RATIONALE:
6.6 THE COURT’S REVERSIBLE ERROR
(b) Noteworthy is respondent’s admission of being still under

PROBATIONARY PERIOD in his January 12, 2005 letter to Sr.
Evidente reiterating his demand for salary differential, which
letter was sent one year after he signed the February 26, 2004
appointment contract
6. THE RATIONALE:
6.7 NO PROOF TO SUBSTANTIATE THE BARE ALLEGATION
THAT HIS PROBATIONARY EMPLOYMENT WAS SHORTENED
BY MANAGEMENT
(a) The teacher claimed that subsequently, the probationary of
three years under the regulations was shortened by the
petitioner as relayed to him by Sr. Evidente himself.
6. THE RATIONALE:
6.7 NO PROOF TO SUBSTANTIATE THE BARE ALLEGATION
THAT HIS PROBATIONARY EMPLOYMENT WAS SHORTENED
BY MANAGEMENT
(b) However, the latter together with Sr. Real, categorically
denied having informed the teacher that his probationary period
was abbreviated, allegedly, the reason his salary adjustment was
not made retroactive.
(c) Apart from his bare assertion, the teacher has NOT adduced
proof of any decision of the school administration to shorten his
probationary period.
6. THE RATIONALE:
6.8 THE THREE-YEAR PERIOD IS THE MAXIMUM LENGTH OF
PROBATION
In Rev. Fr. Labajo vs. Alejandro (248 Phil. 194, 200, 1988), the
Supreme Court held that:
(a) The three-year period of service mentioned in paragraph 75
(of the Manual of Regulation for Private Schools), of course, the
MAXIMUM PERIOD or upper limit, so to speak of PROBATIONARY
EMPLOYMENT allowed in the case of private school teachers.
6. THE RATIONALE:
6.8 THE THREE-YEAR PERIOD IS THE MAXIMUM LENGTH OF
PROBATION
(b) This necessarily implies that a REGULAR or PERMANENT
EMPLOYMENT STATUS may, under certain conditions, be attained
in less than three (3) years.
(c) By an large, however, whether or not one has indeed attained
permanent status in one’s employment, before the passage of
three years, is a matter of PROOF.
6. THE RATIONALE:
6.9 THE PERIOD OF PROBATION MAY BE REDUCED BY THE
EMPLOYER
(a) There can be no dispute that the period of probation may be
reduced if the employer, convinced of the fitness and efficiency
of a probationary employee, voluntarily extends a permanent
appointment even before the three-year period ends.
(b) Conversely, if the purpose sought by the employer is neither
attained not attainable within the said period, the law does NOT
preclude the employer from terminating the probationary
employment on justifiable ground.
6. THE RATIONALE:
EMPLOYER
(c) A shorter probationary period may be incorporated in a
COLLECTIVE BARGAINING AGREEMENT.
(d) But absent any circumstances which unmistakably show
that an abbreviated probationary period has been agreed
upon, the three-year probationary term govern.
6. THE RATIONALE:
EMPLOYER
(e) JURISPRUDENCE IN SUPPORT OF THE ABOVE
(e.1) Magis Young Achievers’ Learning Center vs.
Manalo; (GR 178835, 13 February 2009, 579
SCRA 421, 432)
(e.2) Lacuesta vs. ADMU, (513 Phil 329, 335, 2005)
(e.3) Escorpio vs. University of Baguio (366 Phil. 166,
180, 1999)
6. THE RATIONALE:
6.10 MEANING OF FULL-TIME TEACHING
(a) It bears stressing that FULL-TIME TEACHING primarily refers
to the extent of services rendered by a teacher to the employer
school and not to the nature of his appointment.
(b) Its significance lies in the rule that only full-time teaching
personnel can acquire REGULAR or PERMANENT status.
6. THE RATIONALE:
6.11 GUIDELINES ON STATUS OF EMPLOYMENT OF
TEACHERS AND ACADEMIC PERSONNEL IN PRIVATE
EDUCATIONAL INSTITUTIONS
(1) xxx xxx xxx

(2) Subject, in all instances, to compliance with the concerned
agency and school requirements, the PROBATIONARY PERIOD
for teaching or academic personnel shall not be more than :
6. THE RATIONALE:
(a) Three (3) consecutive school years of SATISFACTORY
SERVICE for those in the elementary and secondary levels;
(b) Six (6) consecutive regular semester of SATISFACTORY
SERVICE for those in the tertiary and graduate levels, and
(c) Nine (9) consecutive TRIMESTERS of STAISFACTORY
SERVICE for those in the tertiary levels where collegiate
courses are offered on a trimester basis.
6. THE RATIONALE:
(3) Teachers or academic personnel who have served the

probationary period, as provided for in the immediately preceding
paragraph shall be made REGULAR or PERMANENT, if allowed to
work after such probationary period.
The educational institution however may shorten the
PROBATIONARY PERIOD after taking into account the qualifications
and performance of probationary teachers and academic personnel.
6. THE RATIONALE:
FULL –TIME TEACHING or FULL-TIME ACADEMIC PERSONNEL are
those meeting all the following requirements:
(3.1) who possess at least the minimum academic
qualifications prescribed by the DEPEd for basic education by
CHED for tertiary education and TESDA for technical and
vocational education.
6. THE RATIONALE:
(3.2) who are paid MONTHLY or HOURLY, based on the
normal or regular teaching loads, as provided in the policies,
rules and standards of agency concerned
(3.3) whose regular working day of not more than 8 hours
a day is devoted to the school
(3.4) who have no other remunerative occupation elsewhere
requiring regular hours of work that will conflict with the working
hours in the school
6. THE RATIONALE:
(3.5) who are not teaching full-time in any other educational

institutions
ALL TEACHING OR ACADEMIC PERSONNEL WHO DO NOT MEET
THE FOREGOING QUALIFICATIONS ARE CONSIDERED PART-TIME
4. Part –time teaching or a academic personnel can not acquire
REGULAR or PERMANENT STATUS.
6. THE RATIONALE:
5. Teaching or academic personnel who do not meet the minimum

academic qualifications shall not acquire tenure or regular status.
The school may terminate their services when a qualified teacher
becomes available.
6. THE RATIONALE:
6.12 THE MEANING AND APPLICATION OF THE 3-YEAR
PROBATIONARY PERIOD
(a) The circumstance that respondent’s services were hired on

semester basis DID NOT negate the applicable probationary period,
which is three school years or six consecutive semesters.
6. THE RATIONALE:
PROBATIONARY PERIOD
(b) In MAGIS YOUNG ACHIEVERS LC, (GR178835, 13 February 2009,

579 SCRA 421, 432), the court explained the three years
probationary period rule in this wise:
(b.1) The common practice is for the employer and the
teacher to enter into a contract, effective for the one school year.
(b.2) At the end of the school year, the employer has the
option NOT to renew the contract, particularly considering the
teacher’s performance
6. THE RATIONALE:
PROBATIONARY PERIOD
(b.3) If the contract is not renewed, the employment

relationship terminates.
(b.4) If the contract is renewed, usually for another school year,
the probationary employment continues.
(b.5) Again, at the end of that period, the parties may opt
TO RENEW or NOT TO RENEW the contract
6. THE RATIONALE:
PROBATIONARY PERIOD
(b.6) If renewed, the second renewal of the contract for
another school year would then be the last year – since it
would be the third school year – of PROBATIONARY
EMPLOYMENT.
(b.7) At the end of this third year, the employer may now
decide whether to extend a PERMANENT EMPLOYMENT to
the employee, primarily on he basic of the employee, having met
the REASONABLE STANDARDS of competence and efficiency, set
by the employer.
6. THE RATIONALE:
PROBATIONARY PERIOD
(b.8) For the entire duration of this THREE YEAR PERIOD, the
teacher remains on probation.
(b.9) Upon the expiration of his contract of employment, being
simply on probation, he can NOT automatically claim SECURITY OF
TENURE and compel the employer to renew his employment
contract.
6. THE RATIONALE:
PROBATIONARY PERIOD
(b.10) It is when the yearly contract is renewed for the third

time that Section 93 of the Manual becomes operative, and the
teacher then is entitled to REGULAR or PERMANENT employment
status.
6. THE RATIONALE:
6.13 PROBATION EXTENDS TO 3 YEARS
(a) As we made clear in the aforecited case of MAGIS YOUNG

ACHIEVERS’ LEARNING CENTER, the Center remains under probation
for the entire duration of the three-year period.
(b) Subsequently, in the case of MERCADO vs. AMA Computer
College-Paranaque City, Inc. (GR 183572, 13 April 2010, 618 SCRA
218), the Supreme Court speaking through Justice Arturo D. Brion,
recognized the right of respondent school to determine for itself
that it shall use FIXED TERM EMPLOYMENT contracts as its medium
for hiring its teachers.
6. THE RATIONALE:
6.14 THE GLARING FACTS IN THIS CASE
(a) The existence of a term-to-term contracts covering the

petitioner’s employment is not disputed.
(b) Nor is it disputed that they were on PROBATIONARY STATUS –
not permanent or regular status- from the time they were employed
on 25 May 1998 and until the expiration of their teaching contracts
on 25 May 2000.
(c) As the CA correctly found, their teaching stints only covered a
period of at least 7 consecutive trimester or two years and 3
months of service
6. THE RATIONALE:
6.15 WHICH, BETWEEN THE TWO FACTORS AFFECTING

EMPLOYMENT, SHOULD PREVAIL?
(Should the teachers probationary status be disregarded simply

because the contracts were FIXED-TERM?)
(a) The provision on employment on probationary status under
the Labor Code is a primary example of the fine BALANCING OF
INTERESTS between labor and management that the code has
institutionalized pursuant to the underlying the intent of the
Constitution.
6. THE RATIONALE:
6.15 WHICH, BETWEEN THE TWO FACTORS AFFECTING
EMPLOYMENT, SHOULD PREVAIL?
(b) On the other hand, employment on probationary status affords

management the chance to fully scrutinize the true worth of hired
personnel before the full force of the SECURITY OF TENURE
Guarantee of the constitution comes into play.
6. THE RATIONALE:
6.16 GROUNDS FOR TERMINATION OF PROBATIONARY
EMPLOYMENT
(a) Based on the standards set at the start of the probationary

period, management is given the widest opportunity during the
probationary period to reject hirees who fail to meet its own
adopted but reasonable standards.
(b) These standards, together with the the JUST and AUTHORIZED
causes for termination of employment the Labor Code expressly
provides, are the grounds available to terminate the employment of
a teacher on a probationary status.
6. THE RATIONALE:
6.17 DUE PROCESS ON PROBATION EMPLOYMENT
(a) Under the terms of the Labor Code, these standards should be
made known to the teachers on probationary status at the start of
their probationary period.
(b) At the very least, under the circumstances of the present case, at
the start of the semester or the trimester during which the
probationary standards are to be applied, the said reasonable
standards should be known to the teachers.
(c) Of critical importance invoking a failure to meet the probationary
standards have been applied.
6. THE RATIONALE:
6.17 DUE PROCESS ON PROBATION EMPLOYMENT
(d) This is effectively the second notice in a dismissal situation that
the law requires as a due process guarantee supporting the
SECURITY OF TENURE provision, and is, in furtherance, too, of the
basic rule in employee dismissal that the employer carries the
burden of justifying a dismissal.
(e) These rules ensure compliance with the limited SECURITY OF
TENURE guarantee of the law extends to probationary employees.
6. THE RATIONALE:
6.18 SEEMING CONFLICT BETWEEN FIXED TERM EMPLOYMENT AND

PROBATIONARY EMPLOYMENT
(a) When FIXED-TERM employment is brought into play under the

above PROBATIONARY PERIOD rules, the situation – as in the
present case- may at first blush, looked muddled as FIXED-TERM
employment, is in itself a valid employment mode under Philippine
Law and jurisprudence.
(b) The conflict, however, is more apparent than real when the
respective nature of fixed-term employment and of employment on
probationary status are closely examined.
6. THE RATIONALE:
6.19 RESOLVING THE CONFLICT
(a) 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.
(b) In a sense, EMPLOYMENT ON A PROBATIONARY STATUS, also
refers to a PERIOD because of the technical meaning “PROBATION”
covers in Philippine law – a maximum period of six (6) months, or in
the academe a period of three years for those engaged in teaching
jobs.
6. THE RATIONALE:
6.19 RESOLVING THE CONFLICT
(c) Then similarity ends there, however, because of the overriding
meaning that being “ON PROBATION” connotes i.e. a process of
testing and observing the character or abilities of a person who is
new to a new role as job.
6. THE RATIONALE:
6.20 PROTECTIVE CHARACTER OF PROBATIONARY
EMPLOYMENT
(a) Understood in the above sense, the essentially protective
character of PROBATIONARY STATUS for management can readily
be appreciated.
(b) But this same protective character gives rise to the
countervailing but equally protective rule that the probationary
period can only last for a specific maximum period and under
reasonable, well-laid and properly-communicated standards.
6. THE RATIONALE:
6.20 PROTECTIVE CHARACTER OF PROBATIONARY
EMPLOYMENT
(c) Otherwise, stated within the period of the probation, any
employer move based on the PROBATIONARY STANDARDS and
affecting the continuity of the employment must strictly confirm to
the probationary rules.
6. THE RATIONALE:
6.21 PURPOSES OF FIXED-TERM EMPLOYMENT
(a) Under the given facts where the school year is divided into
TRIMESTERS, the school apparently utilizes its fixed term contracts
as a convenient arrangement dictated by the trimestral system and
not because the workplace parties really intended to limit the
period of their relationship to any fixed term and to finish this
relationship at the end of that term.
6. THE RATIONALE:
6.21 PURPOSES OF FIXED-TERM EMPLOYMENT
(b) If we pierce the veil, so to speak, of the parties’ so – called FIXED
TERM EMPLOYMENT CONTRACTS, what undeniably comes out at the
core is a FIXED – TERM CONTRACT conveniently used by the school to
define and regulate its relation with its teachers during their
PROBATIONARY PERIOD.
6. THE RATIONALE:
6.22 NOTHING ILLEGITIMATE TO DEFINE SCHOOL –
TEACHER RELATIONSHIP
(a) To be sure, nothing is illegitimate in defining the school – teacher
relationship in this manner.
(b) The school, however, can not 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.
6. THE RATIONALE:
6.23 THE NEED FOR RECONCILIATION
(a) Unless this reconciliation is made, the requirements of this Article
on probationary status would be fully negated, as the school may
freely chose NOT to renew contracts simply because their terms
have expired.
(b) The inevitable effect, of course, is to wreck the scheme that the
Constitution and the Labor Code established to balance
relationships between labor and management.
6. THE RATIONALE:
6.24 THE FIXED-TERM CONTRACT MUST PREVAIL
(a) Given the clear constitutional and statutory intents, we can not but
conclude that in a situation where the probationary status overlaps
with FIXED-TERM contract, not specifically used for the fixed term it
offers.
(b) Article 281 should assume primacy and the fixed period character of
the contract must give away.
6. THE RATIONALE:
6.24 THE FIXED-TERM CONTRACT MUST PREVAIL
(c) This conclusion is immeasurably strengthened by the petitioners and

AMACC’s hardly concealed expectation that the employment on
probation could lead to permanent status, and that the contracts
are renewable unless the petitioners fail to pass the school’s
standards.
6. THE RATIONALE:
6.25 PROBATIONARY EMPLOYEES ENJOY SECURITY OF

TENURE, ALBEIT LIMITED
(a) Notwithstanding the limited engagement of probationary

employees, they are entitled constitutional protection of SECURITY
OF TENURE, during and before the end of the probationary period.
(citing Manila Hotel Corp vs. NLRC, 225 Phil. 127, 133-134, 1986,
which cited Biboso vs. Victorias Milling Co. Inc., 166 Phil. 717, 722-
723, 1997)
6. THE RATIONALE:
6.25 PROBATIONARY EMPLOYEES ENJOY SECURITY OF

TENURE, ALBEIT LIMITED
(b) The service of an employee who has been engaged on probationary

basis may be terminated for any of the following:
(b.1) a JUST, or
(b.2) and AUTHORIZED cause, and
(b.3) when he fails to qualify as a regular employee in accordance
with reasonable standards prescribed by the employer. (citing Abbot
Laboratories vs. Alcaraz, GR 192571, 23 July 2013, which cited
Robinsons Galleria, etc vs. Ranchez, GR 177937, 19 January 2011,
640 SCRA 135)
6. THE RATIONALE:
6.26 PROBATIONARY EMPLOYEES CAN NOT BE DISMISSED
WITHOUT CAUSE
(a) Thus, while no vested right to a permanent appointment had as yet

accrued in favor of respondent, since he has not completed the pre-
requisite three-year period (six consecutive semesters) necessary
for the acquisition of permanent status as required by the MANUAL
OF REGULATIONS FOR PRIVATE SCHOOLS. (citing Fr. Escudero OP vs.
Office of the President, 254 Phil. 789, 797, 1989; Collegio San
Agustin vs. NLRC, 278 Phil 414, 419, 1991).
6. THE RATIONALE:
6.26 PROBATIONARY EMPLOYEES CAN NOT BE DISMISSED
WITHOUT CAUSE
(b) The Manual has the force of a law and probationary employees do
enjoy a limited tenure under said Manual.
(c) During the said probationary periods, his employment can not be
terminated except for a JUST or AUTHORIZED CAUSE, or if he fails to
qualify in accordance with reasonable standards prescribed by the
employer for acquisition of PERMANENT STATUS of its teaching
personnel.
6. THE RATIONALE:
6.27 HERE, THE TEACHER WAS ILLEGALLY DISMISSED
(a) The school failed to prove any just cause to terminate his
employment.
(b) He was even promoted to the rank of Associate Professor.
(c) SC: Clearly, the teacher’s termination from the school, after 5
trimester of SATISFACTORY SERVICE was illegal.

11. EMPLOYERS SHOULD MAKE KNOWN TO THE
PROBATIONARY EMPLOYEE THE REASONABLE
STANDARDS FOR REGULARIZATION

1.THE CASE:
Colegio del Santisimo Rosario, et al

vs. Emmanuel Rojo, et al GR 170338, II del Castillo, J. 04
September 2013
2. THE FACTS:

(a) The school, Colegio Santisimo Rosario (CSR) hired Emmanuel Rojo as a high school teacher for the
school years in 1992 – 1993, 1993 – 1994 and 1994 – 1995

(b) On 5 April 1995, CSR decided not to renew respondent Rojo’s services.

(c) On 13 July 1995, Rojo filed a case of illegal dismissal.


(a) LA (07 Oct 2002): decided that Rojo already attained regular status. The non – renewal of his contract
constituted illegal dismissal.

(b) NLRC (31 July 2003): affirmed the Arbiter’s ruling with modification.

(c) CA (31 August 2005): affirmed the NLRC’s ruling.

(d) SC (04 Sept 2013): affirmed the CA

4. THE RATIONALE:

(a) The Labor Code, supplemented by the MORPS Manual

In Mercado vs. AMA Computer College–Parañaque (GR183572, 13 April 2010, 618, SCRA 218,
223-224), the SC held that cases dealing with employment on probationary status of teaching
personnel are not governed solely by the Labor Code, as the law is supplemented, with respect to
the period of probation, by special rules found in the Manual of Regulations for Private Schools
(Manual).

(b) Probationary Periods for Private Schools Teaching Personnel

In the Mercado case, the SC referred to the Section 92 of the MORPS, as follows:

(b.1) For The Elementary and Secondary Levels: probationary period shall not be more than
three (3) consecutive years of satisfactory service.

(b.2) For tertiary levels, in schools with two semesters for every school year: probationary
period shall not be more than six (6) consecutive regular semesters of satisfactory service;

(b.3) For tertiary levels in schools where collegiate courses are offered on a
trimester basis: probationary period shall not be more than nine consecutive
trimesters of satisfactory service.

(c) Fixed Term One Year Employment Contracts Are Allowed

(c.1) Employment for fixed term during the teacher’s probationary period is an
accepted practice in the teaching profession.

(c.2) Citing MAGIS YOUNG ACHIVERS LEARNING CENTER vs. Manalo (GR
178835, 13 Feb 2009, 579 SCRA 421, 436), the Supreme Court recognized the
right of both parties as well as the common practice to enter into a fix-term
contract of one school year. At the end of the school year, the employer has the
option not to renew the contract, particularly considering the teacher’s
performance. If the contract is not renewed, the employment relation terminates.
If the contract is renewed, the probationary period continues.

(d) NO MORE PROBATIONARY STATUS AFTER THE THIRD YEAR

(d.1) In the above cited case of MAGIS, the Supreme Court stressed that “at the end of the
third year, (for primary and secondary levels in private schools) the employer may now
decide whether to extend a permanent appointment to the employee, primarily on the basis of
the employee having met the reasonable standards of competence and efficiency set by the
employer. For the entire duration of their three-year period, the teacher remains under
probation.

(d.2) Upon the expiration of his contract of employment, being simply on probation, he
cannot automatically claim security of tenure and compel the employer to renew his
employment contract.

(d.3) It is when the yearly contract is renewed for the third time that Section 93 of the
Manual becomes operative, and the teacher then is entitled to regular or permanent
employment status.

(e) ARTICLE 281 OF THE LABOR CODE MODIFIES THE PRACTICE OF
FIXED – TERM EMPLOYMENT

(e.1) The SC held that the scheme of : “OF FIXED – TERM contract” is a system
that operates during the probationary period. For this reason, this practice is
subject to Article 281 of the Labor Code.

(e.2) Article 281 of the Code, was quoted as follows: “xxx 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 the reasonable standards made known by the employer to the employee at the
time of his engagement.

(e.3) Under Article 281, the Court noted, “an employee who is allowed to work
after probationary period shall be considered a regular employee.

(f) THE LAW PROTECTS TEACHERS FROM TERMINATION BASED MERELY ON
EXPIRATION OF HER CONTRACT

(f.1) In the Mercado ruling, the SC noted in this case of Colegio del Santissimo Rosario, that there
is a need to reconcile Article 281 with the procedure of terminating based on expiration of contract.

(f.2) The SC warned that “unless this reconciliation is made, the requirements of Article 281 on
probationary status would be fully negated, as the school may freely choose not to renew contracts
simply because their terms have expired.

(f.3) The SC warned that such a situation will have an unsettling effect in the equilibrium vis–a–vis
the relatins between labor and management that the constitution and the Labor Code have worked
hard to establish.

(f.4) The SC stressed that teachers on probationary employment also enjoy the protection afforded
by Article 281 of Labor Code is supported by Section 93 of the 1992 Manual, which was quoted as
follows: Regular or Permanent Status – THOSE WHO HAVE SERVED THE PROBATIONARY
PERIOD SHALL BE MADE REGULAR or PERMANENT. FULL TIME TEACHERS WHO
HAVE SATISFACTORILY COMPLETED THEIR PROBATIONARY PERIOD SHALL BE
CONSIDERED REGULAR or PERMANENT.

(g) THE MEANING OF “SATISFACTORILY COMPLETED”

(g.1) The SC noted that Section 93 clearly provides that full – time teachers become regular
or permanent employees once they have SATISFACTORILY COMPLETED the
probationary period of three school years.

(g.2) The use of the term SATISFACTORILY necessarily connotes the requirement for
schools set reasonable standards to be followed by teachers on probationary employment.
For how else can one determine if probationary teachers have satisfactorily completed the
probationary period if standards therefore are not provided.

(h) THE LAW AND ITS NUANCES RE: PROBATIONARY PERIOD (Balancing of
Interests Principle) Citing MERCADO (618 SCRA 218, 13 April 2010),

(h.1) The SC noted that the provision on employment on probationary status under the Labor
Code is a primary example of the fine BALANCING OF INTERESTS between labor and
management that the Code has institutionalized pursuant to the underlying intent of the
Constitution.

(h.2) On the other hand, employment on probationary status affords management the chance
to fully scrutinize true worth of hired personnel before the full force of the SECURITY OF
TENURE guarantee of the constitution comes into play.

(h.3) Based on the standards set at the start of the probationary period, management is given
the widest opportunity during the probationary period to reject hires who fail to meet its own
adopted but REASONABLE STANDARDS.

(h.4) The Court emphasized that these standards, together with the just and authorized causes
for termination of employment (which) the Labor Code expressly provides, are the grounds
available to terminate the employment of a teacher on probationary status.

(i) MEANING AND PURPOSE OF EMPLOYMENT STANDARDS

(i.1) Under the terms of the Labor Code, these standards should be made known to the
teachers on probationary status at the start of their probationary period, or at the very least
under the circumstances of the present case, at the start of the semester or the trimester during
which the probationary standards are to be applied.

(i.2) Of critical importance in invoking a failure to meet the probationary standards, is that
the school should show – AS A MATTER OF DUE – PROCESS, how these standards have
been applied.
(j) DUE–PROCESS IN THE TERMINATION OF PROBATIONARY EMPLOYEES FOR

FAILURE TO LEVEL UP TO MANAGEMENT’S REASONABLE STANDARDS

(j.1) This is effectively the second notice in a dismissal situation that the law requires, as a
due-process guarantee, supporting the security of tenure provision, and is in furtherance, too,
of the basic rule in employee dismissal that the employer carries the burden of justifying a
dismissal.

(j.2) These rules ensure compliance with the limited security of tenure the law extends to
probationary employees.

(l) FIXED – TERM EMPLOYMENT AND PROBATIONARY EMPLOYMENT

(l.1) When fixed-term employment is brought into play under the above probationary period
rules, the situation – as in the present case – may at first blush, look muddled as fixed term
Philippine law and jurisprudence.

(l.2) The conflict however, is more apparent than real when the respective nature of fixed
term employment on probationary status are closely examined.

(m) DISTINCTIONS BETWEEN THE TWO KINDS OF EMPLOYMENT

(m.1) 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.

(m.2) In a sense, employment on probationary status also refers to a period because of the
technical meaning “PROBATION” carries in Philippine labor law – a maximum period of six
months, or in the academe, a period of three years for these engaged in teaching jobs.

(m.3) Their similarity ends there, however, because of the overriding meaning that being
“ON PROBATION” connotes i.e. a process of testing and observing the character or abilities
of a person who is new to a role or job.

(n) THE PROTECTIVE CHARACTER OF PROBATIONARY EMPLOYMENT

(n.1) Understood in the above sense, the essentially protective character of
PROBATIONARY STATUS for management can readily be appreciated.

(n.2) But this same protective character gives rise to the countervailing but equally protective
rule THAT THE PROBATIONARY PERIOD can only last for a specific maximum period
and under reasonable, well –laid and properly communicated standards.

(n.3) Otherwise stated, within the period of probation, any employer move BASED ON THE
PROBATIONARY STANDARDS AND AFFECTING THE CONTINUITY OF THE
EMPLOYMENT must strictly conform to the probationary rules.

(o) PIERCING THE VEIL OF FIXED–TERM EMPLOYMENT

(o.1) SC: If we pierce the veil, so to speak, of the parties’ so –called FIXED TERM
employment contracts, what undeniably comes out at the core is a fixed – term contracts,
conveniently used by the school to define and regulate its relations with its teachers during
their probationary period.

(o.2) In the same case, (Mercado vs. AMA Computer College, 618 SCRA 218, 13 April
2010) the SC has definitively pronounced that “IN A SITUATION WHERE THE
PROBATIONARY STATUS OVERLAPS WITH A FIXED- TERM CONTRACT, NOT
SPECIFICALLY USED FOR THE FIXED TERM IT OFFERS, Article 281 should assume
primary and the fixed period character of the contract must give way.

(p) FIXED-TERM EMPLOYMENT, NOT USED FOR PROBATION
(p.1) An example given of a fixed-term contract specifically used for the fixed-term is that of
a replacement teacher or a reliever contracted for a period of one year to temporarily take the
place of a permanent teacher who is on leave.

(p.2) The expiration of the reliever’s fixed-term contract does not have probationary status
implications as he or she was never employed on a probationary basis.

(p.3) This is because his or her employment is for specific purpose with particular focus on
the term. There exists an intent to end his or her employment with the school upon expiration
of his term.

(q) DUTY TO SET REASONABLE STANDARDS

(q.1) For teachers on probationary employment, in which case a FIXED-TERM
CONTRACT is not specifically used for the fixed term it offers, it is incumbent upon the
school to have, not only REASONABLE STANDARDS to be followed by said teacher in
determining qualification for regular employment, the same must have 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.

(q.2) 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.

(q.3) The specific details of this finding of just cause must be communicated to the affected
teachers as a matter of due-process.

(q.4) Corrollarily, should teachers not have been apprised of such reasonable standards at the
time specified above, they shall be deemed regular employees.

(r) ABSENCE OF REASONABLE STANDARDS, FATAL TO
THE EMPLOYER’S CASE
(r.1) The law is clean that, in all cases of probationary employment, the employer shall
convey to the employee the standards under which he will qualify as a regular employee, at
the time of his engagement.

(r.2) Where no standards are made known to the employee at that time, he shall be deemed a
regular employee.
(citing Tamson’s Enterprises Inc. vs. CA, (GR 192881, 16 Nov. 2011, 660 SCRA 374, which
cited Had Primera Development Corp. vs. Villegas, GR 186243, 11 April 2011, 647 SCRA
536)

(s) LACK OF REASONABLE STANDARDS RESULTS TO ADVERSE RULING

(s.1) Glaringly absent from the school’s evidence are REASONABLE STANDARDS that the
teacher was expected to meet that could have served as proper guidelines for the purposes of
evaluating his performance.

(s.2) Nowhere in the Teacher’s Contract could such standards be found. Neither was it
mentioned that the same mere ever conveyed to the teacher.

(s.3) Even assuming that the teacher failed to meet the standards set forth by CSR (for
school) and made known to the teacher at the time he was engage as teacher on probationary
status, still, the termination was flawed for failure to give the required notice to the teacher.

(t) WHERE THERE IS NO REASONABLE STANDARDS, THERE IS NO BASIS FOR
PERFORMANCE EVALATION

(t.1) Curiously, despite the absence of standards, Mofaida mentioned the existence of alleged
performance evaluations.
(t.2) What could have been the basis of such evaluation, as no evidence were adduced to
show the reasonable standards with which the teacher’s performance was to be assessed or
that he was informed thereof.

(t.3) Notably too, none of the supposed performance evaluations were presented.

(t.4) These flaws violated respondent’s right to due process.

(t.5) As such, his dismissal is, for all intents and purposes illegal.

(u) THE PROBATIONARY EMPLOYEE’S RIGHT TO SECURITY OF TENURE

(u.1) As a matter of due – process, teachers on probationary employment, just all
probationary employees, have the right to know whether they have met the standards against
which their performance was evaluated.

(u.2) Should they fail, they also have the right to know the reasons thereof.

(u.3) It should be pointed out that absent any showing of unsatisfactorily performance on the
part of respondent, it cannot be presumed that his performance was satisfactory, especially
taking into consideration the fact that even while he was still more than a year into his
probationary employment, he was already designated Prefect of Discipline.

(v) THE ADMINISTRATION WAS UNFAIR IN THIS CASE

(v.1) In such capacity, he was able to uncover the existence of a drug syndicate within the
school and lessen the incidence of drug use therein –

(v.2) Yet, despite respondent’s substantial contribution to the school, petitioners choose to
disregard the same and instead terminated his services, while most of those who were
involved in drug activities within the school were punished with a slap on the wrist as they
were made to write letters promising that the incident will not happen again.

(v.3) Mofiada (of the administration) would also have no believe that respondent chose to
resign as he feared for life, thus, the school’s decision NOT to renew contract.

(v.4) However, no resignation letter was presented. Besides, this is contrary to respondent’s
act of immediately filing the instant case against the school.
CASE NO 12:DISMISSAL OF A PRIVATE SCHOOL TEACHER DUE TO
ALLEGED ALTERATION OF GRADES
Colegio de San Juan de Letran
VS
ISIDRA DELA ROSA MERES
GR 178837, 01 Sept 2014

Third Division, Peralta J.
A. FACTS
1. Isidra dela Rosa Meres was a teacher of Letran will the following service
records’
(a) Hired Jan 1971,
(b) Became a Master Teacher in June 1982,
(c) Resized in March 1991,
(d) Rehired as substitute teacher in Feb to April 1998
(e) Hired again on 21 Oct 1999 268

(f) Termination of cause on Oct 31, 2003
(g) She filed for illegal dismissal on 06 October 2003.
B. CASE HISTORY:
(a) 14 May 2004: Labor Arbiters rendered a decision finding the dismissal
LEGAL.
(b) 28 Feb 2005: The NLRC affirmed the ruling that there was just cause.
Separation
benefits were awarded of one month for every year of service.
(c) 18 November 2005: On motion for reconsideration, the NLRC found that
the teacher committed DISHONESTY and that the dismissal was LEGLA.
(d) 29 Jan 2007: the CA reversed the NLRC and the Arbiter and found the
dismissal to be illegal and found the dismissal to be illegal. The CA ordered
payment of FINAL BACKWAGES and separation pay. 269
(e) 25 May 2007: the CA affirmed the ruling and added attorney’s fees to the
awards.
C. ISSUES
1. Was there a JUST CAUSE to dismiss?
2. Was the teacher afforded DUE-PROCESS?
3. To what remedy/remedies is complaint teacher entitled?
D. RULING
1. Yes, there was a just cause to dismiss.
2. Yes, she had been afforded DUE-PROCESS
3. She is NOT entitled to any remedy

270
E. SPECEFIC RULING
1. Deliberate Tampering of Grades: A Just Cause To Terminate Employment
(a) These facts clearly indicate that complainant deliberately transpired

with the grades of some of her students in order to favor another
students-Louwis Ariel Arellano, who as a result of such tampering
landed in the top of the Honor Roll class, although he was not
best pupil in the class.
(b) The bad faith on the part of complaint is evident.

(Quoting the NLRC DECISION)
2. Teachers Should Uphold The Integrity of The Grading System (quoting

the NLRC)
(a) Indeed, mush is desired of the complaint insofar as maintaining the

integrity of respondent school’s grading systems.
(b) And, while there exist a certain degree of discretions which a teacher
exercise in terms of assessing a student's academic performance,
271
3. ALTERATIONS OF GRADES WITHOUT SUFFICIENT BASIS ARE NOT
ALLOWED (quoting the NLRC)
(a) But what remains emphatic about this fact is that, alterations could no
longer be made without any sufficient basis therefor.
(b) To acknowledge as acceptable, a teacher’s practice in just increasing or

decreasing points from a recorded grade, by way of a general his
performance, or exerted less efforts towards the end of the grading
period, DOES NOT REFLECT WELL of the objectivity period, DOES NOT
REFLECT WELL of the objectivity that the teaching profession should be
endowed with.
4. STUDENTS’ PERFORMANCE SHOULD BE WELL RECORDED IN THE

TEACHERS’ RECORD BOOK (quoting NLRC)
(a) Such improvement or deteriorations, whatever the case maybe, should be

assigned a specific weight in numerical terms known as grades, that could,
in turn, make up for the general average of a student in a particular
subject.
(b) All of these are necessarily reflected in a teacher’s record book.

Consequently is follows that what should appear in the clean Record272
5. THE SCHOOL RIGHTFULLY DISMISSED THE TEACHER FOR UNDUE GRADE
ALTERATION
(a) Any discrepancy reasonably yields the conclusion that the change was
bot premised on an objective assessment of the performance of a
student.
(b) For this reason alone, respondents (School) may not be faulted for
administratively proceeding against the complainant. (teacher).
6. TIMING OF ALTERATIONS MADE THEM IRREGULAR AND SUSPICIOUS
(a) The timing of such alterations and erasures is crucial in determining the
soundness of respondent’s reasons for making them, and whether
bad faith was obtaining in the instant case.
(b) Unfortunately for respondent (teacher), we find her acts and omissions
highly IRREGULAR and SUSPICIOUS.
273
7. WHY THE TIMING WAS SUSPICIOUS (quoting the NLRC)
(a) Thus, when complainant recorded the grades in the dirty records up to
the time she finished it, it was already VERY MUCH BEYOND THE
FIRST QUARTER.
(b) It is quits incredible that in such a short period of time, students would
show “significant improvements” that would justify a big adjustment of
the final grades in the first quarter.
(c) Assuming that the were “significant improvements” on the part of the
students concerned, they not be reflected in the just quarter because the
improvements, if any, took place in the second quarter.”
8. SUBJECTS WHERE ARE NOT TEST MUST HAVE SOME BASIS NONE______
FOR EVALUATING STUDENT PERFORMANCE
(a) While the subjects of PE, Music an Arts and Writing are all non-tested;
meaning there is no written examinations by which the grades may be
based upon, said SIGNIFICANT IMPROVEMENTS should be backed by
justifiable basis. 274
(b) The same is apt because the components of the grades for non-tested
subjects are not quantifiable and can not be ascertained by
mathematical computation; therefore, it is highly subjective and prove to
manipulation.
9. THE TEACHER FAILED TO ESTABLISH THE BASIS FOR ACTERATION
(a) In the instant case, respondent (teacher) utterly failed to indicate the
reason behind such improvement.
(b) Was it because of the concerned students’ improvement in the

activity books, participation in the play or writing, or on-the-spot drawing
contest?
(c) A concrete basis for such improvement could have been given
respondent, but all she offered were sweeping and general statements of
purported significant improvements.
275
10. THE TEACHER DOES NOT HAVE UNBRIDLED DISCRETION IN GIVING
GRADES
(a)The fact that the grades are non-tested does not give the teacher
unbridled discretion to grade her students arbitrarily and whimsically.
(b) Otherwise, the spirit of section 79 of the Manual of Regulation for Private
Schools would be rendered futile.
(c) section 79 of the MOR PS provides:
SECTION 79: BASIS FOR GRADING
The final grade or rating given to a pupil or student in a

subject should be based on his SCHOLASTIC RECORD. Any addition
or demotion to the grade xxx shall NOT be allowed.
11. DELIBERATE FALSIFIED OF CLASS RECORDS OF SERIOUS

MISCONDUCT, A JUST CAUSE TO DISMISS UNDER ARTICLE 282
( ART 288) OF THE LABOR CODE
(a) In fact, in TIP teachers And Employees Organization vs CA (608 Phil 632,
2009), we have categorically enunciated that knowingly and deliberately276
(b) It is also a serious misconduct, under article 282 (a), (won 288 (a)), a just
cause for termination of employment.
12. FALSIFYING GRADES IS WORST THAT SELLING TEST QUESTIONS

(quoting TIPTEO)
(a) As in the case of unauthorized selling of examination papers, Salon’s

guilt is not erased or mitigated by the fact that she meant well, or that
she tried to rectify her indiscretion after realizing that she violated the
grading system of the School.
(b) Two differences exist between the examination paper selling violation
and the present one.
(c) First, her examination paper violation is legally a transgression

against a school regulation.
(d) The present one goes beyond a school violation against the Manual
of Regulation for Private Schools. (see Section 79, supra). 277
13. FALSIFICATION OF GRADES IS TANTAMOUNT TO FALSIFICATION
(a) The present violation involves elements of FALSIFICATION and

DISHONEST.
(b) Knowing fully well what Manalo deserved, Salon gave her a grade a
6.0, instead of a pasting.
(c) In the process, she change, in short, falsified her on records by

changing the submitted records and supporting documents.
(d) Viewed in any like, this is SERIOUS MISCONDUCT, under article 282
(a of the Labor Code) and a just cause for termination of employment.
14. TEACHERS PREROGATIVE TO GIVE GRADES SHOULD BE SUBJECT TO

THE REQUIREMENT
OF A SCHOLASTIC RECORD
(a) The fact that eight students were made beneficiaries of such increase
the does not justify the irregular alteration since the rule is, the rating of278
(b) Respondent’s (Teachers) prerogative to give her students the grade
that they deserve is NOT in incoherent with having a fair and reasonable
basis therefor.
15. THE ACTS, ACCORDING SUPREME COURT THAT, WHEN ALL TAKEN
TOGETHER,
CONSTITUTE SERIOUS MISCONDUCT.
SC: To our mind, the acts of respondent
(a) In altering the grades CLEAN RESOURCES even after the same were
already received and approved by the subject coordinators;
(b) Of effecting the alternations and erasures, without pleasing her

initials thereon;
(c) Of not informing the subject coordinators of such alternation or

erasures;
(d) Of allowing the discrepancies to last without any effort to reconcile

the same to avoid doubts and grading system of petition;
(e) Of refusing to accept the memo informing her of the aforesaid279

16. THE ACTS OF RESOPONDENT TEACHER WERE VIOLATIONS OF THE
MORPS
(a) Truly then, respondent (teacher) has COMMITTED a MISCONDUCT,

serious enough her warrant dismissal from employment a paragraph (a)
of Article 282 of the Labor Code, as well as section 94 (b) Article XVII of
the Manual regulations for Private Schools, which provides that the
employment of a teacher may be terminated for NEGLIGENCE in keeping
school or student records or tampering with or falsification of the same.
(b) Section 94 (MORPS) Cause For Terminating Employment, in addition

to the JUST CAUSES enumerated in the Labor Code, the employment of
school personnel, including faculty, may be ]terminated for any of the
following causes:
xxx
(b) Negligence in keeping SCHOOL or STUDENTS
records, or tampering with or falsification of the same.
17. COMPASSION FOR STUDENTS DOES NOT JUSTIFY FALSIFICATION
(a) Negligence in keeping school or student records or tampering with280

(b) While respondents motive for increasing the grades of certain
students in the Clean Records was not known and could have been
noble, the fact is, unauthorized and improper alterations were effective in
the official record of petitioner (school) of clear violation of petitioner
ELEMENTARY FACULTY MANUAL as well as the Private School Manual
adhered to buy petitioner (school) and its faculties)
(c) Respondents is deemed to have exercised unreasonable degree of

discretion in failing to provide a concrete basis for increasing the grades
of certain students.
(d) For this, respondent (teacher) should be made to face the

consignments of her actions.
(e) Tolerate such conduct into, indeed, under mine the integrity if
petitioners grading system, and its standing as an academic as well.
18. THE TEACHER AS AN EXEMPLAR OF UPRIGHTNESS (quoting the case of

TIPTED)
281
(b) She is a teacher from whom a lot is expected; she is expected to be
an exemplar of uprightness, integrity and decency, not only in school
but also in the larger community.
(c) She is a role model for her students; in fact, as she claims, she stands
IN LOCO PARENTI to them.
(d) She is looked up to and is accorded genuine respect by almost

everyone as a person task with the heavy responsibility of molding and
guiding the young into what they should be productive and law-abiding
citizens.
19. THE TEACHER RENEGED FROM HER NOBLE TASK (quoting TIPTED)
(a) What Salon committee dis a corrupt act, no less, that we cannot allow
to pass without giving a wrong signal to all who looked up to teachers,
and to this Court, as the models who should the way and sat the example
in fastening a culture of uprightness among the young and in the larger
community.
(b) From the personal perfective, Salon demonstrated though her in282
20. THIS TEACHERS MOST FUNDAMENTAL FAILURE (quoting TIPTED)
(a) She failed in a teacher's most basic task-in honestly rating the
performance of students.
(b) Her feelings lost her the trust and confidence of her employer, and
even her students.
21. THE SCHOOL COMPLIED WITH THE REQUIREMENTS OF SUBSTANTIVE OF

DUE-PROCESS
(a) It is now settled that petitioner (school) duly complied with the
requirement of substantial DUE-PROCESS In terminating the
employment of respondent (teacher).
(b) We will now determined whether petitioner had complied with the
procedural aspect lawful dismissal.
22. THE REQUIREMENTS FOR PROCEDURAL DUE-PROCESS
In termination of employment, the employer must:

283
(b) conduct a hearing or conference during which the employee
concerned, with the assistance of counsel, if he so deserves, is given an
opportunity to respond to the change, present his evidence or rebut the
evidence presented against him, and
(c) give the employee a written notice of termination indiicating that,

upon due consideration, of all circumstances, grounds have been
established to justify his termination. (citing NLRC vs. Salgarino, 529 Phil
355, 374, 2006)
23. THE SCHOOL’S COMPLIANCE WITH PROCEDURAL DUE-PROCESS
(a) First, after receiving information's from parents who lodged

complaints against respondent, petitioner (school) immediately
conducted an investigation, which included a verification of
respondent’s class records, which uncovered the aforementioned
discrepancies.
(b) Second, finding discrepancies and irregularities from the aforesaid

examinations, petitioner (school) directed respondent (teacher) to284
(c) Third, on October 2, 2003, For Law xxx advised her to give a written
explanation why she tampered her class records, otherwise her
employment would be terminated without further investigation, as her
refusal will be taken as a waiver of her right to be heard.
24. REFUSAL TO COOPERATE IN THE ADMINISTRATIVE INVESTIGATON IS

TANTAMOUNT TO
A WAVER
(a) Based on the foregoing, it is clear that respondent (teacher) refused

to present her side by choice.
(b) It can he said that AMPLE OPPORTUNITY was afforded from the
charger levelled on her, but she stopped not to take it.
(c) In a puthora of cases, we have ruled that the essence of DUE-

PROCESS lies simply in an OPPORTUNITY to be heard; and not that an
actual hearing should always and indispensably be held ( See Asian
Terminals Inc. vs Sallao, 580 Phil 229, 237-238, 2008), especially if she
herself, the employee precluded the same from happening, as in this285
25. NO REMEDY IS AVAILABLE TO A LEGALLY DISMISSED EMPLOYEE
(a) Indubitably, respondent was dismissed from employment for a just

cause and in accordance with the due process under existing labor laws,
rules and regulations.
(b) Accordingly, she is NOT entitled to reinstatement, or Separation Pay

Backwages or other claims for damages.
(c) No Court, not even this Court can make an award that is NOT based in
law. (TIPTED vs. CA, 608 Phil 632, 2009)
286
CASE NO 13: A SCHOOL DOCTOR’S GROSS NEGLECT OF MEDICAL DUTIES
Dr. Phylis C. Rio

VS
Colegio de Sta Rosa Makati,
And/or Sr. Marilyn B. Gustilo,
GR 189629, 06 August 2014

Second Division, Perez, J.
A. FACTS
1. Dr. Phylis C. Rio was hired by respondent school as part-time school

physician in June
1993, only for 4 hours every week with a salary of Php 12,640 per moth.
2. In Feb 2002, the school principal offered Dr. Rio Php 12,500 and required
her to report
from Monday to Friday from 8:00 am to 3:00 pm.
3. Dr Rio rejected the new appointment She also rejected a new work
schedule requiring
her to work on MWF from 8:00AM to 11:00 AM and on TTh from 1:00 to
4:00pm. 287
5. On 30 July 2002, Dr Rio and the nurse Neneth Alongo were charged with:
“Grave Misconduct, Dishonesty and/or Gross Neglect of Duty detrimental
not only to the school but, principally, to the health and well-being of the
pupils. The charges were based on the Manual of Regulation of Private
Schools and the labor Code. In the same letter, Dr. Rio and the nurse
were placed under Preventives Suspension.
6. Dr. Rio was directed to answer the following charges:
(a) Nine (9) students have medical records for school years during which
they were not in the school yet, thus could not have been the
subject of medical examination/ evaluation,
(b) seventy-nine (79) students of several classes/ sections during certain

school years were not given any medical/ health
evaluation/examination; and
(c) failure to conduct medical/ health examination on all students of

several classes of different grade levels of the school year
2001-2002.
7. Petition, Dr. Rio, denied the charger 288

B. CASE HISTORY
(a) Labor Arbiter:
decided that there was ILLEGAL DISMISSAL He awarded

Php 259,836.27 as backwages and separation for
Dr. Rio and Php 746,360.49 as backwages and
separation pay for Alonso.
(b) 10 Jan 2005: the NLRC decided in favor of the School and held
that the dismissal of Rio and Alonso was valid.
(c) 7 April 2005, the NLRC denied the School’s Motion For
Reconsiderations.
(d) 21 May 2009, the CA affirmed the NLRC’s decision.
(e) 18 Sept 2009, the CA denied the School’s MR.
(f) 06 Aug 2014: the SC affirmed the CA. 289

C. ISSUES
1. Was there a just cause to dismiss the doctor?

2. Was the doctor afforded Due-PROCESS prior to termination?
3. To what remedies is she entitled?
D. RULING
1. yes. There was a just cause to dismiss the doctor.

2. Yes. She was afforded dur-process.
3. No. She is not entitled to any remedy.
E. SPECIFIC RULING
1. Dr. Rio was Legally Dismissed
(a) Based on Article 282 of the Labor Code, in relation to section

94 of the 1992 Manual of Regulations for Private Schools, petitioner
was legally dismissed on the ground of GROSS INEFFICACY and
INCOMPETENCE. 290
(b) Specifically, he was held guilty of NEGLIGENCE in the keeping of
school and student records, or tampering with, or falsification of
records.
2. MEANING OF GROSS INEFFICIENCY AND GROSS NEGLECT OF DUTY
(a) As we already held, GROSS INEFFICIENCY is closely related to

GROSS NEGLECT because both involve specific acts of omission
resulting in damage to another. (citing Lim vs NLRC, 328 Phil 843, 858,
1996)
(b) Gross Neglect of Duty or Gross Negligence refers to negligence

characterized by the want of even slight case, acting or omitting to act in
a situation where there is a duty to act, not inadvertently but willfully and
intentionally, with a conscious indifference to consequences insofar as
other person may be affected. (Brucal vs. Hon Desierto, 201 Phil 453, 465-
466, 2005).
3. WHY THE DOCTOR IS GUILTY OF GROSS NEGLIGENCE

291
(b) Petitioners failed to diligently perform her duties. It was unrelated
that:
(1) there were dates when a medical examination was conducted

and yet the cases fell on weekends.
(2) failure to conduct medical examinations on all student for two

(2) to five (5) consecutive years.
(3) lack of medical records on all students; and
(4) students having medical records prior to their enrollment.
4. THE COURT OF APPEALS FINDINGS OF GROSS NEGLIGENCE
(a) If petitioner (doctor) had been attentive to her work as she claims, this
cabinet could not have been left dormant for two years as she would
have been regularly updating her records and checking on them xxx.
(b) Assuming that the cabinet was indeed locked, the fact that she did
not bother to have it opened for two years only showed that she no need
to use the files contained therein because she had not been maintaining
and updating the medical records as she had not been performing her292
5. GROSS NEGLIGENCE IN RECORD KEEPING
The CA went further, stating,
(a) “even assuming that petitioner was telling the truth, the fact remains
that she had been grossly insufficient and negligence for failing to
provide a proper system of maintaining and updating the students’
medical records over the years oh her employment with respondent”
(b) Indeed, petitioner was grossly inefficient and negligent in performing

her duties.
293
CASE NO 14: WHEN ARE VALIDLY DISMISSED EMPLOYEES
ENTITLED TO SEPARATION PAY
(GROSS INEFFICIENCY OF A TEACHER)
1. THE CASE:
International School Manila, et al

Versus
International School Alliance of Educators
(ISAE), et al
GR 167286
05 Feb 2014
I Division
Leonardo de Castro, J
2. THE FACTS:
1. This is a case of ILLEGAL DISMISSAL filed by a teacher, Evangeline Santos

against International School.
2. Ms. Santos was first hired in 1978 as a full-time Spanish teacher.
3. She took a leave of absence in April 1992 and came back August of 1993.
4. When she came back there was already a full time Spanish teacher and so,
same for one Spanish class, she was assigned Filipino subjects.
5. Her superior however, found her performance below expectations
6. After a series of negative performance review results, on 10 April 1997, the
administration issued a SHOW CAUSE memo. She was asked to explain in
writing why her employment from the school should not be terminated because
of her failure to meet the criteria for improvement set out in her Professional
Growth Plan and her substandard performance as a teacher.
2. THE FACTS:
7. In her reply letter, dated April 14, 1997, Santos blamed the school for her
predicament. She said that in the last few years, she had been forced to teach
Filipino, a subject which she had no preparation for. The school allegedly
made this happen against her objection and despite the fact that she had no
training in Filipino linguistics and literature. Santos also asked for clarification
on why she was being asked to explain the reasons therefor.
8. She was subjected to administrative investigation. On 29 May 1997, the school

informed Santos that her employment would be terminated
2. THE FACTS:
9. The Union, to which Santos belong, filed a case, on behalf of the teacher, for
a. Unfair labor practice

b. Illegal Dismissal
c. Moral and exemplary damages
d. Violation and refusal to comply with the grievance procedure in the CBA, and
e. Unresolved grievance matter
(a) Labor Arbiter (03 April 2001): held that the dismissal wa ILLEGAL. (L)
(b) NLRC (28 Feb 2003): Affirmed the Labor Arbiter’s Decision “en toto”. (L)
(a) NLRC (30 June 2003): Dismissed the Motion for Reconsideration (L)
(b) CA (17 Nov 2004): Affirmed the Labor Arbiter, The NLRC on the case of Santos. (L)
(c) CA (23 Feb 2005): Denied the Motion for Reconsideration
(d) SC (05 Feb 2015): Reversed the DECISION and held that the termination of Santos
ws valid. Separation pay was however granted to Santos.
4. THE ISSUES:
(a)Was the dismissal of Santos legal?
(b)To what remedy is she entitled?
5. THE RULING:
(a)Yes. The dismissal was legal
(b)The teacher, Ms. Santos, was granted Separation pay.

6. THE RATIONALE:
(a) AS A GENERAL RULE, FINDINGS OF FACTS OF LOWER

AGENCIES ARE FINAL
- Generally, on appeal, the findings of fact of an administrative agency like

the NLRC are accorded not only respect but also finality if the findings
are supported by substantial evidence such rule, however, is by no
means absolute.
6. THE RATIONALE:
(b) EXCEPTION TO THE RULE: E.G. LOWER COURTS / AGENCIES’

FINDINGS, NOT HELD FINAL
(b.1) As held in SMC vs Aballa (500 Phil 170, 194, 2005) when the
findings of facts of the Labor Arbiter and NLRC are not supported by
substantial evidence or their judgment was based on misapprehension
of facts, the appellate court may make independent evaluation of the
facts of the case.
(b.2) The Court finds the said exception extant in this case.
6. THE RATIONALE:
(c) TWO REQUISITES FOR VALID DISMISSAL
In Janseen Pharmaceutica vs Silayro (570 Phil 215, 226, 2008), We stated

that:
(c.1) The dismissal must be for any of the causes provided in Article 282
of the Labor Code, and
(c.2) The employee must be given an opportunity to be heard and to

defend himself
6. THE RATIONALE:
(d) BURDEN OF PROOF, AND SUBSTANTIAL JUSTICE
(d.1) In all cases involving termination of employment, the burden of

providing the existence of the above JUST CAUSES rests upon the
employer. (Lopez vs NLRC, 358 Phil 141, 150, 1998)
(d.2) The quantum of proof required in these cases is SUBSTANTIAL

EVIDENCE, that is such relevant evidence that a reasonable mind
might accept as adequate to support a conclusion, even if other
equally reasonable minds might conceivably opine otherwise
6. THE RATIONALE:
(d) BURDEN OF PROOF, AND SUBSTANTIAL JUSTICE
(d.1) In all cases involving termination of employment, the burden of

providing the existence of the above JUST CAUSES rests upon the
employer. (Lopez vs NLRC, 358 Phil 141, 150, 1998)
(d.2) The quantum of proof required in these cases is SUBSTANTIAL

EVIDENCE, that is such relevant evidence that a reasonable mind
might accept as adequate to support a conclusion, even if other
equally reasonable minds might conceivably opine otherwise
6. THE RATIONALE:
(e) THE CONCEPT OF GROSS HABITUAL NEGLECT OF DUTIES
- The Court had occasion to explain in CENTURY IRON WORKS Inc.

vs BANAS (GR 184116, 19 June 2013) the Concept of GROSS AND
HABITUAL NEGLECT OF DUTIES. Thus:
(e.1) Gross Negligence connotes want or absence of or failure to exercise

slight care of diligence, or the entire absence of care.
(e.2) It evinces a thoughtless disregard of consequences without exerting

any effort to avoid them.
6. THE RATIONALE:
(e) THE CONCEPT OF GROSS HABITUAL NEGLECT OF DUTIES

- The Court had occasion to explain in CENTURY IRON WORKS Inc.
vs BANAS (GR 184116, 19 June 2013) the Concept of GROSS AND
HABITUAL NEGLECT OF DUTIES. Thus:
(e.3) Fraud and willfull neglect of duties imply bad faith of the employee in
failing to perform his job to the detriment of the employer and the
latter’s business.
(e.4) Habitual neglect, on the other hand, implies repeated failure to

perform one’s duties for a period of time, depending upon the
circumstances
6. THE RATIONALE:
(f) TWO ELEMENTS OF GROSS AND NEGLECT OF DUTY
- SC: We also reiterated in UNION MOTOR CORP vs NLRC (487 Phil

197, 2009, 2004) that in dismissing an employee for GROSS AND
HABITUAL NEGLECT OF DUTIES, the negligence should not only be
GROSS, it should be HABITUAL.
6. THE RATIONALE:
(g) THE MEANING OF GROSS INEFFICIENCY
- SC: On GROSS INEFFICIENCY, we ruled that in LIM vs NLRC (328

Phil 843, 858, 1996), that:
(g.1) Gross inefficiency falls within the purview of “OTHER CAUSES

ANALOGOUS TO THE FOREGOING” and constitutes, therefore, just
cause to terminate an employee under Article 282 of the Labor Code.
(g.2) One is Analogous to another if it is susceptible of comparison with

the latter either in general or in some specific detail or has a close
relationship with the latter.
6. THE RATIONALE:
(g) THE MEANING OF GROSS INEFFICIENCY

- SC: On GROSS INEFFICIENCY, we ruled that in LIM vs NLRC (328
Phil 843, 858, 1996), that:
(g.3) Gross Inefficiency is closely related to GROSS NEGLECT for both

involve specific acts of omission on the part of the employee resulting
in damage to the employer and to his business.
(g.4) In BUISER vs LEOGARDO, this Court ruled that failure to observe

prescribed standards of work, or to fulfill reasonable work assignments
due to inefficiency may constitute just cause for dismissal.
6. THE RATIONALE:
(h) JURISPRUDENCE ON VALID DISMISSAL OF TEACHERS FOR

GROSS INEFFICIENCY
- SC: The Court enunciated in Pena vs NLRC (327 Phil 673, 676, 1996)
that:
(h.1) It is the prerogative of the school to set high standards of efficiency

for its teachers since quality education is a mandate of the Constitution
(h.2) As long as the standards fixed are reasonable an not arbitrary,

courts are not at liberty to set them aside
6. THE RATIONALE:
(h) JURISPRUDENCE ON VALID DISMISSAL OF TEACHERS FOR

GROSS INEFFICIENCY
- SC: The Court enunciated in Pena vs NLRC (327 Phil 673, 676, 1996)
that:
(h.3) Moreover, the prerogative of the school to provide standards for its
teachers and to determine whether these standards have been met is
in accordance with the academic freedom, which gives the educational
institution the right to choose who should teach. (citing Merado vs
AMA Computer College, GR 183572, 13 April 2010, 618 SCRA 218.
236)
6. THE RATIONALE:
(i) REINFORCEMENT OF MANAGEMENT PREROGATIVE UNDER

THE CBA
(i.1) The CBA between ISAE and the school for the years 1992-1995 also
recognized the exclusive right of the school to hire and appoint
qualified faculty subject to such reasonable and regulations as it may
prescribe, as well as the right of the school to discipline its faculty and
determine reasonable levels of performance.
(i.2) Section 8 of Appendix A of the CBA also states that “All faculty
members must meet the high standards of performance expected by
the School and abide by all policies, procedures and contractual
6. THE RATIONALE:
(j) THE TEACHERS’ REPEATED FAILURE TO COMPLY WITH

REASONABLE SCHOOL STANDARDS
(j.1) SC: Contrary to the ruling of the Labor Arbiter, it is not accurate to
state that Santos was dismissed by the School for the inefficiency on
account of the fact that she was caught only once without a lesson
plan.
(j.2) The documentary evidence submitted by the school, the contents of

which we laid down in details in our statement of facts, pointed to the
numerous instances when Santos failed to observe the prescribed
standards of performance set by the school in several areas of
concern, not the least of which was the lack of adequate planning for
6. THE RATIONALE:

(j.3) Said evidence established that the school administrators informed
Santos of her Inadequacies as soon as they became apparent; that
they provided constructive criticism of her planning process and
teaching performance; and that regular conferences were held
between Santos and the administrator in order to address the latter’s
concern
(j.4) In view of her slow progress, the school required her to undergo the
remediation phase of the evaluation process through Professional
Growth Plan.
6. THE RATIONALE:

(j.5) Despite the efforts of the school administrators, Santos failed to show
any substantial improvement of her planning process, having failed to
exit the remediation process successfully, the school was left with no
choice but to terminate her employment.
6. THE RATIONALE:
(k) SUBSTANTIAL EVIDENCE WARRANTING TERMINATION BASED

ON GROSS INEFFICIENCY
(k.1) The court finds that, not only did the petitioner’s documentary
evidence sufficiently prove Santos’ inefficient performance of duties,
but the same also remained unrebuttied by respondent’s own
evidence
(k.2) On the contrary, Santos admits in her pleadings that her

performance as a teacher of Filipino had not been satisfactory but she
prays for leniency on account of her prior good record as a Spanish
teacher at the school
6. THE RATIONALE:
(k) SUBSTANTIAL EVIDENCE WARRANTING TERMINATION BASED

ON GROSS INEFFICIENCY
(k.3) Indeed, even the Labor Arbiter, The NLRC and the Court of Appeals
agreed that Santos was NOT without fault but the lower tribunals
deemed that termination was too harsh a penalty.
(k.4) Nonetheless, The court finds that the school had satisfactorily
discharged the burden of proving the existence of gross inefficiency
on the part of Santos warranting her separation from the school.
6. THE RATIONALE:
(l) THE EMPLOYER’S FINDING OF INEFFICIENCY BASED ON ITS

EVALUATION PROCEDURES, SUSTAINED BY THE HIGH COURT
(l.1) Anent the conclusion of the Labor Arbiter that the observations made
by Santos’ supervisors and peers could not be basis for concluding or
finding that she is grossly incompetent or inefficient, the court finds the
same utterly baseless.
(l.2) Far from being random and unstructured exercises, said observations
were born out of the evaluation procedures set up by the school in
order to assist the members of its faculty to improve their performance.
6. THE RATIONALE:
(m) GROSS INEFFICIENCY AS JUST CAUSE FOR TERMINATING THE

EMPLOYMENT OF A TEACHER
(m.1) In view of the acts and omissions of Santos that constituted gross
inefficiency, the Court finds that the school was justified in not keeping
her in its employment.
(m.2) At this point, the court needs to stress that Santos voluntarily
agreed to teach the Filipino classes given to her when she came back
from her leave of absence
6. THE RATIONALE:

(m.3) Said classes were not forced upon her by the school. This much
she admitted in the hearing of the case before the Labor Arbiter. She
stated therein that for the school year 1993 – 1994, she was given the
option to teach only Spanish class and not have any Filipino teaching
loads.
(m.4) She however said that if she took that option, she would have been
underpaid and her salary would not have been the same. Moreover,
for the school years 1994 – 1995 and 1995 – 1996, she made known
6. THE RATIONALE:

(m.5) Thus, when she consented to take on the Filipino classes, it was
Santos’ responsibility to teach them well within the standards of
teaching required by the school, as she had done previously as a
teacher of Spanish. Failing in this, she must answer for the
consequences.
6. THE RATIONALE:
(n) EMPLOYERS’ REASONABLE EXPECTATIONS OF EMPLOYEES
- As held in Agabon vs NLRC (485 Phil 248,279, 2004)
(n.1) The law imposes many obligations on the employer, such providing
jus compensation to workers, observance of the procedural
requirements of NOTICE and HEARING in the termination of
employment
(n.2) On the other hand, the law also recogizes the right of the employer
to expect from its workers not only good performance, adequate work
and diligence, but also good conduct and loyalty
(n.3) The employer may not be compelled to continue to employ such

6. THE RATIONALE:
(o) DUE-PROCESS PRIOR TO TERMINATION OF EMPLOYMENT

- As regards the requirements of PROCEDURAL DUE-PRCESS,
section 2 (d) of Rule I of the Implementing Rules of Book VI (of the
Labor Code) states that:
For termination of employment based on JUST CAUSES, defined in Article
282 of the Labor Code:
(o.1) A written notice served on the employee specifying the ground or

grounds for termination and giving said employee reasonable
opportunity within which to explain his side,
6. THE RATIONALE:
(o.2) A hearing or conference during which the employee concerned, with

the assistance of counsel if he so deserves, is given an opportunity to
respond to the charge, present his evidence or rebut the evidence
presented against him
(o.3) A written notice of termination served on the employee indicating

that, upon due consideration of all circumstances, grounds have been
established to justify the termination.
6. THE RATIONALE:
(p) THE EMPLOYER’S COMPLIANCE WITH DUE-PROCESS

REQUIREMENTS
(p.1) In this case, the school complied with the above requirements
(p.2) Above a thorough evaluation of Santos’ performance, the school

held a series of conferences and meetings with Santos in order to
improve her performance
(p.3) On March 29, 1996, the school required Santos to undertake a

Professional Growth Plan
6. THE RATIONALE:

REQUIREMENTS
(p.4) Thereafter, when the intervention of the school failed to yield any
considerable improvement on Santos, Mc Canley wrote her a letter on
April 10, 1997, which required her to explain in writing within 48 hours
why her employment should not be terminated in view of her failure to
meet standards of the school on very specific areas of concern.
(p.5) On April 16, 1997, Santos responded to Mc Canley’s letter asking

why she was being required to explain.
6. THE RATIONALE:

REQUIREMENTS
(p.6) On April 21, 1997, Mc Canley wrote Santos a letter informing her
that an administrative investigation would be conducted on April 23,
1997 where she would be given opportunity to be heard.
(p.7) On April 23, 1997, an administrative investigation was conducted,

Santos appeared therein with the assistance of ISAE President Ching.
(p.8) In a letter dated May 29, 1997, thee school informed Santos of its
decision to terminate her employment on the ground of her failure to
meet the standards of the school which, as discussed was tantamount
to gross inefficiency
6. THE RATIONALE:
(q) WHEN IS A VALIDLY DISMISSED EMPLOYEE ENTITLED TO AN

AWARD OF SEPARATION PAY
(q.1) In view of the finding that Santos was validly dismissed from
employment, she would not ordinarily be entitled to separation pay.
(citing Section 7, Rule I of the Implementing Rules of Book VI of the
Labor Code)
(q.2) An exception to this rule is when the Court finds justification in

applying the principle of social justice according to the equities of the
case.
6. THE RATIONALE:

(q.3) The Court explained in PLDT vs NLRC (247 Phil 641, 649-650,
1988)
- We hold that henceforth separation pay shall be allowed as a measure
of social justice only in those instance where the emplyee is validly
dismissed for causes other than serious misconduct or those reflecting
on his moral character.
6. THE RATIONALE:

(q.3) The Court explained in PLDT vs NLRC (247 Phil 641, 649-650,
1988)
- Where the reason for the valid dismissal is, for example, habitual
intoxication, or an offense involving a moral turpitude like theft or illicit
sexual relations with a fellow worker, the employer may not be
required to give the dismissed employee SEPARATION PAY of
FINANCIAL ASSISTANCE, or whatever other name it is called, on the
ground of SOCIAL JUSTICE.
6. THE RATIONALE:
(r) ONLY THE DESERVING ARE ENTITLED TO SOCIAL JUSTICE AND

TO SEPARATION PAY
(r.1) The policy of SOCIAL JUSTICE is not intended to countenance

wrong doing simply because it is committed by the underprivileged. At
best, it may mitigate the penalty, nut it certainly will not condone the
offense.
(r.2) Compassion for the poor is an imperative of any humane society but
only when the recipient is not a rascal claiming an undeserved
privilege.
6. THE RATIONALE:
(r) ONLY THE DESERVING ARE ENTITLED TO SOCIAL JUSTICE AND

TO SEPARATION PAY
(r.3) Social Justice can not be permitted to be refuge of scoundrels any
more than can equity be an impediment to the punsihment of the guilty
(r.4) Those who invoke social justice may do so only if their hands are
clean and their motives blameless and not simply because hey
happen to the poor.
(r.5) This great policy of our Constitution is not meant for the protection of
those who have proved thay are not worthy of it; like the workers who
have tainted the cause of labor woth the blemishes of their own
6. THE RATIONALE:
(s) MORE JUST CAUSES WHERE SEPARATION PAY MAY NOT BE

GRANTED
In Toyota Motor Philippines Corp Workers Association vs NLRC (562 Phil

759, 812, 2007, we modified our ruling in PLDT in this case:
(s.1) In all the foregoing situations, the Court declined to grant termination
pay because the causes for dismissal recognized under Article 282 of
the Labor Code were serious or grave in nature and attended by willful
act or wrongful intent or they reflected adversely on the moral
character of the employees.
6. THE RATIONALE:
(s) MORE JUST CAUSES WHERE SEPARATION PAY MAY NOT BE

GRANTED
In Toyota Motor Philippines Corp Workers Association vs NLRC (562 Phil

759, 812, 2007, we modified our ruling in PLDT in this case:
(s.2) We therefore find that in addition to SERIOUS MISCONDUCT, in

dismissals based on other grounds under Art 282 like WILLFUL
DISOBEDIENCE, GROSS AND HABITUAL NEGLECT OF DUTY,
FRAUD OR WILLFULL BREACH OF TRUST AND COMMISSION OF
A CRIME AGAINST AN EMPLOYER OR HIS FAMILY, SEPARATION
PAY SHOULD NOT BE CONCEDED TO THE DISMISSED
6. THE RATIONALE:
(t) IN CASES OF INEFFECIENCY, TERMINATION, SEPARATION PAY

MAY NOT BE GRANTED-
- In analogous cases for termination, the inefficiency, drug use, and others,
the NLRC, or the courts may opt to grant SEPARATION PAY
anchored on SOCIAL JUSTICE, in consideration of the length of
service of the employee , the amount of involved, whether the act is
the first offense, the performance of the employee and the like, using
the guide posts enunciated in PLDT on the propriety of the award of
separation pay.
6. THE RATIONALE:
(u) REASONS FOR GRANTING SANTOS SEPARATION PAY DESPITE

THE DISMISSAL WHICH WAS VALID
(u.1) In the instant case, the Court finds equitable and proper the award of
separation pay in favor of Santos in view of the length of her service
with the school prior to the events that led to the termination of her
employment
(u.2) To recall, Santos was just employed by the school in 1978, as a

language teacher
6. THE RATIONALE:
(u) REASONS FOR GRANTING SANTOS SEPARATION PAY DESPITE

THE DISMISSAL WHICH WAS VALID
(u.3) During this time, the records of their case are silent as to the fact of
any infraction that she committed and/or any other administrative case
against her that was filed by the school.
(u.4) Thus, an award of separation pay equivalent to one-half (1/2) month

pay for every year of service is awarded in favor of Santos on grounds
of equity and social justice. (see PAL vs NLRC, GR 123294, 20 Oct
2010, 634 SCRA 18, 46)
CASE NO 15 : NO SEPARATION PAY FOR A SCHOOL CHIEF ACCOUNTANT
WHO WAS VALIDLY DISMISSED FOR GROSS AND HABITUAL NEGLIGENCE
Immaculate Conception Academy/ Dr. Jose PE. Corpos

VS
EVELYN E. CAMILLON
GR 188035, 02 July 2014

First Division, Villarama, J.
A. FACTS
1. Evelyn Camillon was the Chief Accountant of ICA for 12 years.
2. In July 2004, the School received a complaint from a father of one student
who claimed that his son was denied issuance of an examination permit for
non payment of within fees dispute the fact that the fees had already been
paid.
338
3. The investigation resulted a finding that the Cashier has an unaccounted
amount of Php 1,167,181.45 received from 186 ICA students. There were
missing or unsurrendered booklets of official receipts.
4. The Auditor found that the casher allegedly manipulated entries in the
computerized subsidiary ledger and destroyed records so that the
unaccounted amounts collected by her and the missing official receipts
issued to her as a casher could not be faced or detected.
5. E Camillion was placed under PREVENTIVE SUSPENSIONS.
6. After investigation and after she submitted her explanation on 13 Sept

2004, E Camillion was dismissed on 27 October 2004.
7. On 26 November 2004, Camillion files a case of ILLEGAL DISMISSAL.
339
B. CASE HISTORY
1. 05 June 2007, the Labor Arbiter rules that the dismissal was illegal. The
following were awarded: (a) Backwages- Php 896,846.57, (b) separation Pay
Php 295,487.04, (c) other money claims, and (d) attorney’s fees.
2. 29 February 2008: The NLRC reversed the Arbiter’s ruling and held that the
dismissal and the preventive suspension were legal. Only the money claims
were granted
3. 30 March 2009: the CA affirmed the NLRC ruling but awarded separation
pay for compassionate justice, or as a measure of social justice.
4. 20 May 2009: The CA denied the _____ Motion for reconsideration.
5. 02 July 2014: The SC deleted the award of separation pay and affirmed the
validity of the dismissal.
340
C. ISSUES
1. Was there a JUST CAUSE to dismiss?
2. Was there DUE-PROCESS?
3. Was the complainant entitled to separation pay?
D. RULING
1. Yes, There was a just cause to dismiss, e.g. Gross and Habitual Neglect of
Duty.
2. Yes, There was Due-Process
3. No, E Camillion was NOT entitled to separation pay.
341
E.SPECIFIC RULING
1. The Issue of Her Gross Negligence Was A Settled One
(a) Prefatorily, we note that respondent Evelyn Camillion did not appeal or
file a petition for certiorari to assail the decision of
the NLRC finding her GROSSLY and HABITUALLY
NEGLIGENT in her duties.
(b) The specific negligent pointed out were
(b.1) for failing to regularly pre audit the School cashier’s report;
(b.2) for failing to check the entries in the cashier's report;
(b.3) for failing to keep custody of the petty cash fund.
(c) Such negligence resulted in the school cashier’s mis appropriation od

school funds and students’ tuition fees.
342
(d) It is axiomatic that a party who does NOT appeal or file a petition for
certiorari is NOT entitled to AFFIRMATIVE RELIEF. (Unilever
Phil Inc. vs. Revera, GR 201701, 03 June 2013, 697 SCRA
136, 150 which cited Corinthian Gardens Assoc. Inc. vs. Sps
Tanjanco et al, 578 Phil 712, 723, 2008)
(e) An appellee who is not an appellant may assign errors in his brief where
his purpose is to maintain the judgment but he can not seek
modification or reversal refief when he has also
appealed. (Unilever, supra)
(f) Thus, for failure of respondents to assail the validity of her dismissal,
such ruling is no longer an issue.
2. Separation Pay Should Not Be Granted To Validity Dismissed Employee
(a) The issue of whether a validly dismissed employee is entitled to

separation pay has been settled in the 2007 case of Toyota Motor
Philippines Corp Workers Assoc. (TMPCWA) versus NLRC (562
Phil 759, 2009) 343
(b) In that case, it was further classified that “in addition to serious
misconduct, in dismissal based on other grounds, under Article
282, like WILLFULL DISOBEDIENCE, found or willful breach of trust
and commission of a crime against the employer or his family,
SEPARATION PAY Should not be conceded to the dismissed employee.
3. THE LATEST SC DECISION ON THIS DOCTRINE: NO SEPARATION PAY IN

LAWFUL DISMISSALS
The ruling was reiterated in the case of CENTRAL PHILIPPINES BANDAG

retreaters, Inc. vs. Diasnes (580 Phil 177, 189, 2008) where the court set
aside the award of separation pay to Diasnes in view of the latter’s
gross and habitual negligence.
4. WHAT THE SC SAUS IN CENTRAL PHIL BANPAG RETHREADERS INC.
(a) To reiterate our ruling in Toyota, labor adjudicatory officials and the
CA must demur the award of SEPARATION PAY based
on social justice when an employee’s dismissal is
based on SERIOUS MISCONDUCT or WILLFUL DISOBEDIENCE, GROSS AND
HABITUAL NEGLECT OF DUTY, FRAUD OR WILLFUL BREACH 344
(b) They must be most judicious and circumspect in warding separation pay
or financial assistance as the constitutional policy to provide full
protection to labor is not meant to be an instrument to oppress
the employers.
(c) The commitment of the court to the cause of labor shall not embarrass
us from sustaining the employers when they are right, as
here.
(d) In fine, we should be more cautions in awarding financial assistance to

the undeserving and those who are unworthy of the literality of the
law.
5. THE RECENT CASE OF MORA VERSUS FIRST SOLID RUBBER

INDUSTRIES, INC. (GR 184011, 18 Sept 2013, pp 7, 10)
(a) Again in the recent case of Moya vs. First Solid Rubber Industries Inc.
(GR 184011, 18 Sept 2013), the Court disallowed the payment of
separation pay to an employee dismissed from work based on
345
one of the grounds under Article 282 (non 288) of the Labor
(b) Therein, the court held that Moya’s act concealing the truth from the
company is outside the protective mantle of the principle of social justice.
6. WHY E. CAMILLON IS NOT ENTITLED TO SEPERATION PAY
(a) Pursuant to the aforementioned rulings, respondents is clearly not entitled

to separation pay. Respondent was holding a position which involves a
high degree of responsibility requiring trust and confidence as it
involves the financial interest of the school.
(b) However, respondent proved to be for the position when she failed to
exercise the necessary negligence in the performance of her duties
and responsibilities as chief
Accountant, thus justifying her dismissal from service.
7. THE GROSS NEGLIGENCE OF THE SCHOOL’S CHIEF ACCOUNT THAT

ALLOWED THE CASHIER TO MISAPPROPRIATE Php 1.6 Million
(a) Respondent was guilty of gross and habitual negligence when she failed
to regularly pre-audit the report of the school cashier, check the entries
346
(b) Had respondent been assiduously doing her job, the unaccounted school
funds would have been discovered right away.
(c) Respondent’s dereliction in her duties spanned a period of 11 months thus

enabling the school cashier to misappropriate the school records and
destroy official receipts, in the total amount of Php 1,167,181.45 to the
prejudice of petitioners.
(d) Hence, she should not be granted separation pay.
8. The Negligent Employee Should Not Be Rewarded With Separation Pay
(a) To rule otherwise would be to reward respondent for her negligent acts
instead of punishing her for her offense.
(b) As we held in Reno Foods Inc. vs. (NLN)- Katipunan (GR No. 164016, 15 Mar
2010, 615 SCRA 240, 249). “separation pay is only warranted when the
cause for termination is not attributable to the employee’s fault, such as
those provided in Articles 283 and 284 of the Labor Code, as well as in
cases of illegal dismissal in which reinstatement is no longer feasible.
347
(c) It is not allowed when an employee is dismissed for just cause.
9. LONG YEARS IN SERVICE IS NOT A BARGAINING CHIP
(a) As to whether respondent’s length of service with petitioners justifies

the award of separation pay, we rule in the negative.
(b) Length of service is NOT a bargaining chip that can be simply be

stacked against the employer. (citing Remo Foods, GR 164016, 15
march 2010)
10. WHEN DISMISSAL IS BASED ON JUST CAUSE, LENGTH OF SERVICE

DOES NOT JUSTIFY PAYNEBT OF SEPARATION PAY
(a) Although long years of service might generally be considered for the
award of separation benefits or some form of financial assistance to
mitigate the effects of termination, this case is not the appropriate
instances for generosity xxx.
348
(b) The fact that private respondent served petitioner for more than twenty
years which no negative record prior to his dismissal, in our___ of this
case, dies not call for much award of benefits, since his violation reflects a
regrettable lack of loyalty, and worse, betrayal of the company.
(c) If an employee’s length of service is to be regarded as a justification for

moderating the penalty of dismissal, such a prize for disloyalty,
distorting the meaning of social justice and undermining the efforts of
labor to cleanse its ranks of undesirables.
349
Labor Standards in Private Schools
No 16. University of Pangasinan, GR 211228
Et al 12 November 2014
Third Division
Versus
Reyes, J.
Florentino Fernandez et al
1. IN LEGAL DISMISSAL, RECOMPUTATION OF

BENEFITS IS NOT PROHIBITED
(a) Quoting Gonzalez vs. Solid Cement Corp. (GR 198423, 23

October 2012, 684 SCRA
344), the Court explained:
(a.1) No essential change in made by a re-computation as this

step is a necessary consequence that flows from the nature
of the illegality of dismissal declared in that decision.
(a.2) A re-computation (or an original computation, if no previous

computation has been made) is a part of the law-specifically
Article 279 of the Labor Code and the established
jurisprudence on this provision-and that is read into the
350
(a.3) By the nature of an illegal dismissal case, the reliefs continue
to add on until full satisfaction, as expressed under Article 279
of the Labor Code.
(a.4) The recomputation of the consequences of illegal dismissal

upon execution of the Decision does not constitute an alteration
or amendment of the final decision being implemented.
(a.5) The illegal dismissal ruling stands; only the computation of

monetary consequences of this dismissal is affected and THIS IS
NOT A VIOLATION OF THE PRINCIPLE OF IMMUTABILITY OF
FINAL JUDGMENTS.
2. THE INCREASE IN THE AMMOUNT DUE IS UN-

AVIODABLE DUE TO THE RUNNING OF THE
PERIOD
(a.) That the amount the petitioners shall now pay has
greatly increased is a consequence that it can not avoid as it
is the risk that it ran when it continued to seek recourses
against that Labor Arbiters decision.
(b.) Article 279 provides for the consequences of illegal351

(c.) When that happens, the finality of the illegal dismissal
decision becomes the reckoning point instead of the
reinstatement that the law decrees.
(d) In allowing separation pay, the final

decision effectively declares that the employment
relationship’s ended so that separation pay and backwagaes are to
be computed up to that point.
3. RECKONING POINTS IN COMPUTING BACKWAGES AND SEPARATION

PAY
(a) The CA correctly rules that the

backwages should be computed from May 9,
200, the fate of illegal dismissal, up to July 11,
2005 the date of the entry of judgment.
(b) Separation should be reckoned from the

respective first days of employment up to July 11, 2005,
entry of judgment as well.
4. THE INCLUSION OF THE 13TH MONTH PAY IN THE COMPUTATION IS 352

(b) PD 851 is the law directing the 13th
month payment. On the other hand, Article 279 of the Labor Code,
in part, provide that an illegally dismissed employee shall be
entitled to full backwages, inclusive of allowances, and other
benefits or their monetary equivalent computed from the time actual
reinstatement.
(c) “In Gonzales, a final and executory

decision of the LA did not explicitly awarded the 13th month pay.
During the execution proceedings, the NLRC included it in
the computation. The CA deleted the same. This Court
thereafter rules that the CA abused its discretion since the 13th
month pay fall due xxx by legal mandate,”
(d) “The Court finds that despite the CA’s

non-explicit reference to the 13th month pay, following the
reference to the 13th month pay, following the doctrine in
Gonzales its inclusion in the computation is proper.
(e) Entitlement to it is a right granted by

PD851 Besides, the computation of award for backwages and other353
5. THE COMPUTATION OF BACKWAGES IS NOT INTERRUPTED BY AN
INTERMEDIATE
REVERSAL OF THE ARBITER’S DECISION
(a) “In computing the backwages and

benefits awarded to the respondents, the reckoning period is not
interrupted by the NLRC’s reversal of LA Gambito’s finding of
illegal dismissal.
(b) “In Gonzales, the Court stated that the

increase in the amount that the corporation had to pay is a
consequence that it ran when it continued to seek
resources against the LA’s decision.
(c) “Further, in Reyes vs. NLRC (598 Phil

145, 2009), the Court declared that:
(c.1) “One of the natural consequences of a

finding that an employee has been illegally
dismissed is the payment of backwages corresponding to
the period from his dismissal up to actual reinstatement.
(c.2) “The statutory intent of this matter is

clearly discernable. The payment of backwages allows354
(c.4) “There can be no gap or interruptions,
___ we defeat the very reason of the law in granting
the same xxx.”
6. THERE SHOULD BE NO GAP IN THE COMPUTATION OF BACKWAGES
(a) “Although in Reyes, the issue relates to the

delay in filing of the complaint for illegal dismissal from the
time of termination, there is no preclusion to apply the
doctrine that there should be no gap or interruption in the
reckoning period during _____ the dismissed employee is entitled
to backwages and benefits.
(b) “The statutory intent in the award of backwages
and benefits is clear. Further, as declared in
Gonzales, an employer takes a risk in assailing the LA’s finding if
illegal dismissal, but there is no insulation from the consequences
therefrom.
7. BACKWAGES FOR RETIRING EMPLOYEES
(a) “The petitioners point out that Florentino and

Nilda turned 60 on Dec 11, 2002 and April 30, 2002 respectively.355
(b) “Further, on July 18, 2015, Florentino and Nilda
filed separate claim for retirement benefits, hence,
effectively admitting that 60 and not 65 is the retirement
age for UPI’s faculty members.
(c) Nilda an Frorentino were born on April 30, 1942 and

December 11, 1942 respectively in 2002, both had
turned 60 and can opt to retire.
(d) The Court can not, however agree that this is the
cut-off date for the computation of backwages and
separation pay due to them because of the reason
discussed bellows:
(d.1) “First, 60 is merely an optional but

not the mandatory retirement age.
(d.2) “Second, the evidence submitted

do not show at whose option it is to retire the
faculty members before the age of 65.
(d.3) “Third, there is no proof

whatsoever that the faculty members of UPI
indeed retire at 60 years of age. 356
17.MANAGEMENT CAN NOT ALTER UNILATERALLY, BY
MERE ISSUANCE OF MEMO, AN EXISTING BENEFIT
GRANTED BY CBA OR ESTABLISHED BY COMPANY
PRACTICE
1. THE CASE:
WESLEYAN UNIVERSITY – Phil

Versus
WUP Faculty And Staff
GR 181806 12 March 2014
II, del Castillo, M J.
2. THE FACTS:
(a)The university is a non-stock, non-profit educational institution duly

organized and existing under the laws of the Philippines
(b)The union is duly registered labor organizations acting as the sole and
exclusive bargaining agent of all rank-and-file faculty and staff employees of the
university
(c)In December 2003, the university and the union signed a 5-year CBA
effective 01 June 2003 until 31 May 2008.
(d)On 16 August 2005, the University President issued a memorandum

providing guidelines on the implementation of VACATION and SICK LEAVE
CREDITS as well as VACATION LEAVE commutation
(e)The memo altered the substance of the CBA provisions on vacation and sick
leave entitlement.
2. THE FACTS:
(a)The university is a non-stock, non-profit educational institution duly

organized and existing under the laws of the Philippines
(b)The union is duly registered labor organizations acting as the sole and
exclusive bargaining agent of all rank-and-file faculty and staff employees of the
university
(c)In December 2003, the university and the union signed a 5-year CBA
effective 01 June 2003 until 31 May 2008.
(d)On 16 August 2005, the University President issued a memorandum

providing guidelines on the implementation of VACATION and SICK LEAVE
CREDITS as well as VACATION LEAVE commutation
(e)The memo altered the substance of the CBA provisions on vacation and sick
leave entitlement.
2. THE FACTS:
(f) The university also issued another memo on RETIREMENT policies.
(g)On 25 August 2005, the Union president wrote the university that the Union
did not agree to the unilateral act of management in violation of the CBA. The
Union also objected to the RETIREMENT POLICY that changed the existing
company practice. Unable to settle their problem in the grievance machinery,
the parties submitted the issue to voluntary arbitration
.
(a) On 02 November 2006, the voluntary arbitrator ruled that:
(a.1) The university memo on vacation and sick leave is CONTRARY TO

LAW. The University was ordered to reinstate the old practice which was
more favorable to the employees.
(a.2) The retirement policy that diminished the employees’ retirement rights
was declared null and void, and was rescinded. The university was ordered
to resume the old practice, which was more favorable to the employer.
(b) On 25 September 2007, the Court of Appeals affirmed the decision of the
Arbitrator. The Union’s Motion For Reconsideration was denied by the
appellate court on 05 February 2008.
(c) On 12 March 2014, the Supreme Court affirmed the decision of the Court
of Appeals
4. THE REASONS FOR THE DECISION:
(a)A CBA is a contract entered into by an employer and a legitimate labor

organizations concerning the terms and conditions of employment. (citing NFL
vs CA, 483 Phil 626, 639, 2004).
(b)A CBA, like any other contract has the force of law between the parties and
thus, should be complied with in good faith. (citing HFS Philippines Inc vs. Pilar,
GR 168716, 16 April 2009, 585 SCRA 315
(c)The Non-Diminution Rule in Article 100 of the Labor Code explicitly prohibits
employers from eliminating or reducing the benefits received by their
employees.
(d)The NON-DIMINUTION RULE applies only if the benefit is based on:
(d.1) An explicit policy,
(d.2) A written contract, or
(d.3) has ripened into a practice

(e)To be considered a practice, it must be consistently and deliberately made

by the employer over a long period of time. (citing CAT va CATLU-NLU, supra)
(f)An exception to the rule is when “THE PRACTICE IS DUE TO ERROR IN

CONSTRUCTION OR APPLICATION OF A DOUBTFUL OR A DIFFICULT
QUESTION OF LAW.
(g)The error, however, must be corrected immediately after its discovery,

otherwise the rule on NON-DIMINUTION OF BENEFITS would apply.
(h)The practice of giving two retirement benefits to the university employees is

supported by substantial evidence.
(i)The affidavit of retired employees corroborated by affiants to the incumbent

employees were deemed substantial evidence.

(j)The Supreme Court held that the University President’s Memorandum

alerting the CBA provision is null and void
(k)SC: In closing, it may not be amis to mention that when the provision of the
CBA is clear, leasing no doubt on the intentions of the parties, the literal
meaning of the stipulation shall be given. (citing Supreme Steel Corp vs
NMNSS Independent Union. (NMS-IND-APD, GR 185556, 28 Mar 2001, 646
SCRA 501, 525)
(l)SC: However, if there is doubts in the interpretation, it should be resolved in

favor of labor, as this is mandated by no less than the constitution. (Article II,
Section 18 of the 1987 Constitution)
18. CERTIFICATION ELECTION AND THE EMPLOYER’S BY-
STANDER ROLE

1.THE CASE:
HOLY CHILD CATHOLIC SCHOOL

vs. Hon Patricia Sto. Tomas, et al GR 179146
23 July 2013, En Banc, Peralta, J.
Concurring opinion, Brion, J
2. THE FACTS:

(a) On 31 May 2002, a petition for CE was filed was filed by PIGLAS a union duly registered
with DOLE.

(b) The school filed its comments noting that there was a mixture of rank-and-file and supervisors
and managerial and that there was also a mixture of teaching and non-teaching personnel.

(c) Management held that the mixture of R|F and supervisory/managerial was not proper as held
in Toyota Motor Phil Corp vs. TMLU (335 Phil 1045, 1997).

(d) Management also alleges that the proposed bargaining unit is inappropriate consistent with the
ruling in Dunlop Slazenger (Phil) Inc. vs. Secretary of Labor and Employment (360 Phil 304,
1998). As well as in the case of Dela Salle University Medical Center and College of Medicine vs.
Laguesma (355 Phil 571, 1998).

(e) The union invoked the Globe Doctrine. In re: Globe Machine and Stamping Co. (3 NLRB
294, 1937) as well as Laguna College vs. CIR (134 Phil 168, 1968).


(a) Med Arbiter Agatha Ann Daquigan (10 Aug 2002): The petition for CE
was DENIED.

(b) Secretary of Labor and Employment (24 Dec 2002)
• ordered the holding of two certification elections:
1. for teaching personnel, and
2. for non-teaching personnel

(c) CA ( 18 April 2007): Affirmed the DOLE Secretary

(d) SC (23 July 2013): Affirmed the Secretary of Labor and the CA

4. THE RATIONALE:
THE BYSTANDER RULE

(a) The By-Stander Rule is already well-entrenched in this jurisdiction. It has been
consistently held in the number of cases that a certification election is the sole concern
of the workers, except when the employer itself has to file the petition pursuant to
Article 259 of the Labor Code, as amended but even after such filing, its role in the
certification process causes and becomes merely a bystander.

(b) The following cases were cited by the Supreme Court to enunciate the
BYSTANDER RULE:

(1) DWU of Tacloban vs. SOLE, (GR 91915, 11 September 1992, 213 SCRA 759),
(2) TUPAS vs. Trajano, (205 Phil 41, 43, 1983),
(3) Belyca Corp vs. Ferrer-Calleja (250 Phil 193, 204, 1988)
(c) The employer clearly lacks the personality to dispute the election and has
no right to interfere at all therein. [Barbizon Phil Inc. vs. NSBP-NAFLU, 330
Phil 472, 492, 1996, and Phil Fruits and Vegetable Industries Inc. vs. Torres,
(GR 92391, 03 July 1992, 211 SCRA 95-103)

(d) This is so since any uncalled for concern on the part of the employer may
give rise to the suspicion that it is batting for a company union (See DWU of
Tacloban, above).

(e) Indeed, the demand of the law and policy for an employer to take a strict,
hands-off stance in certification elections is based on the rationale that the
employer’s bargaining representative must owe its loyalty to the employees
alone and to no other. (San Miguel Foods Inc. vs. SMC Supervisors and
Exempt Union, GR 146206, 01 Aug 2011, 655 SCRA).

THE RULE ON MIXTURE OF RANK-AND-FILE EMPLOYEES AND
SUPERVISORS – LAW AND JURISPRUDENCE

(f) Whether a petition for CE is dismissible on the ground that the labor
organizations membership allegedly consists of supervisory and rank-and-file
employees is actually not a novel one.

(g) In the 2008 case of REPUBLIC vs. KAWASHIMA TEXTILE MFG.
PHIL INC. (GR 160352, 23 July 2008, 559 SCRA 386, 396), the Company
moved to dismiss the petition C.E. on the ground, ‘inter alia’, that the union
membership is a mixture of R|F and supervisory employees. The Supreme
Court, in KAWASHIMA, conscientiously discussed the applicability of
TOYOTA and DUNLOP in the context of RA 6715 and DO 9.

(h) In RA 875, under Section 3, the mixture was already prohibited. Under
Section 3, it was provided: “Individuals employed as supervisors shall not be
eligible for membership in a labor organization of employees under their
supervision but may form separate organizations of their own.”

(i) There is nothing in RA 875 that provides that a union loses legitimacy in
case of mixture.

(j) Under Section 15 of RA 875, the only instance when a labor organization
loses its legitimacy is when it violates the duty to bargain collectively. In the
En Banc Supreme Court decision in Lopez vs. Chronicle Publication
Employees Assoc, the Court then held: “The invalidity of membership of one
of the organizers does not make the union illegal, where the requirements of
the law for the organization thereof are, nevertheless, satisfied and met.”

(k) The Labor Code was enacted in 1974 without reproducing See 3 of RA
875. The provision in the Labor Code closest to Section 3 of RA 875 in
Article 290 which is deafeningly silent on the prohibition against supervisory
employees mingling with R|F in one labor organization.

(l) The obvious repeal of the last clause of Sec 3 RA 875 prompted the Court
to declare in Bulletin vs. Sanchez that supervisory employees may join or
assist in the formation of a labor organization for R|F employees, but they may
not form their own labor organization.

(m) While amending certain provisions of Book V of the Labor Code, EO
111 and its implementing rules continued to recognize the right of supervisory
employee who do not fall under the category of managerial employer, to join a
R|F labor organization.

(n) Effective 1989, RA 6715 restored the prohibition against questioned mingling in one
labor organization.

(o) Article 245 of the Labor Code, as amended by section 18 of RA 6715, provided that:
“Supervisory employees shall not be eligible for membership in a labor organization of the
R|F employees but may join, assist or form separate labor organization of their own.”

(p) Unfortunately, just like RA 875, RA 6715 omitted specifying the exact effect any
violation of the prohibition would bring about on the legitimacy of the labor organizations.

(q) It was the Rules and Regulations Implementing RA 6715, which supplied the
deficiency. Rule II, Section thereof provides: “Supervisory employees and security guards
shall not be eligible for membership in a labor organization of the R|F employees but may
join, assist or form separate labor organizations of their own.”

(r) Rule V, Section 2, par c of the said Rules provide: “xxx the appropriate bargaining of
the R|F employees shall not include supervisory employees and/or security guards.”

(s) In the case of TOYOTA (335 Phil 1045, 1997), the Supreme Court made the following
specific pronouncements:

(s.1) Clearly, based on this provision (referring to Article 245), a labor organization
composed of both R|F and supervisory employees is NO labor organization.

(s.2) Not being one, an organization which carries a mixture of R|F and supervisory
employees cannot possess any of the rights of a legitimate labor organization, including the
right to file a petition for C.E. for the purpose of collective bargaining.

(s.3) It becomes necessary therefore, anterior to the granting of an order allowing a
certification election, to inquire into the composition of any labor organization whenever the
status of the labor organization is challenged on the basis of Article 245 of the Labor Code.

(t) In DUNLOP (360 Phil 304, 1998), in which the organization that filed a petition for CE was
one for supervisory employees, but in which the membership included R|F employees, the Court
reiterated that such labor organization had no legal right file petition for CE to represent a
bargaining unit composed of supervisors for as long as it is counted R|F employees among its
members.

(u) It should be emphasized that the petitions for CE involved in Toyota and Dunlop were filed on
26 Nov 1992 and 15 Sept 1995 respectively; hence, the 1989 Rules was applied in both cases.

(v) But then on 21 June 1997, the 1989 Amended Omnibus Rules was further amended by DO 9,
series of 1997. What the 1997 Amended Omnibus Rules require is a plain description of the
bargaining unit.

(w) In PAGPALAIN HAULERS INC. vs. TRAJANO, the Supreme Court upheld the validity of
the 1997 Amended Omnibus Rules.

(x) In TAGAYTAY HIGHLANDS vs. THEU-PTGWO in which the core issue was whether
mingling affects the legitimacy of a labor organization and its right to file a petition for CE. The
Supreme Court then held in Tagaytay Highlands:

(x.1) This time, given the altered milieu, the court abandoned the view in TOYOTA and
DUNLOP and reverted to its pronouncement in LOPEZ.

(x.2) In LOPEZ, it was held that, while there is prohibition against the mingling of
supervisory and R|F in one labor organization, the Labor Code does not provide for the
effects thereof.

(x.3) 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.

(x.4) Any mingling between supervisory and R|F in its membership cannot affect its
legitimacy for that it 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.
(x.5) In SMC (Mandaue Packaging Products Plants) vs. MPPP-SMPP-SMC. Monthlies R|F
Union-FFW, the Court explained that since the 1997 Amended Omnibus Rules does not
require a local or chapter to provide a list of its members, it would be improper for the DOLE
to deny recognition to said local or chapter on account of any questions pertaining to its
individual members.

(x.6) More to the point is Air Phil Corp vs. BLR, which involved a petition for cancellation
of union registration filed by the employer in 1999 against R|F labor organization on the
ground of mixed membership. In that case, the Court reiterated its ruling in TAGAYTAY
HIGHLANDS that the inclusion in a union of disqualified employees is not among the
grounds for cancellation, unless such inclusion is due to misrepresentation, false statement or
fraud under the circumstances enumerated in Sections (a) and (c) of Article 239 of the Labor
Code.
(x.7) All said, while the latest issuance in RA 9481, the 1997 Amended Omnibus Rules
as interpreted by the Court in Tagaytay Highlands, San Miguel and Air Philippines that
already set the tone for it.

(x.8) Toyota and Dunlop no longer hold sway in the present altered state of the law and
the rules.

(x.9) When a similar issue confronted this Court close to three years later, the above
ruling was substantially quoted in Samahang Manggawa sa Charter Chemical Super vs.
Charter Chemical. In unequivocal terms, we reiterated that the alleged inclusion of
supervisory employees in a labor organization seeking to represent the bargaining unit
of the R|F does NOT divest it of its status as a legitimate labor organization.

NO COLLATERAL ATTACK ALLOWED

(y) Following the doctrine laid down in Kawashima and SMCC-Super, it must be stressed
that petitioner cannot collaterally attack the legitimacy of private respondent by praying for
dismissal of the PCE.

(z) In REPUBLIC vs. KAWASHIMA, it was stressed:

(z.1) Further, the determination of whether union membership comprises managerial and/or
supervisory employees is a factual issue that is best left for resolution in the inclusion-
exclusion proceedings, which has not yet happened in this case so still premature to pass
upon.

(z.2) We could only emphasize the rule that factual findings of labor officials, who are
deemed to have acquired expertise in matters within the jurisdiction, are generally accorded
not only with respect, but even finality by the courts, when supported by substantial evidence.

(z.3) The following cases were cited by the Supreme Court:
(a) Julies Bakeshop vs. Arnaiz GR 173882, 15 Feb 2012, 666 SCRA 101, 113-114;
(b) Philippine Veterans Bank vs. NLRC GR 176506, 25 Nov 2009, 605 SCRA 488-494

(z.4) Also, the jurisdiction of the Supreme Court in cases brought before it from the CA via Rule
45 is generally limited to reviewing errors of law or jurisdiction. The findings of fact of the CA
are conclusive and binding. Except in certain recognized instances.

(z.5) Cited are the following cases:

(a) Galang vs. Malasugi
GR 174173, 07 Mar 2012, 667, SCRA 622, 631-632;
(b) Pharmacia and UpJohn Inc. vs. Albayda, Jr.
GR 172724, 23 Aug 2010, 628 SCRA 544
(c) Merck Sharp and Dohme (Phil) vs. Robles
GR 176506, 25 Nov 2009, 605 SCRA 448.

(z.6) We do not entertain factual issues as it is not Our function to analyze or weigh evidence all
over again; the evaluation of facts is best left to the lower courts and administrative
agencies/quasi-judicial bodies which are better equipped for the task. (citing Dimagan vs.
Dacworks United Inc., GR 191053, 28 Nov 2011, 661 SCRA 438 and 628 SCRA 544).

THE DIFFERENCE BETWEEN A UNION AND A BARGAINING UNIT
(aa) The concepts of a union and of a legitimate labor organization are different from, but related
to, the concept of a bargaining unit.

(bb) Article 212 (g) of the Labor Code defines a labor organization as any union or
association of employees which exists in whole or in part for the purpose of collective
bargaining or of dealing with employers concerning terms and conditions of employment.

(cc) Upon compliance with all the documentary requirements, the Regional Office or
Bureau shall issue in favor of the applicant labor organization a certificate indicating that it
is included in the roster of legitimate labor organizations.

(dd) Any applicant labor organization shall acquire legal personality and shall be entitled to
the rights and privileges granted by law to legitimate labor organizations upon issuance of
the certificate of registration (Sta. Lucia East vs. SOLE, GR 162355, 14 August 2009, 596
SCRA 92, 100)

(ee) In the case of alleged inclusion of disqualified employees in a union, the proper
procedure for an employer like petitioner is to directly file a petition for cancellation of the
union’s certificate of registration due to misrepresentation, false statement or fraud under the
circumstances enumerated in Article 239 of the Labor Code, as amended.

(ff) To reiterate, private respondent, having been validly issued a certificate of
registration should be considered as having acquired judicial personality
which may NOT be attacked collaterally.

(gg) A BARGAINING UNIT has been defined as a ‘group of employees of a
given employer, comprised of all or less than all of the entire body of
employees, which the collective interests of all the employees, consistent with
equity to the employer, indicated to be the last suited to serve reciprocal rights
and duties of the parties under the collective bargaining provisions of the law.
(Belyca, supra citing Rothenberg in Labor Relation page 482).

(hh) In determining the proper collective bargaining unit and what unit would be
appropriate to be the collective bargaining agency, the Supreme Court, in the seminal case of
DEMOCRATIC LABOR ASSOCIATION vs. CEBU STEVEDORING CO INC. (103 Phil
1103, 1104 citing Rothenberg in Labor Relations pp482-510), mentioned several factors that
should be considered, to wit:

(1) will of the employees (GLOBE DOCTRINE);
(2) affinity and unity of interests, such as substantial similarity
of Work and duties or similarity of compensation and working conditions;
(3) prior collective bargaining history; and
(4) employment status, such as temporary, seasonal and probationary employees.

(ii) We stressed, however, that the test of the grouping is community or mutuality of
interests, because ‘the basic test of an asserted bargaining units acceptability is whether or
not it is fundamentally the combination which will best assure to all employees the exercise
of their collective rights.

(jj) In the same manner, the teaching and non-teaching personnel of the school must
form separate bargaining units. Thus, the order for the conduct of two separate
certification elections, one involving teaching personnel and the other involving non-
teaching personnel.

(kk) It should be stressed that in the subject petition (for CE), the union sought the
conduct of certification elections among all the R|F employees of the school.

(ll) Since the decision of the Supreme Court in the UP case prohibits from
commingling teaching and non-teaching personnel in one bargaining unit, they have to
be separated into two separate bargaining units, with two separate certification
elections, to determine whether the employees in the respective bargaining units
desired to be represented by the union.

(mm) In the UP case, only one certification election among the non-academic
personnel was ordered because ONAPUP sought to represent that bargaining unit only.

(nn) No petition for CE among the academic personnel was instituted by ALL UP WORKERS
UNION in the said case; thus no certification election pertaining to its intended bargaining unit
was ordered by the court.

5. THE CONCURRING OPINION of Justice A. D. Brion

(1) Previous Cases Involving Commingling of R|F and supervisory

(a) Tagaytay Highlands vs. THEU-PTGWO 443 Phil 841, 2003
(b) Air Phils Flight Attendants vs. BLR 525 Phil 331, 2006
(c) Republic vs. Kawashima Textile Mfg Phil GR 160352, 23 July 2008, 559 SCRA 386
(d) Samahang Manggawa sa Charter Chemical – Super vs.
Charter Chemical and Coating Corp, GR 169717, 16 Mar 2011, 645 SCRA
538

(2) Difference Between Rule 45 and Rule 65 (Montoya vs. TransMed Manila Corp, GR 183329,
27 Aug 2009, 597 SCRA 334)

(a) In a rule 45 review, we consider the correctness of the assailed CA decision, in contrast
with the review for jurisdictional error under Rule 65

(b) Furthermore, Rule 45 limits us to review of QUESTIONS OF LAW raised against the
assailed CA decision in the same context that the petition for CERTIORARI it ruled upon
was presented to it, we have to examine the CA decision from the prism of whether it
correctly determined the presence or absence of grave abuse of discretion in the NLRC
decision before it, not on the basis of whether the NLRC decision on the merits of the case
was correct.

(c) In other words, we have to be keenly aware that the CA undertook a Rule 65 review, not
a review on appeal, of the NLRC decision challenged before it.

(d) This is the approach that should be basic in a Rule 45 review of a CA ruling in a labor
case. In a question form: the question to ask is: Did the CA correctly determine whether the
NLRC committed grave abuse of discretion in ruling the case.
(e) Our review, therefore, is limited to the determination of the legal correctness of the CA’s
ruling on whether it correctly determined the presence or absence of grave abuse of discretion
in the Secretary of Labor’s decision, and not on the basis of whether the latter’s decision on
the merits of the case was strictly correct.

(f) Our review does not entail a re-evaluation of the evidence as we examine the
CA’s decision and whether it correctly affirmed the Secretary of Labor in a
certiorari proceeding.

(g) The CA was tasked to determine whether the Secretary of Labor’s decision
considered all the evidence, that no evidence which should not have been
considered was considered, and the evidence presented supported the findings.

(h) Note in this regard that the labor tribunals exercise primary jurisdiction on the
matter on the basis of their administrative expertise that the law recognizes.

(i) In concrete terms, we are tasked to determine whether the CA correctly ruled
that the Secretary of Labor did not commit grave abuse of discretion in ruling that
separate bargaining units should represent the teaching and the non-teaching
personnel of the petitioner.

(3) Defining The Bargaining Bargaining
(a) Democratic Labor Association vs. Cebu Stevedoring Co Inc.

(103 Phil 1103, 1958)

(1) will of the employees (Globe Doctrine)
(2) Affinity and Unity of Employees’ interests, such as substantial similarity of work
and duties, or similarity of compensation and working condition,
(3) prior collective bargaining history,
(4) employment status, such as temporary, seasonal, probationary

(b) Alhambra Cigar and Cigarette Mfg Co and KMA (FOITAF) vs. Alhambra Employee’s
Ass’n, (107 Phil 23, 28, 1960)
–Where the Supreme Court found that, based on the nature of their work, that employees in
the administrative, sales and dispensary departments have no community of interest with raw
leaf, cigar, cigarette and packing and engineering and garage departments whose employees
are involved in production and maintenance.

(c) PLASLU vs. CIR (110 Phil 176, 180, 1960),

Where the Supreme Court held that casual employees have no commonality or
mutuality of interests with regular employees

Where, also, the High Court ruled that the “most efficacious bargaining unit is one
which is comprised of constituents enjoying a community or mutuality of interests.
(d) LVN Pictures Inc. vs. Philippine Musicians Guild (GR L-12582, 28 Jan 1961, 1
SCRA 132, 136),

Where the Supreme Court held that commonality or mutuality of interest is
sufficient basis to form a bargaining unit.
That such commonality of interest is viewed from the perspective of
SUBSTANTIAL DIFFERENCE in the work performed (musicians) as against
other persons who participate in the film production.

(e) GOLDEN FARMS vs. SEC OF LABOR (GR 102130, 30 July 1994)

Where the Supreme court examined the dissimilarity of the working conditions among the
various groups of employees.

The Court aimed to determine and stress the application of the commonality or mutuality of
interests standard within each group.

The Court observed that the dissimilarity of interests in terms of working conditions between
monthly paid R|F employees (performing administrative or clerical work) and the daily-paid
R|F employees (mainly working in the cultivation of bananas in the field)

The High Court held that such dissimilarity warranted the formation of a separate and distinct
bargaining unit for each group.

(f) Law and Jurisprudence, thus provide that the commonality or mutuality of interest is the most
fundamental standard of an appropriate bargaining unit.

(g) This standard requires that the employees in an asserted bargaining unit be similarly situated
in their terms and conditions of employment relations.

(h) This commonality or mutuality may be appreciated with greater certainty if their areas of
differences with other groups of employees are considered.
4. Bargaining Units in Academic Institutions

[A] In UP vs. CALLEJA (GR 96189, 14 July 1992, 211 SCRA 451), the High Court held:
(a) that the formation of two (2) separate bargaining units (one each for academic and non-
academic), was warranted.

(b) Rationale: The dichotomy of interests, the dissimilarity in the nature of work, and duties, as
well as in the compensation and working conditions of the academic and non-academic personnel
dictate the separation of these two categories of employees for purposes of collective bargaining.

(c) Rationale: The formation of two separate bargaining units, the first consisting of
R|F non-academic personnel and the second of the R|F academic employees, is the set-
up that will best assure to all the employees the exercise of their collective bargaining
rights.

[B] In International School Alliance Educators vs. Quisumbing (338 Phil 661, 2000),
the SC held:

(a) That foreign hires and local hires, while performing similar functions and
responsibilities under similar working conditions, still could not be included in a single
collective bargaining unit because of essential distinction that still separated them –
foreign hires were entitled to and received certain benefits not given to local hires. (338
Phil 675, 678)

(b) The SC concluded that “to include foreign hires in a bargaining unit with local
hires would not assure their group the exercise of their respective collective bargaining
rights.”

[C] THE CHOICE BETWEEN “UNION OF DISSIMILARS” AND SEPARATION

(a) The Adage that there is strength in numbers in a single collective bargaining unit is significant
when the employees are similarly situated, that is, they have the same similar areas of interests
and differences from others in their employment relations.

(b) However, strength in numbers as a consideration must take a back seat to the ultimate standard
of the employee’s right to self-organization based on commonality or mutually of interest;

(c) Simply put, a collective bargaining unit whose membership is characterized by diversity of
interests cannot fully maximize the exercise of each collective bargaining rights.

(d) The commonality and mutuality of interest as a determining force of what constitutes a
collective bargaining unit must be understood along these lines, taking into account, of course, the
facts established in a particular case.

(e) In other words, the parameters we have consistently followed in Democratic Labor
Association must be applied on a case-to-case basis.
Case no 19. THE CASE OF A FAMOUS UNIVERSITY
CHARGED WITH ULP BY ITS OWN UNION
DE LA SALLE UNIVERSITY vs. DLSUEA-
NAPTEU
GR 169254
SC Rulings 23 Aug 2012
a)An intra-union FACTS
Dispute on leadership is I, Leonardo – de Castro, J a)3 NOS filed by the
Not an excuse to refuse to Union
negotiate b) University refused
b) Management has no
to negotiate
Right whatsoever
To withhold union
c) The DOLE found the
Dues in escrow university guilty of ULP,
c) The University was refusal to
Guilty of ULP Negotiate
d) The union d) Almost same
Was correct a) DOLE: (L) 23 July 2003 DWU case
b) CA: (L) 04 Mar 2005
c) SC: (L) 23 Aug 2012
SPECIFIC PRONOUNCEMENTS OF THE SC
a) The university was guilty of REFUSAL TO

BARGAIN a violation of Art. 248, LCP
b) Guilty of
h) DOLE said:
DLSU committed ULP
c) DLSU should learn
An intentional
Avoidance of a From DWU, Tacoban
Legal duty
i) The BLR already told d) Refusal to bargain
DLSU that there is no was tainted with
Void in union BAD FAITH
Leadership admitted
j) DLSU
Was
wrong f) Void in union leadership
(Aliazas vs. Banez)
Not a just cause to refuse to
negotiate
g) The DOLE has amply warned the

Case 10: DENIAL OF DEATH BENEFITS
1. GR 189574, 18 July 2014, Second Div, Perez, J
ESTRELLA D. BAÑEZ
vs
SSS & DLSU
FACTS:
1. Baylon R. Bañez (husband of Estrella) was employed by DLSU
since 19 July 1967.
2. From 25 Jan 1991 to 26 Aug 2006, Bañez was working as
Laboratory Technician at DLSU’s Chemistry Department.

FACTS:
3. Then Bañez got sick, with the following records of medical /
hospital confinement:
April 9 – 15, 2006 Manila Doctors Hospital Fever, Weakness,

Dysuria, UTI
May 18 – 25, 2006 Unnamed Hospital Functional Dyspepsia
June 9, 2006 Medical Center Manila Weakness, Vomiting,

Erythematosus (SLE)
Aug 9, 2006 MMC He died here

FACTS:
4. “Dr. E.S. Castillo (30 July 2006): “Based on the occupational
history of the patient xxx the probability of chemically induced
disease can not be discounted.”

FACTS:
5. “Dr. Dennis Torres (attending physician)
Issued a Medical Certificate stating that Baylon ‘xxx expired in MMC
for SYSTEMIC LUPUS ERYTHEMATOSUS” may have been
precipitated by the chronic exposure to chemicals which is an
occupational hazard in his performance of being a laboratory
technician.”
FACTS:
6. Based on medical opinion of Drs. Castillo and Torresm the widow
Estrella D. Bañez filed a claim for death benefits under the ECC
Law before SSS.

ISSUE:
Was the death compensable?
RULING:
NO
CASE HISTORY:
1. SSS: Denied the claim – Cause of death was not listed as

occupational disease (21 Sept 2007)
2. ECC: Death was not compensable (04 April 2008)
3. CA: Petitioner’s petition, dismissed for being filed out of

time (04 Nov 2008)
4. SC: Filed out of time, not occupational disease
1. LATE FILING OF PETITION FOR REVIEW ON CERTIORARY
UNDER RULE 45
a. “Petitioner received a copy of the DECISION on 16 May 2008.
Thus, she had until 31 May 2008 to file her petition.”
b. “Instead, petitioner filed a Motion For Extension of 30 days from 31
May 2008”
UNDER RULE 45
c. “The CA granted petitioner a mere 15-day extension pursuant to
Section 4, rule 43 of the Rules of Court.”
d. “Petitioner had until 15 June 2008 to file her petition. Petitioner
filed her petition only on 04 July 2008.

UNDER RULE 45
e. “Even if the reckoning point is the extended period, the petition
was filed out of time.”
f. “The CA simply applied the Rules.

2. APPEAL IS A MERE STATUTORY PRIVILEGE
a. “It is doctrinally entrenched that appeal in not a constitutional right,
but a mere statutory privilege. Hence, parties who seek to avail
themselves of it must comply with the statues or rules allowing it.
(citing Calipay vs NLRC, GR 166411, 03 Aug 2010, 626 SCRA
409, 416).
2. APPEAL IS A MERE STATUTORY PRIVILEGE
b. “The rule is that failure to file or perfect an appeal within the
reglementary period will make the judgement FINAL and
EXECUTORY by operation of law.”

3. PERFECTION OF AN APPEAL IS JURISDICTIONAL AND

MANDATORY
a. “Perfection of an appeal within the statutory or reglementary period
is not only mandatory but also jurisdictional.
b. “Failure to do so renders the questioned decision / resolution
FINAL and EXECUTORY.


MANDATORY
c. “and deprives the appellate court of jurisdiction to alter the decision
/ resolution, much less to entertain the appeal. (Citing Miel vs
Malindog, GR 143538, 13 Feb 2009, 579 SCRA 119, which cited
Sapitan vs JB Line Bicol Express Inc, etc 562 Phil 817, etc, 2007

MANDATORY
d. “Filing of an appeal beyond the reglementary period may, under
meritorious cases, be excused if the barring of the appeal would
be in equitable and unjust in the light of ertain circumstances
therein. (Miel vs Malindog, supra, which cited PNB vs CA, 316 Phil
371, 384, 1995)”

4. THE SC FOUND NO GROUND TO CONSIDER THIS CASE AS

AN EXCEPTION TO THE RULE
a. “While there are instances when the Court has relaxed the
governing periods for appeals, in order to serve substantive
justice, this was done only in exceptional cases. (Citing Boardwalk
Business Ventures vs Villareal, GR 181182, 10 April 2013)


b. “We find no compelling reason to justify the fling for petition for
review before the CA beyond the reglementary period.


b. “We find no compelling reason to justify the fling for petition for
review before the CA beyond the reglementary period.

5. EVEN ON THE MERITS, THE CLAIM COULD NOT BE

GRANTED
a. “Just as significant, even if we grant petitioner’s prayer for a ruling
on the merits of the case, the denial of the petition can not be
avoided.”

GRANTED
b. “The findings of fact of the SSS are supported by substantial
evidence and affirmed by the ECC and the CA.”
c. “This Court is not a trier of facts, the Court accord great weights to
the factual findings of the lower Courts or agencies whose
functions is to resolve factual matters.


GRANTED
d. “It is not for the Court to weigh evidence all over again.”
6. REQUIREMENTS FOR ENTITLEMENT TO DEATH BENEFITS
a. “In order for the beneficiary of an employee to be entitled to death

benefits under the SSS, the cause of death of the employee must
be:
• A sickness listed as an occupational disease by ECC
• Or any other illness caused by employment, subject to proof that
the risk of contracting the same is increased by the working
conditions
7. DLSU (the employer) IS NOT A PROPER PARTY TO THE CASE
a. “The CA erred in impleading the DLSU.”
b. “The erroneous inclusion of the DLSU appears to be in adverted
and harmless.
c. “For clarification purposes, the case against DLSU should be
dismissed in this case for lack of cause of action and jurisdiction.

LESSONS LEARNED:
Procedure of
Law
Substance of the
Law

16. VALID TERMINATION OF EMPLOYMENT OF COLLEGE
PROFESSOR WHO
FAILED TO OBTAIN ANY MASTER’S DEGREE

University of the East (UE), et al. GR

193897
vs. 23 November
2012
A. Pepanio, et al. III D,
Abad, J.
By Atty. Josephus B. Jimenez
FACTS:

In 1992, the DECS issued the Revised Manual of Regulations for Private
Schools, Article IX, Section 44, paragraph 1 (a), of which requires college
faculty members to have a master's degree as a minimum educational
qualification for acquiring regular status.
In 1994, UE and the UE Faculty Association executed a five-year CBA with effect
up to 1999 which provided, among others, that:

UE shall extend only semester-to-semester appointments to college faculty
staffs who did not possess the minimum qualifications.
Those with such qualifications shall be given probationary appointments and
their performance on a full-time or full-load basis shall be reviewed for four
semesters.

On 07 February 1996, DECS-CHED-TESDA-DOLE Joint Order 1reiterated that
college faculty members must have a master's degree as a minimum educational
qualification to acquire a regular status.

Due to this, the UE President issued a University Policy stating that, beginning the
School Year 1996-1997, it would hire those who have no postgraduate units or
master’s degree for its college teaching staffs, in the absence of qualified
applicants, only on a semester-to-semester basis.

UE hiredMariti D. Bueno in 1997 and Analiza F. Pepanio in 2000, both on a
semester-to-semester basis to teach in its college. They could not qualify for
probationary or regular status because they lacked postgraduate degrees.

In 2001, a new CBA was executed, which provided that:

the school shall extend probationary full-time appointments to full-time faculty
members who did not yet have the required postgraduate degrees provided
that the latter comply with such requirement within their probationary period.
UE has the option to replace these appointees during their probationary period
if a qualified teacher becomes available at the end of the semester.

Thus, UE extended probationary appointments to Bueno and Pepanio.

Two years later in October 2003, UE College of Arts and Sciences Dean Eleanor
Javier reminded the probationary faculty members of the expiration of the
probationary status of those lacking in postgraduate qualification.

Pepanio replied that she was enrolled at the Polytechnic University of the
Philippines Graduate School. Bueno, on the other hand, replied that she was not
interested in acquiring tenure as she was returning to her province.

Dean Javier subsequently issued a memorandum, stating that she would
recommend the extension of the probationary appointees for two more semesters
for those who want it based on the wishes of the University President.

Pepanio requested a three-semester extension but Dean Javier denied this request
and directed Pepanio to ask for just a two-semester extension. The records do not
show if Bueno submitted a request for extension.

The school eventually wrote Bueno and Pepanio, extending their probationary
period but neither Pepanio nor Bueno reported for work.

Bueno later wrote UE, demanding that it consider her a regular employee based on
her six-and-a-half-year service on a full-load basis, given that UE hired her in 1997
when what was in force was still the 1994 CBA. Pepanio made the same demand,
citing her three-and-a-half years of service on a full-load basis.

When UE did not heed their demands, they filed cases of illegal dismissal against
the school.

CASE HISTORY:

On 10 March 2005, the LA held that:

Bueno and Pepanio were illegally dismissed.
They are regular employees, given that they taught at UE for at least four
semesters under the old CBA.
The new CBA, could not deprive them of the employment benefits they
already enjoyed.
UE should reinstate Bueno and Pepanio with backwages.

On 17 March 2005, the counsel of UE was notified toclaim his mail that contained
the LA Decision. However, theregistry return receipt of the mail addressed to the
said counsel was only on 04 April 2005. Hence, UE appealed only on 14 April
2005.

On 27 September 2006, the NLRC Third Division reversed the LA and held:

(3.1) Untenable Bueno and Pepanio’s contention that appeal was filed beyond
the 10-day period which started 5 days after notice (22 March 2005) and 1 April
2005.
(3.2) There was a valid dismissal.
(3.3) Thefour-semester probationary period under the old CBA did not
automatically confer permanent status to Bueno and Pepanio. They still had to
meet the standards for permanent employment.

On 09 July 2010, CA reinstated LA’s decision. CA agreed to the technical objection
of Bueno and Pepanio.

In this petition to the SC, Dean Javier signed the verification and certification of

ISSUES:

Procedural Issues:

Did UE file a timely appeal to the NLRC from the Decision of the LA?
Can UE’s petition before the SC be given due course given its failure to
enclose a UE Board certification authorizing Dean Javier to execute the
verification and certification of non-forum shopping?

Substantive Issue: Did UE illegally dismiss Bueno and Pepanio?

SC RULING:

Re: Procedural Issues:

Yes. UE filed a timely appeal to the NLRC.

SC: For completeness of service by registered mail, the reckoning period
starts either:
from the date of actual receipt of the mail by the addressee or
after five days from the date he received the first notice from the postmaster.(citing
Sec. 7 of the 2005 NLRC Rules of Procedure.)

SC: There must be a conclusive proof that the registry notice was
received by or at least served on the addressee before the five-day period
begins to run.(citing Antonio v. Court of Appeals, 249 Phil. 123, 129
[1988].)

Pepanio and Bueno failed to present a copy of the receipt evidencing the
alleged registry notice from the post office on March 22, 2005. Thus, the
Court is constrained to consider the registry return receipt bearing April 4,
2005 as a conclusive proof of service of the LA Decision on that date. UE
filed its appeal to the NLRC on time.

Yes. UE’s petition can be given due course notwithstanding the failure to
enclose the Board certification authorizing Dean Javier to execute the
verification and certification of non-forum shopping.

(1.2.1) SC: As a general rule, the Board of Directors or Board of Trustees of a
corporation must authorize the person who signs the verification and certification
against non-forum shopping of its petition.
(1.2.2) SC: But in Cagayan Valley Drug Corp. v. CIR, such authorization is not
necessary when it is self-evident that the signatory is in a position to verify the
truthfulness and correctness of the allegations in the petition.
(1.2.3) SC: Here the verification and certification were signed by petitioner Dean
Javier who, based on the given facts of the case, was "in a position to verify the
truthfulness and correctness of the allegations in the petition."(ibid.)
Re: Substantive Issue: No. Bueno and Pepanio were not illegally dismissed.

LAWS: Sec. 3, B.P. Blg. 232 (Education Act of 1982) and Secs. 8(d) and Secs. 8
(o), R.A. No. 7722.

SC SPECIFIC PRONOUNCEMENTS:
SC: The 1994 CBA recognized the policy requiring postgraduate degrees of college
teachers, which was provided in the Manual of Regulations as early as 1992.

SCHOOL CBA MUST BE READ IN CONJUNCTION WITH STATUTORY AND
ADMINISTRATIVE REGULATIONS GOVERNING FACULTY QUALIFICATIONS:

SC: Such regulations form part of a valid CBA without need for the parties to
make express reference to it.

SC: While the contracting parties may establish such stipulations, clauses,
terms and conditions, as they may see fit, the right to contract is still subject to
the limitation that the agreement must not be contrary to law or public policy.
(citingEscorpizo v. University of Baguio (366 Phil. 166 [1999].)
DepEd AND CHED’S AUTHORITY TO ISSUE MANUAL OF REGULATIONS:

SC: Sec. 3 of B.P. Blg. 232 (The Education Act of 1982) delegated the
administration of the education system and the supervision and regulation of
educational institutions to the Ministry of Education, Culture and Sports (later
Department of Education, Culture and Sports[DECS], and now Department of
Education [DepEd]).

SC: Accordingly, in the exercise of this power, DECS promulgated the Manual
of Regulations to prescribe the minimum academic qualifications for teaching
personnel.

SC: In 1994, Legislature transferred to Commission on Higher Education
(CHED) the power to prescribe qualifications for programs and institutions of
higher learning(Secs. 8[d] and 8[o], R.A. No. 7722.).

CHED issued the Revised Manual of Regulations in 2010 to apply
suppletorily to the existing Manual of Regulations.
Revised Manual of Regulations specifically applies only to institutions
THANK YOU! DIOS TI’ AGNINA!
MARAMING TERIMAH KASHI!
SALAMAT!
DAGHANG SHUKRAN!
SALAMAT! DOMO ARIGATO!
DAMO NGA
SALAMAT! MUCHAS GRACIAS!
DIOS MABALOS!
MERCI!
-JBJ
THAT IN CASE OF DOUBT, IT IS BETTER TO ASK

THE EXPERT.
Atty. Josephus B. Jimenez Tel No. 09062755926
Email Add : attyjosephusbjimenez@yahoo.com

431
Copyright J. B. Jimenez 2012

Usec Jimenez Labor Notes

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LATEST SUPREME

Atty. Josephus B. Jimenez, FPM

Vice President for Human Resources and

Director for Employee

Resource Person and Professor of Law (30 Years)

• Labor Arbiter, 1977 – 1981

1. St. Scholastica’s College (Westgrove)

3. Grace Christian High School

5. Colegio de San Juan de Letran

6. Ateneo de Manila University

9. Chang Kai Shek College

10.Unibersidad de Sta. Isabel

11. Colegio del Santisimo Rosario

12. Colegio de San Juan de Letran

13. Colegio de Sta. Rosa, Makati

14. International School Manila

15. Immaculate Conception Academy

16. University of Pangasinan

17. Wesleyan University

18. Holy Child Catholic School

19. DLSU (Union)

20. DLSU (Death)

21. University of the East

1. 8 Cases out of 21 – Won by employers (38%)

2. 11 Cases out of 21 – Won by employees (52.4%)

3. 1 was won by both (0.47%)

4. 1 was lost by both (0.47%)

7. THE SC REITERATES THE MEANING OF

“WHILE PERMANENT TOTAL

7. THE SC REITERATES THE MEANING OF

7. THE SC REITERATES THE MEANING OF

“THE COMPANY-DESIGNATED PHYSICIAN MUST ARRIVE AT A

“IF HE FAILS TO DO SO AND THE SEA-FARER’S MEDICAL

8. PRESUMPTION OF WORK RELATEDNESS AND

8. PRESUMPTION OF WORK RELATEDNESS AND

8. PRESUMPTION OF WORK RELATEDNESS AND

1. Petron is a domestic corporation engaged in the oil business. It

2. in 1968, Ronaldo D Gindang Contractor started recuiting laborers

3. When Romulado died in 1989, his son Renato D Gindang ( RDG)

4. Among others, the nine complainants were hired by RDG and

5. The names, Date/Year of Hiring, and the Duties And Responsibilities

6.1) Eutiquio Gindand, 1968, Utility, Tanker Reciever, Barge Loader

6.2) Eugema T Laurente, June 1979, Telephone Operator,

6.4) Rex Gabilan, July 1, 1987, Warehouseman, Forklift Driver, Tanker

6.5) Charlie T Hindang, September 18, 1990, Utility tanker,

6.6) Allan S Sungahid, September 18, 1990, Filler, Sealer,

6.7) Maximo S Lee, September 18, 1990, Gasul Filler, Painter,

6.9) Avelino S Alilin, July 16, 1992,

7. On June 1, 2000, Petron and RDG entered into a contract for

(e) Other Utility services

in its Mandaue Bulk Plant.

10. On November 12, 2002, Alilin, Calesa, Hindang, Gindang,

sungahid, Lee, Morato, and Gabilan filed a Complaint.

10. Specific CAUSES OF ACTION were:

10. 1) Illegal Dismissal,

10.2) Underpayment of Wages,

10.3) Damages, and

10.4) Attorney’s Fees.

11.1) Illegal Dismissal

11.2) Underpayment of wages,

12. The two complainants were consolidated.

1.LABOR ARBITER: ( 12 June 2003 ) ruled in favor

1.1) That the workers were regular