University of San Carlos College of Law

LABOR LAW REVIEW CASE DIGESTS

The Diamond Batch
I. APPLICABLE LAWS
II. BASIC PRINCIPLES
ATOK BIG WEDGE COMPANY vs. GISON
G.R. No. !"#$% &UGUST '% ($
)&CTS*
Sometime in )e+r,ary ""(% res-ondent .es,s /. Gison was engaged as
-art0time cons,ltant on retainer +asis +y -etitioner &to1 Big 2edge
Com-any% 3nc. thro,gh its then &sst. 4ice0/resident and &cting Resident
5anager% R,tillo &. Torres. &s a cons,ltant on retainer +asis% res-ondent
assisted -etitioner6s retained legal co,nsel with matters -ertaining to the
-rosec,tion of cases against illegal s,rface occ,-ants within the area
covered +y the com-any6s mineral claims. Res-ondent was li1ewise tas1ed
to -erform liaison wor1 with several government agencies% which he said
was his e7-ertise.
/etitioner did not re8,ire res-ondent to re-ort to its o9ce on a reg,lar
+asis% e7ce-t when occasionally re8,ested +y the management to disc,ss
matters needing his e7-ertise as a cons,ltant. &s -ayment for his services%
res-ondent received a retainer fee of /:%$$$.$$ a month% which was
delivered to him either at his residence or in a local resta,rant. The -arties
e7ec,ted a retainer agreement% +,t s,ch agreement was mis-laced and
can no longer +e fo,nd.
The said arrangement contin,ed for the ne7t eleven years.
Sometime thereafter% since res-ondent was getting old% he re8,ested that
-etitioner ca,se his registration with the Social Sec,rity System ;SSS<% +,t
-etitioner did not accede to his re8,est. =e later reiterated his re8,est +,t
it was ignored +y res-ondent considering that he was only a
retainer>cons,ltant. ?n )e+r,ary @% ($$:% res-ondent Aled a Com-laint with
the SSS against -etitioner for the latter6s ref,sal to ca,se his registration
with the SSS.
?n the same date% 5ario D. Cera% in his ca-acity as resident manager of
-etitioner% iss,ed a 5emorand,m advising res-ondent that within :$ days
from recei-t thereof% -etitioner is terminating his retainer contract with the
com-any since his services are no longer necessary.
?n )e+r,ary (% ($$:% res-ondent Aled a Com-laint for illegal dismissal%
,nfair la+or -ractice% ,nder-ayment of wages% non0-ayment of :th month
-ay% vacation -ay% and sic1 leave -ay with the National La+or Relations
Commission ;NLRC<% Regional &r+itration Branch ;R&B<% Cordillera
&dministrative Region% against -etitioner% 5ario D. Cera% and TeoAlo R.
&s,ncion% .r. The case was doc1eted as NLRC Case No. R&B0C&R0$(0$$"'0
$:.
3SSUB*
2hether or not there was an em-loyer0em-loyee realationshi- and
whether Gison was illegally dismissed.
SC RUL3NG*
The -etition is meritorio,s.
To ascertain the e7istence of an em-loyer0em-loyee relationshi-
C,ris-r,dence has invaria+ly adhered to the fo,r0fold test% to wit* ;< the
selection and engagement of the em-loyeeD ;(< the -ayment of wagesD ;:<
the -ower of dismissalD and ;@< the -ower to control the em-loyee6s
cond,ct% or the so0called Econtrol test.E?f these fo,r% the last one is the
most im-ortant. The so0called Econtrol testE is commonly regarded as the
most cr,cial and determinative indicator of the -resence or a+sence of an
em-loyer0em-loyee relationshi-. Under the control test% an em-loyer0
em-loyee relationshi- e7ists where the -erson for whom the services are
-erformed reserves the right to control not only the end achieved% +,t also
the manner and means to +e ,sed in reaching that end.
&--lying the aforementioned test% an em-loyer0em-loyee relationshi- is
a--arently a+sent in the case at +ar. &mong other things% res-ondent was
not re8,ired to re-ort everyday d,ring reg,lar o9ce ho,rs of -etitioner.
Res-ondent6s monthly retainer fees were -aid to him either at his residence
or a local resta,rant. 5ore im-ortantly% -etitioner did not -rescri+e the
manner in which res-ondent wo,ld accom-lish any of the tas1s in which his
e7-ertise as a liaison o9cer was neededD res-ondent was left alone and
given the freedom to accom-lish the tas1s ,sing his own means and
method. Res-ondent was assigned tas1s to -erform% +,t -etitioner did not
control the manner and methods +y which res-ondent -erformed these
tas1s. 4erily% the a+sence of the element of control on the -art of the
-etitioner engenders a concl,sion that he is not an em-loyee of the
-etitioner.
5oreover% the a+sence of the -arties6 retainershi- agreement
notwithstanding% res-ondent clearly admitted that -etitioner hired him in a
limited ca-acity only and that there will +e no em-loyer0em-loyee
relationshi- +etween them.
F / a g e
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LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
Contrary to the concl,sion of the C&% res-ondent is not an em-loyee% m,ch
more a reg,lar em-loyee of -etitioner. The a--ellate co,rt6s -remise that
reg,lar em-loyees are those who -erform activities which are desira+le
and necessary for the +,siness of the em-loyer is not determinative in this
case. 3n fact% any agreement may -rovide that one -arty shall render
services for and in +ehalf of another% no matter how necessary for the
latter6s +,siness% even witho,t +eing hired as an em-loyee. =ence%
res-ondent6s length of service and -etitioner6s re-eated act of assigning
res-ondent some tas1s to +e -erformed did not res,lt to res-ondent6s
entitlement to the rights and -rivileges of a reg,lar em-loyee.
),rthermore% des-ite the fact that -etitioner made ,se of the services of
res-ondent for eleven years% he still cannot +e considered as a reg,lar
em-loyee of -etitioner. &rticle ('$ of the La+or Code% in which the lower
co,rt ,sed to +,ttress its Andings that res-ondent +ecame a reg,lar
em-loyee of the -etitioner% is not a--lica+le in the case at +ar. 3ndeed% the
Co,rt has r,led that said -rovision is not the yardstic1 for determining the
e7istence of an em-loyment relationshi- +eca,se it merely disting,ishes
+etween two 1inds of em-loyees% i.e.% reg,lar em-loyees and cas,al
em-loyees% for -,r-oses of determining the right of an em-loyee to certain
+eneAts% to Coin or form a ,nion% or to sec,rity of ten,reD it does not a--ly
where the e7istence of an em-loyment relationshi- is in dis-,te. 3t is%
therefore% erroneo,s on the -art of the Co,rt of &--eals to rely on &rticle
('$ in determining whether an em-loyer0em-loyee relationshi- e7ists
+etween res-ondent and the -etitioner
Considering that there is no em-loyer0em-loyee relationshi- +etween the
-arties% the termination of res-ondent6s services +y the -etitioner after d,e
notice did not constit,te illegal dismissal warranting his reinstatement and
the -ayment of f,ll +ac1wages% allowances and other +eneAts.
SEMBLANTE et al., vs. COURT OF APPEALS, et al.
G.R. No. "!@(!% &UGUST #% ($
)&CTS*
/etitioners 5articio Sem+lante ;Sem+lante< and D,+ric1 /ilar ;/ilar< assert
that they were hired +y res-ondents0s-o,ses 4icente and 5aria L,isa Loot%
the owners of Gallera de 5anda,e ;the coc1-it<% as the o9cial masiador
and sentenciador% res-ectively% of the coc1-it sometime in "":.
/etitioners had +oth +een iss,ed em-loyeesI identiAcation cards that they
wear every time they re-ort for d,ty. They alleged never having inc,rred
any infraction and>or violation of the coc1-it r,les and reg,lations.
-etitioners were denied entry into the coc1-it ,-on the instr,ctions of
res-ondents% and were informed of the termination of their services
eJective that date. This -rom-ted -etitioners to Ale a com-laint for illegal
dismissal against res-ondents.
La+or &r+iter .,lie C. Rendo8,e fo,nd -etitioners to +e reg,lar em-loyees
of res-ondents as they -erformed wor1 that was necessary and
indis-ensa+le to the ,s,al trade or +,siness of res-ondents for a n,m+er of
years. NLRC denied the a--eal for its non0-erfection. The NLRC held that
there was no em-loyer0em-loyee relationshi- +etween -etitioners and
res-ondents% res-ondents having no -art in the selection and engagement
of -etitioners% and that no se-arate individ,al contract with res-ondents
was ever e7ec,ted +y -etitioners. % the a--ellate co,rt fo,nd for
res-ondents% noting that referees and +et0ta1ers in a coc1Aght need to
have the 1ind of e7-ertise that is characteristic of the game to inter-ret
messages conveyed +y mere gest,res. =ence% -etitioners are a1in to
inde-endent contractors who -ossess ,ni8,e s1ills% e7-ertise% and talent to
disting,ish them from ordinary em-loyees. ),rther% res-ondents did not
s,--ly -etitioners with the tools and instr,mentalities they needed to
-erform wor1. /etitioners only needed their ,ni8,e s1ills and talents to
-erform their Co+ as masiador and sentenciador. The C& ref,sed to
reconsider its Decision.
3SSUB*
2hether or not there is an em-loyer0em-loyee relationshi-.
SC RUL3NG*
2hile res-ondents had failed to -ost their +ond within the $0day -eriod
-rovided a+ove% it is evident% on the other hand% that -etitioners are N?T
em-loyees of res-ondents% since their relationshi- fails to -ass m,ster the
fo,r0fold test of em-loyment. &s fo,nd +y +oth the NLRC and the C&%
res-ondents had no -art in -etitionersI selection and managementD
-etitionersI com-ensation was -aid o,t of the arri+a ;which is a -ercentage
ded,cted from the total +ets<% not +y -etitionersD and -etitioners -erformed
their f,nctions as masiador and sentenciador free from the direction and
control of res-ondents. 3n the cond,ct of their wor1% -etitioners relied
mainly on their Ee7-ertise that is characteristic of the coc1Aght
gam+ling%E and were never given +y res-ondents any tool needed for the
-erformance of their wor1.
( F / a g e
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University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
Res-ondents% not +eing -etitionersI em-loyers% co,ld never have
dismissed% legally or illegally% -etitioners% since res-ondents were witho,t
-ower or -rerogative to do so in the Arst -lace. The r,le on the -osting of
an a--eal +ond cannot defeat the s,+stantive rights of res-ondents to +e
free from an ,nwarranted +,rden of answering for an illegal dismissal for
which they were never res-onsi+le.
BERNARTE vs. PHIL. BASKETBALL ASSOCIATION et al.
G.R. No. "($'@% SB/TB5BBR @% ($
)&CTS*
Com-lainants ;.ose 5el Bernarte and Renato G,evarra< aver that they were
invited to Coin the /B& as referees. D,ring the leadershi- of Commissioner
Bmilio Bernardino% they were made to sign contracts on a year0to0year
+asis. D,ring the term of Commissioner Bala% however% changes were made
on the terms of their em-loyment. They contend they were illegally
dismissed. Res-ondents aver% on the other hand% that com-lainants
entered into two contracts of retainer with the /B&. Com-lainants were not
illegally dismissed +eca,se they were not em-loyees of the /B&. Their
res-ective contracts of retainer were sim-ly not renewed. /B& had the
-rerogative of whether or not to renew their contracts% which they 1new
were A7ed.
La+or &r+iter declared -etitioner an em-loyee whose dismissal +y
res-ondents was illegal. &ccordingly% the La+or &r+iter ordered the
reinstatement of -etitioner and the -ayment of +ac1wages% moral and
e7em-lary damages and attorneyIs fees. NLRC a9rmed the La+or &r+iterIs
C,dgment. Res-ondents Aled a -etition for certiorari with the Co,rt of
&--eals% which overt,rned the decisions of the NLRC and La+or &r+iter.
3SSUB*
2hether -etitioner is an em-loyee of res-ondents% which in t,rn
determines whether -etitioner was illegally dismissed.
SC RUL3NG*
To determine the e7istence of an em-loyer0em-loyee relationshi-% case law
has consistently a--lied the fo,r0fold test. 3n this case% /B& admits
re-eatedly engaging -etitionerIs services% as shown in the retainer
contracts. /B& -ays -etitioner a retainer fee% e7cl,sive of -er diem or
allowances% as sti-,lated in the retainer contract. /B& can terminate the
retainer contract for -etitionerIs violation of its terms and conditions.
The contract,al sti-,lations hardly demonstrate control over the means
and methods +y which -etitioner -erforms his wor1 as a referee o9ciating
a /B& +as1et+all game. The contract,al sti-,lations do not -ertain to%
m,ch less dictate% how and when -etitioner will +low the whistle and ma1e
calls. ?n the contrary% they merely serve as r,les of cond,ct or g,idelines
in order to maintain the integrity of the -rofessional +as1et+all leag,e. &s
correctly o+served +y the Co,rt of &--eals% Khow co,ld a s1illed referee
-erform his Co+ witho,t +lowing a whistle and ma1ing callsL 7 7 7 M=Now can
the /B& control the -erformance of wor1 of a referee witho,t controlling his
acts of +lowing the whistle and ma1ing callsLO
2e agree with res-ondents that once in the -laying co,rt% the referees
e7ercise their own inde-endent C,dgment% +ased on the r,les of the game%
as to when and how a call or decision is to +e made. The referees decide
whether an infraction was committed% and the /B& cannot overr,le them
once the decision is made on the -laying co,rt. The referees are the only%
a+sol,te% and Anal a,thority on the -laying co,rt. Res-ondents or any of
the /B& o9cers cannot and do not determine which calls to ma1e or not to
ma1e and cannot control the referee when he +lows the whistle +eca,se
s,ch a,thority e7cl,sively +elongs to the referees. The very nat,re of
-etitionerIs Co+ of o9ciating a -rofessional +as1et+all game ,ndo,+tedly
calls for freedom of control +y res-ondents.
5oreover% the following circ,mstances indicate that -etitioner is an
inde-endent contractor* ;< the referees are re8,ired to re-ort for wor1
only when /B& games are sched,led% which is three times a wee1 s-read
over an average of only $# -laying days a year% and they o9ciate games
at an average of two ho,rs -er gameD and ;(< the only ded,ctions from the
fees received +y the referees are withholding ta7es.
3n other words% ,nli1e reg,lar em-loyees who ordinarily re-ort for wor1
eight ho,rs -er day for Ave days a wee1% -etitioner is re8,ired to re-ort for
wor1 only when /B& games are sched,led or three times a wee1 at two
ho,rs -er game. 3n addition% there are no ded,ctions for contri+,tions to
the Social Sec,rity System% /hilhealth or /ag03+ig% which are the ,s,al
ded,ctions from em-loyeesI salaries. These ,ndis-,ted circ,mstances
+,ttress the fact that -etitioner is an inde-endent contractor% and not an
em-loyee of res-ondents.
: F / a g e
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University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
),rthermore% the a--lica+le foreign case law declares that a referee is an
inde-endent contractor whose s-ecial s1ills and inde-endent C,dgment
are re8,ired s-eciAcally for s,ch -osition and cannot -ossi+ly +e controlled
+y the hiring -arty.
3n addition% the fact that /B& re-eatedly hired -etitioner does not +y itself
-rove that -etitioner is an em-loyee of the former. )or a hired -arty to +e
considered an em-loyee% the hiring -arty m,st have control over the
means and methods +y which the hired -arty is to -erform his wor1% which
is a+sent in this case. The contin,o,s rehiring +y /B& of -etitioner sim-ly
signiAes the renewal of the contract +etween /B& and -etitioner% and
highlights the satisfactory services rendered +y -etitioner warranting s,ch
contract renewal. Conversely% if /B& decides to discontin,e -etitionerIs
services at the end of the term A7ed in the contract% whether for
,nsatisfactory services% or violation of the terms and conditions of the
contract% or for whatever other reason% the same merely res,lts in the non0
renewal of the contract% as in the -resent case. The non0renewal of the
contract +etween the -arties does not constit,te illegal dismissal of
-etitioner +y res-ondents.
LIRIO vs. GENOVIA
G.R. No. !"P#P% N?4B5BBR (:% ($
)&CTS*
Res-ondent Genovia alleged he was hired as st,dio manager +y -etitioner
Lirio% owner of Cel1or &d Sonicmi7 Recording St,dio ;Cel1or<. =e was
em-loyed to manage and o-erate Cel1or and to -romote and sell the
recording st,dio6s services to m,sic enth,siasts and other -ros-ective
clients. Res-ondent stated that a few days after he started wor1ing as a
st,dio manager% -etitioner a--roached him and told him a+o,t his -roCect
to -rod,ce an al+,m for his #0year0old da,ghter% Celine 5ei Lirio% a former
talent of &BS0CBN Star Records. /etitioner as1ed res-ondent to com-ose
and arrange songs for Celine and -romised that he ;Lirio< wo,ld draft a
contract to ass,re res-ondent of his com-ensation for s,ch services. &s
agreed ,-on% the additional services that res-ondent wo,ld render incl,ded
com-osing and arranging m,sical scores only% while the technical as-ect in
-rod,cing the al+,m% s,ch as digital editing% mi7ing and so,nd engineering
wo,ld +e -erformed +y res-ondent in his ca-acity as st,dio manager for
which he was -aid on a monthly +asis. /etitioner instr,cted res-ondent
that his wor1 on the al+,m as com-oser and arranger wo,ld only +e done
d,ring his s-are time% since his other wor1 as st,dio manager was the
-riority. Res-ondent then started wor1ing on the al+,m.
=e reminded -etitioner a+o,t his com-ensation as com-oser and arranger
of the al+,m. Res-ondent again reminded -etitioner a+o,t the contract on
his com-ensation as com-oser and arranger of the al+,m. /etitioner told
res-ondent that since he was -ractically a no+ody and had -roven nothing
yet in the m,sic ind,stry% res-ondent did not deserve a high com-ensation%
and he sho,ld +e than1f,l that he was given a Co+ to feed his family.
/etitioner informed res-ondent that he was entitled only to ($Q of the net
-roAt% and not of the gross sales of the al+,m% and that the salaries he
received and wo,ld contin,e to receive as st,dio manager of Cel1or wo,ld
+e ded,cted from the said ($Q net -roAt share. Res-ondent o+Cected and
insisted that he +e -ro-erly com-ensated. ?n 5arch @% ($$(% -etitioner
ver+ally terminated res-ondentIs services% and he was instr,cted not to
re-ort for wor1.
La+or &r+iter rendered a decision% Anding that an em-loyer0em-loyee
relationshi- e7isted +etween -etitioner and res-ondent% and that
res-ondent was illegally dismissed. NLRC reversed and set aside the
decision of the La+or &r+iter. Res-ondentIs motion for reconsideration was
denied +y the NLRC. Co,rt of &--eals rendered a decision reversing and
setting aside the resol,tion of the NLRC% and reinstating the decision of the
La+or &r+iter. /etitionerIs motion for reconsideration was denied for lac1 of
merit +y the Co,rt of &--eals.
3SSUB*
2hether there e7ists an BR0BB relationshi- +etween the -arties.
SC RUL3NG*
/etitionerIs arg,ment lac1s merit. Before a case for illegal dismissal can
-ros-er% it m,st Arst +e esta+lished that an em-loyer0em-loyee
relationshi- e7isted +etween -etitioner and res-ondent.
3t is settled that no -artic,lar form of evidence is re8,ired to -rove the
e7istence of an em-loyer0em-loyee relationshi-. &ny com-etent and
relevant evidence to -rove the relationshi- may +e admitted.
3n this case% the doc,mentary evidence -resented +y res-ondent to -rove
that he was an em-loyee of -etitioner are as follows* ;a< a doc,ment
denominated as E-ayrollE ;dated .,ly :% ($$ to 5arch #% ($$(< certiAed
@ F / a g e
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University of San Carlos College of Law
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The Diamond Batch
correct +y -etitioner% which showed that res-ondent received a monthly
salary of /P%$$$.$$ ;/:%#$$.$$ every #th of the month and
another /:%#$$.$$ every :$th of the month< with the corres-onding
ded,ctions d,e to a+sences inc,rred +y res-ondentD and ;(< co-ies of -etty
cash vo,chers% showing the amo,nts he received and signed for in the
-ayrolls.
The said doc,ments showed that -etitioner hired res-ondent as an
em-loyee and he was -aid monthly wages of /P%$$$.$$. /etitioner wielded
the -ower to dismiss as res-ondent stated that he was ver+ally dismissed
+y -etitioner% and res-ondent% thereafter% Aled an action for illegal
dismissal against -etitioner. The -ower of control refers merely to the
e7istence of the -ower. 3t is not essential for the em-loyer to act,ally
s,-ervise the -erformance of d,ties of the em-loyee% as it is s,9cient that
the former has a right to wield the -ower. Nevertheless% -etitioner stated in
his /osition /a-er that it was agreed that he wo,ld hel- and teach
res-ondent how to ,se the st,dio e8,i-ment. 3n s,ch case% -etitioner
certainly had the -ower to chec1 on the -rogress and wor1 of res-ondent.
?n the other hand% -etitioner failed to -rove that his relationshi- with
res-ondent was one of -artnershi-. S,ch claim was not s,--orted +y any
written agreement. The Co,rt notes that in the -ayroll dated .,ly :% ($$
to 5arch #% ($$(% there were ded,ctions from the wages of res-ondent for
his a+sence from wor1% which negates -etitionerIs claim that the wages
-aid were advances for res-ondentIs wor1 in the -artnershi-.
3n termination cases% the +,rden is ,-on the em-loyer to show +y
s,+stantial evidence that the termination was for lawf,l ca,se and validly
made. &rticle (PP ;+< of the La+or Code -,ts the +,rden of -roving that the
dismissal of an em-loyee was for a valid or a,thoriRed ca,se on the
em-loyer% witho,t distinction whether the em-loyer admits or does not
admit the dismissal. )or an em-loyeeIs dismissal to +e valid% ;a< the
dismissal m,st +e for a valid ca,se% and ;+< the em-loyee m,st +e aJorded
d,e -rocess. /roced,ral d,e -rocess re8,ires the em-loyer to f,rnish an
em-loyee with two written notices +efore the latter is dismissed* ;< the
notice to a--rise the em-loyee of the -artic,lar acts or omissions for which
his dismissal is so,ght% which is the e8,ivalent of a chargeD and ;(< the
notice informing the em-loyee of his dismissal% to +e iss,ed after the
em-loyee has +een given reasona+le o--ort,nity to answer and to +e
heard on his defense. /etitioner failed to com-ly with these legal
re8,irementsD hence% the Co,rt of &--eals correctly a9rmed the La+or
&r+iterIs Anding that res-ondent was illegally dismissed% and entitled to the
-ayment of +ac1wages% and se-aration -ay in lie, of reinstatement.
AO vs. BCC PRODUCTS SALES INC.
G.R. No. !:P$$% &/R3L '% ($(
)&CTS*
/etitioner maintained that res-ondent BCC /rod,ct Sales 3nc. ;BCC< and its
/resident% res-ondent Terrance Ty ;Ty<% em-loyed him as com-troller
starting from Se-tem+er ""# with a monthly salary of /($%$$$.$$ to
handle the Anancial as-ect of BCCIs +,sinessD that on ?cto+er "%""#% the
sec,rity g,ards of BCC% acting ,-on the instr,ction of Ty% +arred him from
entering the -remises of BCC where he then wor1edD that his attem-ts to
re-ort to wor1 in Novem+er and Decem+er (% ""# were fr,strated
+eca,se he contin,ed to +e +arred from entering the -remises of BCCD and
that he Aled a com-laint dated Decem+er ('% ""# for illegal dismissal%
reinstatement with f,ll +ac1wages% non0-ayment of wages% damages and
attorneyIs fees.
Res-ondents co,ntered that -etitioner was not their em-loyee +,t the
em-loyee of So+ien )ood Cor-oration ;S)C<% the maCor creditor and s,--lier
of BCCD and that S)C had -osted him as its com-troller in BCC to oversee
BCCIs Anances and +,siness o-erations and to loo1 after S)CIs interests or
investments in BCC.
La+or &r+iter r,led in favor of -etitioner NLRC vacated the r,ling and
remanded the case for f,rther -roceedings. Thereafter% La+or &r+iter
rendered a new decision dismissing -etitionerIs com-laint for want of an
em-loyer0em-loyee relationshi- +etween the -arties. NLRC rendered a
decision reversing La+or &r+iter 5ayorIs decision% and declaring that
-etitioner had +een illegally dismissed. Res-ondents moved for the
reconsideration of the NLRC decision% +,t their motion for reconsideration
was denied. Thence% res-ondents assailed the NLRC decision
on certiorari in the C& which fo,nd that no em-loyer0em-loyee relationshi-
e7isted +etween -etitioner BCC and the -rivate res-ondent.
3SSUB*
2hether -etitioner was res-ondentsI em-loyee or not.
SC RUL3NG*
# F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
2e cannot side with -etitioner.
?,r -er,sal of the a9davit of -etitioner com-els a concl,sion similar to
that reached +y the C& and the La+or &r+iter to the eJect that the a9davit
act,ally s,--orted the contention that -etitioner had really wor1ed in BCC
as S)CIs re-resentative. 3t does seem more nat,ral and more +elieva+le
that -etitionerIs a9davit was referring to his em-loyment +y S)C even
while he was re-orting to BCC as a com-troller in +ehalf of S)C. &s
res-ondents -ointed o,t% it was im-la,si+le for S)C to still -ost him to
oversee and s,-ervise the collections of acco,nts receiva+les d,e from
BCC +eyond Decem+er ""# if% as he insisted% BCC had already illegally
dismissed him and had even -revented him from entering the -remises of
BCC. Given the -atent animosity and strained relations +etween him and
res-ondents in s,ch circ,mstances% indeed% how co,ld he still e9ciently
-erform in +ehalf of S)C the essential res-onsi+ility to Koversee and
s,-ervise collectionsO at BCCL S,rely% res-ondents wo,ld have vigoro,sly
o+Cected to any arrangement with S)C involving him.
2e note that -etitioner e7ec,ted the a9davit in 5arch ""! to ref,te a
statement Ty himself made in his own a9davit dated Decem+er % ""#
to the eJect that -etitioner had illegally a--ro-riated some chec1s witho,t
a,thority from BCC. /etitioner there+y so,ght to show that he had the
a,thority to receive the chec1s -,rs,ant to the arrangements +etween S)C
and BCC. This showing wo,ld aid in fending oJ the criminal charge
res-ondents Aled against him arising from his mishandling of the chec1s.
),rther% an a9davit dated Se-tem+er #% ($$$ +y &lfredo So% the /resident
of S)C% whom -etitioner oJered as a re+,ttal witness% lent credence to
res-ondentsI denial of -etitionerIs em-loyment. So declared in that
a9davit% among others% that he had 1nown -etitioner for +eing Kearlier his
retained acco,ntant having his own o9ce +,t did not hold o9ceO in S)CIs
-remisesD that Ty had a--roached him ;So< Kloo1ing for an acco,ntant or
com-troller to +e em-loyed +y him ;Ty< in MBCCIsN distri+,tion +,sinessO of
S)CIs general merchandise% and had later as1ed him on his o-inion a+o,t
-etitionerD and that he ;So< had s,+se8,ently learned that KTy had already
em-loyed M-etitionerN as his com-troller as of Se-tem+er ""#.O
The statements of So really s,--orted res-ondentsI -osition in that
-etitionerIs association with S)C -rior to his s,--osed em-loyment +y BCC
went +eyond mere ac8,aintance with So. That So% who had earlier merely
KretainedO -etitioner as his acco,ntant% thereafter em-loyed -etitioner as a
KretainedO acco,ntant after his s,--osed illegal dismissal +y BCC raised a
do,+t as to his em-loyment +y BCC% and rather conArmed res-ondentsI
assertion of -etitioner +eing an em-loyee of S)C while he wor1ed at BCC.
5oreover% in determining the -resence or a+sence of an em-loyer0
em-loyee relationshi-% the Co,rt has consistently loo1ed for the following
incidents% to wit* ;a< the selection and engagement of the em-loyeeD ;+<
the -ayment of wagesD ;c< the -ower of dismissalD and ;d< the em-loyerIs
-ower to control the em-loyee on the means and methods +y which the
wor1 is accom-lished. The last element% the so0called control test% is the
most im-ortant element.
=ere,nder are some of the circ,mstances and incidents occ,rring while
-etitioner was s,--osedly em-loyed +y BCC that de+,n1ed his claim
against res-ondents.

3t can +e ded,ced from the 5arch ""! a9davit of -etitioner that
res-ondents challenged his a,thority to deliver some #' chec1s to S)C.
Considering that he contested res-ondentsI challenge +y -ointing to the
e7isting arrangements +etween BCC and S)C% it sho,ld +e clear that
res-ondents did not e7ercise the -ower of control over him% +eca,se he
there+y acted for the +eneAt and in the interest of S)C more than of BCC.

3n addition% -etitioner -resented no doc,ment setting forth the terms of his
em-loyment +y BCC. The fail,re to -resent s,ch agreement on terms of
em-loyment may +e ,nderstanda+le and e7-ected if he was a common or
ordinary la+orer who wo,ld not Ceo-ardiRe his em-loyment +y demanding
s,ch doc,ment from the em-loyer% +,t may not s8,are well with his act,al
stat,s as a highly ed,cated -rofessional.
/etitionerIs admission that he did not receive his salary for the three
months of his em-loyment +y BCC% as his com-laint for illegal dismissal
and non0-ayment of wages and the criminal case for estafa he later Aled
against the res-ondents for non0-ayment of wages indicated% f,rther raised
grave do,+ts a+o,t his assertion of em-loyment +y BCC. 3f the assertion
was tr,e% we are -,RRled how he co,ld have remained in BCCIs em-loy
in that -eriod of time des-ite not +eing -aid the Arst salary
of/($%$$$.$$>month. 5oreover% his name did not a--ear in the -ayroll of
BCC des-ite him having a--roved the -ayroll as com-troller.
Lastly% the conf,sion a+o,t the date of his alleged illegal dismissal -rovides
another indici,m of the insincerity of -etitionerIs assertion of em-loyment
+y BCC. 3n the -etition for review on certiorari% he averred that he had +een
! F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
+arred from entering the -remises of BCC on ?cto+er "% ""#% and th,s
was illegally dismissed. Set% his com-laint for illegal dismissal stated that
he had +een illegally dismissed on Decem+er (% ""# when res-ondentsI
sec,rity g,ards +arred him from entering the -remises of BCC% ca,sing him
to +ring his com-laint only on Decem+er ("% ""#% and after BCC had
already Aled the criminal com-laint against him. The wide ga-
+etween ?cto+er "% ""# and Decem+er (% ""# cannot +e dismissed as
a trivial inconsistency considering that the several incidents aJecting the
veracity of his assertion of em-loyment +y BCC earlier noted herein
trans-ired in that interval.
2ith all the grave do,+ts th,s raised against -etitionerIs claim% we need
not dwell at length on the other -roofs he -resented% li1e the a9davits of
some of the em-loyees of BCC% the 3D% and the signed chec1s% +ills and
recei-ts. S,9ce it to +e stated that s,ch other -roofs were easily
e7-laina+le +y res-ondents and +y the aforestated circ,mstances showing
him to +e the em-loyee of S)C% not of BCC.
LEGEND HOTEL V. REALUYO
G.R. N?. #:#% .ULS '% ($(
)&CTS*
This la+or case for illegal dismissal involves a -ianist em-loyed to -erform
in the resta,rant of a hotel.
?n &,g,st "% """% res-ondent% whose stage name was .oey R. Roa% Aled a
com-laint for alleged ,nfair la+or -ractice% constr,ctive illegal dismissal%
and the ,nder-ayment>non-ayment of his -remi,m -ay for holidays%
se-aration -ay% service incentive leave -ay% and :th month -ay.
Res-ondent averred that he had wor1ed as a -ianist at the Legend =otelIs
Tanglaw Resta,rant from Se-tem+er ""( with an initial rate of
/@$$.$$>night that was given to him after each nightIs -erformanceD that
his rate had increased to /P#$.$$>nightD and that d,ring his em-loyment%
he co,ld not choose the time of -erformance% which had +een A7ed from
P*$$ -m to $*$$ -m for three to si7 times>wee1. =e added that the Legend
=otelIs resta,rant manager had re8,ired him to conform with the ven,eIs
motifD that he had +een s,+Cected to the r,les on em-loyeesI
re-resentation chec1s and chits% a -rivilege granted to other em-loyeesD
that on .,ly "% """% the management had notiAed him that as a cost0
c,tting meas,re his services as a -ianist wo,ld no longer +e re8,ired
eJective .,ly :$% """D that he dis-,ted the e7c,se% insisting that Legend
=otel had +een l,cratively o-erating as of the Aling of his com-laintD and
that the loss of his em-loyment made him +ring his com-laint.M(N
3n its defense% -etitioner denied the e7istence of an em-loyer0 em-loyee
relationshi- with res-ondent% insisting that he had +een only a talent
engaged to -rovide live m,sic at Legend =otelIs 5adison CoJee Sho- for
three ho,rs>day on two days each wee1D and stated that the economic
crisis that had hit the co,ntry constrained management to dis-ense with
his services.
3SSUBS*
2?N there e7ists an Bm-loyee0Bm-loyer relationshi- +etween the
-etitioner or the res-ondent
RUL3NG*
Bm-loyer0em-loyee relationshi- e7isted +etween the -arties
& review of the circ,mstances reveals that res-ondent was% indeed%
-etitionerIs em-loyee. =e was ,ndenia+ly em-loyed as a -ianist in
-etitionerIs 5adison CoJee Sho->Tanglaw Resta,rant from Se-tem+er ""(
,ntil his services were terminated on .,ly "% """.
/etitioner co,ld not see1 ref,ge +ehind the service contract entered into
with res-ondent. 3t is the law that deAnes and governs an em-loyment
relationshi-% whose terms are not restricted to those A7ed in the written
contract% for other factors% li1e the nat,re of the wor1 the em-loyee has
+een called ,-on to -erform% are also considered. The law aJords
-rotection to an em-loyee% and does not co,ntenance any attem-t to
s,+vert its s-irit and intent. &ny sti-,lation in writing can +e ignored when
the em-loyer ,tiliRes the sti-,lation to de-rive the em-loyee of his sec,rity
of ten,re. The ine8,ality that characteriRes em-loyer0em-loyee relations
generally ti-s the scales in favor of the em-loyer% s,ch that the em-loyee
is often scarcely -rovided real and +etter o-tions.
Secondly% -etitioner arg,es that whatever rem,neration was given to
res-ondent were only his talent fees that were not incl,ded in the deAnition
of wage ,nder theLa+or CodeD and that s,ch talent fees were +,t the
consideration for the service contract entered into +etween them.
The arg,ment is +aseless.
P F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
Res-ondent was -aid /@$$.$$ -er three ho,rs of -erformance from P*$$
-m to $*$$ -m% three to si7 nights a wee1. S,ch rate of rem,neration was
later increased to /P#$.$$ ,-on resta,rant manager 4elaRcoIs
recommendation. There is no denying that the rem,neration denominated
as talent fees was A7ed on the +asis of his talent and s1ill and the 8,ality of
the m,sic he -layed d,ring the ho,rs of -erformance each night% ta1ing
into acco,nt the -revailing rate for similar talents in the entertainment
ind,stry.
Res-ondentIs rem,neration% al+eit denominated as talent fees% was still
considered as incl,ded in the term wage in the sense and conte7t of
the La+or Code% regardless of how -etitioner chose to designate the
rem,neration. &nent this% &rticle "P;f< of the La+or Code clearly states*
777 wage -aid to any em-loyee shall mean the rem,neration or
earnings% however designated% ca-a+le of +eing e7-ressed in terms of
money% whether A7ed or ascertained on a time% tas1% -iece% or commission
+asis% or other method of calc,lating the same% which is -aya+le +y an
em-loyer to an em-loyee ,nder a written or ,nwritten contract of
em-loyment for wor1 done or to +e done% or for services rendered or to +e
rendered% and incl,des the fair and reasona+le val,e% as determined +y the
Secretary of La+or% of +oard% lodging% or other facilities c,stomarily
f,rnished +y the em-loyer to the em-loyee.
THE NEW PHILIPPINE SKYLANDERS, INC VS FRANCISCO N. DAKILA
SB/TB5BBR (@% ($(
)&CTS*
Da1ila was em-loyed +y New /hili--ine S1ylanders as early as "'P and
terminated for ca,se in &-ril ""P when the cor-oration was sold. 3n 5ay
""P% he was rehired as cons,ltant +y the -etitioners ,nder a Contract for
Cons,ltancy Services dated &-ril :$% ""P.
3n a letter dated &-ril "% ($$P% Da1ila informed the cor-oration of his
com-,lsory retirement eJective 5ay (% ($$P and so,ght for the -ayment
of his retirement +eneAts -,rs,ant to the Collective Bargaining &greement.
=owever% his re8,est was not acted ,-on. 3nstead% he was terminated from
service eJective 5ay % ($$P.
Da1ila Aled a com-laint for constr,ctive illegal dismissal% non0-ayment of
retirement +eneAts% ,nder>non0-ayment of wages and other +eneAts of a
reg,lar em-loyee. =e contends that the cons,ltancy contract was a
scheme to de-rive him of the +eneAts of reg,lariRation. =e s,+mitted%
among others% co-ies of his time cards% ?9cial B,siness 3tinerary Sli-s%
Daily &ttendance Sheets and other doc,ments in s,--ort of his claim. The
cor-oration% on the other hand% asserted that no em-loyer0em-loyee
relationshi- e7isted +etween them.
3SSUB*
2as Da1ila an em-loyee of the cor-oration and entitled to the reliefs
so,ghtL
RUL3NG*
The records reveal that +oth the L& and the NLRC% as a9rmed +y the C&%
have fo,nd s,+stantial evidence to show that res-ondent Da1ila was a
reg,lar em-loyee who was dismissed witho,t ca,se.
The L&% as s,stained +y the NLRC% declared res-ondent Da1ila to +e a
reg,lar em-loyee on the +asis of the ,nre+,tted doc,mentary evidence
showing that he was ,nder the cor-orationIs direct control and s,-ervision
and -erformed tas1s that were either incidental or ,s,ally desira+le and
necessary in the trade or +,siness of the cor-oration for a -eriod of ten
years.
There was no showing of -al-a+le error or ar+itrary disregard of evidence
in the Andings of the L& and NLRC and th,s s,ch Anding was ado-ted +y
the S,-reme Co,rt.
Therefore% Da1ila was an em-loyee of the cor-oration th,s entitled to
+ac1wages and -ayment of his retirement +eneAts -,rs,ant to the CB&.
III. RIGHT TO HIRE
IV. WAGES & WAGE RATIONALIZATION
V. VIOLATION OF WAGE ORDERS
VI. WAGE ENFORCEMENT & RECOVERY
A!UINAS SCHOOL, V. SPS. INTON
.&NU&RS (!% ($
' F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
)&CTS*
3n ""' res-ondent .ose L,is 3nton ;.ose L,is< was a grade three st,dent at
&8,inas School ;&8,inas<. Res-ondent Sister 5argarita Samyamin
;Samyamin<% a religion teacher who +egan teaching at that school only in
.,ne of that year% ta,ght .ose L,is6 grade three religion class.
?n .,ly @% ""'% while Samyamin was writing on the +lac1+oard% .ose L,is
left his assigned seat and went over to a classmate to -lay a Co1e of
s,r-rising him. Samyamin noticed this and sent .ose L,is +ac1 to his seat.
&fter a while% .ose L,is got ,- again and went over to the same classmate.
This time% ,na+le to tolerate the child6s +ehavior% Samyamin a--roached
.ose L,is and 1ic1ed him on the legs several times. She also -,lled and
shoved his head on the classmate6s seat. )inally% she told the child to stay
where he was on that s-ot of the room and Anish co-ying the notes on the
+lac1+oard while seated on the Toor.
.ose and 4ictoria 3nton ;the 3ntons< Aled an action for damages on +ehalf of
their son .ose L,is against Samyamin and &8,inas.
3SSUB*
whether or not the C& was correct in holding &8,inas solidarily lia+le with
Samyamin for the damages awarded to .ose L,is.
RUL3NG*
The C& fo,nd &8,inas lia+le to .ose L,is +ased on &rticle ('$ of the Civil
Code ,-on the C&6s +elief that the school was Samyamin6s em-loyer.
&8,inas contests this.
The Co,rt has consistently a--lied the Efo,r0fold testE to determine the
e7istence of an em-loyer0em-loyee relationshi-* the em-loyer ;a< selects
and engages the em-loyeeD ;+< -ays his wagesD ;c< has -ower to dismiss
himD and ;d< has control over his wor1. ?f these% the most cr,cial is the
element of control. Control refers to the right of the em-loyer% whether
act,ally e7ercised or reserved% to control the wor1 of the em-loyee as well
as the means and methods +y which he accom-lishes the same.
3n this case% the school directress testiAed that &8,inas had an agreement
with a congregation of sisters ,nder which% in order to f,lAll its ministry% the
congregation wo,ld send religion teachers to &8,inas to -rovide catechesis
to its st,dents. &8,inas insists that it was not the school +,t Samyamin6s
religio,s congregation that chose her for the tas1 of catechiRing the
school6s grade three st,dents% m,ch li1e the way +isho-s designate the
catechists who wo,ld teach religion in -,+lic schools. Under the
circ,mstances% it was 8,ite evident that &8,inas did not have control over
Samyamin6s teaching methods. The 3ntons had not ref,ted the school
directress6 testimony in this regard. Conse8,ently% it was error for the C&
to hold &8,inas solidarily lia+le with Samyamin.
?f co,rse% &8,inas still had the res-onsi+ility of ta1ing ste-s to ens,re that
only 8,aliAed o,tside catechists are allowed to teach its yo,ng st,dents. 3n
this regard% it cannot +e said that &8,inas too1 no ste-s to avoid the
occ,rrence of im-ro-er cond,ct towards the st,dents +y their religion
teacher.
)irst% Samyamin6s transcri-t of records% certiAcates% and di-lomas showed
that she was 8,aliAed to teach religion.
Second% there is no 8,estion that &8,inas ascertained that Samyamin came
from a legitimate religio,s congregation of sisters and that% given her
Christian training% the school had reason to ass,me that she wo,ld +ehave
-ro-erly towards the st,dents.
Third% the school gave Samyamin a co-y of the school6s &dministrative
)ac,lty StaJ 5an,al that set the standards for handling st,dents. 3t also
re8,ired her to attend a teaching orientation +efore she was allowed to
teach +eginning that .,ne of ""'.
)o,rth% the school -re0a--roved the content of the co,rse she was to teach
to ens,re that she was really catechiRing the st,dents.
&nd Afth% the school had a -rogram for s,+Cecting Samyamin to classroom
eval,ation. Unfort,nately% since she was new and it was C,st the start of
the school year% &8,inas did not have s,9cient o--ort,nity to o+serve her
methods. &t any rate% it acted -rom-tly to relieve her of her assignment as
soon as the school learned of the incident. 3t cannot +e said that &8,inas
was g,ilty of o,tright neglect.
SIP FOODHOUSE V. BATOLINA
G.R. No. "(@P:% ?CT?BBR % ($$
)&CTS*
" F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
The GS3S 5,lti0/,r-ose Coo-erative ;G5/C< is an entity organiRed +y the
em-loyees of the Government Service 3ns,rance System ;GS3S<. 3ncidental
to its -,r-ose% G5/C wanted to o-erate a canteen in the new GS3S
B,ilding% +,t had no ca-a+ility and e7-ertise in this area. Th,s% it engaged
the services of the -etitioner S.3./. )ood =o,se ;S3/<% owned +y the s-o,ses
&leCandro and Bsther /a+lo% as concessionaire. The res-ondents Restit,to
Batolina and nine ;"< others ;the res-ondents< wor1ed as waiters and
waitresses in the canteen.
3n )e+r,ary ($$@% G5/C terminated S3/Is Econtract as G5/C
concessionaire%E +eca,se of G5/CIs decision Eto ta1e direct investment in
and management of the G5/C canteenDE S3/Is contin,ed ref,sal to heed
G5/CIs directives for service im-rovementD and the alleged interference of
the /a+losI two sons with the o-eration of the canteen.# The termination of
the concession contract ca,sed the termination of the res-ondentsI
em-loyment% -rom-ting them to Ale a com-laint for illegal dismissal% with
money claims
3SSUBS*
The -ro-riety of the -etition for review on certiorari raising only 8,estions
of fact and not of law as re8,ired +y R,le @# of the R,les of Co,rt.
2?N BB0BR e7ist
2?N the free +oard and lodging S3/ f,rnished the em-loyees cannot
o-erate as a set0oJ for the ,nder-ayment of their wages.
=BLD*
.< 2hile it is the general r,le that the Co,rt may not review fact,al
Andings of the C&% we deem it -ro-er to de-art from the r,le and e7amine
the facts of the case in view of the conTicting fact,al Andings of the la+or
ar+iter% on one hand% and the NLRC and the C&% on the other. 2e now
consider the merits of the case.
(.< The em-loyer0em-loyee relationshi- iss,e
2hen res-ondents were -revented from entering the -remises as a res,lt
of the termination of their concession% they sent a -rotest letter dated &-ril
@% ($$@ to G5/C thr, their co,nsel. /ertinent -ortion of the letter*
Last 5arch (% ($$@% witho,t any co,rt writ or order% and with the aid of
yo,r armed agents% yo, -hysically +arred o,r clients U their
em-loyees>hel-ers from entering the said -remises and from -erforming
their ,s,al d,ties of serving the food re8,irements of GS3S -ersonnel and
others.
Clearly% no less than res-ondents% thr, their co,nsel% admitted that
com-lainants herein were their em-loyees.
That com-lainants were em-loyees of res-ondents is f,rther +olstered +y
the fact that res-ondents do not deny that they were the ones who -aid
com-lainants salary. 2hen com-lainants charged them of ,nder-ayment%
res-ondents even inter-osed the defense of Ale ;sic< +oard and lodging
given to com-lainants.
The C& r,led o,t S3/Is claim that it was a la+or0only contractor or a mere
agent of G5/C. 2e agree with the C&D S3/ and its -ro-rietors co,ld not +e
considered as mere agents of G5/C +eca,se they e7ercised the essential
elements of an em-loyment relationshi- with the res-ondents s,ch as
hiring% -ayment of wages and the -ower of control% not to mention that S3/
o-erated the canteen on its own acco,nt as it -aid a fee for the ,se of the
+,ilding and for the -rivilege of r,nning the canteen. The fact that the
res-ondents a--lied with G5/C in )e+r,ary ($$@ when it terminated its
contract with S3/% is another clear indication that the two entities were
se-arate and distinct from each other. 2e th,s see no reason to dist,r+ the
C&Is Andings.
:.< The res-ondentsIs money claims
The free +oard and lodging S3/ f,rnished the em-loyees cannot o-erate as
a set0oJ for the ,nder-ayment of their wages. 2e held in 5a+eRa v.
National La+or Relations Commission# that the em-loyer cannot sim-ly
ded,ct from the em-loyeeIs wages the val,e of the +oard and lodging
witho,t satisfying the following re8,irements* ;< -roof that s,ch facilities
are c,stomarily f,rnished +y the tradeD ;(< vol,ntary acce-tance in writing
+y the em-loyees of the ded,cti+le facilitiesD and ;:< -roof of the fair and
reasona+le val,e of the facilities charged. 3t is clear from the records that
S3/ failed to com-ly with these re8,irements.
SLL VS NLRC
5&RC= (% ($
)&CTS*
/rivate res-ondents Roldan Lo-eR ;Lo-eR for +revity< and Danilo CaVete
;CaVete for +revity<% and Bdgardo W,Viga ;W,Viga for +revity< res-ectively%
were hired +y -etitioner Lagon in several -roCect for the com-any the last
+eing the /LDT &nti-olo% RiRal -roCect. )or this -roCect% W,Viga and CaVete
$ F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
received only the wage of /@#.$$ daily. The minim,m -rescri+ed wage for
RiRal at that time was /!$.$$.
Delay in the arrival of the im-orted materials from ),r,1awa Cor-oration
the com-any c,t down on overtime wor1 and -rom-ted that anyone who
insists on doing overtime wor1 wo,ld have to go home witho,t -ay from
the com-any. These -rom-ted res-ondents to go home to Ce+, and their
Aled a case for non -ayment of minim,m wage and illegal dismissal against
-etitioner.
3SSUB*
2?N allowances given +y -etitioner forms -art of the wage of res-ondents.
RUL3NG*
3n an illegal dismissal case against the -etitioner em-loyer% res-ondent
em-loyees alleged that they were ,nder-aid. 3n their defence% -etitioner
em-loyer alleged that res-ondent em-loyees act,ally received wages
higher than the -rescri+ed minim,m. The co,rt r,led that as a general r,le%
a -arty who alleged -ayment of wages as a defence has the +,rden of
-roving it. 3n la+or cases the +,rden of -roving monetary claims rest with
the em-loyer +eca,se the -ertinent -ersonnel Ales% -ayrolls % records and
other doc,ments are with the e7cl,sive control and -ossession of the
em-loyer. 3n the given case -etioner aside from +are allegation failed to
show evidences of -ayment of wages higher than the -rescri+ed minim,m.
/etitioner also alleged that the facilities they -rovided sho,ld +e incl,ded
in the com-,tation of wages. The co,rt r,led that +efore the val,e of
facilities can +e ded,cted from the em-loyeesI wages% the following
re8,isites m,st all +e attendant* Arst% -roof m,st +e shown that s,ch
facilities are c,stomarily f,rnished +y the tradeD second% the -rovision of
ded,cti+le facilities m,st +e vol,ntarily acce-ted in writing +y the
em-loyeeD and Anally% facilities m,st +e charged at reasona+le val,e. 5ere
availment is not s,9cient to allow ded,ctions from the em-loyees wages.
These re8,irements has not +een met in this case.
2herefore% the -etition is denied.
PEOPLE"S BROADCASTING SERVICE #BOMBO RADYO PHILS., INC.$,
VS. THE SECRETARY OF THE DEPARTMENT OF LABOR AND
EMPLOYMENT ET AL.,
G.R. No. P"!#(% 5arch !% ($(
)&CTS*
.andeleon .,eRan Aled a com-laint against /eo-leIs Broadcasting Service
for illegal ded,ction% non0-ayment of service incentive leave% :th month
-ay% -remi,m -ay for holiday and rest day and illegal dimin,tion of
+eneAts% delayed -ayment of wages and non0coverage of SSS% /&G03B3G
and /hilhealth +efore the De-artment of La+or and Bm-loyment Regional
?9ce. ?n the +asis of the com-laint% the D?LB cond,cted a -lant level
ins-ection. D,ring the ins-ection% /BS denied em-loyee0em-loyer
relationshi- with .,eRan. 3n the 3ns-ection Re-ort )orm% the La+or 3ns-ector
wrote non0dimin,tion of +eneAts. /BS was re8,ired to rectify the violations
within Ave days from recei-t% +,t there was no rectiAcation eJected. Th,s%
s,mmary investigations were cond,cted.
The D?LB Regional Director r,led that .,eRan was an em-loyee of /BS% and
was entitled to his money claims. /BS so,ght reconsideration of the
DirectorIs ?rder% +,t failed. The &cting D?LB Secretary dismissed /BSI
a--eal on the gro,nd that it s,+mitted a Deed of &ssignment of Ban1
De-osit instead of -osting a cash or s,rety +ond.
2hen the matter was +ro,ght +efore the C&% where /BS claimed that it had
+een denied d,e -rocess% it was held that it was accorded d,e -rocess as it
had +een given the o--ort,nity to +e heard% and that the D?LB Secretary
had C,risdiction over the matter% as the C,risdictional limitation im-osed +y
&rticle (" of the La+or Code on the -ower of the D?LB Secretary ,nder
&rt. (';+< of the Code had +een re-ealed +y Re-,+lic &ct No. PP:$.
3SSUBS*
2hat is the e7tent of the D?LBIs visitorial and enforcement -ower ,nder
the La+or Code% as amendedL
5ay the D?LB ma1e a determination of whether or not an em-loyer0
em-loyee relationshi- e7ists% and if so% to what e7tentL
RUL3NG*
Under &rt. (" of the La+or Code% the -ower of the D?LB and its d,ly
a,thoriRed hearing o9cers to hear and decide any matter involving the
recovery of wages and other monetary claims and +eneAts was 8,aliAed +y
the -roviso that the com-laint not incl,de a claim for reinstatement% or that
the aggregate money claims not e7ceed /h/ #%$$$. R& PP:$% or an &ct
F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
),rther Strengthening the 4isitorial and Bnforcement /owers of the
Secretary of La+or% did away with the /h/ #%$$$ limitation% allowing the
D?LB Secretary to e7ercise its visitorial and enforcement -ower for claims
+eyond /h/ #%$$$. The only 8,aliAcation to this e7-anded -ower of the
D?LB was only that there still +e an e7isting em-loyer0em-loyee
relationshi-.
No limitation in the law was -laced ,-on the -ower of the D?LB to
determine the e7istence of an em-loyer0em-loyee relationshi-. No
-roced,re was laid down where the D?LB wo,ld only ma1e a -reliminary
Anding% that the -ower was -rimarily held +y the NLRC. The law did not say
that the D?LB wo,ld Arst see1 the NLRCIs determination of the e7istence of
an em-loyer0em-loyee relationshi-% or that sho,ld the e7istence of the
em-loyer0em-loyee relationshi- +e dis-,ted% the D?LB wo,ld refer the
matter to the NLRC. The D?LB m,st have the -ower to determine whether
or not an em-loyer0em-loyee relationshi- e7ists% and from there to decide
whether or not to iss,e com-liance orders in accordance with &rt. (';+< of
the La+or Code% as amended +y R& PP:$.
The D?LB% in determining the e7istence of an em-loyer0em-loyee
relationshi-% has a ready set of g,idelines to follow% the same g,ide the
co,rts themselves ,se. The elements to determine the e7istence of an
em-loyment relationshi- are* ;< the selection and engagement of the
em-loyeeD ;(< the -ayment of wagesD ;:< the -ower of dismissalD ;@< the
em-loyerIs -ower to control the em-loyeeIs cond,ct. The ,se of this test is
not solely limited to the NLRC. The D?LB Secretary% or his or her
re-resentatives% can ,tiliRe the same test% even in the co,rse of ins-ection%
ma1ing ,se of the same evidence that wo,ld have +een -resented +efore
the NLRC.
The determination of the e7istence of an em-loyer0em-loyee relationshi-
+y the D?LB m,st +e res-ected. The e7-anded visitorial and enforcement
-ower of the D?LB granted +y R& PP:$ wo,ld +e rendered n,gatory if the
alleged em-loyer co,ld% +y the sim-le e7-edient of dis-,ting the em-loyer0
em-loyee relationshi-% force the referral of the matter to the NLRC. The
Co,rt iss,ed the declaration that at least a -rima facie showing of the
a+sence of an em-loyer0em-loyee relationshi- +e made to o,st the D?LB
of C,risdiction. B,t it is -recisely the D?LB that will +e faced with that
evidence% and it is the D?LB that will weigh it% to see if the same does
s,ccessf,lly ref,te the e7istence of an em-loyer0em-loyee relationshi-.
3f the D?LB ma1es a Anding that there is an e7isting em-loyer0em-loyee
relationshi-% it ta1es cogniRance of the matter% to the e7cl,sion of the
NLRC. The D?LB wo,ld have no C,risdiction only if the em-loyer0em-loyee
relationshi- has already +een terminated% or it a--ears% ,-on review% that
no em-loyer0em-loyee relationshi- e7isted in the Arst -lace.
The Co,rt% in limiting the -ower of the D?LB% gave the rationale that s,ch
limitation wo,ld eliminate the -ros-ect of com-eting concl,sions +etween
the D?LB and the NLRC. The -ros-ect of com-eting concl,sions co,ld C,st
as well have +een eliminated +y according res-ect to the D?LB Andings% to
the e7cl,sion of the NLRC% and this 2e +elieve is the more -r,dent co,rse
of action to ta1e. This is not to say that the determination +y the D?LB is
+eyond 8,estion or review. S,9ce it to say% there are C,dicial remedies
s,ch as a -etition for certiorari ,nder R,le !# that may +e availed of%
sho,ld a -arty wish to dis-,te the Andings of the D?LB.
3t m,st also +e remem+ered that the -ower of the D?LB to determine the
e7istence of an em-loyer0em-loyee relationshi- need not necessarily res,lt
in an a9rmative Anding. The D?LB may well ma1e the determination that
no em-loyer0em-loyee relationshi- e7ists% th,s divesting itself of
C,risdiction over the case. 3t m,st not +e -recl,ded from +eing a+le to
reach its own concl,sions% not +y the -arties% and certainly not +y this
Co,rt.
Under &rt. (';+< of the La+or Code% as amended +y R& PP:$% the D?LB is
f,lly em-owered to ma1e a determination as to the e7istence of an
em-loyer0em-loyee relationshi- in the e7ercise of its visitorial and
enforcement -ower% s,+Cect to C,dicial review% not review +y the NLRC.
There is a view that des-ite &rt. (';+< of the La+or Code% as amended +y
R& PP:$% there is still a threshold amo,nt set +y &rts. (" and (P of the
La+or Code when money claims are involved% i.e.% that if it is for /h/ #%$$$
and +elow% the C,risdiction is with the regional director of the D?LB% ,nder
&rt. ("% and if the amo,nt involved e7ceeds /h/ #%$$$% the C,risdiction is
with the la+or ar+iter% ,nder &rt. (P. The view states that des-ite the
wording of &rt. (';+<% this wo,ld only a--ly in the co,rse of reg,lar
ins-ections ,nderta1en +y the D?LB% as diJerentiated from cases ,nder
&rts. (" and (P% which originate from com-laints. There are several
cases% however% where the Co,rt has r,led that &rt. (';+< has +een
amended to e7-and the -owers of the D?LB Secretary and his d,ly
a,thoriRed re-resentatives +y R& PP:$. 3n these cases% the Co,rt resolved
( F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
that the D?LB had the C,risdiction% des-ite the amo,nt of the money claims
involved. ),rthermore% in these cases% the ins-ection held +y the D?LB
regional director was -rom-ted s-eciAcally +y a com-laint. Therefore% the
initiation of a case thro,gh a com-laint does not divest the D?LB Secretary
or his d,ly a,thoriRed re-resentative of C,risdiction ,nder &rt. (';+<.
To reca-it,late% if a com-laint is +ro,ght +efore the D?LB to give eJect to
the la+or standards -rovisions of the La+or Code or other la+or legislation%
and there is a Anding +y the D?LB that there is an e7isting em-loyer0
em-loyee relationshi-% the D?LB e7ercises C,risdiction to the e7cl,sion of
the NLRC. 3f the D?LB Ands that there is no em-loyer0em-loyee
relationshi-% the C,risdiction is -ro-erly with the NLRC. 3f a com-laint is Aled
with the D?LB% and it is accom-anied +y a claim for reinstatement% the
C,risdiction is -ro-erly with the La+or &r+iter% ,nder &rt. (P;:< of the La+or
Code% which -rovides that the La+or &r+iter has original and e7cl,sive
C,risdiction over those cases involving wages% rates of -ay% ho,rs of wor1%
and other terms and conditions of em-loyment% if accom-anied +y a claim
for reinstatement. 3f a com-laint is Aled with the NLRC% and there is still an
e7isting em-loyer0em-loyee relationshi-% the C,risdiction is -ro-erly with
the D?LB. The Andings of the D?LB% however% may still +e 8,estioned
thro,gh a -etition for certiorari ,nder R,le !# of the R,les of Co,rt.
3n the -resent case% the Anding of the D?LB Regional Director that there
was an em-loyer0em-loyee relationshi- has +een s,+Cected to review +y
this Co,rt% with the Anding +eing that there was no em-loyer0em-loyee
relationshi- +etween -etitioner and -rivate res-ondent% +ased on the
evidence -resented.
/rivate res-ondent -resented self0serving allegations as well as self0
defeating evidence. The Andings of the Regional Director were not +ased
on s,+stantial evidence% and -rivate res-ondent failed to -rove the
e7istence of an em-loyer0em-loyee relationshi-. The D?LB had no
C,risdiction over the case% as there was no em-loyer0em-loyee relationshi-
-resent. Th,s% the dismissal of the com-laint against -etitioner is -ro-er.
SUPERIOR PACKAGING V. BALAGSAY
GR N?. P'"$"% ?CT?BBR $% ($(
)&CTS*
The -etitioner engaged the services of Lancer to -rovide reliever services
to its +,siness% which involves the man,fact,re and sale of commercial and
ind,strial corr,gated +o7es. /,rs,ant to a com-laint Aled +y the
res-ondents against the -etitioner and its /resident% Cesar L,R ;L,R<% for
,nder-ayment of wages% non0 -ayment of -remi,m -ay for wor1ed rest%
overtime -ay and non0-ayment of salary% the De-artment of La+or and
Bm-loyment ;D?LB< cond,cted an ins-ection of the -etitionerIs -remises
and fo,nd several violations. D?LB% in this case% in the e7ercise of the its
visitorial and enforcement -ower% determined em-loyer0em-loyee
relationshi-.
3SSUB*
2?N D?LB has the a,thority to ma1e a Anding of an em-loyer0em-loyee
relationshi- concomitant to its visitorial and enforcement -ower
RUL3NG*
Ses. &t any rate% s,ch arg,ment lac1s merit. The D?LB clearly acted within
its a,thority when it determined the e7istence of an em-loyer0 em-loyee
relationshi- +etween the -etitioner and res-ondents as it falls within the
-,rview of its visitorial and enforcement -ower ,nder &rticle (';+< of the
La+or Code% which -rovides*
Notwithstanding the -rovisions of &rticles (" and (P of this Code to
the contrary% and in cases where the relationshi- of em-loyer0em-loyee
still e7ists% the Secretary of La+or and Bm-loyment or his d,ly
a,thoriRed re-resentatives shall have the -ower to iss,e com-liance
orders to give eJect to the la+or standards -rovisions of this Code and
other la+or legislation +ased on the Andings of la+or em-loyment and
enforcement o9cers or ind,strial safety engineers made in the co,rse
of ins-ection. The Secretary or his d,ly a,thoriRed re-resentative shall
iss,e writs of e7ec,tion to the a--ro-riate a,thority for the enforcement
of their orders% e7ce-t in cases where the em-loyer contests the
Andings of the la+or em-loyment and enforcement o9cer and raises
iss,es s,--orted +y doc,mentary -roofs which were not considered in
the co,rse of ins-ection.
3n /eo-leIs Broadcasting ;Bom+o Radyo /hils.% 3nc.< v. Secretary of the
De-artment of La+or and Bm-loyment% the Co,rt stated that it can +e
ass,med that the D?LB in the e7ercise of its visitorial and enforcement
-ower somehow has to ma1e a determination of the e7istence of an
em-loyer0em-loyee relationshi-. S,ch determination% however% is merely
-reliminary% incidental and collateral to the D?LBIs -rimary f,nction of
enforcing la+or standards -rovisions. S,ch -ower was f,rther e7-lained
: F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
recently +y the Co,rt in its Resol,tion dated 5arch !% ($( iss,ed in
/eo-leIs Broadcasting% viR*
The determination of the e7istence of an em-loyer0em-loyee
relationshi- +y the D?LB m,st +e res-ected. The e7-anded visitorial
and enforcement -ower of the D?LB granted +y R& PP:$ wo,ld +e
rendered n,gatory if the alleged em-loyer co,ld% +y the sim-le
e7-edient of dis-,ting the em-loyer0em-loyee relationshi-% force the
referral of the matter to the NLRC. The Co,rt iss,ed the declaration that
at least a -rima facie showing of the a+sence of an em-loyer0em-loyee
relationshi- +e made to o,st the D?LB of C,risdiction. B,t it is -recisely
the D?LB that will +e faced with that evidence% and it is the D?LB that
will weigh it% to see if the same does s,ccessf,lly ref,te the e7istence of
an em-loyer0 em-loyee relationshi-.
7777
7 7 7 MTNhe -ower of the D?LB to determine the e7istence of an
em-loyer0em-loyee relationshi- need not necessarily res,lt in an
a9rmative Anding. The D?LB may well ma1e the determination that no
em-loyer0em-loyee relationshi- e7ists% th,s divesting itself of
C,risdiction over the case. 3t m,st not +e -recl,ded from +eing a+le to
reach its own concl,sions% not +y the -arties% and certainly not +y this
Co,rt.
Under &rt. (';+< of the La+or Code% as amended +y R& PP:$% the D?LB
is f,lly em-owered to ma1e a determination as to the e7istence of an
em-loyer0em-loyee relationshi- in the e7ercise of its visitorial and
enforcement -ower% s,+Cect to C,dicial review% not review +y the NLRC.
&lso% the e7istence of an em-loyer0em-loyee relationshi- is ,ltimately a
8,estion of fact. The determination made in this case +y the D?LB% al+eit
-rovisional% and as a9rmed +y the Secretary of D?LB and the C& is +eyond
the am+it of a -etition for review on certiorari.
VII. WAGE PROTECTION PROVISIONS
KIMBERLY%CLARK PHILIPPINES, INC. vs. DIMAYUGA
G.R. N?. PPP$#% SB/TB5BBR '% ($$"
)&CTS*
Nora% Rosemarie and 5aricar were em-loyees of Xim+erly0Clar1 /hili--ines%
3nc. ;-etitioner<. ?n Se-tem+er "% ($$(% Nora tendered her resignation
eJective ?cto+er (% ($$(. ?n ?cto+er P% ($$(% Rosemarie tendered her
resignation% also eJective ?cto+er (% ($$(.
&s -etitioner had +een e7-eriencing a downward trend in its sales% it
created a ta70free early retirement -ac1age for its em-loyees as a cost0
c,tting and streamlining meas,re. Twenty0fo,r of its em-loyees availed of
the oJer that was made availa+le from Novem+er $0:$% ($$(. Des-ite
their resignation +efore the early retirement -ac1age was oJered% Nora and
Rosemarie -leaded with -etitioner that they +e retroactively e7tended the
+eneAts there,nder% to which -etitioner acceded. =ence% Nora received a
total of /%$(#%:.P: while Rosemarie received a total of /%$$!%@":."@%
in consideration of which they e7ec,ted release and 8,itclaim deeds dated
.an,ary P% ($$: and .an,ary !% ($$:% res-ectively.
?n Novem+er @% ($$(% 5aricar tendered her resignation eJective
Decem+er % ($$(% citing career advancement as the reason therefor. &s at
the time of her resignation the early retirement -ac1age was still eJective%
she received a total of /#(:%#@$.: for which she signed a release and
8,itclaim.
?n Novem+er ('% ($$(% -etitioner anno,nced that in lie, of the merit
increase which it did not give that year% it wo,ld -rovide economic
assistance% to +e released the following day% to all monthly0-aid em-loyees
on reg,lar stat,s as of Novem+er !% ($$(. Still later or on .an,ary !%
($$:% -etitioner anno,nced that it wo,ld grant a l,m- s,m retirement -ay
in the amo,nt of/($$%$$$% in addition to the early retirement -ac1age
+eneAt% to those who signed ,- for early retirement and who wo,ld sign ,-
,ntil .an,ary ((% ($$:.
3SSUBS*
2hether or not the res-ondents are entitled to the l,m- s,m retirement
-ay of /($$%$$$% 5aricar to the early retirement -ac1age and% Nora and
Rosemarie to the economic assistance
2hether or not the release and 8,itclaim deeds are valid
RUL3NG*
They are not entitled to these +eneAts.
Lump sum Retirement Pay
3t is settled that entitlement of em-loyees to retirement +eneAts m,st
s-eciAcally +e granted ,nder e7isting laws% a collective +argaining
@ F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
agreement or em-loyment contract% or an esta+lished em-loyer -olicy. No
law or collective +argaining agreement or other a--lica+le contract% or an
esta+lished com-any -olicy was e7isting d,ring res-ondentsI em-loyment
entitling them to the/($$%$$$ l,m-0s,m retirement -ay. /etitioner was not
th,s o+liged to grant them s,ch -ay. Res-ondents nevertheless arg,e that
since other em-loyees who resigned +efore the anno,ncement of the grant
of the l,m- s,m retirement -ay received the same% they ;res-ondents<
sho,ld also receive it. 3n the -resent case% Nora and Rosemarie resigned
-rior to -etitionerIs oJer of the l,m- s,m retirement -ay as an incentive to
those em-loyees who wo,ld vol,ntarily avail of its early retirement scheme
as a cost0c,tting and streamlining meas,re. That res-ondents resigned%
and not retrenched% is clear from their res-ective letters to -etitioner. &nd
nowhere in the letters is there any allegation that they resigned in view of
the com-anyIs downward trend in sales which necessitated downsiRing or
streamlining. &s for 5aricarIs claim to the l,m- s,m retirement -ay% the
Co,rt Ands that% li1e Nora and Rosemarie% she is not entitled to it. &ltho,gh
the incentive was oJered when she was still connected with -etitioner% she
resigned from em-loyment% citing career advancement as the reason
therefor. 3nd,+ita+ly% the incentive was addressed to those em-loyees
who% witho,t -rior -lans of resigning% o-ted to terminate their em-loyment
in light of the downsiRing +eing ,nderta1en +y -etitioner. 3n other words%
5aricar resigned from -etitioner in order to And gainf,l em-loyment
elsewhere a reason which has no +earing on the Anancial via+ility of
-etitioner.
Early Retirement Package
/etitionerIs claim that it allowed Nora and Rosemarie to avail of the early
retirement -ac1age des-ite their -revio,s se-aration from the com-any
o,t of -,re generosity is well0ta1en in light of NoraIs letter of Se-tem+er
#% ($$( as1ing if she co,ld avail of the early retirement -ac1age as Kit
wo,ld certainly +e of great assistance to ,s Anancially.O 3t is th,s a+s,rd to
fa,lt -etitioner for acceding to s,ch a re8,est o,t of com-assion +y
directing it to -ay additional +eneAts to resigned em-loyees who are not
entitled thereto. /etitionerIs decision to e7tend the +eneAt to some former
em-loyees who had already resigned +efore the oJer of the l,m- s,m -ay
incentive was th,s an act of generosity which it is not o+liged to e7tend to
res-ondents. &-ro-os is this Co,rtIs r,ling in B,sinessday*
2ith regard to the -rivate res-ondentsI claim for the mid0year +on,s% it is
settled doctrine that the grant of a +on,s is a -rerogative% not an
o+ligation% of the em-loyer. The matter of giving a +on,s over and a+ove
the wor1erIs lawf,l salaries and allowances is entirely de-endent on the
Anancial ca-a+ility of the em-loyer to give it. The fact that the com-anyIs
+,siness was no longer -roAta+le ;it was in fact mori+,nd< -l,s the fact
that the -rivate res-ondents did not wor1 ,- to the middle of the year
;they were discharged in 5ay ""'< were valid reasons for not granting
them a mid0year +on,s. Re8,iring the com-any to -ay a mid0year +on,s to
them also wo,ld in eJect -enaliRe the com-any for its generosity to those
wor1ers who remained with the com-any Ktill the endO of its days.
Economic Assistance
Neither are Nora and Rosemarie entitled to the economic assistance which
-etitioner awarded to Kall monthly em-loyees who are ,nder reg,lar stat,s
as of Novem+er !% ($$(%O they having resigned earlier or on ?cto+er (%
($$(. The Co,rt Ands that the economic assistance was a +on,sover and
a+ove the em-loyeesI salaries and allowances. The grant of economic
assistance to all monthly em-loyees ,nder reg,lar stat,s as of Novem+er
!% ($$( was th,s well within -etitionerIs -rerogatives. 5oreover%
-etitionerIs decision to give economic assistance was arrived at more than
a month after res-ondentsI resignation and% therefore% it was a +eneAt not
yet e7isting at the time of their se-aration. 3n any event% ass,ming that
Nora and Rosemarie are entitled to the economic assistance% they had
signed release and 8,itclaim deeds ,-on their resignation in which they
waived.
The 8,itclaims are valid and +inding. 2hile 8,itclaims e7ec,ted +y
em-loyees are commonly frowned ,-on as +eing contrary to -,+lic -olicy
and are ineJective to +ar claims for the f,ll meas,re of their legal rights%
where the -erson ma1ing the waiver has done so vol,ntarily% with a f,ll
,nderstanding thereof% and the consideration for the 8,itclaim is credi+le
and reasona+le% the transaction m,st +e recogniRed as +eing a valid and
+inding ,nderta1ing. 3n the case at +ar% Nora and Rosemarie are
&cco,nting grad,ates. They have not alleged having +een com-elled to
sign the 8,itclaims% nor that the considerations thereof ;/%$(@%:.P: for
Nora and /!'(%P(.(@ for Rosemarie< are ,nconsciona+le.
LEPANTO CERAMICS V. LEPANTO CERAMICS EMPLOYEES ASSOC.
G.R. No. '$'!!% 5&RC= (% ($$
)&CTS*
# F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
/etitioner LC3 is a domestic cor-oration engaged -rimarily to man,fact,re%
ma1e% +,y and sell% on wholesale +asis% among others% tiles% mar+les%
mosaics and other similar -rod,ctsD while res-ondent LCB& is a legitimate
la+or organiRation d,ly registered with D?LB% which is the sole and
e7cl,sive +argaining agent of LC3.
3n Se-tem+er """% LC3 and LCB& entered into a CB& which -rovides for%
among others% the grant of a Christmas gift -ac1age>+on,s to the mem+ers
of the res-ondent &ssociation. The Christmas +on,s was one of the
en,merated Ee7isting +eneAt% -ractice of traditional rightsE which Eshall
remain in f,ll force and eJect.E 3n the s,cceeding years% """% ($$$ and
($$% the +on,s was not in cash. 3nstead% LC3 gave each of the mem+ers of
LCB& Tile Redem-tion CertiAcates e8,ivalent to /:%$$$.$$. The +on,s for
the year ($$( is the root of the -resent dis-,te% where LC3 gave a year0end
cash +eneAt of !$$ and oJered a cash advance to interested em-loyees
e8,ivalent to one ;< month salary -aya+le in one year. LC3 o+Cected to the
/!$$.$$ cash +eneAt and arg,ed that this was in violation of the CB&.
LCB& insisted that it has +een the traditional -ractice of the com-any to
grant its mem+ers Christmas +on,ses d,ring the end of the calendar year%
each in the amo,nt of /:%$$$.$$% while LC3 arg,ed that the giving of e7tra
com-ensation was +ased on the com-any6s availa+le reso,rces for a given
year and the wor1ers are not entitled to a +on,s if the com-any does not
ma1e -roAts% th,s a management -rerogative.
3SSUB*
3s LC3 o+liged to give the mem+ers of the LCB& a Christmas +on,s in the
amo,nt of /:%$$$.$$ in ($$(L
RUL3NG*
The -etition was denied.
By deAnition% a E+on,sE is a grat,ity or act of li+erality of the giver. 3t is
something given in addition to what is ordinarily received +y or strictly d,e
the reci-ient. & +on,s is granted and -aid to an em-loyee for his ind,stry
and loyalty which contri+,ted to the s,ccess of the em-loyer6s +,siness
and made -ossi+le the realiRation of -roAts. & +on,s is also granted +y an
enlightened em-loyer to s-,r the em-loyee to greater eJorts for the
s,ccess of the +,siness and realiRation of +igger -roAts.
Generally% a +on,s is not a demanda+le and enforcea+le o+ligation. )or a
+on,s to +e enforcea+le% it m,st have +een -romised +y the em-loyer and
e7-ressly agreed ,-on +y the -arties. Given that the +on,s in this case is
integrated in the CB&% the same -arta1es the nat,re of a demanda+le
o+ligation. 4erily% +y virt,e of its incor-oration in the CB&% the Christmas
+on,s d,e to LCB& has +ecome more than C,st an act of generosity on the
-art of the -etitioner +,t a contract,al o+ligation it has ,nderta1en.
3t is a familiar and f,ndamental doctrine in la+or law that the CB& is the law
+etween the -arties and they are o+liged to com-ly with its -rovisions. This
-rinci-le stands strong and tr,e in the case at +ar.
& reading of the -rovision of the CB& reveals that the same -rovides for the
giving of a EChristmas gift -ac1age>+on,sE witho,t 8,aliAcation. Terse and
clear% the said -rovision did not state that the Christmas -ac1age shall +e
made to de-end on the -etitioner6s Anancial standing. 3f the -arties
intended that the /:%$$$.$$ +on,s wo,ld +e de-endent on the com-any
earnings% s,ch intention sho,ld have +een e7-ressed in the CB&.
3t is noteworthy that LC3 cannot insist on +,siness losses as a +asis for
disregarding its ,nderta1ing% +eca,se it still granted in ""'0($$ the
:%$$$ +on,s des-ite the imminence and -ossi+ility of +,siness losses
owing to the ""P Anancial crisis.
The r,le is settled that any +eneAt and s,--lement +eing enCoyed +y the
em-loyees cannot +e red,ced% diminished% discontin,ed or eliminated +y
the em-loyer. The -rinci-le of non0dimin,tion of +eneAts is fo,nded on the
constit,tional mandate to -rotect the rights of wor1ers and to -romote
their welfare and to aJord la+or f,ll -rotection.
SHS PERFORATED VS. DIA&
GR No. '#'@D ?cto+er :% ($$
)&CTS*
/etitioner S=S /erforated 5aterials% 3nc. (SHS) is a start0,- cor-oration
organiRed and e7isting ,nder the laws of the Re-,+lic of the /hili--ines and
registered with the /hili--ine Bconomic Wone &,thority. /etitioners%
2infried =artmannshenn (Hartmannshenn) is the /resident of S=S while
=inrich .ohann Sch,macher (Schumacher) is the treas,rer and one of the
+oard directors.
! F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
5an,el ). DiaR ;res-ondent< was hired +y -etitioner S=S as 5anager for
B,siness Develo-ment.

& series of events occ,rred which led to the termination of em-loyment of
res-ondent. Res-ondent tendered his resignation. /etitioners averred that
res-ondent was ,na+le to give a -ro-er e7-lanation for his +ehavior.
=artmannshenn then acce-ted res-ondentIs resignation and informed him
that his salary wo,ld +e released ,-on e7-lanation of his fail,re to re-ort to
wor1% and -roof that he did% in fact% wor1 for the -eriod in 8,estion.
Res-ondent sent =artmannshenn and Sch,macher an electronic mail
message a--ealing for the release of his salary. &nother demand letter for
res-ondentIs accr,ed salary for Novem+er ! to Novem+er :$% ($$#% :
th
month -ay% moral and e7em-lary damages% and attorneyIs fees was sent
on Decem+er (% ($$#.
?n Decem+er "% ($$#% res-ondent Aled a Com-laintagainst the -etitioners
for illegal dismissalD non0-ayment of salaries>wages and :
th
month -ay
with -rayer for reinstatement and f,ll +ac1wagesD e7em-lary damages% and
attorneyIs fees% costs of s,it% and legal interest.
/etitioners contend that withholding res-ondentIs salary from Novem+er !
to Novem+er :$% ($$#% was C,stiAed +eca,se res-ondent was a+sent and
did not show ,- for wor1 d,ring that -eriod. =e also failed to acco,nt for
his wherea+o,ts and wor1 accom-lishments d,ring said -eriod. 2hen there
is an iss,e as to whether an em-loyee has% in fact% wor1ed and is entitled
to his salary% it is within management -rerogative to tem-orarily withhold
an em-loyeeIs salary>wages -ending determination of whether or not s,ch
em-loyee did indeed wor1.

3SSUB*
2hether or not the withholding of res-ondentIs salary is valid.
RUL3NG*
2e disagree with -etitioners.

5anagement -rerogative refers Kto the right of an em-loyer to reg,late all
as-ects of em-loyment% s,ch as the freedom to -rescri+e wor1
assignments% wor1ing methods% -rocesses to +e followed% reg,lation
regarding transfer of em-loyees% s,-ervision of their wor1% lay0oJ and
disci-line% and dismissal and recall of wor1.O &ltho,gh management
-rerogative refers to Kthe right to reg,late all as-ects of em-loyment%O it
cannot +e ,nderstood to incl,de the right to tem-orarily withhold
salary>wages witho,t the consent of the em-loyee. To sanction s,ch an
inter-retation wo,ld +e contrary to &rticle ! of the La+or Code% which
-rovides*

&RT. !.Withholding of wages and kickacks prohiited! 3t shall +e
,nlawf,l for any -erson% directly or indirectly% to withhold any amo,nt from
the wages of a wor1er or ind,ce him to give ,- any -art of his wages +y
force% stealth% intimidation% threat or +y any other means whatsoever
witho,t the wor1erIs consent.

&ny withholding of an em-loyeeIs wages +y an em-loyer may only +e
allowed in the form of wage ded,ctions ,nder the circ,mstances -rovided
in &rticle : of the La+or Code% as set forth +elow*

&RT. :.Wage "eduction! No em-loyer% in his own +ehalf or in +ehalf of
any -erson% shall ma1e any ded,ction from the wages of his em-loyees%
e7ce-t*

;a< 3n cases where the wor1er is ins,red with his consent +y the em-loyer%
and the ded,ction is to recom-ense the em-loyer for the amo,nt -aid +y
him as -remi,m on the ins,ranceD
;+< )or ,nion d,es% in cases where the right of the wor1er or his ,nion to
chec10oJ has +een recogniRed +y the em-loyer or a,thoriRed in writing +y
the individ,al wor1er concernedD and
;c< 3n cases where the em-loyer is a,thoriRed +y law or reg,lations iss,ed
+y the Secretary of La+or.

&s correctly -ointed o,t +y the L&% Ka+sent a showing that the withholding
of com-lainantIs wages falls ,nder the e7ce-tions -rovided in &rticle :%
the withholding thereof is th,s ,nlawf,l.O

&ltho,gh it cannot +e determined with certainty whether res-ondent
wor1ed for the entire -eriod from Novem+er ! to Novem+er :$% ($$#% the
consistent r,le is that if do,+t e7ists +etween the evidence -resented +y
the em-loyer and that +y the em-loyee% the scales of C,stice m,st +e tilted
in favor of the latter in line with the -olicy mandated +y &rticles ( and : of
the La+or Code to aJord -rotection to la+or and constr,e do,+ts in favor of
la+or. )or -etitionersI fail,re to satisfy their +,rden of -roof% res-ondent is
-res,med to have wor1ed d,ring the -eriod in 8,estion and is% accordingly%
P F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
entitled to his salary. Therefore% the withholding of res-ondentIs salary +y
-etitioners is contrary to &rticle ! of the La+or Code and% th,s% ,nlawf,l.
NINA EWELRY V. MONTECILLO
N?4B5BBR ('% ($
)&CTS*
?n &,g,st :% ($$@% NiVa .ewelry im-osed a -olicy for goldsmiths re8,iring
them to -ost cash +onds or de-osits in varying amo,nts +,t in no case
e7ceeding #Q of the latter6s salaries -er wee1. The de-osits were
intended to answer for any loss or damage which NiVa .ewelry may s,stain
+y reason of the goldsmiths6 fa,lt or negligence in handling the gold
entr,sted to them. The de-osits shall +e ret,rned ,-on com-letion of the
goldsmiths6 wor1 and after an acco,nting of the gold received.
Said res-ondents deAed same -olicy and were considered constr,ctively
dismissed +y the com-any% who only alleged that they sto--ed re-orting to
wor1. Res-ondents then Aled com-laint +,t same was dismissed +y the
La+or &r+iter% only awarding them their :th month -ay. They then
elevated their com-laint to the NLCR min,s the already0won :th month
-ay.
&--lying &rticle : and @ of the La+or Code% the C& r,led in favor and
awarding res-ondents. =ence this -etition for review
3SSUBS*
2hether or not the re8,irement of -osting cash +onds or have the same
ded,cted from the wor1erIs salaries is -ro-er.
=BLD*
N?. 2hile em-loyers sho,ld generally +e given leeways in their e7ercise of
management -rerogatives% we agree with the res-ondents and the C& that
in the case at +ar% the -etitioners had failed to -rove that their im-osition
of the new -olicy ,-on the goldsmiths ,nder NiVa .ewelry6s em-loy falls
,nder the e7ce-tions s-eciAed in &rticles : and @ of the La+or Code.
2hile the -etitioners are not a+sol,tely -recl,ded from im-osing the new
-olicy% they can only do so ,-on com-liance with the re8,irements of the
law. 3n other words% the -etitioners sho,ld Arst esta+lish that the ma1ing of
ded,ctions from the salaries is a,thoriRed +y law% or reg,lations iss,ed +y
the Secretary of La+or. ),rther% the -osting of cash +onds sho,ld +e -roven
as a recogniRed -ractice in the Cewelry man,fact,ring +,siness% or
alternatively% the -etitioners sho,ld see1 for the determination +y the
Secretary of La+or thro,gh the iss,ance of a--ro-riate r,les and
reg,lations that the -olicy the former see1s to im-lement is necessary or
desira+le in the cond,ct of +,siness. The -etitioners failed in this res-ect. 3t
+ears stressing that witho,t -roofs that re8,iring de-osits and eJecting
ded,ctions are recogniRed -ractices% or witho,t sec,ring the Secretary of
La+or6s determination of the necessity or desira+ility of the same% the
im-osition of new -olicies relative to ded,ctions and de-osits can +e made
s,+Cect to a+,se +y the em-loyers. This is not what the law intends.
VIII. PAYMENT OF WAGES
IX. CONDITIONS OF EMPLOYMENT
X. MINIMUM LABOR STANDARD BENEFITS
RADIO MINDANAO NETWORK, INC. AND ERIC S. CANOY VS.
DOMINGO &. YBAROLA, ET AL.
G.R. N?. "'!!(. SB/TB5BBR (% ($(
)&CTS*
Res-ondents Domingo W. S+arola% .r. and &lfonso B. Rivera% .r. were hired on
.,ne #% "PP and .,ne % "':% res-ectively% +y R5N. They event,ally
+ecame acco,nt managers% soliciting advertisements and servicing vario,s
clients of R5N.
=owever% the res-ondentsI services were terminated as a res,lt of R5NIs
reorganiRation>restr,ct,ringD they were given their se-aration -ay
/!:%(#$.$$ for S+arola% and /@'%(#$.$$ for Rivera. Sometime in ($$(%
they e7ec,ted release>8,itclaim a9davits.
DissatisAed with their se-aration -ay% the res-ondents Aled se-arate
com-laints ;which were later consolidated< against R5N and its /resident%
Bric S. Canoy% for illegal dismissal with several money claims% incl,ding
attorneyIs fees. They indicated that their monthly salary rates were
/!$%$$$.$$ for S+arola and /@$%$$$.$$ for Rivera.
' F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
La+or &r+iter /atricio Li+o0on dismissed the illegal dismissal com-laint% +,t
ordered the -ayment of additional se-aration -ay to the res-ondents
/@"$%$!!.$$ for S+arola and /@("%#P.## for Rivera.
?n a--eal +y the -etitioners to the National La+or Relations Commission
;NLRC<% the NLRC set aside the la+or ar+iterIs decision and dismissed the
com-laint for lac1 of merit. B,t the NLRC ,-held the validity of the
res-ondentsI 8,itclaim a9davits as they failed to show that they were
forced to e7ec,te the doc,ments.
)rom the NLRC% the res-ondents so,ght relief from the C& thro,gh a
-etition for certiorari ,nder R,le !# of the R,les of Co,rt. 3n its decision% the
C& granted the -etition and set aside the assailed NLRC dis-ositions.
3SSUBS*
Sho,ld the commissions earned +y the res-ondents +e incl,ded in the
com-,tation of their se-aration -ayL
2ere the 8,itclaims iss,ed +y the res-ondents invalidL
RUL3NG*
The Co,rt is not convinced with -etitioners claim that the commissions
were not -art of the salaries. 3f these commissions had +een really -roAt0
sharing +on,ses to the res-ondents% they sho,ld have received the same
amo,nts% yet% as the NLRC itself noted% S+arola and Rivera received
/:P(%P:. and /#'!%""'.#$ commissions% res-ectively% in($$(. The
variance in amo,nts the res-ondents received as commissions s,--orts
the C&Is Anding that the salary str,ct,re of the res-ondents was s,ch that
they only received a minimal amo,nt as g,aranteed wageD a greater -art
of their income was derived from the commissions they get from soliciting
advertisementsD these advertisements are the K-rod,ctsO they sell. &s the
C& a-tly noted% this 1ind of salary str,ct,re does not detract from the
character of the commissions +eing -art of the salary or wage -aid to the
em-loyees for services rendered to the com-any
2ith regards to the 8,itclaims% -etitionersI reliance on o,r r,ling in Talam v.
National La+orRelations Commission% regarding the K-ro-er a--reciation of
8,itclaims%Oas they -,t it% is mis-laced. 2hile Talam% in the cited case% and
S+arola and Rivera% in this case% are not ,nlettered em-loyees% their
sit,ations diJer in all other res-ects.
3n Talam% the em-loyee received a val,a+le consideration for his less than
two years of service with the com-anyD he was not shortchanged and no
essential ,nfairness too1 -lace. 3n the case at +ar% as the C& noted% the
se-aration -ay the res-ondents each received was deAcient +y at least
/@$$%$$$.$$D th,s% they were given only half of the amo,nt they were
legally entitled to. To +e s,re% a settlement ,nder these terms is not and
cannot +e a reasona+le one% given es-ecially the res-ondentsI length of
service (# years for S+arola and " years for Rivera. The C& was correct
when it o-ined that the res-ondents were in dire straits when they
e7ec,ted the release>8,itclaim a9davits. 2itho,t Co+s and with families to
s,--ort% they dallied in e7ec,ting the 8,itclaim instr,ment% +,t were
event,ally forced to sign given their circ,mstances.
XI. OTHER SPECIAL BENEFITS
XII. RIGHT TO SECURITY OF TENURE
ST. PAUL COLLEGE, !UE&ON CITY vs. ANCHETA II
G.R. No. !""$#% SB/TB5BBR P% ($
)&CTS*
/etitioner St. /a,l College% Y,eRon City ;S/CYC< is a -rivate Catholic
ed,cational instit,tion. 3t is re-resented +y its /resident% -etitioner Sr. Lilia
Therese Tolentino% S/C% the College Dean% Sr. Bernadette Racadio% S/C% and
the 5ass Comm,nication /rogram Director% Sr. Sarah 5ana-ol% S/C. The
res-ondents% S-o,ses Remigio 5ichael &. &ncheta 33 and Cynthia &.
&ncheta are former teachers of the same school.
Res-ondent Remigio 5ichael was hired +y the S/CYC as a teacher in the
General Bd,cation De-artment with a -ro+ationary ran1 in the School Sear
;SS< ""!0""P which was renewed in the following SS ""P0""'. =is wife%
res-ondent Cynthia was hired +y the same school as a -art time teacher of
the 5ass Comm,nication De-artment in the second semester of SS ""!0
""P and her a--ointment was renewed for SS ""P0""'.
?n )e+r,ary :% ""'% res-ondent Remigio 5ichael wrote a letter to
-etitioner Sr. Lilia% signifying his intention to renew his contract with S/CYC
for SS ""'0""". & letter of the same tenor was also written +y
res-ondent Cynthia addressed to -etitioner Sr. Lilia.
/etitioner Sr. Bernadette% on 5arch "% ""'% sent two letters with the same
contents to the res-ondent s-o,ses informing them that ,-on the
" F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
recommendation of the College Co,ncil% the school is e7tending to them
new contracts for SS ""'0""".
& letter dated &-ril ((% ""' was sent to -etitioner Sr. Bernadette and
signed +y some of the teachers of S/CYC% incl,ding the res-ondent
s-o,ses. The said letter contained the teachers6 sentiments regarding two
school -olicies% namely* Arst% the -olicy of -enaliRing the delay in encoding
Anal grades and% second% the -olicy of withholding salaries of the teachers.
5eanwhile% a letter dated &-ril (% ""' ;the date% later on contested +y
res-ondent Remigio 5ichael to +e ante0dated< was written +y -etitioner Sr.
Bernadette to res-ondent Remigio 5ichael% reiterating the conversation
that too1 -lace +etween them the day +efore the date of the said letter
;&-ril ($% ""'<. The letter en,merated the de-artmental and instr,ctional
-olicies that res-ondent Remigio 5ichael failed to com-ly with% s,ch as the
late s,+mission of Anal grades% fail,re to s,+mit Anal test 8,estions to the
/rogram Coordinator% the giving of tests in the essay form instead of the
m,lti-le choice format as mandated +y the school and the high n,m+er of
st,dents with failing grades in the classes that he handled.
Thereafter% -etitioner Sr. Bernadette wrote a letter dated &-ril :$% ""' to
-etitioner Sr. Lilia% endorsing the immediate termination of the teaching
services of the res-ondent s-o,ses on the following gro,nds*
. Non0com-liance with the de-artmental -olicy to s,+mit their Anal test
8,estions to their res-ective -rogram coordinators for
chec1ing>comments ;violating -ar. P.% -. !# of the )ac,lty 5an,al<.
(. Non0com-liance with the standard format ;m,lti-le choice< of Anal test
8,estions as agreed ,-on in the de-artment. 5r. &ncheta -re-ared
-,rely essay 8,estions for the st,dents.
:. )ail,re to encode their mod,lar grade re-orts as re8,ired ;violating
-ar. =. '% -. !! of o,r )ac,lty man,al<.
@. )ail,re to s,+mit and ,-date re8,ired mod,les ;sylla+i< of their s,+Cect
des-ite reminders ;violating D% .#% -. @$ of o,r )ac,lty 5an,al<.
#. Both s-o,ses have a gross n,m+er of fail,re in their class
!. )ail,re to re-ort to wor1 on time Zre* 5r. &ncheta[ ;violating -ar. %
(% -. !: of o,r )ac,lty 5an,al<.
P. Both s-o,ses are not o-en to s,ggestions to im-rove themselves as
teachers. They C,st see their -oints and their -rinci-les.
2hen 3 tal1ed to 5r. &ncheta the second time telling him of the data 3
gathered% incl,ding the information that statistics -ermits only to (Q
fail,res% he still ref,sed to +,dge in to review his grades and his 8,ality of
teaching. =e stood Arm in his conviction and gro,nd that the st,dents were
to +lame for their fail,res% and reiterated his disagreement with several
school -olicies ;which he violated< contained in his letter which he had
as1ed his wife to give to the dean6s o9ce. Not content on writing down his
-ersonal disagreement on some -olicies% he also as1ed some fac,lty
mem+ers to read his letter and -,t their signat,res on it if they were in
favor of one or all of his -oints.
3n other words% said s-o,ses had ref,sed and contin,e to ref,se to
eval,ate the st,dents6 -erformance on the +ases of an esta+lished grading
system to ens,re C,st and fair a--raisal ;violating -ar. .@% -. @$ of o,r
)ac,lty 5an,al<.
Res-ondent s-o,ses were given an o--ort,nity to comment on the a+ove
letter0recommendation of -etitioner Sr. Bernadette. ?n 5ay @% ""'%
res-ondent s-o,ses sent their res-ective comments to -etitioner Sr. Lilia.
S,+se8,ently% the res-ondent s-o,ses received their res-ective letters of
termination on 5ay @% ""'. Res-ondent s-o,ses sent a letter for
reconsideration to -etitioner Sr. Lilia% +,t was event,ally denied.
Th,s% res-ondent s-o,ses Aled a Com-laint for illegal dismissal with the
NLRC.
3SSUB*
2hether or not the res-ondent s-o,ses were illegally dismissed.
SC RUL3NG*
Before this Co,rt delves into the merits of the -etition% it deems it
necessary to disc,ss the nat,re of the em-loyment of the res-ondents. 3t is
not dis-,ted that res-ondent Remigio 5ichael was a f,ll0time -ro+ationary
em-loyee and his wife% a -art0time teacher of the -etitioner school.
& reality we have to face in the consideration of em-loyment on
-ro+ationary stat,s of teaching -ersonnel is that they are not governed
-,rely +y the La+or Code. The La+or Code is s,--lemented with res-ect to
the -eriod of -ro+ation +y s-ecial r,les fo,nd in the 5an,al of Reg,lations
for /rivate Schools. ?n the matter of -ro+ationary -eriod% Section "( of
these reg,lations -rovides*
Section "(./ro+ationary /eriod. 0 S,+Cect in all instances to
com-liance with the De-artment and school re8,irements% the
-ro+ationary -eriod for academic -ersonnel shall not +e more than three
($ F / a g e
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;:< consec,tive years of satisfactory service for those in the elementary
and secondary levels% si7 ;!< consec,tive reg,lar semesters of satisfactory
service for those in the tertiary level% and nine ;"< consec,tive trimesters of
satisfactory service for those in the tertiary level where collegiate co,rses
are oJered on a trimester +asis.
& -ro+ationary em-loyee or -ro+ationer is one who is on trial for an
em-loyer% d,ring which the latter determines whether or not he is 8,aliAed
for -ermanent em-loyment. The -ro+ationary em-loyment is intended to
aJord the em-loyer an o--ort,nity to o+serve the Atness of a -ro+ationary
em-loyee while at wor1% and to ascertain whether he will +ecome an
e9cient and -rod,ctive em-loyee. 2hile the em-loyer o+serves the
Atness% -ro-riety and e9ciency of a -ro+ationer to ascertain whether he is
8,aliAed for -ermanent em-loyment% the -ro+ationer% on the other hand%
see1s to -rove to the em-loyer that he has the 8,aliAcations to meet the
reasona+le standards for -ermanent em-loyment. Th,s% the word
-ro+ationary% as ,sed to descri+e the -eriod of em-loyment% im-lies the
-,r-ose of the term or -eriod% not its length.
The common -ractice is for the em-loyer and the teacher to enter into a
contract% eJective for one school year. &t the end of the school year% the
em-loyer has the o-tion not to renew the contract% -artic,larly considering
the teacher6s -erformance. 3f the contract is not renewed% the em-loyment
relationshi- terminates. 3f the contract is renewed% ,s,ally for another
school year% the -ro+ationary em-loyment contin,es. &gain% at the end of
that -eriod% the -arties may o-t to renew or not to renew the contract. 3f
renewed% this second renewal of the contract for another school year wo,ld
then +e the last year since it wo,ld +e the third school year of
-ro+ationary em-loyment. &t the end of this third year% the em-loyer may
now decide whether to e7tend a -ermanent a--ointment to the em-loyee%
-rimarily on the +asis of the em-loyee having met the reasona+le
standards of com-etence and e9ciency set +y the em-loyer. )or the entire
d,ration of this three0year -eriod% the teacher remains ,nder
-ro+ation. U-on the e7-iration of his contract of em-loyment% +eing sim-ly
on -ro+ation% he cannot a,tomatically claim sec,rity of ten,re and com-el
the em-loyer to renew his em-loyment contract.
/etitioner school contends that it did not e7tend the contracts of
res-ondent s-o,ses. 3t claims that% altho,gh% it has sent letters to the
s-o,ses informing them that the school is e7tending to them new contracts
for the coming school year% the letters do not constit,te as act,al
em-loyment contracts +,t merely oJers to teach on the said school year.
Section " of the 5an,al of Reg,lations for /rivate Schools% states that*
Section ".Bm-loyment Contract. Bvery contract of em-loyment
shall s-ecify the designation% 8,aliAcation% salary rate% the -eriod and
nat,re of service and its date of eJectivity% and s,ch other terms and
condition of em-loyment as may +e consistent with laws and r,les%
reg,lations and standards of the school. & co-y of the contract shall +e
f,rnished the -ersonnel concerned.
3t is im-ortant that the contract of -ro+ationary em-loyment s-ecify the
-eriod or term of its eJectivity. The fail,re to sti-,late its -recise d,ration
co,ld lead to the inference that the contract is +inding for the f,ll three0
year -ro+ationary -eriod. Therefore% the letters sent +y -etitioner Sr.
Racadio% which were void of any s-eciAcs cannot +e considered as
contracts. The closest they can resem+le to are that of informal
corres-ondence among the said individ,als. &s s,ch% -etitioner school has
the right not to renew the contracts of the res-ondents% the old ones
having +een e7-ired at the end of their terms.
&ss,ming% arg,endo% that the em-loyment contracts +etween the
-etitioner school and the res-ondent s-o,ses were renewed% this Co,rt
Ands that there was a valid and C,st ca,se for their dismissal. The La+or
Code commands that +efore an em-loyer may legally dismiss an em-loyee
from the service% the re8,irement of s,+stantial and -roced,ral d,e
-rocess m,st +e com-lied with. Under the re8,irement of s,+stantial d,e
-rocess% the gro,nds for termination of em-loyment m,st +e +ased on
C,st or a,thoriRed ca,ses.
/etitioner school charged res-ondent Remigio 5ichael of non0com-liance
with a school -olicy regarding the s,+mission of Anal test 8,estions to his
-rogram coordinator for chec1ing or comment.
The -lain admissions of the charges against them were the considerations
ta1en into acco,nt +y the -etitioner school in their decision not to renew
the res-ondent s-o,ses6 em-loyment contracts. This is a right of the school
that is mandated +y law and C,ris-r,dence. 3t is the -rerogative of the
school to set high standards of e9ciency for its teachers since 8,ality
ed,cation is a mandate of the Constit,tion. &s long as the standards A7ed
are reasona+le and not ar+itrary% co,rts are not at li+erty to set them
aside. Schools cannot +e re8,ired to ado-t standards which +arely satisfy
criteria set for government recognition. The same academic freedom grants
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the school the a,tonomy to decide for itself the terms and conditions for
hiring its teacher% s,+Cect of co,rse to the overarching limitations ,nder the
La+or Code. The a,thority to hire is li1ewise covered and -rotected +y its
management -rerogative the right of an em-loyer to reg,late all as-ects
of em-loyment% s,ch as hiring% the freedom to -rescri+e wor1 assignments%
wor1ing methods% -rocess to +e followed% reg,lation regarding transfer of
em-loyees% s,-ervision of their wor1% lay0oJ and disci-line% and dismissal
and recall of wor1ers.
LYNVIL FISHING ENTERPRISES vs. ARIOLA et al.
G.R. No. '"P@% )BBRU&RS % ($(
)&CTS*
The version of the -etitioners follows*
. Lynvil )ishing Bnter-rises% 3nc. ;Lynvil< is a com-any engaged in
dee-0sea Ashing% o-erating along the shores of /alawan and other
o,tlying islands of the /hili--ines. 3t is o-erated and managed +y
Rosendo S. de BorCa.
(. ?n &,g,st ""'% Lynvil received a re-ort from Romanito Clarido%
one of its em-loyees% that on : .,ly ""'% he witnessed that while
on +oard the com-any vessel &nalyn 4333% Lynvil em-loyees%
namely* &ndres G. &riola ;&riola<% the ca-tainD .essie D. &lcovendas
;&lcovendas<% Chief 5ateD .immy B. Calinao ;Calinao<% Chief
BngineerD 3smael G. N,+la ;N,+la<% coo1D Blorde BaVeR ;BaVeR<%
oilerD and Leo-oldo D. Se+,llen ;Se+,llen<% +odegero% cons-ired
with one another and stole eight ;'< t,+s of E-am-anoE and
Etangig,eE Ash and delivered them to another vessel% to the
-reC,dice of Lynvil.
:. The said em-loyees were engaged on a -er tri- +asis or E-or viaCeE
which terminates at the end of each tri-. &riola% &lcovendas and
Calinao were managerial Aeld -ersonnel while the rest of the crew
were Aeld -ersonnel.
@. By reason of the re-ort and after initial investigation% LynvilIs
General 5anager Rosendo S. De BorCa ;De BorCa< s,mmoned
res-ondents to e7-lain within Ave ;#< days why they sho,ld not +e
dismissed from service. =owever% e7ce-t for &lcovendas and
BaVeR% the res-ondents ref,sed to sign the recei-t of the notice.
#. )ailing to e7-lain as re8,ired% res-ondentsI em-loyment was
terminated.
!. Lynvil% thro,gh De BorCa% Aled a criminal com-laint against the
dismissed em-loyees for violation of /.D. #:(% or the &nti0/iracy
and &nti0=ighway Ro++ery Law of "P@ +efore the ?9ce of the City
/rosec,tor of 5ala+on City.
P. ?n ( Novem+er ""'% )irst &ssistant City /rosec,tor Rosa,ro
Silverio fo,nd -ro+a+le ca,se for the indictment of the dismissed
em-loyees for the crime of 8,aliAed theft ,nder the Revised /enal
Code.
?n the other hand% the story of the defense is*
. The -rivate res-ondents were crew mem+ers of LynvilIs vessel
named &nalyn 4333.
(. ?n : .,ly ""'% they arrived at the Navotas )ish-ort on +oard
&nalyn 4333 loaded with %(@ +aVeras of diJerent 1inds of Ashes.
These +aVeras were delivered to a consignee named S&S and
Royale.
The following day% the -rivate res-ondents re-orted +ac1 to Lynvil o9ce to
in8,ire a+o,t their new Co+ assignment +,t were told to wait for f,rther
advice. They were not allowed to +oard any vessel.
:. ?n # &,g,st ""'% only &lcovendas and BaVeR received a
memorand,m from De BorCa ordering them to e7-lain the incident
that ha--ened on : .,ly ""'. U-on +eing informed a+o,t this%
&riola% Calinao% N,+la and Se+,llen went to the Lynvil o9ce.
=owever% they were told that their em-loyments were already
terminated.
&ggrieved% the em-loyees Aled with the &r+itration Branch of the National
La+or Relations Commission0National Ca-ital Region on (# &,g,st ""' a
com-laint for illegal dismissal with claims for +ac1wages% salary diJerential
reinstatement% service incentive leave% holiday -ay and its -remi,m and
:th month -ay from ""! to""'. They also claimed for moral% e7em-lary
damages and attorneyIs fees for their dismissal with +ad faith.
They added that the ,nwarranted acc,sation of theft stemmed from their
oral demand of increase of salaries three months earlier and their re8,est
that they sho,ld not +e re8,ired to sign a +lan1 -ayroll and vo,chers.
3SSUBS*
2hether or not the em-loyees of Lynvil )ishing Bnter-rise were validly
terminated for a C,st ca,se.
(( F / a g e
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2hether or not the em-loyees sec,rity of ten,re were violated.
2hether De BorCa is Cointly and severally lia+le with Lynvil.
SC RUL3NG*
Nonetheless% even witho,t reliance on the -rosec,torIs Anding% we And that
there was valid ca,se for res-ondentsI dismissal. 3n illegal dismissal cases%
the em-loyer +ears the +,rden of -roving that the termination was for a
valid or a,thoriRed ca,se.
.,st ca,se is re8,ired for a valid dismissal. The La+or Code -rovides that an
em-loyer may terminate an em-loyment +ased on fra,d or willf,l +reach of
the tr,st re-osed on the em-loyee. S,ch +reach is considered willf,l if it is
done intentionally% 1nowingly% and -,r-osely% witho,t C,stiAa+le e7c,se% as
disting,ished from an act done carelessly% tho,ghtlessly% heedlessly or
inadvertently. 3t m,st also +e +ased on s,+stantial evidence and not on the
em-loyerIs whims or ca-rices or s,s-icions otherwise% the em-loyee wo,ld
eternally remain at the mercy of the em-loyer. Loss of conAdence m,st not
+e indiscriminately ,sed as a shield +y the em-loyer against a claim that
the dismissal of an em-loyee was ar+itrary. &nd% in order to constit,te a
C,st ca,se for dismissal% the act com-lained of m,st +e wor10related and
shows that the em-loyee concerned is ,nAt to contin,e wor1ing for the
em-loyer. 3n addition% loss of conAdence as a C,st ca,se for termination of
em-loyment is -remised on the fact that the em-loyee concerned holds a
-osition of res-onsi+ility% tr,st and conAdence or that the em-loyee
concerned is entr,sted with conAdence with res-ect to delicate matters%
s,ch as the handling or care and -rotection of the -ro-erty and assets of
the em-loyer. The +etrayal of this tr,st is the essence of the oJense for
which an em-loyee is -enaliRed.
Breach of tr,st is -resent in this case. 2e agree with the r,ling of the La+or
&r+iter and Co,rt of &--eals that the 8,antity of t,+s e7-ected to +e
received was the same as that which was loaded. =owever% what is
material is the 1ind of Ash loaded and then ,nloaded. Sameness is li1ewise
needed.
2e cannot close o,r eyes to the -ositive and clear narration of facts of the
three witnesses to the commission of 8,aliAed theft. .onathan DistaCo% a
crew mem+er of the &nalyn 4333% stated in his letter addressed to De BorCa
dated ' &,g,st ""'% that while the vessel was traversing San Nicolas%
Cavite% he saw a small +oat a--roach them. 2hen the +oat was ne7t to
their vessel% &lcovendas went inside the stoc1room while Se+,llen -,shed
an estimated fo,r t,+s of Ash away from it. &riola% on the other hand%
served as the loo1o,t and negotiator of the transaction. )inally% BaVeR and
Calinao hel-ed in -,tting the t,+s in the small +oat. =e f,rther added that
he received /'$$.$$ as his share for the transaction. Romanito Clarido% who
was also on +oard the vessel% corro+orated the narration of DistaCo on all
acco,nts in his (# &,g,st ""' a9davit. =e added that &lcovendas told
him to 1ee- silent a+o,t what ha--ened on that day. Sealing tight the
credi+ility of the narration of theft is the a9davite7ec,ted +y Blorde BaVeR
dated : 5ay """. BaVeR was one of the dismissed em-loyees who
actively -artici-ated in the ta1ing of the t,+s. =e clariAed in the a9davit
that the fo,r t,+s ta1en o,t of the stoc1room in fact contained Ash ta1en
from the eight t,+s. =e f,rther stated that &riola told everyone in the
vessel not to say anything and instead Ale a la+or case against the
management. Clearly% we cannot fa,lt Lynvil and De BorCa when it
dismissed the em-loyees.
&rt. ('$. Reg,lar and cas,al em-loyment. The -rovisions of written
agreement to the contrary notwithstanding and regardless of the oral
agreement of the -arties% an em-loyment shall +e deemed to +e reg,lar
where the em-loyee has +een engaged to -erform activities which are
,s,ally necessary or desira+le in the ,s,al +,siness or trade of the
em-loyer% e7ce-t where the em-loyment has +een A7ed for a s-eciAc
-roCect or ,nderta1ing the com-letion or termination of which has +een
determined at the time of the engagement of the em-loyee or where the
wor1 or service to +e -erformed is seasonal in nat,re and the em-loyment
is for the d,ration of the season.
&n em-loyment shall +e deemed to +e cas,al if it is not covered +y the
-receding -aragra-h* /rovided% That any em-loyee who has rendered at
least one year of service% whether s,ch service is contin,o,s or +ro1en%
shall +e considered a reg,lar em-loyee with res-ect to the activity in which
he is em-loyed and his em-loyment shall contin,e while s,ch activity
e7ists.
Lynvil contends that it cannot +e g,ilty of illegal dismissal +eca,se the
-rivate res-ondents were em-loyed ,nder a A7ed0term contract which
e7-ired at the end of the voyage.
&ccordingly% and since the entire -,r-ose +ehind the develo-ment of
legislation c,lminating in the -resent &rticle ('$ of the La+or Code clearly
a--ears to have +een% as already o+served% to -revent circ,mvention of
(: F / a g e
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the em-loyee6s right to +e sec,re in his ten,re% the cla,se in said article
indiscriminately and com-letely r,ling o,t all written or oral agreements
conTicting with the conce-t of reg,lar em-loyment as deAned therein
sho,ld +e constr,ed to refer to the s,+stantive evil that the Code itself has
singled o,t* agreements entered into -recisely to circ,mvent sec,rity of
ten,re. 3t sho,ld have no a--lication to instances where a A7ed -eriod of
em-loyment was agreed ,-on 1nowingly and vol,ntarily +y the -arties%
witho,t any force% d,ress or im-ro-er -ress,re +eing +ro,ght to +ear ,-on
the em-loyee and a+sent any other circ,mstances vitiating his consent% or
where it satisfactorily a--ears that the em-loyer and em-loyee dealt with
each other on more or less e8,al terms with no moral dominance whatever
+eing e7ercised +y the former over the latter. Unless th,s limited in its
-,rview% the law wo,ld +e made to a--ly to -,r-oses other than those
e7-licitly stated +y its framersD it th,s +ecomes -ointless and ar+itrary%
,nC,st in its eJects and a-t to lead to a+s,rd and ,nintended
conse8,ences.
Contrarily% the -rivate res-ondents contend that they +ecame reg,lar
em-loyees +y reason of their contin,o,s hiring and -erformance of tas1s
necessary and desira+le in the ,s,al trade and +,siness of Lynvil.
.,ris-r,dence% laid two conditions for the validity of a A7ed0contract
agreement +etween the em-loyer and em-loyee*
)irst% the A7ed -eriod of em-loyment was 1nowingly and vol,ntarily agreed
,-on +y the -arties witho,t any force% d,ress% or im-ro-er -ress,re +eing
+ro,ght to +ear ,-on the em-loyee and a+sent any other circ,mstances
vitiating his consentD or Second% it satisfactorily a--ears that the em-loyer
and the em-loyee dealt with each other on more or less e8,al terms with
no moral dominance e7ercised +y the former or the latter.
Te7t,ally% the -rovision that* EN& a1o ay s,masang0ayon na magling1od at
g,mawa ng mga gawain sang0ayon sa -ata1arang E-or viaCeE na
magm,m,la sa -agalis sa Navotas -a-,nta sa -angisdaan at -ag+a+ali1
sa -ondohan ng lantsa sa Navotas% 5etro 5anilaE is for a A7ed -eriod of
em-loyment. 3n the conte7t% however% of the facts that* ;< the res-ondents
were doing tas1s necessarily to LynvilIs Ashing +,siness with -ositions
ranging from ca-tain of the vessel to +odegeroD ;(< after the end of a tri-%
they will again +e hired for another tri- with new contractsD and ;:< this
arrangement contin,ed for more than ten years% the clear intention is to go
aro,nd the sec,rity of ten,re of the res-ondents as reg,lar em-loyees. &nd
res-ondents are so +y the e7-ress -rovisions of the second -aragra-h of
&rticle ('$% th,s*
777 /rovided% That any em-loyee who has rendered at least one year of
service% whether s,ch service is contin,o,s or +ro1en% shall +e considered
a reg,lar em-loyee with res-ect to the activity in which he is em-loyed and
his em-loyment shall contin,e while s,ch activity e7ists.
The same set of circ,mstances indicate clearly eno,gh that it was the need
for a contin,ed so,rce of income that forced the em-loyeesI acce-tance of
the E-or viaCeE -rovision.
=aving fo,nd that res-ondents are reg,lar em-loyees who may +e%
however% dismissed for ca,se as we have so fo,nd in this case% there is a
need to loo1 into the -roced,ral re8,irement of d,e -rocess in Section (%
R,le \\333% Boo1 4 of the R,les 3m-lementing the La+or Code. 3t is re8,ired
that the em-loyer f,rnish the em-loyee with two written notices* ;< a
written notice served on the em-loyee s-ecifying the gro,nd or gro,nds for
termination% and giving to said em-loyee reasona+le o--ort,nity within
which to e7-lain his sideD and ;(< a written notice of termination served on
the em-loyee indicating that ,-on d,e consideration of all the
circ,mstances% gro,nds have +een esta+lished to C,stify his termination.
)rom the records% there was only one written notice which re8,ired
res-ondents to e7-lain within Ave ;#< days why they sho,ld not +e
dismissed from the service. &lcovendas was the only one who signed the
recei-t of the notice. The others% as claimed +y Lynvil% ref,sed to sign. The
other em-loyees arg,e that no notice was given to them. Des-ite the
inconsistencies% what is clear is that no Anal written notice or notices of
termination were sent to the em-loyees.
The twin re8,irements of notice and hearing constit,te the elements of
Md,eN -rocess in cases of em-loyee6s dismissal. The re8,irement of notice
is intended to inform the em-loyee concerned of the em-loyer6s intent to
dismiss and the reason for the -ro-osed dismissal. U-on the other hand%
the re8,irement of hearing aJords the em-loyee an o--ort,nity to answer
his em-loyer6s charges against him and accordingly% to defend
himselftherefrom +efore dismissal is eJected. ?+vio,sly% the second
written notice% as indis-ensa+le as the Arst% is intended to ens,re the
o+servance of d,e -rocess.
&--lying the r,le to the facts at hand% we grant a monetary award
of /#$%$$$.$$ as nominal damages% this% -,rs,ant to the fresh r,ling of this
Co,rt in C,lili v. Bastern Comm,nication /hili--ines% 3nc. D,e to the fail,re
(@ F / a g e
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of Lynvil to follow the -roced,ral re8,irement of two0notice r,le% nominal
damages are d,e to res-ondents des-ite their dismissal for C,st ca,se.
Given the fact that their dismissal was for C,st ca,se% we cannot grant
+ac1wages and se-aration -ay to res-ondents. =owever% following the
Andings of the La+or &r+iter who with the e7-ertise -resided over the
-roceedings +elow% which Andings were a9rmed +y the Co,rt of &--eals%
we grant the :th month -ay and salary diJerential of the dismissed
em-loyees.
Whether "e #or$a is $ointly and se%erally liale with Lyn%il
&s to the last iss,e% this Co,rt has r,led that in la+or cases% the cor-orate
directors and o9cers are solidarily lia+le with the cor-oration for the
termination of em-loyment of em-loyees done with malice or in +ad faith.
3ndeed% moral damages are recovera+le when the dismissal of an em-loyee
is attended +y +ad faith or fra,d or constit,tes an act o--ressive to la+or%
or is done in a manner contrary to good morals% good c,stoms or -,+lic
-olicy.
3t has also +een disc,ssed in &A& Realty "e%elopment 'orporation %!
(LR' that*
7 7 7 & cor-oration +eing a C,ridical entity% may act only thro,gh its
directors% o9cers and em-loyees. ?+ligations inc,rred +y them% acting as
s,ch cor-orate agents% are not theirs +,t the direct acco,nta+ilities of the
cor-oration they re-resent. Tr,e% solidary lia+ilities may at times +e
inc,rred +,t only when e7ce-tional circ,mstances warrant s,ch as%
generally% in the following cases*
. 2hen directors and tr,stees or% in a--ro-riate cases% the o9cers of a
cor-oration*
777
;+< act in +ad faith or with gross negligence in directing the cor-orate
aJairsD
7 7 7
The term E+ad faithE contem-lates a Estate of mind a9rmatively o-erating
with f,rtive design or with some motive of self0interest or will or for ,lterior
-,r-ose.E
2e agree with the r,ling of +oth the NLRC and the Co,rt of &--eals when
they -rono,nced that there was no evidence on record that indicates
commission of +ad faith on the -art of De BorCa. =e is the general manager
of Lynvil% the one tas1ed with the s,-ervision +y the em-loyees and the
o-eration of the +,siness. =owever% there is no -roof that he im-osed on
the res-ondents the E-or viaCeE -rovision for -,r-ose of eJecting their
s,mmary dismissal.
D.M. CONSUNI INC. vs. AMIN
G.R. No. "(#@% &/R3L '% ($(
)&CTS*
Res-ondents &ntonio Go+res% 5agellan Dalisay% Godofredo /aragsa% Bmilio
&leta and Generoso 5elo wor1ed as car-enters in the constr,ction -roCects
of -etitioner D.5. Cons,nCi% 3nc.% a constr,ction com-any% on several
occasions and>or at vario,s times. Their termination from em-loyment for
each -roCect was re-orted to the De-artment of La+or and Bm-loyment
;D?LB<% in accordance with /olicy 3nstr,ction No. ($% which was later
s,-erseded +y De-artment ?rder No. "% series of "":. Res-ondentsI last
assignment was at Y,ad @0/roCect in Glorietta% &yala% 5a1ati% where they
started wor1ing on Se-tem+er % ""'. ?n ?cto+er @%
""'% res-ondents saw their names incl,ded in the Notice of Termination
-osted on the +,lletin +oard at the -roCect -remises.
Res-ondents Aled a Com-laint with the &r+itration Branch of the National
La+or Relations Commission ;NLRC< against -etitioner D.5. Cons,nCi% 3nc.
and David 5. Cons,nCi for illegal dismissal% and non0-ayment of :th month
-ay% Ave ;#< days service incentive leave -ay% damages and attorneyIs
fees.
/etitioner D.5. Cons,nCi% 3nc. and David 5. Cons,nCi co,ntered that
res-ondents% +eing -roCect em-loyees% are covered +y /olicy 3nstr,ction
No. ($% as s,-erseded +y De-artment ?rder No. "% series of "": with
res-ect to their se-aration or dismissal. Res-ondents were em-loyed -er
-roCect ,nderta1en +y -etitioner com-any and within varying estimated
-eriods indicated in their res-ective -roCect em-loyment contracts. Citing
the em-loyment record of each res-ondent% -etitioner and David 5.
Cons,Ci averred that res-ondentsI services were terminated when their
-hases of wor1 for which their services were engaged were com-leted or
when the -roCects themselves were com-leted. /etitioner contended that
since res-ondents were terminated +y reason of the com-letion of their
res-ective -hases of wor1 in the constr,ction -roCect% their termination was
warranted and legal.
(# F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
Res-ondents re-lied that the Y,ad @0/roCect at Glorietta%
&yala% 5a1ati City was estimated to ta1e two years to Anish% +,t they were
dismissed within the two0year -eriod. They had no -rior notice of their
termination. =ence% granting that they were -roCect em-loyees% they were
still illegally dismissed for non0o+servance of -roced,ral d,e -rocess.
?n ?cto+er @% """% the La+or &r+iter rendered a decision dismissing
res-ondentsI com-laint. The La+or &r+iter fo,nd that res-ondents were
-roCect em-loyees% that they were dismissed from the last -roCect they
were assigned to when their res-ective -hases of wor1 were com-leted%
and that -etitioner D.5. Cons,nCi% 3nc. and David 5. Cons,nCi re-orted their
termination of services to the D?LB in accordance with the re8,irements of
law.
The -etition is meritorio,s. Res-ondents were fo,nd to +e -roCect
em-loyees +y the La+or &r+iter% the NLRC and the Co,rt of &--eals. Their
,nanimo,s Anding that res-ondents are -roCect em-loyees is +inding on
the Co,rt. 3t m,st also +e -ointed o,t that res-ondents have not a--ealed
from s,ch Anding +y the Co,rt of &--eals. 3t is only the -etitioner that
a--ealed from the decision of the Co,rt of &--eals.
3SSUB*
The main iss,e is whether or not res-ondents% as -roCect em-loyees% are
entitled to nominal damages for lac1 of advance notice of their dismissal.
SC RUL3NG*
/rior or advance notice of termination is not -art of -roced,ral d,e -rocess
if the termination of a -roCect em-loyee is +ro,ght a+o,t +y the com-letion
of the contract or -hase thereof. This is +eca,se com-letion of the wor1 or
-roCect a,tomatically terminates the em-loyment% in which case% the
em-loyer is% ,nder the law% only o+liged to render a re-ort to the D?LB.
Therefore% failing to give -roCect em-loyees advance notice of their
termination is not a violation of -roced,ral d,e -rocess and cannot +e the
+asis for the -ayment of nominal damages.
XIII. MANAGEMENT PREROGATIVE
ALERT SECURITY AND INVESTIGATION AGENCY vs. PASAWILAN
G.R. No. '(:"P% SB/TB5BBR @% ($
)&CTS*
Res-ondents Saidali /asawilan% 2ilfredo 4erceles and 5elchor B,l,san
were all reg,lar em-loyees of &lert Sec,rity and 3nvestigation &gency% 3nc.
;&lert Sec,rity<. They were -aid !#.$$ -esos a day as sec,rity g,ards and
assigned at the De-artment of Science and Technology ;D?ST<. Beca,se
they were ,nder-aid% res-ondents Aled a com-laint for money claims
against &lert Sec,rity +efore the La+or &r+iter. &s a res,lt of their
com-laint% they were relieved from their -osts in the D?ST and were not
given new assignments des-ite the la-se of si7 months. They Aled a Coint
com-laint for illegal dismissal against &lert Sec,rity. The com-laint for
money claims was dismissed for lac1 of merit +,t &lert Sec,rity was
ordered to -ay /asawilan et al their latest salary diJerentials.
?n the other hand% the La+or &r+iter handling the illegal dismissal case
r,led that /asawilan et al have +een illegally dismissed and each
com-lainant sho,ld +e -aid individ,al awards. &lert Sec,rity a--ealed the
decision to the NLRC claiming that com-lainants were not illegally
dismissed +,t were only transferred. They claimed that it was the
res-ondents who ref,sed to re-ort for wor1 in their new assignment.
?n .an,ary :% ($$P% the NLRC dismissed the com-laint for illegal dismissal
after r,ling that the fact of dismissal or termination of em-loyment was not
s,9ciently esta+lished. /asawilan et al Aled a -etition for certiorari with the
C&. The C& r,led that &lert Sec,rity% as an em-loyer% failed to discharge its
+,rden to show that the em-loyee6s se-aration from em-loyment was not
motivated +y discrimination% made in +ad faith% or eJected as a form of
-,nishment or demotion witho,t s,9cient ca,se. The C& also fo,nd that
res-ondents were never informed of the ED,ty Detail ?rdersE transferring
them to a new -ost% there+y ma1ing the alleged transfer ineJective. &lert
Sec,rity Aled a -etition for review on certiorari to SC.
3SSUB*
2hether or not /asawilan et al were illegally dismissed.
SC RUL3NG*
/asawilan et al were illegally dismissed.
&s a r,le% em-loyment cannot +e terminated +y an em-loyer witho,t any
C,st or a,thoriRed ca,se. No less than the"'P Constit,tion in Section :%
&rticle : g,arantees sec,rity of ten,re for wor1ers and +eca,se of this% an
em-loyee may only +e terminated for C,st or a,thoriRed ca,ses that m,st
com-ly with the d,e -rocess re8,irements mandated +y law.
(! F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
3n De G,Rman% .r. v. Commission on Blections% the Co,rt% s-ea1ing of the
Constit,tional g,arantee of sec,rity of ten,re to all wor1ers% r,led*
. . 3t only means that an em-loyee cannot +e dismissed ;or transferred<
from the service for ca,ses other than those -rovided +y law and after d,e
-rocess is accorded the em-loyee. 2hat it see1s to -revent is ca-ricio,s
e7ercise of the -ower to dismiss. . .
There m,st +e a valid and lawf,l reason for terminating the em-loyment of
a wor1er. ?therwise% it is illegal and wo,ld +e dealt with +y the co,rts
accordingly.
&s stated in Bascon v. Co,rt of &--eals*
. . . The em-loyer6s -ower to dismiss m,st +e tem-ered with the
em-loyee6s right to sec,rity of ten,re. Time and again we have said that
the -reservation of the life+lood of the toiling la+orer comes +efore concern
for +,siness -roAts. Bm-loyers m,st +e reminded to e7ercise the -ower to
dismiss with great ca,tion% for the State will not hesitate to come to the
s,ccor of wor1ers wrongly dismissed +y ca-ricio,s em-loyers.
3n the case at +ar% res-ondents were relieved from their -osts +eca,se they
Aled with the La+or &r+iter a com-laint against their em-loyer for money
claims d,e to ,nder-ayment of wages. This reason is ,nacce-ta+le and
illegal.
The La+or Code% as amended% en,merates several C,st and a,thoriRed
ca,ses for a valid termination of em-loyment. &n em-loyee asserting his
right and as1ing for minim,m wage is not among those ca,ses. Dismissing
an em-loyee on this gro,nd amo,nts to retaliation +y management for an
em-loyee6s legitimate grievance witho,t d,e -rocess.
MANILA PAVILION HOTEL vs. DELADA
G.R. No. '""@P% .&NU&RS (#% ($(
)&CTS*
Delada was the Union /resident of the 5anila /avilion S,-ervisors
&ssociation at 5/=. =e was originally assigned as =ead 2aiter
of Rotisserie% a Ane0dining resta,rant o-erated +y -etitioner.
/,rs,ant to a s,-ervisory -ersonnel reorganiRation -rogram% 5/=
reassigned him as =ead 2aiter of Seasons CoJee Sho- at the same hotel.
Res-ondent declined the inter0o,tlet transfer. The grievance machinery
,nder their CB& was initiated.
Delada -ersistently re+,Jed orders for him to re-ort to his new assignment
for the time +eing witho,t -reC,dice to the resol,tion of the grievance
involving the transfer. &ccording to him% since the grievance machinery
,nder their CB& had already +een initiated% his transfer m,st +e held in
a+eyance.
5/= initiated administrative -roceedings against him for his ref,sal to
re-ort to his new -ost at Seasons CoJee Sho- and -laced Delada on a :$0
day -reventive s,s-ension. =e attended the hearings together with ,nion
re-resentatives.
The -arties failed to reach a settlement in the grievance meetings% /eers
Reso,rces Develo-ment Director level and the Grievance Committee level.
Delada lodged a Com-laint +efore the National Conciliation and 5ediation
Board. The iss,es s,+mitted +y the -arties for vol,ntary ar+itration
incl,ded ;<2hether or not the transfer of the ,nion -resident from head
waiter at Rotisserie to head waiter at seasons resta,rant is valid and
C,stiAedD and ;(<. 2hether or not the -reventive s,s-ension of the
com-lainant is valid and C,stiAedD
5/= contin,ed with the disci-linary action against him 5/= fo,nd him
g,ilty of ins,+ordination +ased on his re-eated and willf,l diso+edience of
the transfer order and im-osed on Delada the -enalty of "$0day
s,s-ension.
=e o--osed the Decision% arg,ing that 5/= had lost its a,thority to
-roceed with the disci-linary action against him% since the matter had
already +een incl,ded in the vol,ntary ar+itration.
the ;/anel of vol,ntary &r+itrators</4& r,led*
The transfer of Delada was a valid e7ercise of management -rerogative
and he had no valid and C,stiAa+le reason to ref,se or even to delay
com-liance with the management6s directive. The transfer order was done
in the interest of the e9cient and economic o-erations of 5/=% and that
there was no malice% +ad faith% or im-ro-er motive attendant ,-on the
transfer of Delada to Seasons CoJee Sho-. The real reason why he ref,sed
to o+ey the transfer order was that he as1ed for additional monetary
+eneAts as a condition for his transfer. ),rthermore% the -anel r,led that
his transfer from Rotisserie to Seasons CoJee Sho- did not -reC,dice or
inconvenience him. Neither did it res,lt in dimin,tion of salaries or
demotion in ran1.
(P F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
There was no legal and fact,al +asis to s,--ort -etitioner6s im-osition of
-reventive s,s-ension on Delada. The mere assertion of 5/= that Eit is not
far0fetched for =enry Delada to sa+otage the food to +e -re-ared and
served to the res-ondent6s dining g,est and em-loyees +eca,se of the
hostile relationshi- then e7istingE was more imagined than real. &lso% the
5/= went +eyond the :$0day -eriod of -reventive s,s-ension -rescri+ed
+y the 3m-lementing R,les of the La+or Code when -etitioner -roceeded to
im-ose a se-arate -enalty of "$0day s,s-ension on him. ),rthermore% 5/=
lost its a,thority to contin,e with the administrative -roceedings since the
/4& ac8,ired e7cl,sive C,risdiction when the -arties s,+mitted iss,es
+efore it. The -anel reasoned that the Coint s,+mission to it of the iss,e on
the validity of the transfer order encom-assed% +y necessary im-lication%
the iss,e of res-ondent6s ins,+ordination and willf,l diso+edience of the
transfer order.
Since the :$0day -reventive s,s-ension and the -enalty of "$0day
s,s-ension was invalid% then 5/= was lia+le to -ay +ac1 wages and other
+eneAts. The C& a9rmed the Decision of the /4& and denied -etitioner6s
5otion for Reconsideration. Conse8,ently% 5/= Aled the instant /etition.
3SSUBS*
2hether 5/= retained the a,thority to contin,e with the administrative
case against Delada for ins,+ordination and willf,l diso+edience of the
transfer order.
2hether 5/= is lia+le to -ay +ac1 wages.
SC RUL3NG*
Co,ld the /4& herein view that the iss,e -resented +efore it ] the 8,estion
of the validity of the transfer order ] necessarily incl,ded the 8,estion of
res-ondent Delada6s ins,+ordination and willf,l diso+edience of the
transfer orderL
/,rs,ant to the doctrines in Sime Dar+y /ili-inas and L,do U L,ym
Cor-oration% the /4& was a,thoriRed to ass,me C,risdiction over the related
iss,e of ins,+ordination and willf,l diso+edience of the transfer order. 3n
those cases% however% the vol,ntary ar+itrators did in fact ass,me
C,risdiction over the related iss,es and made r,lings on the matter.
3n the -resent case% the /4& did not ma1e a r,ling on the s-eciAc iss,e of
ins,+ordination and willf,l diso+edience of the transfer order. The /4&
merely said that its disagreement with the "$0day -enalty of s,s-ension
stemmed from the fact that the -enalty went +eyond the :$0day limit
for -reventive s,s-ension*
)irst% it m,st +e -ointed o,t that the +asis of the :$0
day -reventive s,s-ension im-osed on Delada was diJerent from that of
the "$0day -enalty of s,s-ension. /reventive s,s-ension is a disci-linary
meas,re resorted to +y the em-loyer -ending investigation of an alleged
malfeasance or misfeasance committed +y an em-loyee. The em-loyer
tem-orarily +ars the em-loyee from wor1ing if his contin,ed em-loyment
-oses a serio,s and imminent threat to the life or -ro-erty of the em-loyer
or of his co0wor1ers. ?n the other hand% the -enalty of s,s-ension refers to
the disci-linary action im-osed on the em-loyee after an o9cial
investigation or administrative hearing is cond,cted. The em-loyer
e7ercises its right to disci-line erring em-loyees -,rs,ant to com-any r,les
and reg,lations. Th,s% a Anding of validity of the -enalty of "$0day
s,s-ension will not em+race the iss,e of the validity of the :$0
day -reventive s,s-ension.
The /4& herein did not ma1e a deAnitive r,ling on the merits of the validity
of the "$0day s,s-ension. The -anel only held that 5/= lost its C,risdiction
to im-ose disci-linary action on res-ondent.
&ccordingly% we r,le in this case that 5/= did not lose its a,thority to
disci-line res-ondent for his contin,ed ref,sal to re-ort to his new
assignment. 3n relation to this -oint% we recall o,r Decision in &llied
Ban1ing Cor-oration v. Co,rt of &--eals.
The ref,sal to o+ey a valid transfer order constit,tes willf,l diso+edience of
a lawf,l order of an em-loyer. Bm-loyees may o+Cect to% negotiate and
see1 redress against em-loyers for r,les or orders that they regard as
,nC,st or illegal. =owever% ,ntil and ,nless these r,les or orders are
declared illegal or im-ro-er +y com-etent a,thority% the em-loyees ignore
or diso+ey them at their -eril. )or Galanida6s contin,ed ref,sal to o+ey
&llied Ban16s transfer orders% we hold that the +an1 dismissed Galanida for
C,st ca,se in accordance with &rticle ('(;a< of the La+or Code. Galanida is
th,s not entitled to reinstatement or to se-aration -ay. ;Bm-hasis s,--lied%
citations omitted<. /,rs,ant to &llied Ban1ing% ,nless the order of 5/= is
rendered invalid% there is a -res,m-tion of the validity of that order.
Since the /4& event,ally r,led that the transfer order was a valid e7ercise
of management -rerogative% 5/= had the a,thority to contin,e with the
administrative -roceedings for ins,+ordination and willf,l diso+edience
(' F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
against Delada and to im-ose on him the -enalty of s,s-ension. &s a
conse8,ence% -etitioner is not lia+le to -ay +ac1 wages and other +eneAts
for the -eriod corres-onding to the -enalty of "$0day s,s-ension.
2e r,le that -etitioner 5anila /avilion =otel had the a,thority to contin,e
with the administrative -roceedings for ins,+ordination and willf,l
diso+edience against Delada and to im-ose on him the -enalty of
s,s-ension. Conse8,ently% -etitioner is not lia+le to -ay +ac1 wages and
other +eneAts for the -eriod corres-onding to the -enalty of "$0day
s,s-ension.
XIV. TERMINATION OF EMPLOYMENT
LOPE& vs. ALTURAS GROUP OF COMPANIES
G.R. No. "$$'% &/R3L % ($
)&CTS*
/etitioner Y,irico Lo-eR was hired as a tr,c1 driver +y &lt,ras Gro,- of
Com-anies. Sometime in ""P% he was dismissed after he was allegedly
ca,ght +y res-ondent6s sec,rity g,ard in the act of attem-ting to sm,ggle
o,t of the com-any -remises !$ 1ilos of scra- iron worth /'@$. 3n
com-liance with the Show Ca,se ?rder% -etitioner answered the allegations
+y a handwritten e7-lanation.
)inding -etitioner6s e7-lanation ,nsatisfactory% res-ondent com-any
terminated his em-loyment +y Notice of Termination% on the gro,nds of
loss of tr,st and conAdence% and of violation of com-any r,les and
reg,lations. /etitioner there,-on Aled a com-laint against res-ondent
com-any for illegal dismissal and ,nder-ayment of wages. =e claimed that
the sm,ggling charge against him was fa+ricated to C,stify his illegal
dismissalD that the Aling of the charge came a+o,t after he re-orted the
loss of the original co-y of his -ay sli-% which re-ort% he went on to claim%
res-ondent com-any too1 to mean that he co,ld ,se the -ay sli- as
evidence for Aling a com-laint for violation of la+or laws.
By decision of the La+or &r+iter% it was held that -etitioner6s dismissal was
C,stiAed% for he% a tr,c1 driver% held a -osition of tr,st and conAdence% and
his act of stealing com-any -ro-erty was a violation of the tr,st re-osed
,-on him. ?n a--eal% the National La+or Relations Commission6s ;NLRC<%
reversed the r,ling of the La+or &r+iter ,-on Anding that res-ondent6s
evidence did not s,9ce to warrant the termination of -etitioner6s services.
2hen the res-ondent a--ealed the case to the Co,rt of &--eals% it
reversed the NLRC r,ling and held that res-ondent com-any was C,stiAed
in terminating -etitioner6s em-loyment on the gro,nd of loss of tr,st and
conAdence% his alleged act of sm,ggling o,t the scra- iron having +een
s,9ciently esta+lished thro,gh the a9davits of s,-erior em-loyees.
&l+eit the a--ellate co,rt fo,nd that -etitioner6s dismissal was for a C,st
ca,se% it held that d,e -rocess was not o+served when res-ondent
com-any failed to give him a chance to defend his side in a -ro-er hearing.
3SSUBS*
2?N the termination was for a C,st ca,se.
2?N the -etitioner was aJorded d,e -rocess.
SC RUL3NG*
The termination was for a C,st ca,se.
Dismissals have two facets* the legality of the act of dismissal% which
constit,tes s,+stantive d,e -rocess% and the legality of the manner of
dismissal which constit,tes -roced,ral d,e -rocess. &s to s,+stantive d,e
-rocess% the Co,rt Ands that res-ondent com-any6s loss of tr,st and
conAdence arising from -etitioner6s sm,ggling o,t of the scra- iron%
com-o,nded +y his -ast acts of ,na,thoriRed selling cartons +elonging to
res-ondent com-any% constit,ted C,st ca,se for terminating his services.
/etitioner% a driver assigned with a s-eciAc vehicle% was entr,sted with the
trans-ortation of res-ondent com-any6s goods and -ro-erty% and
conse8,ently with its handling and -rotection% hence% even if he did not
occ,-y a managerial -osition% he can +e said to +e holding a -osition of
res-onsi+ility. &s to his act ] -rinci-al gro,nd for his dismissal ] his
attem-t to sm,ggle o,t the scra- iron +elonging to res-ondent com-any%
the same is ,ndo,+tedly wor10related.
The /etitioner was given d,e -rocess.
/roced,ral d,e -rocess has +een deAned as giving an o--ort,nity to +e
heard +efore C,dgment is rendered. /etitioner was given the o--ort,nity to
e7-lain his side when he was informed of the charge against him and
re8,ired to s,+mit his written e7-lanation with which he com-lied. There
is no violation of d,e -rocess even if no hearing was cond,cted% where the
-arty was given a chance to e7-lain his side of the controversy. The right to
co,nsel and the assistance of one in investigations involving termination
(" F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
cases is neither indis-ensa+le nor mandatory% e7ce-t when the em-loyee
himself re8,ests for one or that he manifests that he wants a formal
hearing on the charges against him. 3n -etitioner6s case% there is no
showing that he re8,ested for a formal hearing to +e cond,cted or that he
+e assisted +y co,nsel.
=ence% the -etition was denied.
APACIBLE vs. MULTIMED INDUSTRIES INC.
G.R. No. P'"$:% 5&S :$% ($
)&CTS*
/etitioner .,liet &-aci+le was the com-anyIs &ssistant &rea Sales 5anager
for Ce+, ?-erations when she was se-arated from service. ?n ($$:%
/etitioner was informed that she will +e transferred to the com-any6s main
o9ce in /asig City on acco,nt of the ongoing reorganiRation. &t the same
time% she was -laced ,nder investigation for the delayed released of BCRs
;cash +,dget for c,stomer re-resentation in sealed envelo-es which are
given to loyal clients<. 3n her written e7-lanation% -etitioner% admitting that
the delay constit,ted a violation of com-any -olicies% averred that she
forgot to endorse the BCRs +eca,se she was thin1ing a+o,t her im-ending
transferD and that she did not misa--ro-riate the money as she had already
released the BCRs. )inding that the delay in releasing the BCRs amo,nted
to loss of tr,st and conAdence% -etitioner was given the o-tion to resign.
She there,-on re-orted to the head o9ce in /asig City. 3n the meeting
there% she was given the o-tions of resignation% termination% availment of
an early retirement -ac1age% or transfer to /asig City. 2itho,t availing of
any o-tion% -etitioner too1 a leave of a+sence.
/etitioner% thro,gh co,nsel% inform the com-any that the meeting that too1
-lace was Eillegal%E Einsensitive%E Einh,maneE and -etitioner6s dismissals a
E,nilateral arrangement and r,thless dis-lay of -ower.E 3n the same letter%
her co,nsel demanded -ayment of se-aration -ay and stated that he had
advised -etitioner to remain in her c,rrent -osition in Ce+,.
The res-ondent com-any then sent -etitioner a memorand,m0directivefor
her to immediately re-ort to the head o9ce in /asig City and to ret,rn the
com-any vehicle assigned to her to the Ce+, ?9ce within (@ ho,rs.
/etitioner did not heed the directive% however. She instead Aled an
a--lication for sic1 leave.
By 5emorand,m% res-ondent reiterated its directive to -etitioner% +,t her
co,nsel sent another letter to the com-any% fa,lting her for -ress,ring
-etitioner to resign and reiterating the demand for se-aration -ay. &gain
co,nsel stated that he had advised -etitioner to remain in Ce+,.
/etitioner then re8,ested that she +e given her daily wor1 assignment in
Ce+,% which re8,est was denied +y the res-ondent. Later on% -etitioner
was given a show ca,se notice for her to e7-lain in writing why she sho,ld
not +e sanctioned for ins,+ordination for fail,re to com-ly with the transfer
order.
&gain% -etitioner% thro,gh co,nsel% wrote res-ondent com-any% maintaining
that she was Enot transferring to 5anilaE and that if the com-any EwantMedN
-etitioner o,t of the com-any%E se-aration -ay m,st +e -aid. By letter to
the -etitionerIs co,nsel% res-ondent com-any denied having -ress,red
-etitioner as it stressed that the transfer was +ased on +,siness demands
and did not entail a demotion in ran1 nor dimin,tion of +eneAts.
Res-ondent com-any then sent -etitioner a notice of termination for
ins,+ordination% -rom-ting -etitioner to Ale a com-laintfor illegal dismissal%
non0-ayment of overtime -ay% :th month -ay% service incentive leave
-ay% se-aration -ay% damages and attorney6s fees +efore the La+or &r+iter.
The La+or &r+iter dismissed -etitioner6s com-laint% r,ling that she was
dismissed for C,st ca,se% i.e.% fra,d or loss or tr,st and conAdence ,nder
&rticle ('( ;a< and ;c< of the La+or Code.
?n a--eal% the National La+or Relations Commission ;NLRC<% a9rmed the
La+or &r+iter6s decision +,t on a diJerent gro,nd ] -etitioner6s ref,sal to
o+ey the transfer orders which amo,nted to ins,+ordination. The NLRC%
however% granted -etitioner se-aration -ay +y way of Anancial assistance%
:th month -ay% and an amo,nt re-resenting salary for Ave ,n-aid days.
The Co,rt of &--eals granted res-ondent com-any6s a--eal +y modifying
the NLRC Decision. 3t r,led that -etitioner was not entitled to se-aration
-ay +eca,se% contrary to the NLRC6s Anding% she Elac1ed good faith.E 3t
noted that -etitioner% from the start% 1new and acce-ted the com-any
-olicy on transfers whenever so re8,ired% and co,ld not th,s ref,se
Eanother valid reassignment +y treating it as an im-osition and +,rden.E
The a--ellate co,rt f,rther held that as an &ssistant &rea Sales 5anager%
-etitioner was e7-ected to Eshow more e7acting wor1 ethics% a higher
degree of loyalty and res-ect as o--osed to her s,+ordinate em-loyees%E
:$ F / a g e
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yet she Eo-enly and contin,ally deAedE the transfer ordersD and that her
+elligerent attit,de +ecame even more -rono,nced when her co,nsel sent
several ins,lting and threatening letters to res-ondent com-any and its
o9cers.
The a--ellate co,rt went on to And that -etitioner6s acts were Ehighly
insolent% im-ertinent and lac1ing in good faith%E hence% not entitled to
se-aration -ay +y way of Anancial assistance.
3SSUB*
2?N -etitioner is entitled se-aration -ay +y way of Anancial assistance.
SC RUL3NG*
The -etition fails. &s fo,nd +y the La+or &r+iter% the NLRC and the
a--ellate co,rt% -etitioner was C,stly dismissed from em-loyment.
The law is clear. Se-aration -ay is only warranted when the ca,se for
termination is not attri+,ta+le to the em-loyee6s fa,lt s,ch as those
-rovided in &rticles (': and ('@ of the La+or Code% as well as in cases of
illegal dismissal in which reinstatement is no longer feasi+le. 3t is not
allowed when an em-loyee is dismissed for C,st ca,se% s,ch as serio,s
miscond,ct. 3n clear and ,nmista1a+le lang,age% it has +een held that the
award of Anancial assistance shall not +e given to validly terminated
em-loyees% whose oJenses are ini8,ito,s or reTective of some de-ravity in
their moral character. 2hen the em-loyee commits an act of dishonesty%
de-ravity% or ini8,ity% the grant of Anancial assistance is mis-laced
com-assion.
/etitioner was% it +ears reiteration% dismissed for willf,lly diso+eying the
lawf,l order of her em-loyer to transfer from Ce+, to /asig City. &s
correctly noted +y the a--ellate co,rt% -etitioner 1new and acce-ted
res-ondent com-any6s -olicy on transfers when she was hired and was in
fact even transferred many times from one area of o-erations to another ]
Bacolod City% 3loilo City and Ce+,.
The act of the /etitioner constit,tes serio,s miscond,ct or willf,l
diso+edience. 2illf,l diso+edience of the em-loyer6s lawf,l orders% as a C,st
ca,se for dismissal of an em-loyee% envisages the conc,rrence of at least
two re8,isites* ;< the em-loyee6s assailed cond,ct m,st have +een willf,l%
that is% characteriRed +y a wrongf,l and -erverse attit,deD and ;(< the
order violated m,st have +een reasona+le% lawf,l% made 1nown to the
em-loyee and m,st -ertain to the d,ties which he had +een engaged to
discharge.
Clearly% -etitioner6s adamant ref,sal to transfer% co,-led with her fail,re to
heed the order for her ret,rn the com-any vehicle assigned to her and%
more im-ortantly% allowing her co,nsel to write letters co,ched in harsh
lang,age to her s,-eriors ,n8,estiona+ly show that she was g,ilty of
ins,+ordination% hence% not entitled to the award of se-aration -ay.
BARROGA vs. DATA CENTER COLLEGE OF THE PHILIPPINES
G.R. No. P@#'% .UNB (P% ($
)&CTS*
/etitioner was em-loyed as an 3nstr,ctor in Data Center College Laoag City
+ranch in 3locos Norte. & 5emorand,m was iss,ed +y the res-ondent which
transferred him to University of Northern /hili--ines ;UN/< in 4igan% 3locos
S,r where the school had a tie0,- -rogram. /etitioner was informed that he
wo,ld +e receiving% in addition to his monthly salary% an allowance for
+oard and lodging d,ring his stint as instr,ctor in UN/04igan. =e was
recalled to Laoag cam-,s afterwards. &gain% -etitioner received a
5emorand,mtransferring him to Data Center College Bang,ed% &+ra
+ranch as =ead for Bd,cation>3nstr,ctor d,e to an ,rgent need for an
e7-erienced o9cer and com-,ter instr,ctor thereat.
=owever% -etitioner declined to acce-t his transfer to &+ra citing among
others% the a+sence of additional rem,neration to defray e7-enses for
+oard and lodging which constit,tes im-licit dimin,tion of his
salary. /etitioner Aled a Com-laint for constr,ctive dismissal against
res-ondents. /etitioner alleged that his -ro-osed transfer to &+ra
constit,tes a demotion in ran1 and dimin,tion in -ay and wo,ld ca,se
-ersonal inconvenience and hardshi-.
)or their -art% res-ondents claimed that they were merely e7ercising their
management -rerogative to transfer em-loyees for the -,r-ose of
advancing the school6s interests. They arg,ed that -etitioner6s ref,sal to +e
transferred to &+ra constit,tes ins,+ordination. They claimed that
-etitioner6s a--ointment as instr,ctor carries a -roviso of -ossi+le re0
assignments to any +ranch or tie0,- schools as the school6s necessity
demands. =ead for Bd,cation in Laoag +ranch was merely tem-orary and
: F / a g e
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that he wo,ld still occ,-y his original -lantilla item as instr,ctor at his
-ro-osed assignment in &+ra +ranch.
The La+or &r+iter rendered a Decision dismissing the Com-laint for lac1 of
merit. The La+or &r+iter r,led that there was no demotion in ran1 as
-etitioner6s original a--ointment as instr,ctor conferred ,-on res-ondents
the right to transfer him to any of the school6s +ranches and that
-etitioner6s designation as =ead for Bd,cation can +e withdrawn anytime
since he held s,ch administrative -osition in a non0-ermanent ca-acity.
The NLRC a9rmed the Andings of the La+or &r+iter that there was no
constr,ctive dismissal. 3t r,led that the management decision to transfer
-etitioner was well within the rights of res-ondents in consonance with
-etitioner6s contract of em-loyment and which was not s,9ciently shown
to have +een e7ercised ar+itrarily +y res-ondents.
The C& dismissed the -etition +eca,se of the non0com-liance of certain
-roced,ral re8,irements.
3SSUB*
2?N the transfer of the -etitioner was tantamo,nt to constr,ctive
dismissal.
SC RUL3NG*
/etitioner6s transfer was not tantamo,nt to constr,ctive dismissal.
Constr,ctive dismissal is 8,itting +eca,se contin,ed em-loyment is
rendered im-ossi+le% ,nreasona+le or ,nli1ely% or +eca,se of a demotion in
ran1 or a dimin,tion of -ay. 3t e7ists when there is a clear act of
discrimination% insensi+ility or disdain +y an em-loyer which +ecomes
,n+eara+le for the em-loyee to contin,e his em-loyment.
/etitioner was originally a--ointed as instr,ctor and was given additional
administrative f,nctions as =ead for Bd,cation d,ring his stint in Laoag
+ranch. =e did not deny having +een designated as =ead for Bd,cation in a
tem-orary ca-acity for which he cannot invo1e any ten,rial sec,rity.
=ence% +eing tem-orary in character% s,ch designation is termina+le at the
-leas,re of res-ondents who made s,ch a--ointment. 3t is management
-rerogative for em-loyers to transfer em-loyees on C,st and valid gro,nds
s,ch as gen,ine +,siness necessity.
The Co,rt agrees with the La+or &r+iter that there was no violation of the
-rohi+ition on dimin,tion of +eneAts. 3ndeed% any +eneAt and -er1s +eing
enCoyed +y em-loyees cannot +e red,ced and discontin,edD otherwise% the
constit,tional mandate to aJord f,ll -rotection to la+or shall +e
oJended.B,t the r,le against dimin,tion of +eneAts is a--lica+le only if the
grant or +eneAt is fo,nded on an e7-ress -olicy or has ri-ened into a
-ractice over a long -eriod which is consistent and deli+erate.
/etitioner failed to -resent any other evidence that res-ondents committed
to -rovide the additional allowance or that they were consistently granting
s,ch +eneAt as to have ri-ened into a -ractice which cannot +e
-erem-torily withdrawn. 5oreover% there is no concl,sive -roof that
-etitioner6s +asic salary will +e red,ced as it was not shown that s,ch
allowance is -art of -etitioner6s +asic salary. =ence% there will +e no
violation of the r,le against dimin,tion of -ay en,nciated ,nder &rticle $$
of the La+or Code.
LOPE& vs. KEPEL BANK PHILS.
G.R. No. P!'$$% SB/TB5BBR #% ($
)&CTS*
/BT3T3?NBR was the +ranch manager of Xe--el Ban1 /hili--ines% 3nc. in
3loilo City. 3n&,g,st ($$:% res-ondent s-eciAcally instr,cted him not to
-roceed with =ertR B7cl,sive Cars% 3nc.Is loan a--lication +eca,se of the
negative credit rating iss,ed +y the +an1Is credit committee. This%
notwithstanding% Lo-eR -rocessed the loan. =e was dismissed from
the service.
3SSUB*
2as the dismissal C,stiAedL
SC RUL3NG*
Ses. Lo-eRIs good intentions% ass,ming them to +e tr,e% are +eside the
-oint +eca,se ,ltimately% what comes o,t is his deAance of a direct order
of the +an1 on a matter of +,siness C,dgment. The right of an em-loyer
to freely select or discharge his em-loyee is a recogniRed -rerogative of
managementD an em-loyer cannot +e com-elled to contin,e em-loying
one who has +een g,ilty of acts inimical to its interests. 2hen this
ha--ens% the em-loyer can dismiss the em-loyee for loss of conAdence. &t
the same time% loss of conAdence as a C,st ca,se of dismissal was never
intended to -rovide em-loyers with a +lan1 chec1 for terminating
em-loyment. Loss of conAdence sho,ld ideally a--ly only ;< to cases
:( F / a g e
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University of San Carlos College of Law
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The Diamond Batch
involving em-loyees occ,-ying -ositions of tr,st and conAdence% or ;(< to
sit,ations where the em-loyee is ro,tinely charged with the care and
c,stody of the em-loyerIs money or -ro-erty. To the Arst class +elong
managerial em-loyees% i.e.% those vested with the -owers and -rerogatives
to lay down management -olicies and>or to hire% transfer% s,s-end% lay0oJ%
recall% discharge% assign or disci-line em-loyees% or eJectively recommend
s,ch managerial actions. To the second class +elong cashiers% a,ditors%
-ro-erty c,stodians% or those who% in the normal and ro,tine e7ercise of
their f,nctions% reg,larly handle signiAcant amo,nts of money or -ro-erty.
&s +ranch manager% Lo-eR clearly occ,-ies a E-osition of tr,st.E =is hold on
his -osition and his stay in the service de-end on the em-loyer6s tr,st and
conAdence in him and on his managerial services. &ccording to the +an1%
Lo-eR +etrayed this tr,st and conAdence when he iss,ed the s,+Cect /?s
witho,t a,thority and des-ite the e7-ress directive to -,t the client6s
a--lication on hold. 3n res-onse% Lo-eR insists that he had s,9cient
a,thority to act as he did% as this a,thority is inherent in his -osition as
+an1 manager. =e -oints to his record in the -ast when he iss,ed /?s
which were honored and -aid +y the +an1 and which constit,ted the
ar+iter6s Eoverwhelming evidenceE in s,--ort of the Anding that
Ecom-lainant6s dismissal from wor1 was witho,t C,st ca,se% hence% illegal.E
)he due process issue *** &s the NLRC and the C& did% we And Lo-eR to
have +een aJorded d,e -rocess when he was dismissed. =e was given the
re8,ired notices. 5ore im-ortantly% he was act,ally given the o--ort,nity
to +e heardD when he moved for reconsideration of the +an16s decision to
terminate his em-loyment% it sched,led a hearing where he a--eared
together with his lawyer and a military man. This was an o--ort,nity to +e
heard that the law recogniRes.
La+or &r+iter* 3llegal dismissal
NLRC* Legal dismissal C&* Legal dismissal
ST. PAUL COLLEGE !UE&ON CITY, ET. AL., vs. ANCHETA II
G.R. No. !""$#% SB/TB5BBR P% ($
)&CTS*
RBS/?NDBNT Remigio 5ichael was hired +y the -etitioner St. /a,l College
Y,eRon City ;S/CYC< as a teacher in the General Bd,cation De-artment%
with a -ro+ationary ran1% in the school year ;SS< ""!0""P. This was
renewed in the following SS ""P0""'. =is wife% res-ondent Cynthia% was
hired +y the same school as a -art0time teacher of the 5ass
Comm,nication De-artment in the second semester of SS ""!0""P and
her a--ointment was renewed for SS ""P0""'.
3n res-onse to res-ondent s-o,sesI re8,est for renewal of contract%
-etitioner S/CYC thro,gh Sr. Bernadete Racadio sent each of them letters
+oth dated 5arch "% ""'% informing them that the school was e7tending to
them new contracts for SS ""'0""".
?n &-ril :$% ""'% Sr. Racadio endorsed the immediate termination of the
teaching services of res-ondent s-o,ses for fail,re to com-ly with
en,merated de-artmental and instr,ctional -olicies of S/CYC. ?n 5ay @%
""'% the s-o,ses received their letters of termination.
Both the la+or ar+iter and the National La+or Relations Commission ;NLRC<
dismissed the res-ondentsI com-laint for illegal dismissal. The Co,rt of
&--eals ;C&< granted their -etition for certiorari and reversed the decisions
of the la+or ar+iter and the NLRC.
3SSUB*
Did the C& errL
SC RUL3NG*
Ses.
The common -ractice is for the em-loyer and the teacher to enter into a
contract% eJective for one school year. &t the end of the school year% the
em-loyer has the o-tion not to renew the contract% -artic,larly considering
the teacherIs -erformance.
3f the contract is not renewed% the em-loyment relationshi- terminates. 3f
the contract is renewed% ,s,ally for another school year% the -ro+ationary
em-loyment contin,es. &gain% at the end of that -eriod% the -arties may
o-t to renew or not to renew the contract. 3f renewed% this second renewal
of the contract for another school year wo,ld then +e the last year since
it wo,ld +e the third school year of -ro+ationary em-loyment. &t the end
of this third year% the em-loyer may now decide whether to e7tend a
-ermanent a--ointment to the em-loyee% -rimarily on the +asis of the
em-loyee having met the reasona+le standards of com-etence and
e9ciency set +y the em-loyer. )or the entire d,ration of this three0year
-eriod% the teacher remains ,nder -ro+ation. U-on the e7-iration of his
contract of em-loyment% +eing sim-ly on -ro+ation% he cannot
a,tomatically claim sec,rity of ten,re and com-el the em-loyer to renew
his em-loyment contract.
7 7 7
:: F / a g e
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The Diamond Batch
3t is im-ortant that the contract of -ro+ationary em-loyment s-ecify the
-eriod or term of its eJectivity. The fail,re to sti-,late its -recise d,ration
co,ld lead to the inference that the contract is +inding for the f,ll three0
year -ro+ationary -eriod. Therefore% the letters sent +y -etitioner Sr.
Racadio% which were void of any s-eciAcs cannot +e considered as
contracts. The closest they can resem+le to are that of informal
corres-ondence among the said individ,als. &s s,ch% -etitioner school has
the right not to renew the contracts of the res-ondents% the old ones
having +een e7-ired at the end of their terms. ;St. /a,l College Y,eRon
City% et. al. vs. Remigio 5ichael &. &ncheta 33% G.R. No. !""$#% Se-t. P%
($<.
UMUAD vs. HI%FLYER FOOD
G.R. No. 'P''P% SB/TB5BBR P% ($
.,m,ad was fo,nd to have willf,lly +reached her d,ties as to +e ,nworthy
of the tr,st and conAdence of =i0)lyer. )irst% .,m,ad was a managerial
em-loyeeD she e7ec,ted management -olicies and had the -ower to
disci-line the em-loyees of X)C +ranches in her area. She recommended
actions on em-loyees to the head o9ce. &ccording to the S,-reme Co,rt%
+ased on esta+lished facts% the mere e7istence of the gro,nds for the loss
of tr,st and conAdence C,stiAes -etitionerIs dismissal. 3n the -resent case%
the CBRIs re-orts of =i0)lyer show that there were anomalies committed in
the X)C +ranches managed +y .,m,ad. ?n the -rinci-le ofres-ondeat
s,-erior or command res-onsi+ility alone% .,m,ad may +e held lia+le for
negligence in the -erformance of her managerial d,ties. She may not have
+een directly involved in ca,sing the cash shortages in X)C0Bohol% +,t her
involvement in not -erforming her d,ty monitoring and s,--orting the day
to day o-erations of the +ranches and ens,re that all the facilities and
e8,i-ment at the resta,rant were -ro-erly maintained and serviced% co,ld
have -revented the whole de+acle from occ,rring.
NISSAN MORTOR PHILS. vs. ANGELO
G.R. No. !@'% SB/TB5BBR @% ($
Neglect of d,ty% to +e a gro,nd for dismissal% m,st +e +oth gross and
ha+it,al. 3n this case% Res-ondentIs re-eated fail,re to t,rn over his tas1 of
-re-aring the -ayroll of the -etitionerIs em-loyees to someone ca-a+le of
-erforming the vital tas1s which he co,ld not eJectively -erform or
,nderta1e +eca,se of his heart ailment or condition constit,tes gross
neglect. =owever% altho,gh the dismissal was legal% res-ondent was still
held to +e entitled to a se-aration -ay as a meas,re of com-assionate
C,stice% considering his length of service and his -oor -hysical condition
which was one of the reasons he Aled a leave of a+sence. &s a general r,le%
an em-loyee who has +een dismissed for any of the C,st ca,ses
en,merated ,nder &rticle ('( of the La+or Code is not entitled to
se-aration -ay. By way of e7ce-tion% however% the grant of se-aration -ay
or some other Anancial assistance may +e allowed to an em-loyee
dismissed for C,st ca,ses on the +asis of e8,ity.
PHILIPPINE NATIONAL BANK vs. PADAO
G.R. No. '$'@"% N?4B5BBR !% ($
)&CTS*
/adao was a credit investigator at /NB% Di-olog City +ranch. Sometime in
""@% /NB +ecame em+roiled in a scandal involving E+ehest loans.E The
8,estiona+le loans were re-ortedly +eing e7tended to select +an1 clients
that the collateral -rovided in n,mero,s loan accommodations were
grossly over0a--raised. The credit standing of the loan a--licants was also
fa+ricated% allowing them to o+tain larger loan -ortfolios from /NB. These
+orrowers event,ally defa,lted on the -ayment of their loans% ca,sing /NB
to s,Jer millions in losses.
/adao was administratively charged. &fter d,e investigation% /NB fo,nd
/adao g,ilty of gross and ha+it,al neglect of d,ty and ordered him
dismissed from the +an1.
SC RUL3NG*
DismissalD gross and ha+it,al neglect of d,ties. Gross negligence connotes
want of care in the -erformance of oneIs d,ties% while ha+it,al neglect
im-lies re-eated fail,re to -erform oneIs d,ties for a -eriod of time%
de-ending on the circ,mstances. 3n the case at +ench% /adao was acc,sed
of having -resented a fra,d,lently -ositive eval,ation of the +,siness%
credit standing>rating and Anancial ca-a+ility of Reynaldo and L,Rvilla
Bal,ma and eleven other loan a--licants. Some +,sinesses were
event,ally fo,nd not to e7ist at all% while in other transactions% the Anancial
stat,s of the +orrowers sim-ly co,ld not s,--ort the grant of loans in the
a--roved amo,nts. 5oreover% /adao over0a--raised the collateral of
s-o,ses Gardito and &lma &Cero% and that of s-o,ses 3ha+a and Rolly
/ango. /adaoIs re-eated fail,re to discharge his d,ties as a credit
:@ F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
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The Diamond Batch
investigator of the +an1 amo,nted to gross and ha+it,al neglect of d,ties
,nder &rticle ('( ;+< of the La+or Code. =e not only failed to -erform what
he was em-loyed to do% +,t also did so re-etitively and ha+it,ally% ca,sing
millions of -esos in damage to /NB. Th,s% /NB acted within the +o,nds of
the law +y meting o,t the -enalty of dismissal% which it deemed
a--ro-riate given the circ,mstances.
That there is no -roof that /adao derived any +eneAt from the scheme is
immaterial. 2hat is cr,cial is that his gross and ha+it,al negligence
ca,sed great damage to his em-loyer. /adao was aware that there was
something irreg,lar a+o,t the -ractices +eing im-lemented +y his
s,-eriors% +,t he went along with% +ecame -art of% and -artici-ated in the
scheme.
Dismissed em-loyeesD se-aration -ay. /adao is not entitled to Anancial
assistance. The r,le regarding se-aration -ay as a meas,re of social
C,stice is that it shall +e -aid only in those instances where the em-loyee is
validly dismissed for ca,ses other than serio,s miscond,ct% willf,l
diso+edience% gross and ha+it,al neglect of d,ty% fra,d or willf,l +reach of
tr,st% commission of a crime against the em-loyer or his family% or those
reTecting on his moral character. 3n this case% /adao was g,ilty of gross
and ha+it,al neglect of d,ties.
Termination of em-loymentD when com-any tolerated violation of com-any
-olicy. The C& was correct in stating that when the violation of com-any
-olicy or +reach of com-any r,les and reg,lations is tolerated +y
management% it cannot serve as a +asis for termination. This -rinci-le%
however% only a--lies when the +reach or violation is one which neither
amo,nts to nor involves fra,d or illegal activities. 3n s,ch a case% one
cannot evade lia+ility or c,l-a+ility +ased on o+edience to the cor-orate
chain of command. 3n this case% /adao% in a97ing his signat,re on the
fra,d,lent re-orts% attested to the falsehoods contained therein. 5oreover%
+y doing so% he re-eatedly failed to -erform his d,ties as a credit
investigator. Th,s% the termination of his em-loyment is C,stiAed.
TAMSONS ENTERPRISES INC. vs. COURT OF APPEALS
G.R. No. "(''% N?4B5BBR !% ($
)&CTS*
?n Se-tem+er % ($$!% Rosemarie L. Sy was hired +y Tamson6s as &ssistant
to the /resident. Des-ite the title% she did not act as s,ch +eca,se% -er
instr,ction of the com-any /resident% she was directed to act as -ayroll
o9cer% tho,gh she act,ally wor1ed as a -ayroll cler1. ?n )e+r,ary (@%
($$P% fo,r days +efore she com-leted her si7th month of wor1ing in
Tamson6s% Sy was informed that her services wo,ld +e terminated d,e to
ine9ciency. She was as1ed to sign a letter of resignation and 8,itclaim.
She was told not to re-ort for wor1 anymore +eca,se her services were no
longer needed.
D,ring her -re0em-loyment interview% Lee had nice comments a+o,t her
good wor1 e7-erience and ed,cational +ac1gro,nd. She was ass,red of a
long0term em-loyment with +eneAts. Thro,gho,t her em-loyment% she
earnestly -erformed her d,ties% had a -erfect attendance record% wor1ed
even d,ring +rowno,ts and ty-hoons% and wo,ld often wor1 overtime C,st
to Anish her wor1.
3SSUB*
2?N her dismissal was valid.
SC RUL3NG*
/ro+ationary em-loymentD sec,rity of ten,re. 3t is settled that even if
-ro+ationary em-loyees do not enCoy -ermanent stat,s% they are accorded
the constit,tional -rotection of sec,rity of ten,re. This means they may
only +e terminated for a C,st ca,se or when they otherwise fail to 8,alify as
reg,lar em-loyees in accordance with reasona+le standards made 1nown
to them +y the em-loyer at the time of their engagement. 3n this case% the
C,stiAcation given +y the -etitioners for SyIs dismissal was her alleged
fail,re to 8,alify +y the com-anyIs standard. ?ther than the general
allegation that said standards were made 1nown to her at the time of her
em-loyment% however% no evidence% doc,mentary or otherwise% was
-resented to s,+stantiate the same. Neither was there any -erformance
eval,ation -resented to -rove that indeed hers was ,nsatisfactory. =ence%
for fail,re of the -etitioners to s,--ort their claim of ,nsatisfactory
-erformance +y Sy% the SC held that SyIs em-loyment was ,nC,stly
terminated to -revent her from ac8,iring a reg,lar stat,s in circ,mvention
of the law on sec,rity of ten,re.
/ro+ationary em-loymentD termination. Bven on the ass,m-tion that Sy
indeed failed to meet the standards set +y the -etitioner0em-loyer and
made 1nown to the former at the time of her engagement% still% the
:# F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
termination was Tawed for fail,re to give the re8,ired notice to Sy. Section
(% R,le 3% Boo1 43 of the 3m-lementing R,les -rovides that* K3f the
termination is +ro,ght a+o,t +y the com-letion of a contract or -hase
thereof% or +y fail,re of an em-loyee to meet the standards of the em-loyer
in the case of -ro+ationary em-loyment% it shall +e s,9cient that a written
notice is served the em-loyee% within a reasona+le time from the eJective
date of termination.O
CONCEPCION vs. MINE' IMPORT CORP.
G.R. No. #:#!"% .&NU&RS (@% ($(
)&CTS*
Res-ondent 5ine7 3m-ort0B7-ort Cor-oration is engaged in the retail of
semi0-recio,s stones% selling them in 1ios1s or stalls installed in vario,s
sho--ing centers within 5etro 5anila. 3t em-loyed -etitioner Conce-cion
initially as a salesgirl and then made her a s,-ervisor. ?ne day% -etitioner
determined their total for three days to +e /#$%"(.$$. The ne7t day%
-etitioner -honed the assistant manager to re-ort that the said amo,nt
was missing% e7-laining how she and her salesgirls had -laced the wra--ed
amo,nt at the +ottom of the ca+inet the night +efore% and how she had
fo,nd ,-on re-orting to wor1 that morning that the contents of the ca+inet
were in disarray and the money already missing.
2hile -etitioner was giving a detailed statement on the theft to the
sec,rity investigator of the sho--ing center% her s,-eriors arrived with a
-oliceman who immediately -laced her ,nder arrest and +ro,ght her to the
-olice station where she was investigated and detained for a day.
/etitioner com-lained against the res-ondents for illegal dismissal in the
De-artment of La+or and Bm-loyment. 5ine7 Aled a com-laint for
8,aliAed theft against the -etitioner in the ?9ce of the City /rosec,tor in
5anila.
SC RUL3NG*
Bm-loyee dismissalD C,st ca,seD loss of conAdence. To dismiss an em-loyee%
the law re8,ires the e7istence of a C,st and valid ca,se. &rticle ('( of the
La+or Code en,merates the C,st ca,ses for termination +y the em-loyer. 3t
is ,nfair to re8,ire an em-loyer to Arst +e morally certain of the g,ilt of the
em-loyee +y awaiting a conviction +efore terminating him when there is
already s,9cient showing of the wrongdoing. Re8,iring that certainty may
-rove too late for the em-loyer% whose loss may -otentially +e +eyond
re-air. 3n the -resent case% no less than the D?. Secretary fo,nd -ro+a+le
ca,se for 8,aliAed theft against Conce-cion. That Anding was eno,gh to
C,stify her termination for loss of conAdence.
3ndeed% the em-loyer is not e7-ected to +e as strict and rigoro,s as a C,dge
in a criminal trial in weighing all the -ro+a+ilities of g,ilt +efore terminating
the em-loyee. Unli1e a criminal case% which necessitates a moral certainty
of g,ilt d,e to the loss of the -ersonal li+erty of the acc,sed +eing the
iss,e% a case concerning an em-loyee s,s-ected of wrongdoing leads only
to his termination as a conse8,ence. The 8,ant,m of -roof re8,ired for
convicting an acc,sed is th,s higher ] -roof of g,ilt +eyond reasona+le
do,+t ] than the 8,ant,m -rescri+ed for dismissing an em-loyee ]
s,+stantial evidence.
Bm-loyee dismissalD d,e -rocess. Bven if there is a C,st or valid ca,se for
terminating an em-loyee% it is necessary to com-ly with the re8,irements
of d,e -rocess -rior to the termination. The -etitioner -lainly demonstrated
how 8,ic1ly and s,mmarily her dismissal was carried o,t witho,t Arst
re8,iring her to e7-lain anything in her defense as demanded ,nder
Section ( ;d< of R,le 3 of the 3m-lementing R,les of Boo1 43 of the La+or
Code. 3nstead% the res-ondents forthwith had her arrested and investigated
+y the -olice a,thorities for 8,aliAed theft. This% we thin1% was a denial of
her right to d,e -rocess of law% consisting in the o--ort,nity to +e heard
and to defend herself. 3n &ga+on v. NLRC the Co,rt said* K2here the
dismissal is for a C,st ca,se% as in the instant case% the lac1 of stat,tory d,e
-rocess sho,ld not n,llify the dismissal% or render it illegal% or ineJect,al.
=owever% the em-loyer sho,ld indemnify the em-loyee for the violation of
his stat,tory rights% as r,led in Reta v. National La+or Relations
Commission.O
MORALES vs. HARBOUR CENTRE PORT TERMINAL INC.
G.R. No. P@($'.&NU&RS (#% ($(
)&CTS*
/etitioner 5orales was a Division 5anager of the &cco,nting De-artment of
res-ondent =ar+o,r Centre /ort Terminal% 3nc. ;=C/T3<. S,+se8,ent to
=C/T36s transfer to its new o9ces% 5orales received an inter0o9ce
memorand,m reassigning him to ?-erations Cost &cco,nting. 5orales
wrote Singson% =C/T3Is &dministration 5anager% -rotesting that his
:! F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
reassignment was a clear demotion since the -osition to which he was
transferred was not even incl,ded in =C/T36s -lantilla. 3n res-onse to
5orales6 grievance that he had +een eJectively -laced on Toating
stat,s% Singson iss,ed a inter0o9ce memorand,m to the eJect that
Etransfer of em-loyees is a management -rerogative.E )or the whole of the
ens,ing month 5orales was a+sent from wor1 and>or tardy. &s a
conse8,ence% Singson iss,ed to 5orales the following inter0o9ce
memoranda* )irst 2arning% Second 2arning and a Notice to Re-ort for 2or1
and )inal 2arning.
3n the meantime% 5orales Aled a com-laint against =C/T3 for constr,ctive
dismissal. =e alleged that s,+se8,ent to its transfer to its new o9ces%
=C/T3 had s,s-ended all the -rivileges enCoyed +y its 5anagers% Division
Chiefs and Section =eads.
=C/T3 arg,ed that 5orales a+andoned his em-loyment and was not
constr,ctively dismissed.
SC RUL3NG*
Constr,ctive dismissalD change in -osition. Constr,ctive dismissal e7ists
where there is cessation of wor1 +eca,se Kcontin,ed em-loyment is
rendered im-ossi+le% ,nreasona+le or ,nli1ely% as an oJer involving a
demotion in ran1 or a dimin,tion in -ayO and other +eneAts. &-tly called a
dismissal in disg,ise of an act amo,nting to dismissal +,t made to a--ear
as if it were not% constr,ctive dismissal may% li1ewise% e7ist if an act of clear
discrimination% insensi+ility% or disdain +y an em-loyer +ecomes so
,n+eara+le on the -art of the em-loyee that it co,ld foreclose any choice
+y him e7ce-t to forego his contin,ed em-loyment.3n cases of a transfer of
an em-loyee% the r,le is settled that the em-loyer is charged with the
+,rden of -roving that its cond,ct and action are for valid and legitimate
gro,nds s,ch as gen,ine +,siness necessity and that the transfer is not
,nreasona+le% inconvenient or -reC,dicial to the em-loyee. 3f the em-loyer
cannot overcome this +,rden of -roof% the em-loyeeIs transfer shall +e
tantamo,nt to ,nlawf,l constr,ctive dismissal.
DismissalD a+andonment. &s a C,st and valid gro,nd for dismissal% at any
rate% a+andonment re8,ires the deli+erate% ,nC,stiAed ref,sal of the
em-loyee to res,me his em-loyment% witho,t any intention of
ret,rning. Since an em-loyee li1e 5orales who ta1es ste-s to -rotest his
dismissal cannot logically +e said to have a+andoned his wor1% it is a
settled doctrine that the Aling of a com-laint for illegal dismissal is
inconsistent with a+andonment of em-loyment.
MANSION PRINTING CENTER vs. BITARA, R.
G.R. No. !'($% .&NU&RS (#% ($(
)&CTS*
/etitioner 5ansion /rinting Center is engaged in the -rinting of 8,ality self0
adhesive la+els and the li1e. Res-ondent Bitara was the com-any6s sole
driver tas1ed to -ic10,- raw materials% collect acco,nt receiva+les and
deliver the -rod,cts within the delivery sched,les. /etitioner noted his
ha+it,al tardiness and a+senteeism. /etitioner iss,ed several memoranda
to res-ondent re8,iring the latter to s,+mit written e7-lanations* Arst% as to
why no administrative sanction sho,ld +e im-osed on him for his ha+it,al
tardinessD and then several months later% after BitaraIs a-ology and a failed
,nderta1ing to adhere to the attendance -olicies% why his services sho,ld
not +e terminated. The last memoranda was -ersonally handed to him% +,t
the latter% after reading the directive% ref,sed to ac1nowledge recei-t
thereof. =e did not s,+mit any e7-lanation and% thereafter% never re-orted
for wor1. &s a conse8,ence% Davis Cheng% General 5anager% -ersonally
served another 5emorand,m ;Notice of Termination< ,-on him informing
him that the com-any fo,nd him grossly negligent of his d,ties% for which
reason% his services were terminated. Res-ondent met with the
management re8,esting for reconsideration of his termination. =owever%
after hearing his -osition% the management decided to im-lement the last
5emorand,m. Res-ondent Aled a com-laint for illegal dismissal.
SC RUL3NG*
Bm-loyee dismissalD gross negligenceD ha+it,al neglect. Gross negligence
has +een deAned as the Kwant of care in the -erformance of oneIs d,tiesO
and ha+it,al neglect has +een deAned as Kre-eated fail,re to -erform
oneIs d,ties for a -eriod of time% de-ending ,-on the circ,mstances.O
These are not overly technical terms% which% in the Arst -lace% are e7-ressly
sanctioned +y the La+or Code of the /hili--ines% to wit* &RT. ('(.
Termination +y em-loyer. &n em-loyer may terminate an em-loyment for
any of the following ca,ses* M777N;+< Gross and ha+it,al neglect +y the
em-loyee of his d,tiesD M777N Diosdado Bitara was dismissed from service
d,e to ha+it,al tardiness and a+senteeism% and for having contin,ed
disregarding attendance -olicies des-ite his ,nderta1ing to re-ort on time.
=is wee1ly time record for the Arst 8,arter of the year ($$$ revealed that
he came late " times o,t of the @P times he re-orted for wor1. =e also
inc,rred " a+sences o,t of the !! wor1ing days d,ring the 8,arter. =is
:P F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
a+sences witho,t -rior notice and a--roval from 5arch 0!% ($$$ were
considered to +e the most serio,s infraction of all +eca,se of its adverse
eJect on +,siness o-erations. The S,-reme Co,rt held that even in the
a+sence of a written com-any r,le deAning gross and ha+it,al neglect of
d,ties% BitaraIs omissions 8,alify as s,ch warranting his dismissal from the
service.
DismissalD -roced,ral d,e -rocess. /roced,ral d,e -rocess entails
com-liance with the two0notice r,le in dismissing an em-loyee% to wit* ;<
the em-loyer m,st inform the em-loyee of the s-eciAc acts or omissions
for which his dismissal is so,ghtD and ;(< after the em-loyee has +een
given the o--ort,nity to +e heard% the em-loyer m,st inform him of the
decision to terminate his em-loyment.
3n B,ghaw v. Treas,re 3sland 3nd,strial Cor-oration% this Co,rt% in verifying
the veracity of the allegation that res-ondent ref,sed to receive the Notice
of Termination% essentially loo1ed for the following* ;< a9davit of service
stating the reason for fail,re to serve the notice ,-on the reci-ientD and ;(<
a notation to that eJect% which shall +e written on the notice itself. 2e are
convinced that the notices have +een validly served.
MANILA ELECTRIC CO. vs. BELTRAN
G.R. No. P:PP@% .&NU&RS :$% ($(
)&CTS*
/etitioner% the res-ondentIs em-loyer% dismissed the latter on the gro,nd
of +reach of tr,st and conAdence for allegedly having withheld and
misa--ro-riated for her -ersonal -,r-ose or +eneAt an electric +ill
-ayment of a 5eralco c,stomer.
Res-ondent Aled for illegal dismissal against -etitioner and arg,ed that
Kshe had no intention to withhold com-any f,nds. Besides% it was not her
c,stomary d,ty to collect and remit -ayments from c,stomers. She
claimed good faith% +elieving that her acce-tance of Chang6s -ayment is
considered goodwill in favor of +oth 5BR&LC? and its c,stomer. 3f at all%
her only violation was a sim-le delay in remitting the -ayment% which
ca,sed no considera+le harm to the com-any. ),rther% her nine years of
,n+lemished service to the com-any sho,ld +e ta1en into acco,nt s,ch
that the -enalty of dismissal is not a commens,rate -enalty for the
,nintentional act committed.O
5BR&LC?% on the other hand% maintained that ,nder com-any -olicy%
Beltran had the d,ty to remit -ayment for electric +ills +y any c,stomer on
the day the same was received. 3t o-ined that if indeed the money was
1e-t intact inside the drawer and was not -,t to -ersonal ,se% Beltran co,ld
have easily t,rned over the same when Garcia instr,cted her to do so on
.an,ary P% ""P. =owever% Beltran failed to remit the money on said date
and even on the following day% .an,ary '% when she re-orted for wor1.
2orse% in the two s,cceeding days% she went on leave. Th,s% there was a
clear sign of misa--ro-riation of com-any f,nds% considered a serio,s
miscond,ct and -,nisha+le +y dismissal from the service. ),rther% Beltran6s
reason for her fail,re to -erform s,ch o+ligation on acco,nt of family
-ro+lems deserves scant consideration. 5BR&LC? insisted that Beltran6s
act renders her ,nworthy of the tr,st and conAdence demanded of her
-osition.
L& r,led for res-ondent stating that the -enalty of dismissal as not
commens,rate to the degree of infraction committed as there was no
ade8,ate -roof of misa--ro-riation on the -art of Beltran and that it was
,nintentional and same cannot serve as s,9cient +asis to concl,de that
there was misa--ro-riation of com-any f,nds. 2hile the La+or &r+iter
commiserated with Beltran6s circ,mstances and too1 into acco,nt her long
and ,ntainted service% he nonetheless im-osed disci-linary action in the
form of forfeit,re of salary for her neglect in remitting the f,nds at once.
NLRC reversed and fo,nd that Beltran withheld com-any f,nds +y failing to
remit it for almost fo,r months. 3t disregarded Beltran6s assertion of family
-ro+lems as the same cannot +e ,sed as an e7c,se for committing a
serio,s miscond,ct in violation of the tr,st re-osed on her as a Senior
Branch Cler1. The NLRC was convinced that Beltran ,sed the money for her
-ersonal needs since her act of ta1ing a leave of a+sence right after her
confrontation with Garcia s,ggested that she needed time to -rod,ce it.
The NLRC th,s r,led that 5BR&LC? validly dismissed Beltran from the
service in the e7ercise of its inherent right to disci-line its em-loyees. 3t
li1ewise denied BeltranIs 5R.
C& a9rmed L&.
3SSUB*
2=BT=BR ?R N?T C& SBR3?USLS BRRBD 3N ?RDBR3NG T=B
RB3NST&TB5BNT ?) BBLTR&N DBS/3TB T=B UND3S/UTBD )3ND3NG T=&T S=B
3S GU3LTS ?) 23T==?LD3NG C?5/&NS )UNDS.
SC RUL3NG*
:' F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
Co,rt Ands for res-ondent% a9rms C&.
)or loss of tr,st and conAdence to +e a valid gro,nd for dismissal% it m,st
+e +ased on a willf,l +reach of tr,st and fo,nded on clearly esta+lished
facts. & +reach is willf,l if it is done intentionally% 1nowingly and -,r-osely%
witho,t C,stiAa+le e7c,se% as disting,ished from an act done carelessly%
tho,ghtlessly% heedlessly or inadvertently. 3n addition% loss of tr,st and
conAdence m,st rest on s,+stantial gro,nds and not on the em-loyer6s
ar+itrariness% whims% ca-rices or s,s-icion.
3n the case at +ench% Beltran attri+,ted her delay in t,rning over Chang6s
-ayment to her di9c,lt family sit,ation as she and her h,s+and were
having marital -ro+lems and her child was s,Jering from an illness.
&dmittedly% she was reminded of Chang6s -ayment +y her s,-ervisor on
.an,ary P% ""P +,t denied having +een ordered to remit the money on
that day. She then reasoned that her contin,ed delay was ca,sed +y an
inevita+le need to ta1e a leave of a+sence for her to attend to the needs of
her child who was s,Jering from asthma.
3t sho,ld +e em-hasiRed at this -oint that the +,rden of -roving the legality
of an em-loyee6s dismissal lies with the em-loyer. EUns,+stantiated
s,s-icions% acc,sations% and concl,sions of em-loyers do not -rovide legal
C,stiAcation for dismissing em-loyees.E E5ere conCect,res cannot wor1 to
de-rive em-loyees of their means of livelihood.E To +egin with% 5BR&LC?
cannot claim or concl,de that Beltran misa--ro-riated the money +ased on
mere s,s-icion. The NLRC th,s erred in concl,ding that Beltran made ,se
of the money from the mere fact that she too1 a leave of a+sence after
having +een reminded of the ,nremitted f,nds. &nd even if Beltran delayed
handing over the f,nds to the com-any% 5BR&LC? still has the +,rden of
-roof to show clearly that s,ch act of negligence is s,9cient to C,stify
termination from em-loyment. 5oreover% we And that Beltran6s delay does
not clearly and convincingly esta+lish a willf,l +reach on her -art% that is%
which is done Eintentionally% 1nowingly and -,r-osely% witho,t any
C,stiAa+le e7c,se.E Tr,e% the reasons Beltran -roJered for her delay in
remitting the cash -ayment are mere allegations witho,t any concrete
-roof. Nonetheless% we em-hasiRe that as the em-loyer% the +,rden still
lies on 5BR&LC? to -rovide clear and convincing facts ,-on which the
alleged loss of conAdence is to +e made to rest.
Undo,+tedly% Beltran was remiss in her d,ties for her fail,re to
immediately t,rn over Chang6s -ayment to the com-any. S,ch negligence%
however% is not s,9cient to warrant se-aration from em-loyment. To C,stify
removal from service% the negligence sho,ld +e gross and ha+it,al. EGross
negligence . . . is the want of even slight care% acting or omitting to act in a
sit,ation where there is d,ty to act% not inadvertently +,t willf,lly and
intentionally% with a conscio,s indiJerence to conse8,ences insofar as
other -ersons may +e aJected.E :$ =a+it,al neglect% on the other hand%
connotes re-eated fail,re to -erform one6s d,ties for a -eriod of time%
de-ending ,-on the circ,mstances. No concrete evidence was -resented
+y 5BR&LC? to show that Beltran6s delay in remitting the f,nds was done
intentionally. Neither was it shown that same is willf,l% ,nlawf,l and
felonio,s contrary to 5BR&LC?6s Anding as stated in the letter of
termination it sent to Beltran. S,rely% Beltran6s single and isolated act of
negligence cannot C,stify her dismissal from service.
5oreover% Beltran6s sim-le negligence did not res,lt in any loss. )rom the
time she received the -ayment on Se-tem+er ('% ""! ,ntil .an,ary P%
""P when she was a--rised +y her s,-ervisor a+o,t Chang6s -ayment% no
harm or damage to the com-any or to its c,stomers attri+,ta+le to
Beltran6s negligence was alleged +y 5BR&LC?. &lso% from the time she was
a--rised of the non0remittance +y her s,-erior on .an,ary P% ""P% ,ntil
the t,rn0over of the amo,nt on .an,ary :% ""P% no s,ch harm or damage
was ever claimed +y 5BR&LC?.
Under the circ,mstances% 5BR&LC?6s sanction of dismissal will not +e
commens,rate to Beltran6s inadvertence not only +eca,se there was no
clear showing of +ad faith and malice +,t also in consideration of her
,ntainted record of long and dedicated service to 5BR&LC?. 3n the similar
case of /hili--ine Long Distance Tele-hone Com-any v. Ber+ano% .r.% we
held that*
The magnit,de of the infraction committed +y an em-loyee m,st +e
weighed and e8,ated with the -enalty -rescri+ed and m,st +e
commens,rate thereto% in view of the gravity of the -enalty of dismissal or
termination from the service. The em-loyer sho,ld +ear in mind that in
termination cases% what is at sta1e is not sim-ly the em-loyee6s Co+ or
-osition +,t MherN very livelihood.
2here a -enalty less -,nitive wo,ld s,9ce% whatever misste-s may +e
committed +y an em-loyee o,ght not to +e visited with a conse8,ence so
severe s,ch as dismissal from em-loyment. =ence% we And no reversi+le
error or any grave a+,se of discretion on the -art of the C& in ordering
Beltran6s reinstatement witho,t +ac1wages. The forfeit,re of her salary is
an e8,ita+le -,nishment for the sim-le negligence committed.
:" F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
BANK OF LUBAO vs. MANABAT, ET. AL.
G.R. No. ''P((% )BBRU&RS % ($(
)&CTS*
Res-ondent which was a mar1et collector and s,+se8,ently assigned as an
encoder of the Ban1 of L,+ao6s Sta. Cr,R B7tension ?9ce% was terminated
from his em-loyment +y reason of serio,s miscond,ct tantamo,nt to willf,l
+reach of tr,st and was li1ewise charged with criminal com-laints for
Y,aliAed Theft with a certain Lingad. Res-ondent6s -rimary d,ty is to
encode the clients6 de-osits on the +an16s com-,ter after the same are
received +y Lingad. /etitioner after investigation had Andings of
discre-ancies d,ring the a,dit that showed a misa--ro-riation of f,nds in
the amo,nt of / :%$$$%$$$.$$% hence the dismissal from service.
Res-ondent Aled a Com-laint : for illegal dismissal with the Regional
&r+itration Branch of the National La+or Relations Commission ;NLRC< in
San )ernando City% /am-anga. 3n the said com-laint% the res-ondent% to
+olster his claim that there was no valid gro,nd for his dismissal% averred
that the charge against him for 8,aliAed theft was dismissed for lac1 of
s,9cient +asis to concl,de that he cons-ired with Lingad. The res-ondent
so,ght an award for se-aration -ay% f,ll +ac1wages% :th month -ay for
($$@ and moral and e7em-lary damages.
)or its -art% the -etitioner insists that the dismissal of the res-ondent is
C,stiAed% asserting the )e+r,ary @% ($$! &,dit Re-ort which conArmed the
-artici-ation of the res-ondent in the alleged misa--ro-riations. Li1ewise%
the -etitioner asserted that the dismissal of the 8,aliAed theft charge
against the res-ondent is immaterial to the validity of the gro,nd for the
latter6s dismissal.
L& s,stained res-ondent6s claim of illegal dismissal th,s ordering the
-etitioner to reinstate the res-ondent to his former -osition and awarding
the latter +ac1wages in the amo,nt of /%"!$.$$ and :th month -ay in
the amo,nt of /!%(($.$$. The L& o-ined that the -etitioner failed to
add,ce s,+stantial evidence that there was a valid gro,nd for the
res-ondent6s dismissal.
NLRC a9rmed decision of L&* Kit was s,9ciently esta+lished that only
Lingad was the one res-onsi+le for the said misa--ro-riations. ),rther% the
NLRC asserted that the )e+r,ary @% ($$! and &-ril :$% ($$P a,dit re-orts
-resented +y the -etitioner co,ld not +e given evidentiary weight as the
same were e7ec,ted after the res-ondent had already +een dismissed.O
NLRC denied 5R of -etitioner.
C& denied -etitionerIs Certiorari% C& agreed with the L& and the NLRC that
the -etitioner failed to esta+lish +y s,+stantial evidence that there was
indeed a valid gro,nd for the res-ondent6s dismissal. Nevertheless% the C&
held that the -etitioner sho,ld -ay the res-ondent se-aration -ay since the
latter did not -ray for reinstatement +efore the L& and that the same wo,ld
+e in the +est interest of the -arties considering the animosity and
antagonism that e7ist +etween them.
3SSUBS*
2hether or not the C& erred in ordering the -etitioner to -ay the
res-ondent se-aration -ay in lie, of reinstatementD
2hether or not the res-ondent is entitled to -ayment of +ac1wages.
SC RUL3NG*
Co,rt Ands for res-ondent% ,-held ,nanimo,s decisions of L&% NLRC and
C&.
Doctrine of Strained Relations. Under the law and -revailing C,ris-r,dence%
an illegally dismissed em-loyee is entitled to reinstatement as a matter of
right. =owever% if reinstatement wo,ld only e7acer+ate the tension and
strained relations +etween the -arties% or where the relationshi- +etween
the em-loyer and the em-loyee has +een ,nd,ly strained +y reason of
their irreconcila+le diJerences% -artic,larly where the illegally dismissed
em-loyee held a managerial or 1ey -osition in the com-any% it wo,ld +e
more -r,dent to order -ayment of se-aration -ay instead of reinstatement.
Under the doctrine of strained relations% the -ayment of se-aration -ay is
considered an acce-ta+le alternative to reinstatement when the latter
o-tion is no longer desira+le or via+le. ?n one hand% s,ch -ayment
li+erates the em-loyee from what co,ld +e a highly o--ressive wor1
environment. ?n the other hand% it releases the em-loyer from the grossly
,n-alata+le o+ligation of maintaining in its em-loy a wor1er it co,ld no
longer tr,st.
3n s,ch cases% it sho,ld +e -roved that the em-loyee concerned occ,-ies a
-osition where he enCoys the tr,st and conAdence of his em-loyerD and that
it is li1ely that if reinstated% an atmos-here of anti-athy and antagonism
@$ F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
may +e generated as to adversely aJect the e9ciency and -rod,ctivity of
the em-loyee concerned.
=ere% we agree with the C& that the relations +etween the -arties had +een
already strained there+y C,stifying the grant of se-aration -ay in lie, of
reinstatement in favor of the res-ondent.
)irst% it cannot +e gainsaid that the -etitioner6s reinstatement to his former
-osition wo,ld only serve to intensify the atmos-here of anti-athy and
antagonism +etween the -arties. Undo,+tedly% the -etitioner6s Aling of
vario,s criminal com-laints against the res-ondent for 8,aliAed theft and
the s,+se8,ent Aling +y the latter of the com-laint for illegal dismissal
against the latter% ta1en together with the -endency of the instant case for
more than si7 years% had ca,sed strained relations +etween the -arties.
Second% considering that the res-ondent6s former -osition as +an1 encoder
involves the handling of acco,nts of the de-ositors of the Ban1 of L,+ao% it
wo,ld not +e e8,ita+le on the -art of the -etitioner to +e ordered to
maintain the former in its em-loy since it may only ins-ire vindictiveness
on the -art of the res-ondent. Third% the ref,sal of the res-ondent to +e re0
admitted to wor1 is in itself indicative of the e7istence of strained relations
+etween him and the -etitioner. 3n the case of Lagniton% Sr. v. National
La+or Relations Commission% the Co,rt held that the ref,sal of the
dismissed em-loyee to +e re0admitted is constit,tive of strained relations*
3t a--ears that relations +etween the -etitioner and the com-lainants have
+een so strained that the com-lainants are no longer willing to +e
reinstated. &s s,ch reinstatement wo,ld only e7acer+ate the animosities
that have develo-ed +etween the -arties% the -,+lic res-ondents were
correct in ordering instead the grant of se-aration -ay to the dismissed
em-loyees in the interest of ind,strial -eace.
Time and again% this Co,rt has recogniRed that strained relations +etween
the em-loyer and em-loyee is an e7ce-tion to the r,le re8,iring act,al
reinstatement for illegally dismissed em-loyees for the -ractical reason
that the already e7isting antagonism will only fester and deteriorate% and
will only worsen with -ossi+le adverse eJects on the -arties% if we shall
com-el reinstatementD th,s% the ,se of a via+le s,+stit,te that -rotects the
interests of +oth -arties while ens,ring that the law is res-ected.
#ackwages. The arg,ments raised +y the -etitioner with regard to the iss,e
of +ac1wages% essentially% attac1s the fact,al Andings of the C&% the NLRC
and the L&. &s stated earlier% s,+Cect to well0deAned e7ce-tions% fact,al
8,estions may not +e raised in a -etition for review on certiorari ,nder R,le
@# as this Co,rt is not a trier of facts. The -etitioner failed to assert any
circ,mstance which wo,ld im-el this Co,rt to disregard the Andings of fact
of the lower tri+,nals on the -ro-riety of the award of +ac1wages in favor
of the res-ondent.
=owever% the +ac1wages that sho,ld +e awarded to the res-ondent sho,ld
+e modiAed. Bm-loyees who are illegally dismissed are entitled to f,ll
+ac1wages% incl,sive of allowances and other +eneAts or their monetary
e8,ivalent% com-,ted from the time their act,al com-ensation was
withheld from them ,- to the time of their act,al reinstatement. B,t if
reinstatement is no longer -ossi+le% the +ac1wages shall +e com-,ted from
the time of their illegal termination ,- to the Anality of the decision.
Th,s% when there is an order of reinstatement% the com-,tation of
+ac1wages shall +e rec1oned from the time of illegal dismissal ,- to the
time that the em-loyee is act,ally reinstated to his former -osition.
/,rs,ant to the order of reinstatement rendered +y the L&% the -etitioner
sent the res-ondent a letter re8,iring him to re-ort +ac1 to wor1 on 5ay @%
($$P. Notwithstanding the said letter% the res-ondent o-ted not to re-ort
for wor1. Th,s% it is +,t fair that the +ac1wages that sho,ld +e awarded to
the res-ondent +e com-,ted from the time that the res-ondent was
illegally dismissed ,ntil the time when he was re8,ired to re-ort for wor1%
i.e.% from Se-tem+er % ($$# ,ntil 5ay @% ($$P. 3t is only d,ring the said
-eriod that the res-ondent is deemed to +e entitled to the -ayment of
+ac1wages.
The fact that the C&% in its &-ril @% ($$" decision% ordered the -ayment of
se-aration -ay in lie, of the res-ondent6s reinstatement wo,ld not entitle
the latter to +ac1wages. 3t +ears stressing that decisions of the C&% ,nli1e
that of the L&% are not immediately e7ec,tory. &ccordingly% the -etitioner
sho,ld only -ay the res-ondent +ac1wages from Se-tem+er % ($$#% the
date when the res-ondent was illegally dismissed% ,ntil 5ay @% ($$P% the
date when the -etitioner re8,ired the former to re-ort to wor1.
CANADIAN OPPORTUNITIES UNLIMITED vs. DALANGIN
G.R. No. P(((:% )BBRU&RS !% ($(
)&CTS*
@ F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
Res-ondent was hired as 3mmigration and Legal 5anager of -etitioner
com-any. =e was -laced on -ro+ation for si7 months. =e was to re-ort
directly to the Chief ?-erations ?9cer% &nnie LlamanRares &+ad. =is tas1s
involved -rinci-ally the review of the clients6 a--lications for immigration
to Canada to ens,re that they are in accordance with Canadian and
/hili--ine laws.
The com-any terminated Dalangin6s em-loyment% declaring him E,nAtE and
E,n8,aliAedE to contin,e as 3mmigration and Legal 5anager on the
gro,nds of*
a. ?+stinacy and ,tter disregard of com-any -olicies. /ro-ensity to
ta1e -rolonged and e7tended l,nch +rea1s% shows no interest in
familiariRing oneself with the -olicies and o+Cectives.
+. Lac1 of concern for the com-any6s interest des-ite having C,st +een
em-loyed in the com-any. ;Declined to attend com-any s-onsored
activities% seminars intended to familiariRe com-any em-loyees
with 5anagement o+Cectives and enhancement of com-any
interest and o+Cectives.<
c. Showed lac1 of enth,siasm toward wor1.
d. Showed lac1 of interest in fostering relationshi- with his co0
em-loyees.
Res-ondent Aled a com-laint for illegal dismissal with -rayer for
reinstatement and +ac1wages% as well as damages ;moral and e7em-lary<
and attorney6s fees% against -etitioner. =e arg,es that the seminar he was
re8,ired to attend +ears no connection with his d,ties and f,nctions and
that it is +eyond his wor1 ho,rs as sti-,lated in his em-loyment contract.
&side from that he -osits that he sho,ld not +e treated similarly with other
em-loyees ;re8,ired to attend s,ch seminars< as they are diJerently
sit,ated in terms of -ositions and d,ties.
Thro,gh their -osition -a-er% the com-any and its -rinci-al o9cers alleged
that at the time of Dalangin6s engagement% he was advised that he was
,nder -ro+ation for si7 months and his em-loyment co,ld +e terminated
sho,ld he fail to meet the standards to 8,alify him as a reg,lar em-loyee.
=e was informed that he wo,ld +e eval,ated on the +asis of the res,lts of
his wor1D on his attit,de towards the com-any% his wor1 and his co0
em-loyees% as s-elled o,t in his Co+ descri-tion. The com-any arg,ed that
since Dalangin failed to 8,alify for the -osition of 3mmigration and Legal
5anager% the com-any decided to terminate his services% after d,ly
notifying him of the com-any6s decision and the reason for his se-aration.
L& declared Dalangin6s dismissal illegal% and awarded him +ac1wages of
/P#%$$$.$$% moral damages of /#$%$$$.$$ and e7em-lary damages of
/#$%$$$.$$% -l,s $Q attorney6s fees. The la+or ar+iter fo,nd that the
charges against Dalangin% which led to his dismissal% were not esta+lished
+y clear and s,+stantial -roof.
NLRC rendered a decision on 5arch (!% ($$@ granting the a--eal% there+y
reversing the la+or ar+iter6s r,ling. 3t fo,nd Dalangin6s dismissal to +e a
valid e7ercise of the com-any6s management -rerogative +eca,se
Dalangin failed to meet the standards for reg,lar em-loyment. NLRC
denied 5R.
C& fo,nd for res-ondent agreeing with L& that he was illegally dismissed.
C& fo,nd that the com-any failed to s,--ort% with s,+stantial evidence% its
claim that Dalangin failed to meet the standards to 8,alify as a reg,lar
em-loyee. C& -ointed o,t that the com-any did not allow Dalangin to
-rove that he -ossessed the 8,aliAcations to meet the reasona+le
standards for his reg,lar em-loymentD instead% it dismissed Dalangin
-erem-torily from the service. 3t o-ined that it was 8,ite im-ro+a+le that
the com-any co,ld f,lly determine Dalangin6s -erformance +arely one
month into his em-loyment. C& denied 5R.
3SSUB*
2hether or not res-ondent as a -ro+ationary em-loyee was validly
dismissed.
SC RUL3NG*
Co,rt Ands for -etitionerAnding s,+stantial evidence indicating that the
com-any was C,stiAed in terminating Dalangin6s em-loyment% however
+rief it had +een.
?ne month eno,gh to determine res-ondentIs ,nAtness% -ro+ationary term
or -eriod denotes its -,r-ose +,t not its length. Dalangin admitted in
com-,lsory ar+itration that the -ro7imate ca,se for his dismissal was his
ref,sal to attend the com-any6s E4al,es )ormation SeminarE sched,led for
?cto+er (P% ($$% a Sat,rday. =e ref,sed to attend the seminar after he
learned that it had no relation to his d,ties% as he claimed% and that he had
to leave at (*$$ -.m. +eca,se he wanted to +e with his family in the
-rovince. 2hen &+ad insisted that he attend the seminar to enco,rage his
co0em-loyees to attend% he stood -at on not attending% arg,ing that
mar1ed diJerences e7ist +etween their -ositions and d,ties% and
@( F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
insin,ating that he did not want to Coin the other em-loyees. =e also
8,estioned the sched,led (*$$ -.m. seminars on Sat,rdays as they were
not s,--osed to +e doing a com-any activity +eyond (*$$ -.m. =e
considers (*$$ -.m. as the close of wor1ing ho,rs on Sat,rdaysD th,s%
holding them +eyond (*$$ -.m. wo,ld +e in violation of the law.
The E4al,es )ormation SeminarE incident is an eye0o-ener on the 1ind of
-erson and em-loyee Dalangin was. =is ref,sal to attend the seminar
+rings into foc,s and validates what was wrong with him% as &+ad narrated
in her a9davit and as reTected in the termination of em-loyment
memorand,m. 3t highlights his lac1 of interest in familiariRing himself with
the com-any6s o+Cectives and -olicies. SigniAcantly% the seminar involved
ac8,ainting and ,-dating the em-loyees with the com-any6s -olicies and
o+Cectives. =ad he attended the seminar% Dalangin co,ld have +roadened
his awareness of the com-any6s -olicies% in addition to &+ad6s +rieAng him
a+o,t the com-any6s -olicies on -,nct,ality and attendance% and the
-roced,res to +e followed in handling the clients6 a--lications. No wonder
the com-any charged him with o+stinacy.
The incident also reveals Dalangin6s lac1 of interest in esta+lishing good
wor1ing relationshi- with his co0em-loyees% es-ecially the ran1 and AleD he
did not want to Coin them +eca,se of his view that the seminar was not
relevant to his -osition and d,ties. 3t also +etrays an arrogant and
condescending attit,de on his -art towards his co0em-loyees% and a lac1 of
s,--ort for the com-any o+Cective that com-any managers +e e7am-les to
the ran1 and Ale em-loyees.
&dditionally% very early in his em-loyment% Dalangin e7hi+ited negative
wor1ing ha+its% -artic,larly with res-ect to the one ho,r l,nch +rea1 -olicy
of the com-any and the o+servance of the com-any6s wor1ing ho,rs. Th,s%
&+ad stated that Dalangin wo,ld ta1e -rolonged l,nch +rea1s or wo,ld go
o,t of the o9ce ] witho,t leave of the com-any ] only to call the
-ersonnel manager later to inform the latter that he wo,ld +e ,na+le to
ret,rn as he had to attend to -ersonal matters. 2itho,t e7-ressly
co,ntering or denying &+ad6s statement% Dalangin dismissed the charge for
the com-any6s fail,re to -rod,ce his daily time record.
The same thing is tr,e with Dalangin6s handling of Tecson6s a--lication for
immigration to Canada% es-ecially his fail,re to And ways to a--eal the
denial of Tecson6s a--lication% as &+ad stated in her a9davit. &gain%
witho,t e7-ressly denying &+ad6s statement or e7-laining e7actly what he
did with Tecson6s a--lication% Dalangin +r,shes aside &+ad6s insin,ation
that he was not doing his Co+ well% with the ready arg,ment that the
com-any did not even +other to -resent Tecson6s testimony.
3n the face of &+ad6s direct statements% as well as those of his co0
em-loyees% it is -,RRling that Dalangin chose to +e silent a+o,t the
charges% other than saying that the com-any co,ld not cite any -olicy he
violated. &ll along% he had +een com-laining that he was not a+le to
e7-lain his side% yet from the la+or ar+iter6s level% all the way to this Co,rt%
he oJered no satisfactory e7-lanation of the charges. 3n this light% co,-led
with Dalangin6s adamant ref,sal to attend the com-any6s E4al,es
)ormation SeminarE and a similar -rogram sched,led earlier% we And
credence in the com-any6s s,+mission that Dalangin was ,nAt to contin,e
as its 3mmigration and Legal 5anager. &s we stressed earlier% we are
convinced that the com-any had seen eno,gh from Dalangin6s act,ations%
+ehavior and de-ortment d,ring a fo,r0wee1 -eriod to realiRe that Dalangin
wo,ld +e a lia+ility rather than an asset to its o-erations.
2e% therefore% disagree with the C& that the com-any co,ld not have f,lly
determined Dalangin6s -erformance +arely one month into his
em-loyment. &s we said in 3nternational Catholic 5igration Commission%
the -ro+ationary term or -eriod denotes its -,r-ose +,t not its length. To
o,r mind% fo,r wee1s was eno,gh for the com-any to assess Dalangin6s
Atness for the Co+ and he was fo,nd wanting. 3n se-arating Dalangin from
the service +efore the sit,ation got worse% we And the com-any not lia+le
for illegal dismissal.
/roced,ral D,e /rocess. The notice served on him did not give him a
reasona+le time% from the eJective date of his se-aration% as re8,ired +y
the r,les. =e was dismissed on the very day the notice was given to him%
or% on ?cto+er (P% ($$. &ltho,gh we cannot invalidate his dismissal in
light of the valid ca,se for his se-aration% the com-any6s non0com-liance
with the notice re8,irement entitles Dalangin to indemnity% in the form of
nominal damages in an amo,nt s,+Cect to o,r discretion. @$ Under the
circ,mstances% we consider a--ro-riate an award of nominal damages of
/$%$$$.$$ to Dalangin.
MANILA ELECTRIC COMPANY vs. GALA
G.R. No. "('' U ":$@% )BBRU&RS ("% ($(
)&CTS*
@: F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
Res-ondent was em-loyed as a -ro+ationary lineman of -etitioner
com-any% +arely @ months on the Co+ he was dismissed for alleged
com-licity in -ilferages of 5eralco6s electrical s,--lies% -artic,larly% for the
incident which too1 -lace on 5ay (#% ($$!. ?n that day% Gala and other
5eralco wor1ers were instr,cted to re-lace a worn0o,t electrical -ole at the
/acheco S,+division in 4alenR,ela City.
2hile the 5eralco crew was at wor1% one No+erto EBingE Llanes% a non0
5eralco em-loyee% arrived. =e a--eared to +e 1nown to the 5eralco
foremen as they were seen conversing with him. Llanes +oarded the tr,c1s%
witho,t +eing sto--ed% and too1 o,t what were later fo,nd as electrical
s,--lies. &side from Gala% the foremen and the other linemen who were at
the wor1site when the -ilferage ha--ened were later charged with
miscond,ct and dishonesty for their involvement in the incident. Un1nown
to them the whole incident was +eing videoed +y 5eralco s,rveillance tas1
force.
5eralco called for an investigation of the incident and as1ed Gala to
e7-lain. Gala denied involvement in the -ilferage% contending that even if
his s,-eriors might have committed a wrongdoing% he had no -artici-ation
in what they did. =e claimed that* ;< he was at some distance away from
the tr,c1s when the -ilferage ha--enedD ;(< he did not have an in1ling that
an illegal activity was ta1ing -lace since his s,-ervisors were conversing
with Llanes% giving him the im-ression that they 1new himD ;:< he did not
call the attention of his s,-eriors +eca,se he was not in a -osition to do so
as he was a mere linemanD and ;@< he was C,st following instr,ctions in
connection with his wor1 and had no control in the dis-osition of com-any
s,--lies and materials. =e maintained that his mere -resence at the scene
of the incident was not s,9cient to hold him lia+le as a cons-irator.
Des-ite Gala6s e7-lanation% 5eralco -roceeded with the investigation and
event,ally terminated his em-loyment on .,ly (P% ($$!. Gala res-onded +y
Aling an illegal dismissal com-laint against 5eralco.
L& dismissed the com-laint for lac1 of merit. She held that Gala6s
-artici-ation in the -ilferage of 5eralco6s -ro-erty rendered him ,n8,aliAed
to +ecome a reg,lar em-loyee.
NLRC reversed the la+or ar+iter6s r,ling. 3t fo,nd that Gala had +een
illegally dismissed% since there was Eno concrete showing of com-licity with
the alleged miscond,ct>dishonestyM.NE The NLRC% however% r,led o,t Gala6s
reinstatement% stating that his ten,re lasted only ,- to the end of his
-ro+ationary -eriod. 3t awarded him +ac1wages and attorney6s fees.
Both -arties moved for -artial reconsiderationD Gala% on the gro,nd that he
sho,ld have +een reinstated with f,ll +ac1wages% damages and interestsD
and 5eralco% on the gro,nd that the NLRC erred in Anding that Gala had
+een illegally dismissed. The NLRC denied the motions.
C& denied 5eralco6s -etition for lac1 of merit and -artially granted Gala6s
-etition. 3t conc,rred with the NLRC that Gala had +een illegally dismissed%
a r,ling that was s,--orted +y the evidence. 3t o-ined that nothing in the
records show Gala6s 1nowledge of or com-licity in the -ilferage. 3t ordered
Gala6s reinstatement with f,ll +ac1wages and other +eneAts. The C& also
denied 5eralco6s motion for reconsideration.
3SSUB*
2hether or not res-ondent was illegaly dismissed.
SC RUL3NG*
Co,rt Ands for -etitioner% contrary to concl,sions of NLRC and C&.
Res-ondent failed to meet standards and 8,aliAcation of com-any. Gala
misses the -oint. =e forgets that as a -ro+ationary em-loyee% his overall
Co+ -erformance and his +ehavior were +eing monitored and meas,red in
accordance with the standards ;i.e.% the terms and conditions< laid down in
his -ro+ationary em-loyment agreement. (( Under -aragra-h ' of the
agreement% he was s,+Cect to strict com-liance with% and non0violation of
the Com-any Code on Bm-loyee Disci-line% Safety Code% r,les and
reg,lations and e7isting -olicies. /ar. $ re8,ired him to o+serve at all
times the highest degree of trans-arency% selTessness and integrity in the
-erformance of his d,ties and res-onsi+ilities% free from any form of conTict
or contradicting with his own -ersonal interest. TD&=CS
The evidence on record esta+lished Gala6s -resence in the wor1site where
the -ilferage of com-any -ro-erty ha--ened. 3t also esta+lished that it was
not only on 5ay (#% ($$! that Llanes% the -ilferer% had +een seen d,ring a
5eralco o-eration. =e had +een -revio,sly noticed +y 5eralco em-loyees%
incl,ding Gala ;+ased on his admission<% in -ast o-erations. 3f Gala had
seen Llanes in earlier -roCects or o-erations of the com-any% it is
incred,lo,s for him to say that he did not 1now why Llanes was there or
what W,Viga and Llanes were tal1ing a+o,t. To o,r mind% the 5eralco crew
;the foremen and the linemen< allowed or co,ld have even as1ed Llanes to
+e there d,ring their o-erations for one and only -,r-ose ] to serve as
their cond,it for -ilfered com-any s,--lies to +e sold to ready +,yers
o,tside 5eralco wor1sites.
@@ F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
The familiarity of the 5eralco crew with Llanes% a non05eralco em-loyee
who had +een -resent in 5eralco Aeld o-erations% does not contradict at all
+,t rather s,--ort the 5eralco s,+mission that there had +een Ere-orted
-ilferageE or Eram-ant theft%E +y the crew% of com-any -ro-erty even
+efore 5ay (#% ($$!.
The esta+lished fact that Llanes% a non05eralco em-loyee% was often seen
d,ring com-any o-erations% conversing with the foremen% for reason or
reasons connected with the ongoing com-any o-erations% gives rise to the
8,estion* what was he doing thereL &--arently% he had +een visiting
5eralco wor1sites% at least in the 4alenR,ela Sector% not sim-ly to socialiRe%
+,t to do something else. &s testiAed to +y witnesses% he was -ic1ing ,-
,n,sed s,--lies and materials that were not ret,rned to the com-any.
)rom these fact,al -remises% it is not hard to concl,de that this activity was
for the m,t,al -ec,niary +eneAt of himself and the crew who tolerated the
-ractice. )or one wor1ing at the scene who had seen or who had shown
familiarity with Llanes ;a non05eralco em-loyee<% not to have 1nown the
reason for his -resence is to disregard the o+vio,s% or at least the very
s,s-icio,s.
2e consider% too% and we And credi+le the com-any s,+mission that the
5eralco crew who wor1ed at the /acheco S,+division in 4alenR,ela City on
5ay (#% ($$! had not +een ret,rning ,n,sed s,--lies and materials% to the
-reC,dice of the com-any. )rom all these% the allegedly hearsay evidence
that is not com-etent in C,dicial -roceedings ;as noted a+ove<% ta1es on
s-ecial meaning and relevance.
?n the whole% the totality of the circ,mstances o+taining in the case
convinces ,s that Gala co,ld not +,t have 1nowledge of the -ilferage of
com-any electrical s,--lies on 5ay (#% ($$!D he was com-licit in its
commission% if not +y direct -artici-ation% certainly% +y his inaction while it
was +eing -er-etrated and +y not re-orting the incident to com-any
a,thorities. Th,s% we And s,+stantial evidence to s,--ort the concl,sion
that Gala does not deserve to remain in 5eralco6s em-loy as a reg,lar
em-loyee. =e violated his -ro+ationary em-loyment agreement% es-ecially
the re8,irement for him Eto o+serve at all times the highest degree of
trans-arency% selTessness and integrity in the -erformance of their d,ties
and res-onsi+ilitiesM.NE =e failed to 8,alify as a reg,lar em-loyee.
Com-laint dismissed for lac1 of merit.
ARO, ET. AL. vs. NLRC, ET. AL.
G.R. No. P@P"(% 5&RC= P% ($(
)&CTS*
Several em-loyees of -rivate res-ondent Benthel Develo-ment
Cor-oration% incl,ding the -etitioners% Aled a Com-laint for illegal dismissal
with vario,s money claims and -rayer for damages against the res-ondent.
L& fo,nd for the -rivate res-ondents% r,led illegal dismissal and ordered to
-ay their se-aration -ay. NLRC a9rmed decision of the L& +,t with the
modiAcation that -rivate res-ondent -ay +ac1wages com-,ted from the
res-ective dates of dismissal ,ntil Anality of the decision. /rivate
res-ondent% ,nsatisAed with the modiAcation made +y the NLRC% Aled a
motion for reconsideration with the contention that% since it has +een fo,nd
+y the La+or &r+iter and a9rmed in the assailed decision that the
em-loyees were -roCect em-loyees% the com-,tation of +ac1wages sho,ld
+e limited to the date of the com-letion of the -roCect and not to the
Anality of the decision. The NLRC% however% denied the motion r,ling that
-rivate res-ondent failed to esta+lish the date of the com-letion of the
-roCect.
C& denied -etition for certiorari and 5R.
/rivate Res-ondent a--ealed to NLRC contending that the com-,tation for
+ac1wages m,st +e only ,ntil the com-letion of the -roCect and not ,ntil
the Anality of the decision. /,+lic res-ondent% in its Decision dated .,ne (#%
($$@% a9rmed the ?rder of La+or &r+iter Bant,g% +,t red,ced the total
amo,nt to /@%$P:%'#'.$$% incl,sive of attorney6s fees. Thereafter -rivate
res-ondent Aled another 5R which was denied +y -,+lic res-ondent%
hence% -rivate res-ondent Aled a -etition for certiorari with the C&% alleging
that -,+lic res-ondent committed grave a+,se of discretion in
-rom,lgating its assailed decision and denying its motion for
reconsideration. The C& granted the -etition% therefore% ann,lling and
setting aside the decision and resol,tion of the NLRC as to the award for
+ac1wages and remanded the case to the same -,+lic res-ondent for the
-ro-er com-,tation of the +ac1wages d,e to each of the -etitioners herein.
=ence the -resent -etition.
3SSUBS*
2hether or not em-loyees were -roCect em-loyees.
@# F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
2hether or not the com-,tation of their +ac1wages was to +e rec1oned
from the time of their illegal dismissal ,- to the time of the Anality of
C,dgment.
SC RUL3NG*
Co,rt Ands for -rivate res-ondent% denied -etitioners -etition for review
and a9rming decision of C& dated 5arch P% ($$! and Resol,tion dated .,ly
(P% ($$! in toto.
Termination of -roCect em-loyees and their +ac1wages. &ccording to the
C&% -etitioners are -roCect em-loyees as fo,nd +y La+or &r+iter Brnesto
Carreon in his Decision dated 5ay ('% ""'% +eca,se they were hired for
the constr,ction of the Cordova Reef 4illage Resort in Cordova% Ce+,% which
was later on a9rmed +y the NLRC in its .an,ary (% """ decision. The only
discre-ancy is the ?rder of the NLRC that -etitioners are entitled to
+ac1wages ,- to the Anality of its decision% when as -roCect em-loyees%
-rivate res-ondents are only entitled to -ayment of +ac1wages ,ntil the
date of the com-letion of the -roCect. 3n a later resol,tion on -rivate
res-ondent6s motion for reconsideration of its .an,ary (% """ decision%
the NLRC changed its Andings +y r,ling that -etitioners herein were reg,lar
em-loyees and% therefore% entitled to f,ll +ac1wages% ,ntil Anality of the
decision% citing that -etitioners6 re-eated rehiring over a long s-an of time
made them reg,lar em-loyees.
This Co,rt agrees with the Andings of the C& that -etitioners were -roCect
em-loyees. 3t is not dis-,ted that -etitioners were hired for the
constr,ction of the Cordova Reef 4illage Resort in Cordova% Ce+,. By the
nat,re of the contract alone% it is clear that -etitioners6 em-loyment was to
carry o,t a s-eciAc -roCect. =ence% the C& did not commit grave a+,se of
discretion when it a9rmed the Andings of the La+or &r+iter. The C&
correctly r,led*
& review of the facts and the evidence in this case readily shows that a
Anding had +een made +y La+or &r+iter Brnesto Carreon% in his decision
dated 5ay ('% ""'% that com-lainants% incl,ding -rivate res-ondents% are
-roCect em-loyees. They were hired for the constr,ction of the Cordova
Reef 4illage Resort in Cordova% Ce+,. 2e note that no a--eal had +een
made +y the com-lainants% incl,ding herein -rivate res-ondents% from the
said Anding. Th,s% that -rivate res-ondents are -roCect em-loyees has
already +een eJectively esta+lished. Li1ewise% a review of the -,+lic
res-ondent6s .an,ary (% """ decision shows that it a9rmed the la+or
ar+iter6s Anding of the -rivate res-ondents6 +eing -roCect em-loyees.
2e therefore cannot fathom how the -,+lic res-ondent co,ld have ordered
+ac1wages ,- to the Anality of its decision when% as -roCect em-loyees%
-rivate res-ondents are only entitled to -ayment of the same ,ntil the date
of the com-letion of the -roCect. 3t is settled that% witho,t a valid ca,se% the
em-loyment of -roCect em-loyees cannot +e terminated -rior to e7-iration.
?therwise% they shall +e entitled to reinstatement with f,ll +ac1wages.
=owever% if the -roCect or wor1 is com-leted d,ring the -endency of the
ens,ing s,it for illegal dismissal% the em-loyees shall +e entitled only to f,ll
+ac1wages from the date of the termination of their em-loyment ,ntil the
act,al com-letion of the wor1.
2hile it may +e tr,e that in the -roceedings +elow the date of com-letion
of the -roCect for which the -rivate res-ondents were hired had not +een
clearly esta+lished% it constit,tes grave a+,se of discretion on the -art of
the -,+lic res-ondent for not determining for itself the date of said
com-letion instead of merely ordering -ayment of +ac1wages ,ntil Anality
of its decision.
777 777 777
The decision of the la+or ar+iter% as a9rmed +y the -,+lic res-ondent in its
.an,ary (% """ decision% clearly esta+lished that -rivate res-ondents
were -roCect em-loyees. Beca,se there was no showing then that the
-roCect for which their services were engaged had already +een com-leted%
the -,+lic res-ondent li1ewise fo,nd that -rivate res-ondents were illegally
dismissed and th,s entitled to +ac1wages.
=owever% in ,tter disregard of the law and -revailing C,ris-r,dence% the
-,+lic res-ondents ca-ricio,sly and ar+itrarily ordered that the said
+ac1wages +e com-,ted ,ntil the Anality of its decision instead of only
,ntil the date of the -roCect com-letion. 3n grave a+,se of its discretion% the
-,+lic res-ondent ref,sed to consider the evidence -resented +efore it as
to the date of com-letion of the Cordova Reef 4illage Resort -roCect. The
records show that a9davits have +een e7ec,ted +y the -etitioner6s
manager% cor-orate architect and -roCect engineer as to the fact of the
com-letion of the -roCect in ?cto+er ""!. &s these evidences were already
a matter of record% the -,+lic res-ondent sho,ld not have closed its eyes
and sho,ld have endeavored to render a correct and C,st C,dgment.
777 777 777
@! F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
),rthermore% as earlier noted% -rivate res-ondents did not a--eal from the
La+or &r+iter6s Andings that they were ind,+ita+ly -roCect em-loyees.
=owever% they were entitled to the -ayment of se-aration -ay only for the
reason that the date of the com-letion of the -roCect for which they were
hired had not +een clearly esta+lished. Th,s% in a9rming the la+or ar+iter6s
decision% the -,+lic res-ondent in eJect s,stained the Anding that -rivate
res-ondents are -roCect em-loyees. The statement% therefore% contained in
the resol,tion of the -etitioner6s motion for reconsideration of its .an,ary
(% """ decision that re-eated rehiring ma1es the wor1er a reg,lar
em-loyee% is at +est an o+iter% es-ecially considering that s,ch concl,sion
had not +een shown to a--ly to the circ,mstances then o+taining with the
-rivate res-ondents6 em-loyment with the -etitioner.
Therefore% +eing -roCect em-loyees% -etitioners are only entitled to f,ll
+ac1wages% com-,ted from the date of the termination of their
em-loyment ,ntil the act,al com-letion of the wor1. 3llegally dismissed
wor1ers are entitled to the -ayment of their salaries corres-onding to the
,ne7-ired -ortion of their em-loyment where the em-loyment is for a
deAnite -eriod. 3n this case% as fo,nd +y the C&% the Cordova Reef 4illage
Resort -roCect had +een com-leted in ?cto+er ""! and -rivate res-ondent
herein had signiAed its willingness% +y way of concession to -etitioners% to
set the date of com-letion of the -roCect as 5arch '% ""PD hence% the
latter date sho,ld +e considered as the date of com-letion of the -roCect for
-,r-oses of com-,ting the f,ll +ac1wages of -etitioners.
YMBONG vs. ABS%CBN BROADCASTING CORP.
G.R. No. '@''#% 5&RC= P% ($(
)&CTS*
/etitioner Brnesto G. Sm+ong started wor1ing for &BS0CBN Broadcasting
Cor-oration ;&BS0CBN< in "": at its regional station in Ce+, as a
television talent% co0anchoring =oy Gising and T4 /atrol Ce+,. =is stint in
&BS0CBN later e7tended to radio when &BS0CBN Ce+, la,nched its &5
station DS&B in ""# where he wor1ed as drama and voice talent% s-inner%
scri-twriter and -,+lic aJairs -rogram anchor.
Li1e Sm+ong% Leandro /atalingh,g also wor1ed for &BS0CBN Ce+,. Starting
""#% he wor1ed as talent% director and scri-twriter for vario,s radio
-rograms aired over DS&B.
?n .an,ary % ""!% the &BS0CBN =ead ?9ce in 5anila iss,ed /olicy No.
=R0BR0$! or the E/olicy on Bm-loyees See1ing /,+lic ?9ce.E The
-ertinent -ortions read*
.&ny em-loyee who intends to r,n for any -,+lic o9ce -osition% m,st Ale
his>her letter of resignation% at least thirty ;:$< days -rior to the o9cial
Aling of the certiAcate of candidacy either for national or local election.
777 777 777
:.),rther% any em-loyee who intends to Coin a -olitical gro,->-arty or even
with no -olitical a9liation +,t who intends to o-enly and aggressively
cam-aign for a candidate or gro,- of candidates ;e.g.% -,+licly
s-ea1ing>endorsing candidate% recr,iting cam-aign wor1ers% etc.< m,st Ale
a re8,est for leave of a+sence s,+Cect to management6s a--roval. )or this
-artic,lar reason% the em-loyee sho,ld Ale the leave re8,est at least thirty
;:$< days -rior to the start of the -lanned leave -eriod.
Beca,se of the im-ending 5ay ""' elections and +ased on his immediate
recollection of the -olicy at that time% Dante L,Ron% &ssistant Station
5anager of DS&B iss,ed the following memorand,m*
T?*&LL C?NCBRNBD
)R?5*D&NTB LUW?N
D&TB*5&RC= (#% ""'
SUB.BCT*&S ST&TBD
/lease +e informed that -er com-any -olicy% any em-loyee>talent who wants to r,n for any
-osition in the coming election will have to Ale a leave of a+sence the moment he>she Ales
his>her certiAcate of candidacy.
The services rendered +y the concerned em-loyee>talent to this com-any will then +e
tem-orarily s,s-ended for the entire cam-aign>election -eriod.
&fter the iss,ance of the 5arch (#% ""' 5emorand,m% Sm+ong got in
to,ch with L,Ron. L,Ron claims that Sm+ong a--roached him and told him
that he wo,ld leave radio for a co,-le of months +eca,se he will cam-aign
for the administration tic1et. 3t was only after the elections that they fo,nd
o,t that Sm+ong act,ally ran for -,+lic o9ce himself at the eleventh ho,r.
Sm+ong% on the other hand% claims that in accordance with the 5arch (#%
""' 5emorand,m% he informed L,Ron thro,gh a letter that he wo,ld ta1e
a few months leave of a+sence from 5arch '% ""' to 5ay '% ""' since
he was r,nning for co,ncilor of La-,0La-, City.
&s regards /atalingh,g% /atalingh,g a--roached L,Ron and advised him
that he will r,n as co,ncilor for Naga% Ce+,. &ccording to L,Ron% he clariAed
to /atalingh,g that he will +e considered resigned and not C,st on leave
once he Ales a certiAcate of candidacy. Later% Sm+ong and /atalingh,g
+oth tried to come +ac1 to &BS0CBN Ce+,. &ccording to L,Ron% he informed
@P F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
them that they cannot wor1 there anymore +eca,se of com-any -olicy. &s
a res,lt% they Aled as illegal dismissal s,it against &BS0CBN.
3SSUBS*
;< 2hether /olicy No. =R0BR0$! is validD
;(< 2hether the 5arch (#% ""' 5emorand,m iss,ed +y L,Ron
s,-erseded /olicy No. =R0BR0$!D and
;:< 2hether Sm+ong% +y see1ing an elective -ost% is deemed to have
resigned and not dismissed +y &BS0CBN.
SC RUL3NGS*
/olicy No. =R0BR0$! is valid.
2e have consistently held that so long as a com-any6s management
-rerogatives are e7ercised in good faith for the advancement of the
em-loyer6s interest and not for the -,r-ose of defeating or circ,mventing
the rights of the em-loyees ,nder s-ecial laws or ,nder valid agreements%
this Co,rt will ,-hold them. 3n the instant case% &BS0CBN validly C,stiAed
the im-lementation of /olicy No. =R0BR0$!. 3t is well within its rights to
ens,re that it maintains its o+Cectivity and credi+ility and freeing itself from
any a--earance of im-artiality so that the conAdence of the viewing and
listening -,+lic in it will not +e in any way eroded. Bven as the law is
solicito,s of the welfare of the em-loyees% it m,st also -rotect the right of
an em-loyer to e7ercise what are clearly management -rerogatives. The
free will of management to cond,ct its own +,siness aJairs to achieve its
-,r-ose cannot +e denied.
/olicy No. =R0BR0$! was not s,-erseded +y the 5arch (#% ""'
5emorand,m
The C& correctly r,led that tho,gh L,Ron% as &ssistant Station 5anager for
Radio of &BS0CBN% has -olicy0ma1ing -owers in relation to his -rinci-al tas1
of administering the networ16s radio station in the Ce+, region% the
e7ercise of s,ch -ower sho,ld +e in accord with the general r,les and
reg,lations im-osed +y the &BS0CBN =ead ?9ce to its em-loyees. Clearly%
the 5arch (#% ""' 5emorand,m iss,ed +y L,Ron which only re8,ires
em-loyees to go on leave if they intend to r,n for any elective -osition is in
a+sol,te contradiction with /olicy No. =R0BR0$! iss,ed +y the &BS0CBN
=ead ?9ce in 5anila which re8,ires the resignation% not only the Aling of a
leave of a+sence% of any em-loyee who intends to r,n for -,+lic o9ce.
=aving +een iss,ed +eyond the sco-e of his a,thority% the 5arch (#% ""'
5emorand,m is therefore void and did not s,-ersede /olicy No.=R0BR0$!.
Sm+ong is deemed resigned when he ran for co,ncilor.
&s /olicy No. =R0BR0$! is the s,+sisting com-any -olicy and not L,Ron6s
5arch (#% ""' 5emorand,m% Sm+ong is deemed resigned when he ran
for co,ncilor.
Sm+ong6s overt act of r,nning for co,ncilor of La-,0La-, City is
tantamo,nt to resignation on his -art. =e was se-arated from &BS0CBN not
+eca,se he was dismissed +,t +eca,se he resigned. Since there was no
termination to s-ea1 of% the re8,irement of d,e -rocess in dismissal cases
cannot +e a--lied to Sm+ong. Th,s% &BS0CBN is not d,ty0+o,nd to as1 him
to e7-lain why he did not tender his resignation +efore he ran for -,+lic
o9ce as mandated +y the s,+Cect com-any -olicy.
3n addition% we do not s,+scri+e to Sm+ong6s claim that he was not in a
-osition to 1now which of the two iss,ances was correct. Sm+ong most
li1ely than not% is f,lly aware that the s,+sisting -olicy is /olicy No. =R0BR0
$! and not the 5arch (#% ""' 5emorand,m and it was for this reason
that% as stated +y L,Ron in his Sworn Statement% he only told the latter that
he will only cam-aign for the administration tic1et and not act,ally r,n for
an elective -ost.
BLUE SKY TRADING CO. vs. BLAS, ET. AL.
G.R. No. "$#""% 5&RC= P% ($(
)&CTS*
/etitioner Bl,e S1y Trading Com-any% 3nc. ;Bl,e S1y< is a d,ly registered
domestic cor-oration engaged in the im-ortation and sale of medical
s,--lies and e8,i-ment. The res-ondents &rlene /. Blas ;&rlene< and
.ose-h D. Silvano ;.ose-h< were reg,lar em-loyees of Bl,e S1y and they
res-ectively held the -ositions of stoc1 cler1 and wareho,se hel-er +efore
they were dismissed from service on )e+r,ary #% ($$#.
&n incident occ,rred where si7 -airs of intensifying screens were missing.
?n )e+r,ary :% ($$#% .ean B. De La /aR ;.ean<% =,man Reso,rce
De-artment =ead iss,ed notices to e7-lain>-reventive s,s-ension to
&rlene% .ose-h% delivery -ersonnel .ayde Tano0an ;.ayde< and maintenance
-ersonnel>driver 2ilfredo )asonilao ;2ilfredo<. The notices informed them
that they were +eing acc,sed of gross dishonesty in connection with their
alleged -artici-ation in and cons-iracy with other em-loyees in committing
@' F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
theft against com-any -ro-erty% s-eciAcally relative to the loss of the si7
intensifying screens.
?n )e+r,ary #% ($$#% .ean iss,ed to &rlene% .ose-h% .ayde and 2ilfredo
notices of dismissal for ca,se stating therein that evidence that they had
cons-ired with each other to commit theft against com-any -ro-erty was
too glaring to ignore. Bl,e S1y had lost its tr,st and conAdence on them
and as an act of self0-reservation% their termination from service was in
order.
?n )e+r,ary '% ($$#% &rlene% .ose-h% =elario% .ayde and 2ilfredo Aled with
the National La+or Relations Commission ;NLRC< a com-laint for illegal
dismissal and s,s-ension% ,nder-ayment of overtime -ay% and non0
-ayment of emergency cost of living allowance ;BC?L&<% with -rayers for
reinstatement and -ayment of f,ll +ac1wages.
5eanwhile% an entra-ment o-eration was cond,cted +y the -olice d,ring
which .ayde and =elario were ca,ght allegedly attem-ting to sell to an
o-erative an ,ltraso,nd -ro+e worth aro,nd /@$$%$$$.$$ +elonging to Bl,e
S1y. Tho,gh event,ally% .ayde and =elario e7ec,ted a9davits of desistance
stating that their dismissal was for ca,se.
The La+or &r+iter denied the claims of the res-ondents of illegal
s,s-ension and dismissal since they failed in their d,ties to e7ercise
,tmost -rotection% care% or c,stody of res-ondent6s -ro-erty. =ence% their
dismissal from the service is warranted.The Arst decision of the NLRC r,led
that res-ondents were not holding -ositions of tr,st and m,st therefore +e
reinstated and +e -aid their +ac1wages. Their second decision on the other
hand reversed the -revio,s one which in t,rn reinstated the La+or &r+iterIs
dismissal of the com-laint saying that res-ondents were holding -ositions
of tr,st and that the loss of the com-anyIs -ro-erty are s,+stantially
-roven. The C& on the other hand fo,nd merit on their claims% tho,gh
fo,nd res-ondents to have -ositions of tr,st and conAdence% -etitioner in
this case failed to s,9ciently esta+lish the charge against res-ondents
which was the +asis for its loss of tr,st and conAdence that warranted their
dismissal.
3SSUB*
2hether or not res-ondents Blas and Silvano committed a +reach of tr,st
SC RUL3NG*
The r,le is long and well settled that% in illegal dismissal cases li1e the one
at +ench% the +,rden of -roof is ,-on the em-loyer to show that the
em-loyee6s termination from service is for a C,st and valid ca,se. The
em-loyer6s case s,cceeds or fails on the strength of its evidence and not
on the wea1ness of that add,ced +y the em-loyee% in 1ee-ing with the
-rinci-le that the scales of C,stice sho,ld +e tilted in favor of the latter in
case of do,+t in the evidence -resented +y them. ?ften descri+ed as more
than a mere scintilla% the 8,ant,m of -roof is s,+stantial evidence which is
,nderstood as s,ch relevant evidence as a reasona+le mind might acce-t
as ade8,ate to s,--ort a concl,sion% even if other e8,ally reasona+le
minds might conceiva+ly o-ine otherwise. )ail,re of the em-loyer to
discharge the foregoing on,s wo,ld mean that the dismissal is not C,stiAed
and therefore illegal.
2e And no error in the C&6s Andings that the -etitioners had not ade8,ately
-roven +y s,+stantial evidence that &rlene and .ose-h indeed -artici-ated
or coo-erated in the commission of theft relative to the si7 missing
intensifying screens so as to C,stify the latter6s termination from
em-loyment on the gro,nd of loss of tr,st and conAdence.
2e note that the -arties disagree as to what tas1s were act,ally and
reg,larly -erformed +y &rlene and .ose-h. They are at odds as to the iss,e
of whether or not &rlene and .ose-h had c,stody of the missing screens.
2e o+serve tho,gh that neither of the -arties -resented any doc,mentary
evidence% s,ch as em-loyment contracts% to esta+lish their claims relative
to the act,al nat,re of &rlene and .ose-h6s daily tas1s.
The -etitioners also arg,e that if &rlene and .ose-h had not +een grossly
negligent in the -erformance of their d,ties% Bl,e S1y wo,ld not have
inc,rred the loss. 2e o+serve tho,gh that in the notices sent to &rlene and
.ose-h% Arst charging them with theft% and later% informing them of their
dismissal from service% gross negligence was not stated therein as a
gro,nd. =ence% &rlene and .ose-h co,ld not have defended themselves
against the charge of gross negligence. They cannot +e dismissed on that
gro,nd lest d,e -rocess +e violated.
?ther 5atters* ;)or Disc,ssion /,r-oses<
+mpropriety of the Pre%enti%e Suspension
The -,r-ose of the s,s-ension is to -revent an em-loyee from ca,sing
harm or inC,ry to his colleag,es and to the em-loyer. The ma7im,m -eriod
of s,s-ension is :$ days% +eyond which the em-loyee sho,ld either +e
reinstated or +e -aid wages and +eneAts d,e to him.
@" F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
2hile we do not agree with Bl,e S1y6s s,+se8,ent decision to terminate
them from service% we And no im-ro-riety in its act of im-osing -reventive
s,s-ension ,-on the res-ondents since the -eriod did not e7ceed the
ma7im,m im-osed +y law and there was a valid -,r-ose for the same.
3n lie, of reinstatement% se-aration -ay
3f reinstatement -roves im-ractica+le% and hardly in the +est interest of the
-arties% -erha-s d,e to the la-se of time since the em-loyee6s dismissal% or
if the em-loyee decides not to +e reinstated% the latter sho,ld +e awarded
se-aration -ay in lie, of reinstatement.
3n the case at +ar% &rlene and .ose-h were dismissed from service on
)e+r,ary #% ($$#. 2e And that the la-se of more than seven years already
renders their reinstatement im-ractica+le. ),rther% from the st,++orn
stances of the -arties% to wit% the -etitioners6 insistence that dismissal was
valid on one hand% and the res-ondents6 e7-ress -rayer for the -ayment of
se-aration -ay on the other% we And that reinstatement wo,ld no longer +e
in the +est interest of the contending -arties.
Liaility of 'orporate ,-cers
&s a general r,le% a cor-orate o9cer cannot +e held lia+le for acts done in
his o9cial ca-acity +eca,se a cor-oration% +y legal Action% has a
-ersonality se-arate and distinct from its o9cers% stoc1holders% and
mem+ers. 3n illegal dismissal cases% cor-orate o9cers may only +e held
solidarily lia+le with the cor-oration if the termination was done with
malice or +ad faith. 2e And that the aforementioned circ,mstance did not
o+tain in the case of .ose ;vice0-resident< and Linda ;secretary< relative to
&rlene and .ose-h6s dismissal from service.
INTERNATIONAL MANAGEMENT SERVICES vs. LOGARTA
G.R. No. !:!#P% &/R3L '% ($(
)&CTS*
Recr,itment agency% 3nternational 5anagement Services ;35S<% owned and
o-erated +y 5arilyn C. /asc,al% de-loyed res-ondent Roel /. Logarta to
wor1 for /etrocon &ra+ia Limited ;/etrocon< in &l1ho+ar% Xingdom of Sa,di
&ra+ia% in connection with general engineering services of /etrocon for the
Sa,di &ra+ian ?il Com-any ;Sa,di &ramco<. Res-ondent was em-loyed for
a -eriod of two ;(< years% commencing on ?cto+er (% ""P% with a monthly
salary of eight h,ndred US Dollars ;US^'$$.$$<.
?n &-ril ("% ""'% Sa,di &ramco notiAed /etrocon that d,e to changes in
the general engineering services wor1 forecast for ""'% the man0ho,rs
that were formerly allotted to /etrocon is going to +e red,ced +y @$Q
which constrained /etrocon to red,ce its -ersonnel.
Th,s% on .,ne % ""'% /etrocon gave res-ondent a written notice informing
the latter that d,e to the lac1 of -roCect wor1s related to his e7-ertise% he is
given a :$0day notice of termination% and that his last day of wor1 with
/etrocon will +e on .,ly % ""'. /etrocon also informed res-ondent that all
d,e +eneAts in accordance with the terms and conditions of his
em-loyment contract will +e -aid to res-ondent% incl,ding his tic1et +ac1
to the /hili--ines.
Before his de-art,re from Sa,di &ra+ia% res-ondent received his Anal
-aychec1 from /etrocon amo,nting SRP%@''.#P.
U-on his ret,rn% res-ondent Aled a com-laint with the Regional &r+itration
Branch 433% National La+or Relations Commission ;NLRC<% Ce+, City% against
-etitioner as the recr,itment agency which em-loyed him for em-loyment
a+road. 3n Aling the com-laint% res-ondent so,ght to recover his ,nearned
salaries covering the ,ne7-ired -ortion of his em-loyment contract with
/etrocon on the gro,nd that he was illegally dismissed.
The La+or &r+iter rendered C,dgment in favor of the res-ondent and
ordered -etitioner to -ay the -eso e8,ivalent of US^#%!$$.$$ +ased on the
rate at the time of act,al -ayment% as -ayment of his wages for the
,ne7-ired -ortion of his contract of em-loyment. The NLRC on a--eal
a9rmed the La+or &r+iterIs decision +,t red,ced the award to only
US^@%'$$.$$ or its -eso e8,ivalent at the time of -ayment. The C& li1ewise
dismissed the -etition and a9rmed the NLRC decision.
3SSUB*
2hether or not res-ondents dismissal thro,gh retrenchment illegal.
SC RUL3NG*
No
Retrenchment is the red,ction of wor1 -ersonnel ,s,ally d,e to -oor
Anancial ret,rns% aimed to c,t down costs for o-eration -artic,larly on
salaries and wages. 3t is one of the economic gro,nds to dismiss em-loyees
and is resorted +y an em-loyer -rimarily to avoid or minimiRe +,siness
losses.
#$ F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
Retrenchment -rograms are -,rely +,siness decisions within the -,rview of
a valid and reasona+le e7ercise of management -rerogative. 3t is one way
of downsiRing an em-loyer6s wor1force and is often resorted to +y the
em-loyer d,ring -eriods of +,siness recession% ind,strial de-ression% or
seasonal T,ct,ations% and d,ring l,lls in -rod,ction occasioned +y lac1 of
orders% shortage of materials% conversion of the -lant for a new -rod,ction
-rogram% or introd,ction of new methods or more e9cient machinery or
a,tomation. 3t is a valid management -rerogative% -rovided it is done in
good faith and the em-loyer faithf,lly com-lies with the s,+stantive and
-roced,ral re8,irements laid down +y law and C,ris-r,dence.
/hili--ine Law recogniRes retrenchment as a valid ca,se for the dismissal
of a migrant or overseas )ili-ino wor1er ,nder &rticle (': of the La+or
Code.
Th,s% retrenchment is a valid e7ercise of management -rerogative s,+Cect
to the strict re8,irements set +y C,ris-r,dence% to wit*
;<That the retrenchment is reasona+ly necessary and li1ely to -revent
+,siness losses which% if already inc,rred% are not merely de minimis% +,t
s,+stantial% serio,s% act,al and real% or if only e7-ected% are reasona+ly
imminent as -erceived o+Cectively and in good faith +y the em-loyerD
;(<That the em-loyer served written notice +oth to the em-loyees and to
the De-artment of La+or and Bm-loyment at least one month -rior to the
intended date of retrenchmentD
;:<That the em-loyer -ays the retrenched em-loyees se-aration -ay
e8,ivalent to one month -ay or at least >( month -ay for every year of
service% whichever is higherD
;@<That the em-loyer e7ercises its -rerogative to retrench em-loyees in
good faith for the advancement of its interest and not to defeat or
circ,mvent the em-loyees6 right to sec,rity of ten,reD and
;#<That the em-loyer ,sed fair and reasona+le criteria in ascertaining who
wo,ld +e dismissed and who wo,ld +e retained among the em-loyees%
s,ch as stat,s%_e9ciency% seniority% -hysical Atness% age% and Anancial
hardshi- for certain wor1ers.
&--lying the a+ove0stated re8,isites for a valid retrenchment in the case at
+ar% it is a--arent that the Arst% fo,rth and Afth re8,irements were
com-lied with +y res-ondent6s em-loyer. =owever% the second and third
re8,isites were a+sent when /etrocon terminated the services of
res-ondent.
&s a-tly fo,nd +y the NLRC and C,stly s,stained +y the C&% /etrocon
e7ercised its -rerogative to retrench its em-loyees in good faith and the
considera+le red,ction of wor1 allotments of /etrocon +y Sa,di &ramco was
s,9cient +asis for /etrocon to red,ce the n,m+er of its -ersonnel.
&s for the notice re8,irement% however% contrary to -etitioner6s contention%
-ro-er notice to the D?LB within :$ days -rior to the intended date of
retrenchment is necessary and m,st +e com-lied with des-ite the fact that
res-ondent is an overseas )ili-ino wor1er. 3n the -resent case% altho,gh
res-ondent was d,ly notiAed of his termination +y /etrocon :$ days +efore
its eJectivity% no allegation or -roof was advanced +y -etitioner to
esta+lish that /etrocon ever sent a notice to the D?LB :$ days +efore the
res-ondent was terminated. Th,s% this re8,irement of the law was not
com-lied with.
3n the case at +ar% des-ite the fact that res-ondent was em-loyed +y
/etrocon as an ?)2 in Sa,di &ra+ia% still +oth he and his em-loyer are
s,+Cect to the -rovisions of the La+or Code when a--lica+le. The +asic
-olicy in this C,risdiction is that all )ili-ino wor1ers% whether em-loyed
locally or overseas% enCoy the -rotective mantle of /hili--ine la+or and
social legislations.
&lso% res-ondent is entitled to the -ayment of his se-aration -ay. =owever%
this Co,rt disagrees with the concl,sion of the La+or &r+iter% the NLRC and
the C&% that res-ondent sho,ld +e -aid his se-aration -ay in accordance
with the -rovision of Section $ of R.&. No. '$@(. & -lain reading of the said
-rovision clearly reveals that it a--lies only to an illegally dismissed
overseas contract wor1er or a wor1er dismissed from overseas em-loyment
witho,t C,st% valid or a,thoriRed ca,se.
3n the case at +ar% notwithstanding the fact that res-ondent6s termination
from his em-loyment was -roced,rally inArm% having not com-lied with the
notice re8,irement% nevertheless the same remains to +e for a C,st% valid
and a,thoriRed ca,se% i.e.% retrenchment as a valid e7ercise of
management -rerogative. To stress% des-ite the em-loyer6s fail,re to
com-ly with the one0month notice to the D?LB -rior to res-ondent6s
termination% it is only a -roced,ral inArmity which does not render the
retrenchment illegal. 3n &ga+on v. NLRC% this Co,rt r,led that when the
dismissal is for a C,st ca,se% the a+sence of -ro-er notice sho,ld not n,llify
the dismissal or render it illegal or ineJect,al. 3nstead% the em-loyer sho,ld
indemnify the em-loyee for violation of his stat,tory rights.
# F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
Conse8,ently% it is &rticle (': of the La+or Code and not Section $ of R.&.
No. '$@( that is controlling. Th,s% res-ondent is entitled to -ayment of
se-aration -ay e8,ivalent to one ;< month -ay% or at least one0half ;>(<
month -ay for every year of service% whichever is higher. Considering that
res-ondent was em-loyed +y /etrocon for a -eriod of eight ;'< months% he
is entitled to receive one ;< month -ay as se-aration -ay. 3n addition%
-,rs,ant to c,rrent C,ris-r,dence% for fail,re to f,lly com-ly with the
stat,tory d,e -rocess of s,9cient notice% res-ondent is entitled to nominal
damages in the amo,nt /#$%$$$.$$.
IAO, ET. AL. vs. NLRC
G.R. No. '(::% &/R3L '% ($(
)&CTS*
The -etitioners were reg,lar em-loyees of the /hili--ine Ban1ing
Cor-oration ;/hil+an1<% each with at least ten years of service in the
com-any. /,rs,ant to its 5emorand,m dated &,g,st ('% "P$% /hil+an1
esta+lished a Grat,ity /ay /lan ;?ld /lan< for its em-loyees. The ?ld /lan
-rovided*
Any employee who has reached the compulsory retirement age of ./ years0 or who
wishes to retire or resign prior to the attainment of such age or who is separated
from ser%ice y reason of death0 sickness or other causes eyond his1her control
shall for himself or thru his1her heirs 2le with the personnel o-ce an application for
the payment of ene2ts under the plan!
?n 5arch '% ""% /hil+an1 im-lemented a new Grat,ity /ay /lan ;New
Grat,ity /lan<. 3n -artic,lar% the New Grat,ity /lan stated th,s*
7 7 7 &n Bm-loyee who is invol,ntarily se-arated from the service +y
reason of death% sic1ness or -hysical disa+ility% or for any a,thoriRed ca,se
,nder the law s,ch as red,ndancy% or other ca,ses not d,e to his own
fa,lt% miscond,ct or vol,ntary resignation% shall +e entitled to either one
h,ndred -ercent ;$$Q< of his accr,ed grat,ity +eneAt or the act,al
+eneAt d,e him ,nder the /lan% whichever is greater.
3n )e+r,ary ($$$% /hil+an1 merged with Glo+al B,siness Ban1% 3nc.
;Glo+al+an1<% with the former as the s,rviving cor-oration and the latter as
the a+sor+ed cor-oration% +,t the +an1 o-erated ,nder the name Glo+al
B,siness Ban1% 3nc. &s a res,lt of the merger% com-lainantsI res-ective
-ositions +ecame red,ndant. & S-ecial Se-aration /rogram ;SS/< was
im-lemented and the -etitioners were granted a se-aration -ac1age
e8,ivalent to one and a half monthIs -ay ;or #$Q of one monthIs salary<
for every year of service +ased on their c,rrent salary. Before the
-etitioners co,ld avail of this -rogram% they were re8,ired to sign two
doc,ments% namely% an &cce-tance Letter and a Release% 2aiver% Y,itclaim
;8,itclaim<.
&s their -ositions were incl,ded in the red,ndancy declaration% the
-etitioners availed of the SS/% signed acce-tance letters and e7ec,ted
8,itclaims in Glo+al+an1Is favor in consideration of their recei-t of
se-aration -ay e8,ivalent to #$Q of their monthly salaries for every year
of service.
S,+se8,ently% the -etitioners Aled se-arate com-laints for non0-ayment of
se-aration -ay with -rayer for damages and attorneyIs fees +efore the
National La+or Relations Commission ;NLRC<. The -etitioners asserted that%
,nder the ?ld /lan% they were entitled to an additional #$Q of their grat,ity
-ay on to- of #$Q of one monthIs salary for every year of service they
had already received. They insisted that $$Q of the #$Q rightf,lly
+elongs to them as their se-aration -ay. Th,s% the remaining #$Q was only
half of the grat,ity -ay that they are entitled to ,nder the ?ld /lan. The
-etitioners f,rther arg,ed that the 8,itclaims they signed sho,ld not +ar
them from claiming their f,ll entitlement ,nder the law. They also claimed
that they were defra,ded into signing the same witho,t f,ll 1nowledge of
its legal im-lications.
3SSUBS*
The -etitioners are now +efore this Co,rt raising the following errors
s,--osedly committed +y the C&*
a. 3n holding that Kthe +an1 had a+andoned the old -lanO ;referring to
the old Grat,ity /ay /lan< and re-laced it with a S-ecial Se-aration
/rogram ,nder which the -etitioners Kwo,ld +e receiving more than
the rate in the old -lan and higher than the legal rate for red,ndant
em-loyees.
+. 3n holding that the +eneAts ,nder the S-ecial Se-aration /rogram
legally re-laced not only the grat,ity -ay -lan to which the
-etitioners were entitled ,nder the old and new Grat,ity /ay /lans
+,t also all other +eneAts incl,ding se-aration -ay ,nder the law.
c. 3n not holding that when MtheN -etitioners were se-arated d,e to
red,ndancy they were entitled -er -rovision of &rticle (': of the
La+or Code to se-aration -ay e8,ivalent to one month -ay for
every year of service.
#( F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
d. 3n holding that the -etitioners are +o,nd ,nder the &cce-tance and
Release% 2aiver and Y,itclaim that they had e7ec,ted and McannotN
8,estion the same% hence they cannot claim +eneAts in addition to
those they had received from the +an1.
SC RUL3NG*
The -etitionersI recei-t of se-aration -ay e8,ivalent to their one and a half
months salary for every year of service as -rovided in the SS/ and the New
Grat,ity /lan more than s,9ciently com-lies with the La+or Code% which
only re8,ires the -ayment of se-aration -ay at the rate of one month
salary for every year of service.
Glo+al+an1Is right to re-lace the ?ld /lan and the New Grat,ity /lan is
within legal +o,nds as the terms thereof are in accordance with the
-rovisions of the La+or Code and com-lies with the minim,m re8,irements
thereof. Contrary to the -etitionersI claim% they had no vested right over
the +eneAts ,nder the ?ld /lan considering that none of the events
contem-lated there,nder occ,rred -rior to the re-eal thereof +y the
ado-tion of the New Grat,ity /lan. S,ch right accr,es only ,-on their
se-aration from service for ca,ses contem-lated ,nder the ?ld /lan and
the -etitioners can only avail the +eneAts ,nder the -lan that is eJective at
the time of their dismissal. 3n this case% when the merger and the
red,ndancy -rogram were im-lemented% what was in eJect were the New
Grat,ity /lan and the SS/D the -etitioners cannot% th,s% insist on the
-rovisions of the ?ld /lan which is no longer e7istent.
The SS/ did not revo1e or s,-ersede the New Grat,ity /lan.
The SS/ was not intended to s,-ersede the New Grat,ity /lan. ?n the
contrary% the SS/ was iss,ed to ma1e the +eneAts ,nder the New Grat,ity
/lan availa+le to em-loyees whose -ositions had +ecome red,ndant
+eca,se of the merger +etween /hil+an1 and Glo+al+an1% s,+Cect to
com-liance with certain re8,irements s,ch as age and length of service%
and to im-rove s,ch +eneAts +y increasing or ro,nding it ,- to an amo,nt
e8,ivalent to the aJected em-loyeesI one and a half monthly salary for
every year of service. 3n other words% the +eneAts to which the red,ndated
em-loyees are entitled to% incl,ding the -etitioners% are the +eneAts ,nder
the New Grat,ity /lan% al+eit increased +y the SS/.
Considering that the New Grat,ity /lan still stands and has not +een
revo1ed +y the SS/% does this mean that the -etitioners can claim the
+eneAts there,nder in addition to or on to- of what is re8,ired ,nder the
&rticle (': of the La+or CodeL
)or as long as the minim,m re8,irements of the La+or Code are met% it is
within the management -rerogatives of em-loyers to come ,- with
se-aration -ac1ages that will +e given in lie, of what is -rovided ,nder the
La+or Code.
&rticle (': of the La+or Code -rovides only the re8,ired minim,m amo,nt
of se-aration -ay% which em-loyees dismissed for any of the a,thoriRed
ca,ses are entitled to receive. Bm-loyers% therefore% have the right to
create -lans% -roviding for se-aration -ay in an amo,nt over and a+ove
what is im-osed +y &rticle (':. There is nothing therein that -rohi+its
em-loyers and em-loyees from contracting on the terms of em-loyment%
or from entering into agreements on em-loyee +eneAts% so long as they do
not violate the La+or Code or any other law% and are not contrary to morals%
good c,stoms% -,+lic order% or -,+lic -olicy.
3n the a+sence of -roof that any of the vices of consent are -resent% the
-etitionersI acce-tance letters and 8,itclaims are validD th,s% +arring them
from claiming additional se-aration -ay.
The Co,rt% in other cases% has ,-held 8,itclaims if fo,nd to com-ly with the
following re8,isites* ;< the em-loyee e7ec,tes a deed of 8,itclaim
vol,ntarilyD ;(< there is no fra,d or deceit on the -art of any of the -artiesD
;:< the consideration of the 8,itclaim is credi+le and reasona+leD and ;@<
the contract is not contrary to law% -,+lic order% -,+lic -olicy% morals or
good c,stoms or -reC,dicial to a third -erson with a right recogniRed +y law.
2e hold that 5etro+an1 cannot +e held lia+le for the -etitionersI claims.
2=BRB)?RB% the foregoing -remises considered% the -etition is DBN3BD.
REALDA vs. NEW AGE GRAPHICS INC.
G.R. No. "("$% &/R3L (#% ($(
)&CTS*
/etitioner Realda was dismissed +y Res-ondent New &ge Gra-hics 3nc. for
,nC,stiAed ref,sal to render overtime wor1% ,ne7-lained fail,re to o+serve
-rescri+ed wor1 standards% ha+it,al tardiness and chronic a+senteeism
des-ite warning and non0com-liance with the directive for him to e7-lain
his n,mero,s ,na,thoriRed a+sences. The Co,rt of &--eals recogniRed the
e7istence of C,st ca,ses for -etitionerIs dismissal% however% the a--ellate
co,rt fo,nd that the res-ondent failed to o+serve the -roced,ral
#: F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
re8,irements of d,e -rocess and% as a conse8,ence% awarded the
-etitioner /#%$$$.$$ as Nominal Damages.
3SSUBS*
2hether or not the dismissal +ased on the gro,nds cited constit,ted C,st
ca,sesD and
2hether or not the amo,nt awarded as Nominal Damages of /#%$$$.$$
was valid
SC RUL3NG*
)irst% the -etitionerIs ar+itrary deAance to Gra-hics% 3nc.Is order for him to
render overtime wor1 constit,tes willf,l diso+edience. Ta1ing this in
conC,nction with his inclination to a+sent himself and to re-ort late for wor1
des-ite +eing -revio,sly -enaliRed% the C& correctly r,led that the
-etitioner is indeed ,tterly deAant of the lawf,l orders and the reasona+le
wor1 standards -rescri+ed +y his em-loyer.
Second% the -etitionerIs fail,re to o+serve Gra-hics% 3nc.Is wor1 standards
constit,tes ine9ciency that is a valid ca,se for dismissal. )ail,re to
o+serve -rescri+ed standards of wor1% or to f,lAll reasona+le wor1
assignments d,e to ine9ciency may constit,te C,st ca,se for dismissal.
S,ch ine9ciency is ,nderstood to mean fail,re to attain wor1 goals or wor1
8,otas% either +y failing to com-lete the same within the alloted reasona+le
-eriod% or +y -rod,cing ,nsatisfactory res,lts. &s the o-erator of Gra-hics%
3nc.Is -rinter% he is mandated to chec1 whether the colors that wo,ld +e
-rinted are in accordance with the clientIs s-eciAcations and for him to do
so% he m,st cons,lt the General 5anager and the color g,ide ,sed +y
Gra-hics% 3nc. +efore ma1ing a f,ll r,n. Unfort,nately% he failed to o+serve
this sim-le -roced,re and -roceeded to -rint witho,t ma1ing s,re that the
colors were at -ar with the clientIs demands. This res,lted to delays in the
delivery of o,t-,t% client dissatisfaction% and additional costs on Gra-hics%
3nc.Is -art.
2hile a -enalty in the form of s,s-ension had already +een im-osed on the
-etitioner for his ha+it,al tardiness and re-eated a+senteeism% the
-rinci-le of Ktotality of infractionsO sanctions the act of Gra-hics% 3nc. of
considering s,ch -revio,s infractions in decreeing dismissal as the -ro-er
-enalty for his tardiness and ,na,thoriRed a+sences inc,rred afterwards% in
addition to his ref,sal to render overtime wor1 and conform to the
-rescri+ed wor1 standards.
This Co,rt cannot li1ewise agree to the -etitionerIs attem-t to +r,sh aside
his ref,sal to render overtime wor1 as inconse8,ential when Gra-hics%
3nc.Is order for him to do so is C,stiAed +y Gra-hics% 3nc.Is contract,al
commitments to its clients. S,ch an order is legal ,nder &rticle '" of the
La+or Code and the -etitionerIs ,ne7-lained ref,sal to o+ey is
ins,+ordination that merits dismissal from service.
Nonetheless% while the C& Anding that the -etitioner is entitled to nominal
damages as his right to -roced,ral d,e -rocess was not res-ected des-ite
the -resence of C,st ca,ses for his dismissal is a9rmed% this Co,rt Ands the
C& to have erred in A7ing the amo,nt that the Com-any is lia+le to -ay.
The C& sho,ld have ta1en cogniRance of the n,mero,s cases decided +y
this Co,rt where the amo,nt of nominal damages was A7ed at /:$%$$$.$$
if the dismissal was for a C,st ca,se.
2=BRB)?RB% -remises considered% the -etition is DBN3BD. The Decision of
the Co,rt of &--eals in C&0G.R. S/ No. $!"(' is &))3R5BD with
5?D3)3C&T3?N in that res-ondent New &ge Gra-hics% 3nc. is here+y ordered
to -ay -etitioner Billy 5. Realda nominal damages in the amo,nt of Thirty
Tho,sand /esos ;/:$%$$$.$$<.
KAKAMPI AND ITS MEMBERS, VICTOR PANUELOS, ET. AL. vs.
KINGSPOINT E'PRESS
G.R. No. "@':. &/R3L (#% ($(.
)&CTS*
4ictor /aV,elos ;/aV,elos<% Bo++y Dacara ;Dacara<% &lson DiRon ;DiRon<%
Saldy Dima+ayao ;Dima+ayao<% )ernando L,-angco% .r. ;L,-angco<% Sandy
/aRi ;/aRi<% Camilo Ta+arangao% .r. ;Ta+arangao<% Bd,ardo =iRole ;=iRole<
and Reginald Carillo ;Carillo< were the former drivers of Xings-oint B7-ress
and Logistic ;Xings-oint B7-ress<% a sole -ro-rietorshi- registered in the
name of 5ary &nn Co ;Co< and engaged in the +,siness of trans-ort of
goods. ?n .an,ary !% ($$!% Xings-oint B7-ress iss,ed se-arate notices to
individ,al -etitioners ,niformly stating that they have +een charged with
dishonesty% serio,s miscond,ct% loss of conAdence% and acts inimical to the
com-any% +y Aling with the NLRC false% malicio,s% and fa+ricated cases
against the com-any. 3n addition% Xings-oint stated that the -etitionersI
ref,sal to ,ndergo dr,g testing is ,nwarranted and against com-any -olicy.
The -etitioners were given @' hrs ;( days< to s,+mit their answers and
e7-lanation to the charges.
#@ F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
The individ,al -etitioners failed to s,+mit their written e7-lanation within
the stated -eriod. S,+se8,ently% Xings-oint B7-ress iss,ed to them
se-arate yet ,niformly worded notices informing them of their dismissal.
The charges were allegedly +ased on these acts*
)&BR3C&T3?N ?) B&SBLBSS 5?NBS CL&35S against the com-anyD
53SLB&D3NG )BLL?2 C?02?RXBRS to sign the 5&L3C3?US C?5/L&3NT )?R 5?NBS
CL&35S against the com-anyD
RB)US&L T? UNDBRG? T=B C?5/&NSIS GBNBR&L DRUG TBST
B\T?RT3NG 5?NBS )R?5 C?02?RXBRS T? )UND &CT343T3BS T=&T T=BS 2BRB
NB4BR )ULLS 3N)?R5BD ?).
& com-laint for illegal dismissal was s,+se8,ently Aled +y -etitioners%
alleging that the charges against them were fa+ricated and that their
dismissal was -rom-ted +y Xings-oint B7-ressI aversion to their ,nion
activities. The La+or &r+iter fo,nd Dacara% L,-angco% /aRi% Ta+arangao%
=iRole and Carillo illegally dismissed. ?n the other hand% the com-laint was
dismissed insofar as /an,elos% DiRon and Dima+ayao are concerned as they
were deemed not to have Aled their -osition -a-ers. 2hile the allegation of
anti0,nionism as the -rimordial motivation for the dismissal is considered
,nfo,nded% the res-ondents failed to -rove that the dismissal was for a C,st
ca,se.
?n a--eal% the NLRC a9rmed the La+or &r+iterIs Decision. 3n addition% the
NLRC r,led that the res-ondents failed to com-ly with the -roced,ral
re8,irements of d,e -rocess considering that the ,niformly worded Arst
notice sent +y Xings-oint to the -etitioners% did not a--rise them of the
-artic,lar acts or omission for which their dismissal were so,ght.
Res-ondents moved for reconsideration and the NLRC reversed itself and
declared the individ,al -etitioners legally dismissed.
S,+se8,ently% the -etitioners Aled a -etition for certiorari with the C&. The
C& reversed and set aside the NLRC Decision. Res-ondents -rom-tly Aled a
motion for reconsideration. Similar to the NLRC% the C& reversed itself and
retracted its earlier Anding that the individ,al -etitioners were illegally
dismissed. The C& concl,ded that the ( notices iss,ed +y Xings-oint
B7-ress com-lied with the re8,irements of the law.
3SSUB*
2hether or not the individ,al -etitionersI dismissal is valid.
SC RUL3NG*
Ses% the -etitioners were legally dismissed.
3t is f,ndamental that in order to validly dismiss an em-loyee% the em-loyer
is re8,ired to o+serve +oth s,+stantive and -roced,ral d,e -rocess the
termination of em-loyment m,st +e +ased on a C,st or a,thoriRed ca,se
and the dismissal m,st +e eJected after d,e notice and hearing. The Co,rt
agreed with the C& that the -etitionersI ref,sal to s,+mit themselves to
dr,g test is a C,st ca,se for their dismissal. &n em-loyer may terminate an
em-loyment on the gro,nd of serio,s miscond,ct or willf,l diso+edience +y
the em-loyee of the lawf,l orders of his em-loyer or re-resentative in
connection with his wor1. 2illf,l diso+edience re8,ires the conc,rrence of
two elements* ;< the em-loyee6s assailed cond,ct m,st have +een willf,l%
that is% characteriRed +y a wrongf,l and -erverse attit,deD and ;(< the
order violated m,st have +een reasona+le% lawf,l% made 1nown to the
em-loyee% and m,st -ertain to the d,ties which he had +een engaged to
discharge. Both elements are -resent in this case.
&t no -oint did the dismissed em-loyees deny Xings-oint B7-ressI claim
that they ref,sed to com-ly with the directive for them to s,+mit to a dr,g
test or% at the very least% e7-lain their ref,sal. Th,s% this gives rise to the
im-ression that their non0com-liance is deli+erate. The ,tter lac1 of reason
or C,stiAcation for their ins,+ordination indicates that it was -rom-ted +y
mere o+stinacy% hence% willf,l and warranting of dismissal. Drivers are
indis-ensa+le to Xings-oint B7-ressI -rimary +,siness of rendering door0to0
door delivery services. 3t is common 1nowledge that the ,se of dangero,s
dr,gs has adverse eJects on driving a+ilities that may render the
dismissed em-loyees inca-a+le of -erforming their d,ties to Xings-oint
B7-ress and acting against its interests% in addition to the threat they -ose
to the -,+lic.
Nonetheless% while Xings-oint B7-ress had reason to sever their
em-loyment relations% the Co,rt fo,nd its s,--osed o+servance of the
re8,irements of -roced,ral d,e -rocess -retentio,s. 2hile Xings-oint
B7-ress re8,ired the dismissed em-loyees to e7-lain their ref,sal to s,+mit
to a dr,g test% the ( days aJorded to them to do so cannot 8,alify as
Kreasona+le o--ort,nityO% which the Co,rt constr,ed in Xing of Xings
Trans-ort% 3nc. v. 5amac as a -eriod of at least # calendar days from
recei-t of the notice. Th,s% even if Xings-oint B7-ressI defective attem-t to
com-ly with -roced,ral d,e -rocess does not negate the e7istence of a C,st
ca,se for their dismissal% it was held that Xings-oint B7-ress is still lia+le to
indemnify the dismissed em-loyees.
## F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
EVER ELECTRICAL V. SAMAHANG MANGGAGAWA NG EVER
ELECTRICAL
G.R. N?. "@P"#% .UNB :% ($(
)&CTS*
Bver Blectrical 5an,fact,ring% 3nc. ;BB53< is a cor-oration engaged in the
+,siness of man,fact,ring electrical -arts and s,--lies. The res-ondents
are mem+ers of Samahang 5anggagawa ng Bver Blectrical>N&5&2U Local
((@. The controversy started when BB53 closed its +,siness o-erations
res,lting in the termination of the services of its em-loyees. Res-ondents
Aled a com-laint for illegal dismissal. They alleged that the clos,re was
made witho,t any warning% notice or memorand,m and in f,ll disregard of
the re8,irements of the La+or Code. BB53% in its defense% e7-lained that it
had closed the +,siness d,e to vario,s factors. 3t alleged that it inc,rred
serio,s losses when ?rient Ban1% one of the com-anies that it invested%
s,Jered losses +eca,se of the then -revailing asian crisis. 3t also o+tained
a loan from UC/B which it failed to -ay and as a conse8,ence UC/B Aled an
,nlawf,l detainer case against BB53. The 5eTC r,led in favor of UC/B and a
writ of e7ec,tion was iss,ed as a res,lt BB53Is em-loyees were -revented
from entering the com-anyIs factory.
The L& r,led in favor of the em-loyees. U-on a--eal% the NLRC reversed
the decision of the L&. 2hen it reached the C&% it reinstated the r,ling of
the L&. The C& held that res-ondents were entitled to se-aration -ay and
:th month -ay +eca,se the clos,re of BB53Is +,siness o-eration was
eJected +y the enforcement of a writ of e7ec,tion and not +y reason of
+,siness losses. =ence this -etition.
3SSUB*
2hether the clos,re was validly carried o,t as a res,lt of +,siness losses.
=BLD*
N?% the clos,re was not validly carried o,t.
&rticle (': of the La+or Code identiAes clos,re or cessation of o-eration of
the esta+lishment as an a,thoriRed ca,se for terminating an em-loyee.
Similarly% the said -rovision mandates that em-loyees who are laid oJ from
wor1 d,e to clos,res that are not d,e to +,siness insolvency sho,ld +e -aid
se-aration -ay e8,ivalent to one0month -ay or to at least one0half month
-ay for every year of service% whichever is higher. & fraction of at least si7
months shall +e considered one whole year.
&ltho,gh +,siness reverses or losses are recogniRed +y law as an
a,thoriRed ca,se% it is still essential that the alleged losses in the +,siness
o-erations +e -roven convincinglyD otherwise% this gro,nd for termination
of em-loyment wo,ld +e s,sce-ti+le to a+,se +y conniving em-loyers% who
might +e merely feigning +,siness losses or reverses in their +,siness
vent,res in order to ease o,t em-loyees.
3n this case% BB53 failed to esta+lish that the main reason for its clos,re
was +,siness reverses. &s a-tly o+served +y the C&% the cessation of
BB53Is +,siness was not directly +ro,ght a+o,t +y serio,s +,siness losses
or Anancial reverses% +,t +y reason of the enforcement of a C,dgment
against it. Th,s% BB53 sho,ld +e re8,ired to -ay se-aration -ay to its
aJected em-loyees. 3ts -resident cannot +e held solidarily lia+le +eca,se
of lac1 of malice or +ad faith on his -art.
WATERFRONT CEBU CITY HOTEL, VS. MA. MELANIE P. IMENE& et al.
.UNB :% ($(
)&CTS*
The res-ondents were laid oJ as a res,lt of the s,s-ension of the Cl,+Is
o-eration.
Under &rt. ('! of the La+or Code% a +ona Ade s,s-ension of +,siness
o-erations for not more than si7 ;!< months does not terminate
em-loyment. &fter si7 ;!< months% the em-loyee may +e recalled to wor1
or +e -ermanently laid oJ.
3n this case% more than si7 ;!< months have ela-sed from the time the Cl,+
ceased to o-erate. =ence% res-ondentsI termination +ecame -ermanent.
/etitioner anchors its arg,ments mainly on the thesis that retrenchment to
-revent losses was ,nderta1en to C,stify the dismissal of res-ondents.
/etitioner li1ened the clos,re of the Cl,+% which it deemed as a
division>de-artment% to retrenchment. &cting on the same -remise that the
Cl,+ is a division of -etitioner% res-ondents demanded that they sho,ld +e
transferred to another de-artment of -etitioner% instead of +eing dismissed
from em-loyment. Res-ondents also claim that -etitioner failed to -rove
losses to s,--ort retrenchment.
&t the o,tset% it sho,ld +e stated that the res-ondents cannot +e
accommodated in other de-artments of the =otel.
#! F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
The d,ties and f,nctions they -erform are -ec,liar to the -ositions they
hold in the Cl,+.
3t is li1ewise ,ndis-,ted that the Cl,+ remained closed and there is no
other de-artment in the =otel similar to the Cl,+ and which catered to
foreign high sta1es gam+lers. 4erily% reinstatement cannot +e and co,ld not
have +een an o-tion for -etitioner =otel.
La+or &r+iter Brnesto ). Carreon r,led in favor of -etitioner and ,-held the
clos,re of the Cl,+Is +,siness o-erations as a management
-rerogative. =owever% the -etitioner was directed to com-ly with &rticle
(': of the La+or Code and to -ay com-lainants their se-aration -ay
e8,ivalent to one0half month -ay for every year of service% a fraction of at
least ! months +eing considered as one year.
Res-ondents a--ealed to the NLRC which iss,ed a Decision a9rming the
r,ling of the La+or &r+iter. The NLRC o+served that -etitioner was a+le to
s,+stantiate the losses s,Jered +y the Cl,+ thro,gh Anancial statements
-ro-erly a,dited +y an inde-endent a,ditor. &fter the denial of
res-ondentsI motion for reconsideration% they elevated the case to the
Co,rt of &--eals.
The Co,rt of &--eals rendered a Decision reversing the Andings and
concl,sions of the NLRC. =ence% this -etition for review on certiorari.
=BLD*
2aterfront /romotion% Ltd. is a wholly0owned s,+sidiary of 2aterfront
/hili--ines. /etitioner =otel% as shown in the o9cial records% is also
another s,+sidiary of 2aterfront /hili--ines.
& review of the consolidated Anancial statement shows that for the Ascal
years ($$( and ($$:% the -arent com-any and the consolidated com-anies
reTect the same amo,nts of losses* United States ;U.S.< ^(%P"%$@.$$ for
($$( and U.S. ^P!#%(((.$$ for ($$:. This -roves -etitionerIs assertion that
the losses there reTected refer to the losses of the Cl,+.
The consolidated Anancial statement and the cor-orate relationshi-s it
indicates% cannot% however% +e relied ,-on +y -etitioner to avoid this
-artic,lar la+or dis-,te +eca,se% as already stated% -etitioner itself has
+een claiming from the very +eginning that the Cl,+ is only a
division>de-artment of the hotel.
4erily% retrenchment and not clos,re was eJected to warrant the valid
dismissal of res-ondents. /etitioner has not totally ceased its o-erations.
3t merely closed down a de-artment.
Retrenchment is the termination of em-loyment initiated +y the em-loyer
thro,gh no fa,lt of and witho,t -reC,dice to the em-loyees. 3t is resorted to
d,ring -eriods of +,siness recession% ind,strial de-ression% or seasonal
T,ct,ations or d,ring l,lls occasioned +y lac1 of orders% shortage of
materials% conversion of the -lant for a new -rod,ction -rogram or the
introd,ction of new methods or more e9cient machinery or of a,tomation.
3t is an act of the em-loyer of dismissing em-loyees +eca,se of losses in
the o-eration of a +,siness% lac1 of wor1% and considera+le red,ction on the
vol,me of his +,siness.
3n case of retrenchment% -roof of Anancial losses +ecomes the determining
factor in -roving its legitimacy. 3n esta+lishing a ,nilateral claim of act,al
or -otential losses% Anancial statements a,dited +y inde-endent e7ternal
a,ditors constit,te the normal method of -roof of -roAt and loss
-erformance of a com-any. The condition of +,siness losses C,stifying
retrenchment is normally shown +y a,dited Anancial doc,ments li1e yearly
+alance sheets and -roAt and loss statements as well as ann,al income ta7
ret,rns.
Retrenchment is s,+Cect to faithf,l com-liance with the s,+stantative and
-roced,ral re8,irements laid down +y law and C,ris-r,dence. )or a valid
retrenchment% the following elements m,st +e -resent*
. That retrenchment is reasona+ly necessary and li1ely to -revent
+,siness losses which% if already inc,rred% are not merely de minimis%
+,t s,+stantial% serio,s% act,al and real% or if only e7-ected% are
reasona+ly imminent as -erceived o+Cectively and in good faith +y
the em-loyerD
(. That the em-loyer served written notice +oth to the em-loyees and
to the De-artment of La+or and Bm-loyment at least one month -rior
to the intended date of retrenchmentD
:. That the em-loyer -ays the retrenched em-loyees se-aration -ay
e8,ivalent to one ;< month -ay or at least ` month -ay for every
year of service% whichever is higherD
@. That the em-loyer e7ercises its -rerogative to retrench em-loyees in
good faith for the advancement of its interest and not to defeat or
circ,mvent the em-loyeesI right to sec,rity of ten,reD and
#P F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
#. That the em-loyer ,sed fair and reasona+le criteria in ascertaining
who wo,ld +e dismissed and who wo,ld +e retained among the
em-loyees% s,ch as stat,s% e9ciency% seniority% -hysical Atness% age%
and Anancial hardshi- for certain wor1ers.
&ll these elements were s,ccessf,lly -roven +y -etitioner.
)irst% the h,ge losses s,Jered +y the Cl,+ for the -ast two years had forced
-etitioner to close it down to avert f,rther losses which wo,ld event,ally
aJect the o-erations of -etitioner.
Second% all @# em-loyees wor1ing ,nder the Cl,+ were served with notice
of termination. The corres-onding notice was li1ewise served to the D?LB
one month -rior to retrenchment.
Third% the em-loyees were oJered se-aration -ay% most of whom have
acce-ted and o-ted not to Coin in this com-laint.
)o,rth% cessation of or withdrawal from +,siness o-erations was +ona Ade
in character and not im-elled +y a motive to defeat or circ,mvent the
ten,rial rights of em-loyees.
&s a matter of fact% as of this writing% the Cl,+ has not res,med
o-erations. Neither is there a showing that -etitioner carried o,t the
clos,re of the +,siness in +ad faith. No la+or dis-,te e7isted +etween
management and the em-loyees when the latter were terminated. )inally%
we a9rm the NLRCIs award and com-,tation of se-aration -ay in favor of
res-ondents. ($$# Resol,tion of the National La+or Relations Commission
in are RB3NST&TBD.
COSMOS BOTTLING CORP. vs. WILSON FERMIN
G.R. No. "@:$:% .,ne ($% ($(
)&CTS*
2ilson B. )ermin ;)ermin< was a for1lift o-erator at Cosmos Bottling
Cor-oration ;C?S5?S<% where he started his em-loyment on (P &,g,st
"P!. ?n ! Decem+er ($$(% he was acc,sed of stealing the cell-hone of
his fellow em-loyee% L,is Braga ;Braga<. )ermin was then given a Show
Ca,se 5emorand,m% re8,iring him to e7-lain why the cell-hone was fo,nd
inside his loc1er. 3n com-liance therewith% he s,+mitted an a9davit the
following day% e7-laining that he only hid the -hone as a -ractical Co1e and
had every intention of ret,rning it to Braga.
&fter cond,cting an investigation% C?S5?S fo,nd )ermin g,ilty of stealing
Braga6s -hone in violation of com-any r,les and reg,lations. Conse8,ently%
on ( ?cto+er ($$:% the com-any terminated )ermin from em-loyment after
(P years of service% eJective on ! ?cto+er ($$:.
)ollowing the dismissal of )ermin from em-loyment% Braga e7ec,ted an
a9davit% which stated the +elief that the former had merely -,lled a -ran1
witho,t any intention of stealing the cell-hone% and withdrew from
C?S5?S his com-laint against )ermin. 5eanwhile% )ermin Aled a Com-laint
for 3llegal Dismissal% which the La+or &r+iter ;L&< dismissed for lac1 of
merit on the gro,nd that the act of ta1ing a fellow em-loyee6s cell-hone
amo,nted to gross miscond,ct. ),rther% the L& li1ewise too1 into
consideration )ermin6s other infractions% namely* ;a< committing acts of
disres-ect to a s,-erior o9cer% and ;+< slee-ing on d,ty and a+andonment
of d,ty.
3SSUB*
2hether the im-osition of -enalty of dismissal was a--ro-riate.
RUL3NG*
Theft committed against a co0em-loyee is considered as a case analogo,s
to serio,s miscond,ct% for which the -enalty of dismissal from service may
+e meted o,t to the erring em-loyee% (! viR.*
&rticle ('( of the La+or Code -rovides*
Article 343!)ermination y Employer! 5 An employer may terminate an employment
for any of the following causes6
(a)Serious misconduct or willful disoedience y the employee of the lawful orders of
his employer or his representati%es in connection with his work7 cSH+aA
888 888 888
(e),ther causes analogous to the foregoing.
5iscond,ct involves Ethe transgression of some esta+lished and deAnite
r,le of action% for+idden act% a dereliction of d,ty% willf,l in character% and
im-lies wrongf,l intent and not mere error in C,dgment.E )or miscond,ct to
+e serio,s and therefore a valid gro,nd for dismissal% it m,st +e*
. of grave and aggravated character and not merely trivial or
,nim-ortant and
(. connected with the wor1 of the em-loyee.
3n this case% -etitioner dismissed res-ondent +ased on the NB36s Anding
that the latter stole and ,sed S,seco6s credit cards. B,t since the theft was
not committed against -etitioner itself +,t against one of its em-loyees%
#' F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
res-ondent6s miscond,ct was not wor10related and therefore% she co,ld not
+e dismissed for serio,s miscond,ct.
& ca,se analogo,s to serio,s miscond,ct is a vol,ntary and>or willf,l act or
omission attesting to an em-loyee6s moral de-ravity. Theft committed +y
an em-loyee against a -erson other than his em-loyer% if -roven +y
s,+stantial evidence% is a ca,se analogo,s to serio,s miscond,ct. (P
;Bm-hasis s,--lied.<
3n this case% the L& has already made a fact,al Anding% which was a9rmed
+y +oth the NLRC and the C&% that )ermin had committed theft when he
too1 Braga6s cell-hone. Th,s% this act is deemed analogo,s to serio,s
miscond,ct% rendering )ermin6s dismissal from service C,st and valid.
APO CEMENT CORPORATION vs. &ALDY E. BAPTISMA
G.R. N?. P!!P .UNB ($% ($(
)&CTS*
Waldy B. Ba-tisma was em-loyed +y &-o Cement Cor-oration% a d,ly
registered cor-oration maintaining and o-erating a cement man,fact,ring
-lant in Naga% Ce+,. Sometime in Se-tem+er ($$:% the com-any received
information that some of its -ersonnel% incl,ding Ba-tisma who was then
the manager of the /ower /lant De-artment% were receiving commissions
or E1ic1+ac1sE from s,--liers. The to- management cond,cted an
investigation d,ring which one of the accredited s,--liers% Lo+itaVa% came
forward and testiAed that $Q to ($Q of the 8,oted -rice is ,s,ally set
aside as +ri+e money for certain -ersonnel. &mong those who receive
+ri+es from s,--liers are 5r. .ose Cr,R% the 5echanical 5aintenance
5anager and Waldy Ba-tisma% &-o /ower /lant 5anager. =aving +een
im-licated in the irreg,larities% Ba-tisma received a Show Ca,se Letter with
Notice of /reventive S,s-ension. =e then s,+mitted his written e7-lanation
denying the acc,sations h,rled against him. To f,rther aJord res-ondent
am-le o--ort,nity to defend himself% -etitioner cond,cted a series of
administrative investigation hearings. =owever% on 5arch ((% ($$@%
Ba-tisma received the Notice of Termination dated 5arch "% ($$@
informing him of his dismissal from em-loyment eJective immediately on
the gro,nd of loss of tr,st and conAdence. Thereafter% a com-laint for
illegal dismissal was Aled +efore the La+or &r+iter.
?n .an,ary #% ($$#% La+or &r+iter declared Ba-tisma illegally0dismissed. =e
o-ined that since Ba-tisma was not involved in the canvassing and
-,rchasing of s,--lies% he co,ld not have entered into any irreg,lar
arrangement with s,--liers.
=owever% the NLRC reversed the r,ling of the La+or &r+iter. 3t r,led that his
E-ersonal and direct involvement in the irreg,larities com-lained of renders
him ,nworthy of the tr,st and conAdence demanded MofN his -osition.E
Thereafter% the C& reinstated the Decision of the La+or &r+iter. 3t r,led that
-etitioner failed to -rove the e7istence of a C,st ca,se to warrant the
termination of res-ondent as the alleged loss of tr,st and conAdence was
not +ased on esta+lished facts.
3SSUBS*
2hether or not there was C,st ca,se for the dismissal of Ba-tisma.
SC RUL3NG*
To validly dismiss an em-loyee on the gro,nd of loss of tr,st and
conAdence ,nder &rticle ('( ;c<#: of the La+or Code of the /hili--ines% the
following g,idelines m,st +e o+served*
< loss of conAdence sho,ld not +e sim,latedD
(< it sho,ld not +e ,sed as s,+terf,ge for ca,ses which are im-ro-er%
illegal or ,nC,stiAedD
:< it may not +e ar+itrarily asserted in the face of overwhelming
evidence to the contraryD and
@< it m,st +e gen,ine% not a mere aftertho,ght to C,stify earlier action
ta1en in +ad faith.E
5ore im-ortant% it Em,st +e +ased on a willf,l +reach of tr,st and fo,nded
on clearly esta+lished facts.E
3n this case% we agree with the NLRC that the termination of Ba-tisma on
the gro,nd of loss of tr,st and conAdence was C,stiAed. Unli1e the La+or
&r+iter and the C&% we And the testimony of Lo+itaVa% the s,--lier% as
credi+le and tr,thf,l.
To +egin with% we And no inconsistencies +etween the Arst and the second
a9davits of Lo+itaVa. &lso% there a--ears to +e no ill0motive on the -art of
Lo+itaVa to falsely acc,se Ba-tisma of acce-ting commissions and>or
E1ic1+ac1s.E 5oreover% as +etween the -ositive testimony of Lo+itaVa that
he gave Ba-tisma commissions and>or E1ic1+ac1sE on two se-arate
#" F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
occasions% and the negative testimony of res-ondentIs witnesses CedeVo
and BanRon that no s,ch meeting too1 -lace% we are more inclined to give
credence to the former. 3t +ears stressing that a -ositive testimony -revails
over a negative one% more es-ecially in this case where res-ondentIs
witnesses did not even e7ec,te a9davits to attest to the tr,thf,lness of
their statements.
Li1ewise erroneo,s is the reasoning of the La+or &r+iter and the C& that
since Ba-tisma was not involved in the -roc,rement -rocess% he co,ld not
+e g,ilty of violating Section (.$@#P of the Com-any R,les and
Reg,lations. &ltho,gh he was not directly involved in the -roc,rement
-rocess% Ba-tisma% as the then /ower /lant 5anager% act,ally wielded
some a,thority which is vital and indis-ensa+le to the E-roc,rement
-rocess.E Being then the manager of the /ower /lant% it was Mres-ondentIsN
d,ty to a--rove -,rchase re8,isitionMsN and -re-are or ca,sed to +e
-re-ared the desired s-eciAcations of the item so,ght to +e -roc,red for
the /ower /lant% es-ecially on the technical side of the items. U-on the
delivery% Mres-ondentN has the a,thority to determine if the items or
e8,i-ment delivered are in accordance with the s-eciAcations given.
3n -erforming this f,nction% Mres-ondentN wo,ld e7ercise some discretion
either to acce-t the items delivered if he Ands them to have com-lied with
the desired s-eciAcations or reCect the same if to his C,dgment the items
delivered failed to meet the desired s-eciAcations.
Conse8,ently% C,st +eca,se Mres-ondentIsN signat,re cannot +e fo,nd in
&nne7es E$%E E$0&%E E$0B%E E(%E E(0&%E E:E and E:0&E% it does not
necessarily mean that Ehe has a+sol,tely nothing to doE with the entire
-roc,rement -rocess. &s said% while Mres-ondentN may not have +een
em-owered% Eto canvass and award -,rchase orders to s,--liers%E he was
em-owered% as an end0,ser% to determine whether to acce-t or reCect any
item delivered +y any s,--lier% which a,thority is -art and -arcel of the
entire -roc,rement mechanism -,t in -lace +y the com-any.
=ence% the testimony of Lo+itaVa constit,tes s,+stantial evidence to -rove
that res-ondent% as the then /ower /lant 5anager% acce-ted commissions
and>or E1ic1+ac1sE from s,--liers% which is a clear violation of Section (.$@
of -etitionerIs Com-any R,les and Reg,lations. .,ris-r,dence consistently
holds that for managerial em-loyees Ethe mere e7istence of a +asis for
+elieving that s,ch em-loyee has +reached the tr,st of his em-loyer wo,ld
s,9ce for his dismissal.E Therefore% Ba-tismaIs termination was for a C,st
and valid ca,se.
REYES%RAYEL vs. PHILIPPINE LUEN THAI HOLDINGS,
CORPORATION(L)T INTERNATIONAL GROUP PHILIPPINES, INC
G.R. No. P@'":% .,ly % ($(
)he law is fair and $ust to oth laor and management! )hus0 while the
'onstitution accords an employee security or tenure0 it ahors oppression
to an employer who cannot e compelled to retain an employee whose
continued employment would e patently inimical to its interest!
)&CTS*
3n )e+r,ary ($$$% /LT=C hired Reyes0Rayel as Cor-orate =,man Reso,rces
;C=R< Director for 5an,fact,ring for its s,+sidiary>a9liate com-any% LUT.
3n the em-loyment contract% she was tas1ed to -erform f,nctions in
relation to administration% recr,itment% +eneAts% a,dit>com-liance% -olicy
develo-ment> str,ct,re% -roCect -lan% and s,ch other wor1s as may +e
assigned +y her immediate s,-erior% Sa,ceda% /LT=CIs Cor-orate Director
for =,man Reso,rces.
?n Se-tem+er !% ($$% -etitioner received a /rere8,isite Notice from
Sa,ceda and the Cor-orate Legal Co,nsel of /LT=C% 5a. Lorelie T. Bdles
;Bdles<. The /RBRBRBYU3S3TB N?T3CB contained averments to her fail,re to
-erform in accordance with management directives in vario,s instances%
s,ch as*
< She made -rono,ncements against the =R( -rogram which is for
the enhancement of -ersonnel management in the com-any.
(< =er ina+ility to incite colla+oration U harmony within the Cor-orate
=,man Reso,rces Division ;C=RD<.Com-laints of her negative
attit,de towards the com-any.
:< =er negative acts led to the de-art,re of -romising em-loyees who
co,ld not wor1 with her.
The Notice said that these acts led to L?SS ?) C?N)3DBNCB in her
ca-a+ility to -romote the interests of the com-any.
The com-any gave her the o--ort,nity to s,+mit her written re-ly to the
memo within @' ho,rs from recei-t. 3t f,rther read* K)ail,re to so s,+mit
shall +e constr,ed as waiver of yo,r right to +e heard. Conse8,ently% the
Com-any shall immediately decide on this matter.O
!$ F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
3n her written res-onse dated Se-tem+er $% ($$% Reyes0Rayel e7-lained
that*
=er alleged fail,re to -erform management directives co,ld +e attri+,ted
to the lac1 of eJective comm,nication with her s,-eriors d,e to
malf,nctioning email system. She denied ,ttering negative comments
a+o,t the =R( /rogram and instead claimed to have intimated her s,--ort
for it. She f,rther denied ca,sing disharmony in her division.
She em-hasiRed that in .,ne ($$% she received a relatively good rating of
'$.(Q in her overall -erformance a--raisal which meant that she dis-layed
de-enda+le wor1 level -erformance as well as good cor-orate relationshi-
with her s,-eriors and s,+ordinates.
Reyes0Rayel was given termination notice on Se-tem+er (%($$. She was
dismissed from the service for loss of conAdence on her a+ility to -romote
the interests of the com-any.
/etitioner arg,es that* There is no s,+stantial evidence to esta+lish valid
gro,nds for her dismissal since vario,s emails from her s,-eriors
ill,strating her accom-lishments and commendations% as well as her
EgoodE overall -erformance rating negate loss of tr,st and conAdence. She
also insists that she was not aJorded d,e -rocess at the com-any level.
She claims that she was not -ro-erly informed of the oJenses charged
against her d,e to the vag,eness of the terms written in the termination
notices and that no investigation and hearing was cond,cted as re8,ired
+y com-any -olicy.
3SSUBS*
a. 2?N -etitioner was illegally dismissed.
+. 2?N -etitioner was accorded d,e -rocess.
RUL3NG*
The -etition is devoid of merit. Reyes0Rayel was validly dismissed.
A! )here e8ists a %alid ground for petitioner9s termination from
employment!
.,ris-r,dence -rovides that an em-loyer has a distinct -rerogative and
wider latit,de of discretion in dismissing a managerial -ersonnel who
-erforms f,nctions which +y their nat,re re8,ire the em-loyerIs f,ll tr,st
and conAdence. &s disting,ished from a ran1 and Ale -ersonnel% mere
e7istence of a +asis for +elieving that a managerial em-loyee has +reached
the tr,st of the em-loyer C,stiAes dismissal.
EMLNoss of conAdence as a gro,nd for dismissal does not re8,ire -roof
+eyond reasona+le do,+t as the law re8,ires only that there +e at least
some +asis to C,stify it.E
/etitioner holds a managerial -osition.
She was com-anyIs C=R Director for 5an,fact,ring. She was directly
res-onsi+le for managing her own staJ. She was the KfaceO of the com-any
to its em-loyees. D,e to her -osition% she m,st enCoy the f,ll tr,st U
conAdence of her s,-eriors. She o,ght to 1now that she is E+o,nd +y more
e7acting wor1 ethicsE and sho,ld live ,- to this high standard of
res-onsi+ility.
Res-ondents also im-,te ,-on -etitioner gross negligence and
incom-etence which are li1ewise C,stiAa+le gro,nds for dismissal. The
+,rden of -roving that the termination was for a valid ca,se lies on the
em-loyer. =ere% res-ondents were a+le to overcome this +,rden as the
evidence -resented clearly s,--ort the validity of -etitionerIs dismissal*
. Records show that -etitioner indeed ,nreasona+ly failed to eJectively
comm,nicate with her immediate s,-erior in order to ens,re that her wor1
is ,- to -ar.
(. &9davits of her co0wor1ers revealed her negative attit,de U
,n-rofessional +ehavior towards them U the com-any. They all descri+ed
her as having an KirrationalO +ehavior and Es,-erior and condescendingE
attit,de in the wor1-lace.
:. =er dis-lay of ine9ciency and ine-tit,de in her Co+ as a C=R Director.
She% on two occasions% gave wrong information regarding iss,es on leave
and holiday -ay which generated conf,sion among em-loyees in the
com-,tation of salaries and wages. D,e to the nat,re of her f,nctions%
-etitioner is e7-ected to have strong wor1ing 1nowledge of la+or laws and
reg,lations to hel- shed light on iss,es and 8,estions regarding the same
instead of com-licating them. /etitioner o+vio,sly failed in this res-ect.
The C& is correct in saying that her '$.(Q rating are low mar1s which
revealed the Edegree of M-etitionerIsN wor1 handica-.O She delivered dismal
-erformance U dis-layed -oor wor1 attit,de which constit,te s,9cient
reasons for an BR to terminate an BB on the gro,nd of L?SS ?) TRUST &ND
C?N)3DBNCB.
&n em-loyer Ehas the right to reg,late% according to its discretion and +est
C,dgment% all as-ects of em-loyment% incl,ding wor1 assignment% wor1ing
methods% -rocesses to +e followed% wor1ing reg,lations% transfer of
em-loyees% wor1 s,-ervision% lay0oJ of wor1ers and the disci-line%
! F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
dismissal and recall of wor1ers.E EMSNo long as they are e7ercised in good
faith for the advancement of the em-loyerIs interest and not for the
-,r-ose of defeating or circ,mventing the rights of the em-loyees ,nder
s-ecial laws or ,nder valid agreements%E the e7ercise of this management
-rerogative m,st +e ,-held.
#! Petitioner was accorded due process!
/etitioner insists that she was not -ro-erly a--rised of the s-eciAc gro,nds
for her termination as to give her a reasona+le o--ort,nity to e7-lain
+eca,se the /rere8,isite Notice and Notice of Termination did not mention
any valid or a,thoriRed ca,se for dismissal +,t rather merely contained
general allegations and vag,e terms. The SC e7amined that /rere8,isite
Notice and held that it was free from any am+ig,ity. The said notice
-ro-erly advised -etitioner to e7-lain thro,gh a written res-onse her
fail,re to -erform in accordance with management directives% which
deAciency res,lted in the com-anyIs loss of conAdence in her ca-a+ility to
-romote its interest.
The notice cited s-eciAc incidents from vario,s instances which showed
-etitionerIs Ere-eated fail,re to com-ly with wor1 directives% her inclination
to ma1e negative remar1s a+o,t com-any goals and her di9c,lt
-ersonality%E that have collectively contri+,ted to the com-anyIs loss of
tr,st and conAdence in her.
These s-eciAed acts% in addition to her low -erformance rating%
demonstrated -etitionerIs neglect of d,ty and incom-etence which s,--ort
the termination for loss of tr,st and conAdence.
Neither can there +e any denial of d,e -rocess d,e to the a+sence of a
hearing or investigation at the com-any level.
3t has +een held in a -lethora of cases that d,e -rocess re8,irement is met
when there is sim-ly an o--ort,nity to +e heard and to e7-lain oneIs side
even if no hearing is cond,cted.
3n the case of Pere: %! Philippine )elegraph and )elephone 'ompany0 this
Co,rt -rono,nced that an em-loyee may +e aJorded am-le o--ort,nity to
+e heard +y means of any method% ver+al or written% whether in a hearing%
conference or some other fair% C,st and reasona+le way.
The following are the GU3D3NG /R3NC3/LBS in connection with T=B =B&R3NG
RBYU3RB5BNT 3N D3S53SS&L C&SBS*
;a< aam-le o--ort,nity to +e heardI means any meaningf,l o--ort,nity
;ver+al or written< given to the em-loyee to answer the charges
against him and s,+mit evidence in s,--ort of his defense%
whether in a hearing% conference or some other fair% C,st and
reasona+le way.
;+< a formal hearing or conference +ecomes mandatory only when
re8,ested +y the em-loyee in writing or s,+stantial evidentiary
dis-,tes e7ist or a com-any r,le or -ractice re8,ires it% or when
similar circ,mstances C,stify it.
;c< the aam-le o--ort,nity to +e heardI standard in the La+or Code
-revails over the ahearing or conferenceI re8,irement in the
im-lementing r,les and reg,lations.
3n this case% -etitioner6s written res-onse to the /rere8,isite Notice
-rovided her with an aven,e to e7-lain and defend her side and th,s
served the -,r-ose of d,e -rocess. That there was no hearing.
investigation or right to a--eal which -etitioner o-ined to +e violation of
com-any -olicies% is of no moment since the records is +ereft of any
showing that there is an e7isting com-any -olicy that re8,ires these
-roced,res with res-ect to the termination of a C=R Director li1e -etitioner
or that com-any -ractice calls for the same. There was also no re8,est for
a formal hearing on the -art of -etitioner.
&s she was served with a notice a--rising her of the changes against her
and also a s,+se8,ent notice informing her of the management6s decision
to terminate her services alter res-ondents fo,nd her written res-onse to
the Arst notice ,nsatisfactory% -etitioner was clearly aJorded her right to
d,e -rocess.
NARANO V. BIOMEDICAL HEALTH CARE
SB/TB5BBR "% ($(
)&CTS*
Res-ondent Biomedica =ealth Care% 3nc. ;Biomedica< was% d,ring the
material -eriod% engaged in the distri+,tion of medical e8,i-ment.
Res-ondent Carina KXarenO .. 5otol ;5otol< was then its /resident.
/etitioners were former em-loyees of Biomedica. ?n 5otolIs +irthday%
-etitioners were a+sent for vario,s reasons. These same em-loyees or
res-ondents were the ones who Aled a case against Biomedica in the
De-artment of La+orfor lac1 of salary increases% fail,re to remit Social
!( F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
Sec,rity System and /ag03B3G contri+,tions% and violation of the minim,m
wage law% among other grievances. /er availa+le records% the com-laint
has not +een acted ,-on.Later that day% -etitioners re-orted for wor1 after
receiving te7t messages for them to -roceed to Biomedica. They were%
however% ref,sed entry and told to start loo1ing for another
wor1-lace./etitioners allegedly came in for wor1 +,t were not allowed to
enter the -remises. The following day%on Novem+er "% ($$!% Biomedica
iss,ed a notice of -reventive s,s-ension and notices to e7-lain within (@
ho,rs ;Notices<to -etitioners. 3n the Notices% Biomedica acc,sed the
-etitioners of having cond,cted an illegal stri1e and were accordingly
directed to e7-lain why they sho,ld not +e held g,ilty of and dismissed for
violating the com-any -olicy against illegal stri1es ./etitioners were
re8,ired to -roceed to the Biomedica o9ce where they were each served
their Notices.?nly &ngeles and Casimiro s,+mitted their written
e7-lanation for their a+sence whereinthey alleged that -etitioners forced
them to go on a Kmass leaveO while as1ing Biomedica for forgiveness for
their actions. % -etitioners Aled a Com-laint with the NLRC for constr,ctive
dismissal and non-ayment of salaries% overtime -ay% :thmonth -ay as
well as non0remittance of SSS% /ag03B3G and /hilhealth contri+,tions as
well as loan -ayments. Thereafter% Biomedica served Notices of Termination
on -etitioners. La+or ar+iter held that -etitioners -erformed an illegal stri1e
and g,ilty of s,ch miscond,ct. ?n a--eal% NLRC r,led that they were
illegally dismissed. ?n a--eal of C&% the decision of the La+or &r+iter was
,-held. =ence this case.
3SSUB*
2?N the -etitioners were illegally dismissed.
=BLD*
They were illegally dismissed. 3t +ears -ointing o,t that in the dismissal of
an em-loyee% the law re8,ires that d,e -rocess +e o+served. S,ch d,e
-rocess re8,irement is twofold% -roced,ral and s,+stantive% that is% Kthe
termination of em-loyment m,st +e +ased on a C,st or a,thoriRed ca,se of
dismissal and the dismissal m,st +e eJected after d,e notice and hearing.O
3n the instant case% -etitioners were not aJorded +oth -roced,ral and
s,+stantive d,e -rocess.
Th,s% the Co,rt ela+orated in Xing of Xings Trans-ort% 3nc. v. 5amac that a
mere general descri-tion of the charges against an em-loyee +y the
em-loyer is ins,9cient to com-ly with the a+ove -rovisions of the law.
3n the instant case% the notice s-ecifying the gro,nds for termination are as
follows*
BJective ,-on recei-t hereof% yo, are -laced ,nder -reventive s,s-ension
for willf,lly organiRing and>or engaging in illegal stri1e on Novem+er P%
($$!. So,r said illegal act0in cons-iracy with yo,r other co0em-loyees%
-aralyRed the com-any o-eration on that day and res,lted to ,nd,e
damage and -reC,dice to the com-any and is direct violation of &rticle \3%
Category )o,r Section !% '% (% ' U (# of o,r Com-any /olicy% which if
fo,nd g,ilty% yo, will +e meted a -enalty of dismissal. /lease e7-lain in
writing within (@ ho,rs from recei-t hereof why yo, sho,ld not +e held
g,ilty of violating the com-any -olicy considering f,rther that yo,
committed and timed s,ch act d,ring the +irthday of o,r Com-any
-resident.
Clearly% -etitioners were charged with cond,cting an illegal stri1e% not a
mass leave% witho,t s-ecifying the e7act acts that the com-any considers
as constit,ting an illegal stri1e or violative of com-any -olicies. S,ch
allegation falls short of the re8,irement in Xing of Xings Trans-ort% 3nc. of
Ka detailed narration of the facts and circ,mstances that will serve as
+asisfor the charge against the em-loyees.O & +are mention of an Killegal
stri1eO will not s,9ce),rther% while Biomedica cites the -rovisions of the
com-any -olicy which -etitioners -,r-ortedly violated% it failed to 8,ote
said -rovisions in the notice so -etitioners can +e ade8,ately informed of
the nat,re of the charges against them and intelligently Ale their
e7-lanation and defenses to said acc,sations. The notice is +are of s,ch
descri-tion of the com-any -olicies. 5oreover% it is inc,m+ent ,-on
res-ondent com-any to show that -etitioners were d,ly informed of said
com-any -olicies at the time of their em-loyment and were given co-ies of
these -olicies. No s,ch -roof was -resented +y res-ondents. There was
even no mention at all that s,ch re8,irement was met. 2orse% res-ondent
Biomedica did not even 8,ote or re-rod,ce the com-any -olicies referred
to in the notice as -ointed o,t +y the C& stating*
3t m,st +e noted that the com-any -olicy which the -etitioner was referring
to was not 8,oted or re-rod,ced in the -etition% a co-y of which is not also
a--ended in the -etition% as s,ch we cannot determine the veracity of the
e7istence of said -olicy.
5oreover% the -eriod of (@ ho,rs allotted to -etitioners to answer the
notice was severely ins,9cient and in violation of the im-lementing r,les
!: F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
of the La+or Code. Under the im-lementing r,le of &rt. (PP% an em-loyee
sho,ld +e given Kreasona+le o--ort,nityO to Ale a res-onse to the notice.
Xing of Xings Trans-ort% 3nc. el,cidates in this wise*
To clarify% the following sho,ld +e considered in terminating the services of
em-loyees*
;< The Arst written notice to +e served on the em-loyees sho,ld contain
the s-eciAc ca,ses or gro,nds for termination against them% and a directive
that the em-loyees are given the o--ort,nity to s,+mit their written
e7-lanation within a reasona+le -eriod. KReasona+le o--ort,nityO ,nder
the ?mni+,s R,les means every 1ind of assistance that management m,st
accord to the em-loyees to ena+le them to -re-are ade8,ately for their
defense. This sho,ld +e constr,ed as a -eriod of at least Ave ;#< calendar
days from recei-t of the notice to give the em-loyees an o--ort,nity to
st,dy the acc,sation against them% cons,lt a ,nion o9cial or lawyer%
gather data and evidence% and decide on the defenses they will raise
against the com-laint.
3n addition% Biomedica did not set the charges against -etitioners for
hearing or conference in accordance with Sec. (% Boo1 4% R,le \333 of the
3m-lementing R,les and Reg,lations of the La+or Code and in line with
r,ling in Xing of Xings Trans-ort% 3nc.% where the Co,rt e7-lained*
;(< &fter serving the Arst notice% the em-loyers sho,ld sched,le and
cond,ct a hearing or conference wherein the em-loyees will +e given the
o--ort,nity to* ;< e7-lain and clarify their defenses to the charge against
themD ;(< -resent evidence in s,--ort of their defensesD and ;:< re+,t the
evidence -resented against them +y the management. D,ring the hearing
or conference% the em-loyees are given the chance to defend themselves
-ersonally% with the assistance of a re-resentative or co,nsel of their
choice. 5oreover% this conference or hearing co,ld +e ,sed +y the-arties as
an o--ort,nity to come to an amica+le settlement.
2hile -etitioners did not s,+mit any written e7-lanation to the charges% it
is inc,m+ent for Biomedica to set the matter for hearing or conference to
hear the defenses and receive evidence of the em-loyees.
5ore im-ortantly% Biomedica is d,ty0+o,nd to e7ert eJorts% d,ring said
hearing or conference% to hammer o,t a settlement of its diJerences with
-etitioners. These -rescri-tions Biomedica failed to satisfy.
Lastly% Biomedica again deviated from the dictated contents of a written
notice of termination as laid down in Sec. (% Boo1 4% R,le \333 of the
3m-lementing R,les that it sho,ld em+ody the facts and circ,mstances to
s,--ort the gro,nds C,stifying the termination. &s am-liAed in Xing of
Xings Trans-ort% 3nc.*
;:< &fter determining that termination of em-loyment is C,stiAed% the
em-loyers shall serve the em-loyees a written notice of termination
indicating that* ;< all circ,mstances involving the charge against the
em-loyees have +een consideredD and ;(< gro,nds have +een esta+lished
to C,stify the severance of their em-loyment.
The Novem+er (!% ($$! Notice of Termination iss,ed +y Biomedica
misera+ly failed to satisfy the re8,isite contents of a valid notice of
termination% as it sim-ly mentioned the fail,re of -etitioners to s,+mit their
res-ective written e7-lanations witho,t disc,ssing the facts and
circ,mstances to s,--ort the alleged violations of Secs. !% '% (% ' and (#
of Category )o,r% &rt.\3 of the alleged com-any r,les.
&ll told% Biomedica made mincemeat of the d,e -rocess re8,irements
,nder the 3m-lementing R,les and the Xing of Xings Trans-ort% 3nc. r,ling
+y sim-ly not following any of their dictates% to the e7treme -reC,dice of
-etitioners.
/etitioners were also denied of s,+stantive d,e -rocess.Clearly% to C,stify
the dismissal of an em-loyee on the gro,nd of serio,s miscond,ct% the
em-loyer m,st Arst esta+lish that the em-loyee is g,ilty of im-ro-er
cond,ct% that the em-loyee violated an e7isting and valid com-any r,le or
reg,lation% or that the em-loyee is g,ilty of a wrongdoing. 3n the instant
case% Biomedica failed to even esta+lish that -etitioners indeed violated
com-any r,les% failing to even -resent a co-y of the r,les and to -rove that
-etitioners were made aware of s,ch reg,lations. 3n fact% from the records
of the case% Biomedica has failed to -rove that -etitioners are g,ilty of a
wrongdoing that is -,nisha+le with termination from em-loyment. &rt.
(PP;+< of the La+or Code states% KThe +,rden of -roving that the
termination was for a valid or a,thoriRed ca,se shall rest on the em-loyer.O
3n the instant case% Biomedica failed to overcomes,ch +,rden. &s will +e
shown% -etitionersI a+sence on Novem+er P% ($$! cannot +e considered a
massleave% m,ch less a stri1e and% th,s% cannot C,stify their dismissal
fromem-loyment.
The acc,sation is for engaging in a mass leave tantamo,nt to an illegal
stri1e. The term K5ass LeaveO has +een left ,ndeAned +y the La+or Code.
!@ F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
/lainly% the legislat,re intended that thetermIs ordinary sense +e ,sed.
K5assO is deAned as K-artici-ated in% attended +y% or aJecting a large
n,m+er of individ,alsD having a large0scale character% 2hile the term
KLeaveO is deAned as Kan a,thoriRed a+sence or vacation from d,ty or
em-loyment ,s,ally with -ay.OTh,s% the -hrase Kmass leaveO may refer to
a sim,ltaneo,s availmentof a,thoriRed leave +eneAts +y a large n,m+er of
em-loyee in a com-any.
XV. SUSPENSION OF BUSINESS OPERATIONS
XVI. DISEASE AS A GROUND OF TERMINATION
VILLARUEL vs. YEO HAN GUAN
G.R. No. !""% .UNB % ($
)&CTS*
?n )e+r,ary #% """% herein -etitioner Aled with the NLRC% National
Ca-ital Region% Y,eRon City a Com-laintM:N for -ayment of se-aration -ay
against S,hans Bnter-rises. S,+se8,ently% in his &mended Com-laint and
/osition /a-er dated Decem+er !%"""% -etitioner alleged that in
.,ne "!:% he was em-loyed as a machine o-erator +y Ri+onette
5an,fact,ring Com-any% an enter-rise engaged in the +,siness of
man,fact,ring and selling /4C -i-es and is owned and managed +y herein
res-ondent Seo =an G,an. ?ver a -eriod of almost twenty ;($< years% the
com-any changed its name fo,r times. Starting in "": ,- to the time of
the Aling of -etitioner6s com-laint in """% the com-any was o-erating
,nder the name of S,hans Bnter-rises. Des-ite the changes in the
com-any6s name% -etitioner remained in the em-loy of res-ondent.
/etitioner f,rther alleged that on ?cto+er #% ""'% he got sic1 and was
conAned in a hos-italD on Decem+er(% ""'% he re-orted for wor1 +,t was
no longer -ermitted to go +ac1 +eca,se of his illnessD he as1ed that
res-ondent allow him to contin,e wor1ing +,t +e assigned a lighter 1ind of
wor1 +,t his re8,est was deniedD instead% he was oJered a s,m of
/#%$$$.$$ as his se-aration -ayD however% the said amo,nt corres-onds
only to the -eriod +etween "": and """D -etitioner -rayed that he +e
granted se-aration -ay com-,ted from his Arst day of em-loyment in .,ne
"!:% +,t res-ondent ref,sed. &side from se-aration -ay% -etitioner -rayed
for the -ayment of service incentive leave for three years as well as
attorney6s fees.
?n the other hand% res-ondent averred in his /osition /a-erM#N that
-etitioner was hired as machine o-erator from 5arch % "": ,ntil
he sto--ed wor1ing sometime in )e+r,ary """ on the gro,nd that he was
s,Jering from illnessD after his recovery% -etitioner was directed to re-ort
for wor1% +,t he never showed ,-. Res-ondent was later ca,ght +y s,r-rise
when -etitioner Aled the instant case for recovery of se-aration -ay.
Res-ondent claimed that he never terminated the services of -etitioner
and that d,ring their mandatory conference% he even told the latter that he
co,ld go +ac1 to wor1 anytime +,t -etitioner clearly manifested that he
was no longer interested in ret,rning to wor1 and instead as1ed for
se-aration -ay. ?n Novem+er (P% ($$$% the La+or &r+iter handling the case
rendered C,dgment in favor of -etitioner. &ggrieved% res-ondent Aled
an a--eal with the NLRC which also dismissed the -etition. ?n 5arch :%
($$:% the Third Division of the NLRC rendered its Decision dismissing
res-ondent6s a--eal and a9rming the La+or &r+iter6s Decision. 3n theC&%
-etition was -artially granted.
3SSUB*
2hether or not res-ondent% in fact% dismissed -etitioner from his
em-loyment.
SC RUL3NG*
The Co,rt Ands no convincing C,stiAcation% in the Decision of the La+or
&r+iter on why -etitioner is entitled to s,ch -ay. 3n the same manner% the
NLRC Decision did not give any rationaliRation as the gist thereof sim-ly
consisted of a 8,oted -ortion of the a--ealed Decision of the La+or &r+iter.
?n the other hand% the Co,rt agrees with the C& in its o+servation of the
following circ,mstances as -roof that res-ondent did not terminate
-etitioner6s em-loyment* Arst % the only ca,se of action in -etitioner6s
original com-laint is that he was EoJered a very low se-aration -ayED
second % there was no allegation of illegal dismissal% +oth in -etitioner6s
original and amended com-laints and -osition -a-erD and% third % there was
no -rayer for reinstatement. in consonance with the a+ove Andings%
the Co,rt Ands that -etitioner was the one who initiated the severance of
his em-loyment relations with res-ondent. 3t is evident from the vario,s
-leadings Aled +y -etitioner that he never intended to ret,rn to
his em-loyment with res-ondent on the gro,nd that his health is failing.
3ndeed% -etitioner did not as1 for reinstatement. 3n fact% he reCected
res-ondent6s oJer for him to ret,rn to wor1. This is tantamo,nt to
resignation.
!# F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
Resignation is deAned as the vol,ntary act of an em-loyee who Ands
himself in a sit,ation where he +elieves that -ersonal reasons cannot +e
sacriAced in favor of the e7igency of the service and he has no other choice
+,t to disassociate himself from his em-loyment. By way of e7ce-tion%
this Co,rt has allowed grants of se-aration -ay to stand as Ea meas,re of
social C,sticeE where the em-loyee is validly dismissed for ca,ses other
than serio,s miscond,ct or those reTecting on his moral character.
=owever% there is no -rovision in the La+or Code which grants se-aration
-ay to vol,ntarily resigning em-loyees. 3n fact% the r,le is that an em-loyee
who vol,ntarily resigns from em-loyment is not entitled to se-aration -ay%
e7ce-t when it is sti-,lated in the em-loyment contract or CB&% or it is
sanctioned +y esta+lished em-loyer -ractice or -olicy. 3n the -resent case%
neither the a+ovementioned -rovisions of the La+or Code and its
im-lementing r,les and reg,lations nor the e7ce-tions a--ly +eca,se
-etitioner was not dismissed from his em-loyment and there is no evidence
to show that -ayment of se-aration -ay is sti-,lated in his em-loyment
contractor sanctioned +y esta+lished -ractice or -olicy of herein
res-ondent% his em-loyer.
Since -etitioner was not terminated from his em-loyment and% instead% is
deemed to have resigned there from% he is not entitled to se-aration -ay
,nder the -rovisions of the La+or Code. B,t we m,st stress that this Co,rt
did allow% in several instances% the grant of Anancial assistance as a
meas,re of social C,stice and e7ce-tional circ,mstances% and as an
e8,ita+le concession. The instant case e8,ally calls for +alancing the
interests of the em-loyer with those of the wor1er% if only to a--ro7imate
what .,stice La,rel calls C,stice in its sec,lar sense. 3n the -resent case%
res-ondent had +een em-loyed with the -etitioner for almost twelve ;(<
years. ?n )e+r,ary :% ""!% he s,Jered from a Efract,red left transverse
-rocess of fo,rth l,m+ar verte+ra%E while their vessel was at the -ort of
So1ohama% .a-an. &fter cons,lting a doctor% he was re8,ired to rest for a
month. 2hen he was re-atriated to 5anila and e7amined +y a com-any
doctor% he was declared At to contin,e his wor1.
2hen he re-orted for wor1% -etitioner ref,sed to em-loy him des-ite
the ass,rance of its -ersonnel manager. Res-ondent -atiently waited for
more than one year to em+ar1 on the vessel as(nd Bngineer% +,t the
-osition was not given to him% as it was occ,-ied +y another -erson 1nown
to one of the stoc1holders. Conse8,ently% for having +een de-rived of
contin,ed em-loyment with -etitioner6s vessel% res-ondent o-ted to a--ly
for o-tional retirement. 3n addition% records show that res-ondent6s
seaman6s +oo1% as d,ly noted and signed +y the ca-tain of the vessel was
mar1ed E4ery Good%E and Erecommended for hire.E 5oreover% res-ondent
had no derogatory record on Ale over his long years of service with the
-etitioner. Considering all of the foregoing and in line with Bastern% the
ends of social and com-assionate C,stice wo,ld +e served +est
if res-ondent will +e given some e8,ita+le relief. Th,s% the award of /$$%
$$$.$$ to res-ondent as Anancial assistance is deemed e8,ita+le ,nder the
circ,mstances. /etition denied.
XVII. OTHER CAUSES OF SEVERANCE OF EMPLOYMENT
SKIPPERS UNITED PACIFIC, INC. vs. DO&A, ET. AL.
G.R. No. P###'% )BBRU&RS '% ($(
)&CTS*
S1i--ers United /aciAc% 3nc. de-loyed% in +ehalf of S1i--ers% De Gracia%
Lata% and &-rosta to wor1 on +oard the vessel 54 2isdom Star. De Gracia%
et al. claimed that S1i--ers failed to remit their res-ective allotments for
almost Ave months% com-elling them to air their grievances with the
Romanian Seafarers )ree Union.?n ! Decem+er ""'% 3T) 3ns-ector &drian
5ihalcioi, of the Romanian Seafarers Union sent Ca-tain Savvas of Cosmos
Shi--ing a fa7 letter% relaying the com-laints of his crew% namely* home
allotment delay% ,n-aid salaries ;only advances<% late -rovisions% lac1 of
la,ndry services ;only one washing machine<% and lac1 of maintenance of
the vessel ;-erforated and ,nre-aired dec1<.To date% however% S1i--ers
only failed to remit the home allotment for the month of Decem+er
""'.?n (' .an,ary """% De Gracia% et al. were ,nceremonio,sly
discharged from 54 2isdom Stars and immediately re-atriated.U-on
arrival in the /hili--ines% De Gracia% et al. Aled a com-laint for illegal
dismissal with the La+or &r+iter on @ &-ril """ and -rayed for -ayment of
their home allotment for the month of Decem+er ""'% salaries for the
,ne7-ired -ortion of their contracts% moral damages% e7em-lary damages%
and attorney6s fees.
S1i--ers% on the other hand% claims% as evidenced +y a tele7 re-ort to
S1i--ers that on : Decem+er ""'% De Gracia% smelling strongly of alcohol%
went to the ca+in of Ga+riel ?lesRe1% 5aster of 54 2isdom Stars% and was
r,de% sho,ting noisily to the master. 3t also claims that on (( .an,ary """%
fo,r )ili-ino seafarers% namely &-rosta% De Gracia% Lata and DoRa% arrived in
!! F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
the master6s ca+in and demanded immediate re-atriation +eca,se they
were not satisAed with the shi-% as evidenced +y a tele7 of Cosmoshi- 54
2isdom to S1i--ers% which however +ears conTicting dates of (( .an,ary
""' and (( .an,ary """. S1i--ers also claims that% d,e to the
disem+ar1ation of De Gracia% et al.% P other seafarers disem+ar1ed ,nder
a+normal circ,mstsances% which was again evidenced +y a fa7 of
Cosmoshi- 54 2isdom to S1i--ers% which +ears conTicting dates of (@
.an,ary ""' and (@ .an,ary """. S1i--ers% in its /osition /a-er% also
admitted non0-ayment of home allotment for the month of Decem+er
""'% +,t -rayed for the oJsetting of s,ch amo,nt with the re-atriation
e7-enses. Since De Gracia% et al. -re0terminated their contracts% S1i--ers
claims they are lia+le for their re-atriation e7-ensesin accordance with
Section ";G< of /hili--ine ?verseas Bm-loyment &dministration ;/?B&<
5emorand,m Circ,lar No. ##% series of ""! and f,rther -rayed for moral
and e7em-lary damages.
L& dismissed De Gracia% et al.6s com-laint for illegal dismissal +eca,se the
seafarers vol,ntarily -re0terminated their em-loyment contracts +y
demanding for immediate re-atriation d,e to dissatisfaction with the shi-.
The La+or &r+iter held that s,ch vol,ntary -re0termination of em-loyment
contract is a1in to resignation% a form of termination +y em-loyee of his
em-loyment contract ,nder &rticle ('# of the La+or Code. The La+or
&r+iter gave weight and credi+ility to the tele7 of the master of the vessel
to S1i--ers. NRLC a9rmed L&Is decision. C& reversed the decisions of the
La+or &r+iter and NLRC.
3SSUB*
2hether or not the seafarers were illegally dismissed or was there
vol,ntary -re0termination of em-loyment contract.
SC RUL3NG*
)or a wor1er6s dismissal to +e considered valid% it m,st com-ly with +oth
-roced,ral and s,+stantive d,e -rocess. The legality of the manner of
dismissal constit,tes -roced,ral d,e -rocess% while the legality of the act of
dismissal constit,tes s,+stantive d,e -rocess.
/roced,ral d,e -rocess in dismissal cases consists of the twin re8,irements
of notice and hearing. The em-loyer m,st f,rnish the em-loyee with two
written notices +efore the termination of em-loyment can +e eJected* ;<
the Arst notice a--rises the em-loyee of the -artic,lar acts or omissions for
which his dismissal is so,ghtD and ;(< the second notice informs the
em-loyee of the em-loyer6s decision to dismiss him. Before the iss,ance of
the second notice% the re8,irement of a hearing m,st +e com-lied with +y
giving the wor1er an o--ort,nity to +e heard. 3t is not necessary that an
act,al hearing +e cond,cted.
S,+stantive d,e -rocess% on the other hand% re8,ires that dismissal +y the
em-loyer +e made ,nder a C,st or a,thoriRed ca,se ,nder &rticles ('( to
('@ of the La+or Code.
3n this case% there was no written notice f,rnished to De Gracia% et al.
regarding the ca,se of their dismissal. Cosmoshi- f,rnished a written
notice ;tele7< to S1i--ers% the local manning agency% claiming that De
Gracia% et al. were re-atriated +eca,se the latter vol,ntarily -re0terminated
their contracts. This tele7 was given credi+ility and weight +y the La+or
&r+iter and NLRC in deciding that there was -re0termination of the
em-loyment contract Ea1in to resignationE and no illegal dismissal.
=owever% as correctly r,led +y the C&% the tele7 message is Ea +iased and
self0serving doc,ment that does not satisfy the re8,irement of s,+stantial
evidence.E 3f% indeed% De Gracia% et al. vol,ntarily -re0terminated their
contracts% then De Gracia% et al. sho,ld have s,+mitted their written
resignations.
&rticle ('# of the La+or Code recogniRes termination +y the em-loyee of
the em-loyment contract +y Eserving written notice on the em-loyer at
least one ;< month in advance.E Given that -rovision% the law
contem-lates the re8,irement of a written notice of resignation. 3n the
a+sence of a written resignation% it is safe to -res,me that the em-loyer
terminated the seafarers. 3n addition% the tele7 message relied ,-on +y the
La+or &r+iter and NLRC +ore conTicting dates of (( .an,ary ""' and ((
.an,ary """% giving do,+t to the veracity and a,thenticity of the
doc,ment. 3n (( .an,ary ""'% De Gracia% et al. were not even em-loyed
yet +y the foreign -rinci-al. )or these reasons% the dismissal of De Gracia%
et al. was illegal.
?n the iss,e of home allotment -ay% S1i--ers eJectively admitted non0
remittance of home allotment -ay for the month of Decem+er ""' in its
/osition /a-er. S1i--ers so,ght the re-atriation e7-enses to +e oJset with
the home allotment -ay. =owever% since De Gracia% et al.6s dismissal was
illegal% their re-atriation e7-enses were for the acco,nt of S1i--ers and
co,ld not +e oJset with the home allotment -ay.
!P F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
Contrary to the claim of the La+or &r+iter and NLRC that the home
allotment -ay is in Ethe nat,re of e7traordinary money where the +,rden of
-roof is shifted to the wor1er who m,st -rove he is entitled to s,ch
monetary +eneAt%E Section ' of /?B& 5emorand,m Circ,lar No. ##% series
of ""!% states that the allotment act,ally constit,tes at least eighty
-ercent ;'$Q< of the seafarer6s salary. /aragra-h ( of the em-loyment
contracts of De Gracia% Lata and &-rosta incor-orated the -rovisions of
a+ove 5emorand,m Circ,lar No. ##% series of ""!% in the em-loyment
contracts. Since said memorand,m states that home allotment of seafarers
act,ally constit,tes at least eighty -ercent ;'$Q< of their salary% home
allotment -ay is not in the nat,re of an e7traordinary money or +eneAt% +,t
sho,ld act,ally +e considered as salary. . )or this reason% s,ch non0
remittance of home allotment -ay sho,ld +e considered as ,n-aid salaries%
and S1i--ers shall +e lia+le to -ay the home allotment -ay of De Gracia% et
al. for the month of Decem+er ""'.
C& decision is &))3R5BD and S1i--ers United /aciAc% 3nc. and S1i--ers
5aritime Services 3nc.% Ltd. are Cointly and severally lia+le for -ayment of
the following* < Unremitted home allotment -ay for the month of
Decem+er ""' in its e8,ivalent rate in /hili--ine /esos at the time of
termination on (' .an,ary """D (< Salary for the ,ne7-ired -ortion of the
em-loyment contract or its c,rrent e8,ivalent in /hili--ine /esosD :<
&ttorney6s fees and litigation e7-enses e8,ivalent to $Q of the total
claims.
XVIII. PRESCRIPTION OF CLAIMS
MEDLINE MANAGEMENT INC., vs. ROSLINDA
G.R. No. !'P#% SB/TB5BBR #% ($$
)&CTS*
/etitioner 5edline 5anagement% 3nc. ;553<% on +ehalf of its foreign
-rinci-al% -etitioner Grecomar Shi--ing &gency ;GS&<% hired .,liano
Roslinda ;.,liano< to wor1 on +oard the vessel 54 E4ictory.E =is contract
was a--roved +y the /?B& on Se-tem+er "% ""' for a d,ration of nine
months. 3n accordance with which% he +oarded the vessel 54 E4ictoryE on
?cto+er (#% ""' as an oiler and% after several months of e7tension% was
discharged on .an,ary ($% ($$$.
5onths after his re-atriation% or on 5arch !% ($$$% .,liano cons,lted Dr.
/amela R. Lloren ;Dr. Lloren< of 5etro-olitan =os-ital. =e com-lained a+o,t
a+dominal distention which is the medical term for a -atient who vomits
-revio,sly ingested foods. 3n a 5edical CertiAcate iss,ed +y Dr. Lloren% the
condition of .,liano re8,ired hemodialysis. =owever% on &,g,st (P% ($$%
.,liano died.
?n Se-tem+er @% ($$:% his wife Gliceria Roslinda and son &riel Roslinda%
res-ondents herein% Aled a com-laint against 553 and GS& for -ayment of
death com-ensation% reim+,rsement of medical e7-enses% damages% and
attorney6s fees +efore the La+or &r+itration Branch of the NLRC. /etitioners%
instead of Aling an answer to the com-laint% they Aled a 5otion to Dismiss
on the gro,nds of -rescri-tion% lac1 of C,risdiction and -remat,rity.
/etitioners contended that the action has already -rescri+ed +eca,se it was
Aled three years% seven months and (( days from the time the deceased
seafarer reached the -oint of hire.
3SSUB*
2hether or not the action has -rescri+ed.
SC RUL3NG*
The action has not yet -rescri+ed.
The em-loyment contract signed +y .,liano stated that EU-on a--roval% the
same shall +e deemed an integral -art of the Standard Bm-loyment
Contract ;SBC< for seafarers.E' Section (' of the /?B& SBC states*
SE')+,( 34! ;<R+S"+')+,(
)he Philippine ,%erseas Employment Administration (P,EA) or the (ational Laor
Relations 'ommission ((LR') shall ha%e original and e8clusi%e $urisdiction o%er any
and all disputes or contro%ersies arising out of or y %irtue of this
'ontract!Recogni:ing the peculiar nature of o%erseas shipoard employment0 the
employer and the seafarer agree that all claims arising from this contract shall e
made within one (=) year from the date of the seafarer>s return to the point of hire!
?n the other hand% the La+or Code states*
AR)! 3?=! &oney claims! @ All money claims arising from employer*employee
relations accruing during the eAecti%ity of this 'ode shall e 2led within three
(B) years from the time the cause of action accrued7 otherwise they shall fore%er e
arred!
3n So,theastern Shi--ing v. Navarra% .r.% we r,led that E&rticle (" is the
law governing the -rescri-tion of money claims of seafarers% a class of
overseas contract wor1ers. This law -revails over Section (' of the
Standard Bm-loyment Contract for Seafarers which -rovides for claims to
+e +ro,ght only within one year from the date of the seafarer6s ret,rn to
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the -oint of hire.E 2e f,rther declared that Efor the g,idance of all% Section
(' of the Standard Bm-loyment Contract for Seafarers% insofar as it limits
the -rescri-tive -eriod within which the seafarers may Ale their money
claims% is here+y declared n,ll and void. The a--lica+le -rovision is &rticle
(" of the La+or Code% it +eing more favora+le to the seafarers and more in
accord with the State6s declared -olicy to aJord f,ll -rotection to la+or. The
-rescri-tive -eriod in the -resent case is th,s three years from the time the
ca,se of action accr,es.E
3n the -resent case% the ca,se of action accr,ed on &,g,st (P% ($$ when
.,liano died. =ence% the claim has not yet -rescri+ed% since the com-laint
was Aled with the ar+itration +ranch of the NLRC on Se-tem+er @% ($$:.
The -etition was dismissed.
UNIVERSITY OF EAST vs. UNIVERSITY OF EAST EMPLOYEES
ASSOCIATION
G.R. No. P"#":% SB/TB5BBR @% ($
)&CTS*
/etitioner University of the Bast ;UB< is an ed,cational instit,tion d,ly
organiRed and e7isting ,nder /hili--ine laws. ?n the other hand%
res-ondent University of the Bast Bm-loyees6 &ssociation ;UBB&< is a d,ly
registered la+or ,nion of the ran10and0Ale em-loyees of UB. 3t a--ears from
the records that -rior to school year ;SS< "':0"'@% the P$Q incremental
-roceeds from t,ition fee increases as mandated +y /residential Decree No.
@# ;/.D. No. @#<% as amended% was distri+,ted +y UB in -ro-ortion to the
average n,m+er of academic and non0academic -ersonnel. The distri+,tion
scheme +ecame the s,+Cect of an &greement dated ?cto+er '% "':
signed +y the management% fac,lty association and res-ondent. Starting
SS ""@0""#% however% the P$Q incremental -roceeds from the t,ition fee
increase was distri+,ted +y UB to its covered em-loyees +ased on a new
form,la of -ercentage of salary.
Not in conformity% UBB&% thr, its -resident Brnesto C. 4erceles ;4erceles<%
sent a letterdated Decem+er ((% ""@ to then UB /resident% Dr. Rosalina S.
CaC,com ;Dr. CaC,com<% 8,estioning the manner of distri+,tion of the
em-loyees6 share in the ""@0""# t,ition fee increase.
?n )e+r,ary (:% ""#% UBB& sent another letter to the UB /resident
reiterating its earlier o+Cection to the distri+,tion scheme of the P$Q
incremental -roceeds from the t,ition fee increase and re8,ested a
tri-artite conference among management% fac,lty% administration% and
ran10and0Ale re-resentatives to address the iss,e. ?n .,ne "% ""#% a
tri-artite meeting was held among the re-resentatives of management%
fac,lty ,nion and UBB&. 3n the said meeting% it was agreed that the
distri+,tion of the incremental -roceeds wo,ld now +e +ased on
-ercentage of salary% and not anymore on the average n,m+er of
-ersonnel. The 5in,tesof the .,ne "% ""# meeting was signed and
attested to +y UBB& o9cers who attended. ?n &-ril (P% """% UBB& Aled a
com-laint +efore the NLRC for non0-ayment>,nder-ayment of the ran10
and0Ale em-loyees6 share of the t,ition fee increases against UB -,rs,ant
to /.D. No. @#% as amended% and Re-,+lic &ct ;R.&.<No. !P(' otherwise
1nown as Government &ssistance to St,dents and Teachers in /rivate
Bd,cation &ct.
3SSUBS*
2hether or not the change in the scheme of distri+,tion of the incremental
-roceeds from t,ition fee increase is a dimin,tion of +eneAtD and 2hether
or not the claim has -rescri+ed.
SC RUL3NG*
No.
The Co,rt agrees with -etitioner UB that the change in the distri+,tion of
the P$Q incremental -roceeds from t,ition fee increase from e8,al sharing
to -ercentage of salaries is not a dimin,tion of +eneAts. 3ts distri+,tion to
covered em-loyees +ased on e8,al sharing scheme cannot +e considered
to have ri-ened into a com-any -ractice that the res-ondents have a right
to demand.
Generally% em-loyees have a vested right over e7isting +eneAts vol,ntarily
granted to them +y their em-loyer% th,s% said +eneAts cannot +e red,ced%
diminished% discontin,ed or eliminated +y the latter. This -rinci-le against
dimin,tion of +eneAts% however% is a--lica+le only if the grant or +eneAt is
fo,nded on an e7-ress -olicy or has ri-ened into a -ractice over a long
-eriod of time which is consistent and deli+erate. 3t does not contem-late
the contin,o,s grant of ,na,thoriRed or irreg,lar com-ensation +,t it
-res,--oses that a com-any -ractice% -olicy and tradition favo,ra+le to
the em-loyees has +een clearly esta+lishedD and that the -ayments made
+y the com-any -,rs,ant to it have ri-ened into +eneAts enCoyed +y them.
3n the case at +ench% contrary to UBB&6s claim% the distri+,tion of the P$Q
incremental -roceeds +ased on e8,al sharing scheme cannot +e held to
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have ri-ened into a com-any -ractice that the res-ondents have a right to
demand.
Ses% the claim has -rescri+ed.
The Co,rt agrees with UB and holds that UBB&6s right to 8,estion the
distri+,tion of the incremental -roceeds for SS ""@0""# has already
-rescri+ed. &rticle (" of the La+or Code -rovides that money claims
arising from an em-loyer0em-loyee relationshi- m,st +e Aled within three
;:< years from the time the ca,se of action accr,ed. 3n the -resent case%
the ca,se of action accr,ed when the distri+,tion of the incremental
-roceeds +ased on -ercentage of salary of the covered em-loyees was
disc,ssed in the tri-artite meeting held on .,ne "% ""#. UBB& did not
8,estion the manner of its distri+,tion and only on &-ril (P% """ did it Ale
an action +ased therein. =ence% -rescri-tion had set in.
XIX. JURISDICTION OF THE LA
XX. 2011 NLRC RULES
RODOLFO LUNA, vs. ALLADO CONSTRUCTION CO., INC., a*+(,-
RAMON ALLADO%
G.R. N?. P#(#% 5&S :$% ($
)&CTS*
/etitioner L,na was the em-loyee of the constr,ctions com-any of the
Res-ondent. =e was assigned in Saranggani /rovince. &s he was ca,ght
-ilfering the res-ondentIs -ro-erty% he was dismissed from his
em-loyment% and there+y Aled a case of illegal dismissal against the
res-ondent.
The La+or &r+iter r,led that there was no illegal dismissal% +,t awarded
Anancial assistance in favo,r of the -etitioner. The res-ondent then
a--ealed to the NLRC 8,estioning solely the L&Is decision in awarding
Anancial assistance. The NLRC reversed the L&Is decision% Anding o,t that
there was illegal dismissal and awarded the +ac1wages to the -etitioner.
&ggrieved +y s,ch an ,nfavo,ra+le decision% the res-ondent via R,le !#
-osed in its a--eal the validity of the NLRCIs decision on the gro,nd that it
has no C,risdiction to entertain 8,estions not alleged in the a--eal. The
res-ondentIs gro,nd was only 8,estioning the -ro-riety of the award of the
Anancial assistance% yet NLRC entertained iss,es other than that -osed in
the a--eal. 2ith the same adverse decision +y the C&% the res-ondents
came +efore the SC via -etition for certiorari still 8,estioning the validity of
the decision. Res-ondent arg,ed that the NLRC does not have a,thority to
review iss,es not +ro,ght +efore it for a--eal.
3SSUB*
2?N the NLRC has C,risdiction to review iss,es not +ro,ght +efore it for
a--eal
SC RUL3NG*
N?.
Section @;c<% R,le 43 of the ($$( R,les of /roced,re of the NLRC% which was
in eJect at the time res-ondents a--ealed the La+or &r+iterIs decision%
e7-ressly -rovided that% on a--eal% the NLRC shall limit itself only to the
s-eciAc iss,es that were elevated for review% to wit*
R<LE C+
Appeals
Section D!ReEuisites for Perfection of Appeal!
8 8 8 8
(c) Su$ect to the pro%isions of Article 3=40 once the appeal is perfected in
accordance with these Rules0 the 'ommission shall limit itself to re%iewing and
deciding speci2c issues that were ele%ated on appeal! (Emphasis supplied!)
&s a testament to its eJectivity and the NLRCIs contin,ed im-lementation
of this -roced,ral -olicy% the same -rovision was retained as Section @;d<%
R,le 43 of the ($$# Revised R,les of /roced,re of the NLRC.
3n the case at +ar% the NLRC evidently went against its own r,les of
-roced,re when it -assed ,-on the iss,e of illegal dismissal altho,gh the
8,estion raised +y res-ondents in their a--eal was concerned solely with
the legality of the la+or ar+iterIs award of Anancial assistance des-ite the
Anding that -etitioner was lawf,lly terminated.
&n a--eal from a decision% award or order of the la+or ar+iter m,st +e
+ro,ght to the NLRC within ten ;$< calendar days from recei-t of s,ch
decision% award or order% otherwise% the same +ecomes Anal and e7ec,tory
M&rt. ((:% La+or CodeD R,le 4333% Sec. ;a<% Revised R,les of the NLRCN.
5oreover% the r,les of the NLRC e7-ressly -rovide that on a--eal% the
Commission shall limit itself only to the s-eciAc iss,es that were elevated
for review% all other matters +eing Anal and e7ec,tory MR,le 4333% Sec. #;c<%
Revised R,les of the NLRC% italics s,--liedN.
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3n the -resent case% -etitioner% aggrieved +y the la+or ar+iterIs decision
ordering the e7tension of Anancial assistance to Galagar des-ite the Anding
that his termination was for C,st ca,se% s-eciAcally limited his a--eal to a
single legal 8,estion% i.e.% the validity of the award of Anancial assistance to
an em-loyee dismissed for -ilfering com-any -ro-erty. ?n the other hand%
-rivate res-ondent did not a--eal.
2hen -etitioner limited the iss,e on a--eal% necessarily the NLRC may
review only that iss,e raised. &ll other matters% incl,ding the iss,e of the
validity of -rivate res-ondentIs dismissal% are Anal. 3f -rivate res-ondent
wanted to challenge the Anding of a valid dismissal% he sho,ld have
a--ealed his case seasona+ly to the NLRC. By raising new iss,es in the
re-ly to a--eal% -rivate res-ondent is in eJect a--ealing his case altho,gh
he has% in fact% allowed his case to +ecome Anal +y not a--ealing within the
reglementary -eriod. & re-ly>o--osition to a--eal cannot ta1e the -lace of
an a--eal. Therefore% in this case% the dismissal of the com-laint for illegal
dismissal and the denial of the -rayer for reinstatement% having +ecome
Anal% can no longer +e reviewed.
The La+or Code -rovision% read in its entirety% states that the NLRCIs -ower
to correct errors% whether s,+stantial or formal% may +e e7ercised only in
the determination of a 8,estion% matter or controversywithin its
C,risdiction M&rt. ('% La+or CodeN. Therefore% +y considering the arg,ments
and iss,es in the re-ly>o--osition to a--eal which were not -ro-erly raised
+y timely a--eal nor com-rehended within the sco-e of the iss,e raised in
-etitionerIs a--eal% -,+lic res-ondent committed grave a+,se of discretion
amo,nting to e7cess of C,risdiction.
The contention that the NLRC may nevertheless loo1 into other iss,es
altho,gh not raised on a--eal since it is not +o,nd +y technical r,les of
-roced,re% is li1ewise devoid of merit. The law does not -rovide that the
NLRC is totally free from Etechnical r,les of -roced,reE% +,t only that the
r,les of evidence -revailing in co,rts of law or e8,ity shall not +e
controlling in -roceedings +efore the NLRC M&rt. ((% La+or CodeN. This is
hardly license for the NLRC to disregard and violate the im-lementing r,les
it has itself -rom,lgated. =aving done so% the NLRC committed grave a+,se
of discretion.
BANAHAW BROADCASTING vs. PACANA III, ET. AL.
G.R. N?. P!P:% 5&S :$% ($
)&CTS*
?n &,g,st ("% ""#% the D\2G -ersonnel ;/acana 333 et al.< Aled with the
La+or &r+iter a com-laint for illegal dismissal% ,nfair la+or -ractice%
reim+,rsement of ,n-aid Collective Bargaining &greement ;CB&< +eneAts%
and attorneyIs fees against 3BC and BBC.
?n .,ne (% ""!% La+or &r+iter &+d,llah L. &l,g rendered his
Decision awarding the D\2G -ersonnel a total of/(%$$(%#P.(' as ,n-aid
CB& +eneAts consisting of ,n-aid wages and increases% :th month -ay%
longevity -ay% sic1 leave cash conversion% rice and s,gar s,+sidy%
retirement -ay% loyalty reward and se-aration -ay. The La+or &r+iter
denied the other claims of the D\2G -ersonnel for Christmas +on,s%
ed,cational assistance% medical chec10,- and o-tical e7-enses. Both sets
of -arties a--ealed to the National La+or Relations Commission ;NLRC<.
The NLRC iss,ed a resol,tion vacating the decision of the La+or &r+iter and
remanded the case to ar+itration +ranch of origin. ?n ?cto+er #% ""'%
La+or &r+iter Nicodem,s G. /alangan rendered a Decision adC,dging BBC to
+e lia+le for the same amo,nt in the vacated Decision of La+or &r+iter
&l,g.
Both BBC and res-ondents a--ealed to the NLRC anew. 3n their a--eal% the
D\2G -ersonnel reasserted their claim for the remaining CB& +eneAts not
awarded to them% and alleged error in the rec1oning date of the
com-,tation of the monetary award. BBC% in its own 5emorand,m of
&--eal% challenged the monetary award itself% claiming that s,ch +eneAts
were only d,e to 3BC% not BBC% em-loyees. 3n the same 5emorand,m of
&--eal% BBC incor-orated a 5otion for the Recom-,tation of the 5onetary
&ward ;of the La+or &r+iter<% in order that the a--eal +ond may +e red,ced.
The NLRC iss,ed an ?rder denying the 5otion for the Recom-,tation of the
5onetary &ward. &ccording to the NLRC% s,ch recom-,tation wo,ld res,lt
in the -remat,re resol,tion of the iss,e raised on a--eal. The NLRC
ordered BBC to -ost the re8,ired +ond within $ days from recei-t of said
?rder% with a warning that noncom-liance will ca,se the dismissal of the
a--eal for non0-erfection. 3nstead of com-lying with the ?rder to -ost the
re8,ired +ond% BBC Aled a 5otion for Reconsideration% alleging this time
that since it is wholly owned +y the Re-,+lic of the /hili--ines% it need not
-ost an a--eal +ond.
3SSUB*
2hether or not Banahaw Broadcasting Cor-oration ;BBC<% a Government
?wned and Controlled Cor-oration is e7em-t from -osting an a--eal +ond
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SC RUL3NG*
2e can infer from the foregoing C,ris-r,dential -recedents that% as a
general r,le% the government and all the attached agencies with no legal
-ersonality distinct from the former are e7em-t from -osting a--eal +onds%
whereas government0owned and controlled cor-orations ;G?CCs< are not
similarly e7em-ted. This distinction is +ro,ght a+o,t +y the very reason of
the a--eal +ond itself* to -rotect the -res,m-tive C,dgment creditor
against the insolvency of the -res,m-tive C,dgment de+tor. 2hen the
State litigates% it is not re8,ired to -,t ,- an a--eal +ond +eca,se it is
-res,med to +e always solvent. This e7em-tion% however% does not% as a
general r,le% a--ly to G?CCs for the reason that the latter has a -ersonality
distinct from its shareholders.
3n the case at +ar% BBC was organiRed as a -rivate cor-oration% se8,estered
in the "'$Is and the ownershi- of which was s,+se8,ently transferred to
the government in a com-romise agreement. ),rther% it is stated in its
&mended &rticles of 3ncor-oration that BBC has the following -rimary
f,nction*
)o engage in commercial radio and tele%ision roadcasting0 and for this purpose0 to
estalish0 operate and maintain such stations0 oth terrestrial and satellite or
interplanetary0 as may e necessary for roadcasting on a network wide or
international asis!
3t is therefore crystal clear that BBCIs f,nction is -,rely commercial or
-ro-rietary and not governmental. &s s,ch% BBC cannot +e deemed entitled
to an e7em-tion from the -osting of an a--eal +ond.
Conse8,ently% the NLRC did not commit an error% and m,ch less grave
a+,se of discretion% in dismissing the a--eal of BBC on acco,nt of non0
-erfection of the same.
SOCIAL SECURITY COMMISSION, vs. RI&AL POULTRY a*+ LIVESTOCK
ASSOCIATION, INC., BSD AGRO INDUSTRIAL DEVELOPMENT
CORPORATION a*+ BENAMIN SAN DIEGO%
G.R. No. !P$#$% .,ne % ($
)&CTS*
The instant case stemmed from a -etition Aled +y &l+erto &ngeles
;&ngeles< +efore the Social Sec,rity Commission ;SSC< to com-el
res-ondents RiRal /o,ltry and Livestoc1 &ssociation% 3nc. ;RiRal /o,ltry< or
BSD &gro 3nd,strial Develo-ment Cor-oration ;BSD &gro< to remit to the
Social Sec,rity System ;SSS< all contri+,tions d,e for and in his +ehalf.
&ngeles had earlier Aled a com-laint for illegal dismissal against BSD &gro
and>or its owner% BenCamin San Diego ;San Diego<. The La+or &r+iter
initially fo,nd that &ngeles was an em-loyee and that he was illegally
dismissed. ?n a--eal% however% the NLRC reversed the La+or &r+iterIs
Decision and held that no em-loyer0em-loyee relationshi- e7isted +etween
&ngeles and res-ondents. The r,ling was anchored on the Anding that the
d,ties -erformed +y &ngeles% s,ch as car-entry% -l,m+ing% -ainting and
electrical wor1s% were not inde-endent and integral ste-s in the essential
o-erations of the com-any% which is engaged in the -o,ltry +,siness.
&ngeles elevated the case to the Co,rt of &--eals via -etition for certiorari.
The a--ellate co,rt a9rmed the NLRC r,ling and ,-held the a+sence of
em-loyer0em-loyee relationshi-. &ngeles moved for reconsideration +,t it
was denied +y the Co,rt of &--eals. No f,rther a--eal was ,nderta1en%
hence% an entry of C,dgment was made on (! 5ay ($$.
&t any rate% the SSC did not ta1e into consideration the decision of the
NLRC. 3t denied res-ondentsI motion to dismiss in an ?rder dated "
)e+r,ary ($$(. The SSC ratiocinated% th,s*
Decisions of the NLRC and other tri+,nals on the iss,e of e7istence of
em-loyer0em-loyee relationshi- +etween -arties are not +inding on the
Commission. &t most% s,ch Anding has only a -ers,asive eJect and does
not constit,te res C,dicata as a gro,nd for dismissal of an action -ending
+efore Us. 2hile it is tr,e that the -arties +efore the NLRC and in this case
are the same% the iss,es and s,+Cect matter are entirely diJerent. The la+or
case is for illegal dismissal with demand for +ac1wages and other monetary
claims% while the -resent action is for remittance of ,n-aid SSMSN
contri+,tions. 3n other words% altho,gh in +oth s,its the res-ondents invo1e
lac1 of em-loyer0em-loyee relationshi-% the same does not -roceed from
identical ca,ses of action as one is for violation of the La+or Code while the
instant case is for violation of the SSMSN Law.
Res-ondents so,ght reco,rse +efore the Co,rt of &--eals +y way of a
-etition for certiorari. The Co,rt of &--eals reversed the r,lings of the SSC
and held that there is a common iss,e +etween the cases +efore the SSC
and in the NLRCD and it is whether there e7isted an em-loyer0em-loyee
relationshi- +etween &ngeles and res-ondents. Th,s% the case falls
s8,arely ,nder the -rinci-le of res C,dicata% -artic,larly ,nder the r,le on
concl,siveness of C,dgment% as en,nciated in Smith Bell and Co. v. Co,rt of
&--eals.
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3SSUB*
2=BT=BR ?R N?T T=B DBC3S3?N ?) T=B NLRC &ND T=B C?URT ?)
&//B&LS% )3ND3NG N? B5/L?SBR0B5/L?SBB RBL&T3?NS=3/% C?NST3TUTBS
RBS .UD3C&T& &S & RULB ?N C?NCLUS34BNBSS ?) .UDG5BNT &S T?
/RBCLUDB T=B RBL3T3G&T3?N ?) T=B 3SSUB ?) B5/L?SBR0B5/L?SBB
RBL&T3?NS=3/ 3N & SUBSBYUBNT C&SB )3LBD BB)?RB T=B /BT3T3?NBR.
SC RUL3NG*
The elements of res C,dicata are* ;< the C,dgment so,ght to +ar the new
action m,st +e AnalD ;(< the decision m,st have +een rendered +y a co,rt
having C,risdiction over the s,+Cect matter and the -artiesD ;:< the
dis-osition of the case m,st +e a C,dgment on the meritsD and ;@< there
m,st +e as +etween the Arst and second action% identity of -arties% s,+Cect
matter% and ca,ses of action. Sho,ld identity of -arties% s,+Cect matter% and
ca,ses of action +e shown in the two cases% then res C,dicata in its as-ect
as a E+ar +y -rior C,dgmentE wo,ld a--ly. 3f as +etween the two cases% only
identity of -arties can +e shown% +,t not identical ca,ses of action% then res
C,dicata as Econcl,siveness of C,dgmentE a--lies.
4erily% the -rinci-le of res C,dicata in the mode of Econcl,siveness of
C,dgmentE a--lies in this case. The Arst element is -resent in this case. The
NLRC r,ling was a9rmed +y the Co,rt of &--eals. 3t was a C,dicial
a9rmation thro,gh a decision d,ly -rom,lgated and rendered Anal and
e7ec,tory when no a--eal was ,nderta1en within the reglementary -eriod.
The C,risdiction of the NLRC% which is a 8,asi0C,dicial +ody% was ,ndis-,ted.
Neither can the C,risdiction of the Co,rt of &--eals over the NLRC decision
+e the s,+Cect of a dis-,te. The NLRC case was clearly decided on its
meritsD li1ewise on the merits was the a9rmance of the NLRC +y the Co,rt
of &--eals.
2ith res-ect to the fo,rth element of identity of -arties% we hold that there
is s,+stantial com-liance.
The -arties in SSC and NLRC cases are not strictly identical. RiRal /o,ltry
was im-leaded as additional res-ondent in the SSC case. .,ris-r,dence
however does not dictate a+sol,te identity +,t only s,+stantial identity.
There is s,+stantial identity of -arties when there is a comm,nity of
interest +etween a -arty in the Arst case and a -arty in the second case%
even if the latter was not im-leaded in the Arst case.
& case in -oint is Smith Bell and Co. v. Co,rt of &--eals(# which% contrary
to SSC% is a-t and -ro-er reference. Smith Bell availed of the services of
-rivate res-ondents to trans-ort cargoes from the -ier to the com-any6s
wareho,se. Cases were Aled against Smith Bell% one for illegal dismissal
+efore the NLRC and the other one with the SSC% to direct Smith Bell to
re-ort all -rivate res-ondents to the SSS for coverage. 2hile the SSC case
was -ending +efore the Co,rt of &--eals% Smith Bell -resented the
resol,tion of the S,-reme Co,rt in G.R. No. L0@@!($% which a9rmed the
NLRC% Secretary of La+or% and Co,rt of &--ealsI Anding that no em-loyer0
em-loyee relationshi- e7isted +etween the -arties% to constit,te as +ar to
the SSC case. 2e granted the -etition of Smith Bell and ordered the
dismissal of the case. 2e held that the controversy is s8,arely covered +y
the -rinci-le of res C,dicata% -artic,larly ,nder the r,le on Econcl,siveness
of C,dgment.E Therefore% the C,dgment in G.R. No. L0@@!($ +ars the SSC
case% as the relief so,ght in the latter case is ine7trica+ly related to the
r,ling in G.R. No. L0@@!($ to the eJect that -rivate res-ondents are not
em-loyees of Smith Bell.
UNIVERSITY PLANS INCORPORATED% vs. BELINDA P. SOLANO,
TERRY A. LAMUG, GLENDA S. BELGA, MELBA S. ALVARE&, WELMA
R. NAMATA, MARIETTA D. BACHO a*+ MANOLO L. CENIDO%
G.R. No. P$@!% .UNB ((% ($
)&CTS*
Res-ondents Aled +efore the La+or &r+iter com-laints for illegal dismissal%
illegal ded,ctions% overriding commissions% ,nfair la+or -ractice% moral and
e7em-lary damages% and act,al damages against -etitioner University
/lans 3ncor-orated.
The La+or &r+iter fo,nd -etitioner g,ilty of illegal dismissal and ordered
res-ondents6 reinstatement as well as the -ayment of their f,ll +ac1wages%
-ro-ortionate :th month -ay% moral>e7em-lary damages% and attorney6s
fees.
/etitioner a--ealed the Decision of the L& to the NLRC and Aled its
5emorand,m on &--eal as well as a 5otion to Red,ce Bond. Sim,ltaneo,s
with the Aling of said -leadings% it -osted a cash +ond in the amo,nt of
/:$%$$$.$$.
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LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
3n its 5otion to Red,ce Bond% -etitioner alleged that it was ,nder
receivershi- and that it cannot dis-ose of its assets at s,ch a short notice.
Beca,se of this% it co,ld not -ost the re8,ired +ond. Nevertheless% it has
/:$%$$$.$$ availa+le for immediate dis-osition and th,s -rayed that said
amo,nt +e deemed s,9cient to satisfy the re8,ired +ond for the -erfection
of its a--eal. The NLRC denied -etitioner6s 5otion to Red,ce Bond and
directed it to -ost an additional a--eal +ond in the amo,nt of
/:%$:%#"".#$ within an ,ne7tendi+le -eriod of $ days from notice%
otherwise the a--eal shall +e dismissed for non0-erfection.
The NLRC denied -etitioner6s motion for reconsideration ratiocinating that
while it has the discretion to red,ce the a--eal +ond% it is nevertheless not
-ers,aded that -etitioner was inca-a+le of -osting the re8,ired +ond. 3t
noted that -etitioner failed to s,+mit any Anancial statement or -rovide
details anent its alleged receivershi- or its so,rces of income.
UnsatisAed% -etitioner went to the C& thro,gh a /etition for Certiorari. The
C& ,-held the NLRC Resol,tion.
3SSUB*
2hether or not the NLRC erred in not considering the merit or lac1 of merit
of -etitionerIs 5otion to Red,ce Bond.
SC RUL3NG*
There is merit in the -etition.
The NLRC erred in not considering the merit or lac1 of merit of -etitioner6s
5otion to Red,ce Bond.
/etitioner attached to its 5otion to Red,ce Bond the SBC ?rders dated
&,g,st (:% """ and 5ay (:% ($$$. The ?rder of &,g,st (:% """ is a
Cease and Desist ?rder which% among others% -rohi+ited the o9cers and
agents of -etitioner from withdrawing from its tr,st f,nds or from ma1ing
any dis-osition thereof and% ordered the freeRe of all its assets and
-ro-erties. ?n the other hand% the 5ay (:% ($$$ ?rder -laced U/3% 3nc.
,nder the management and control of a RBCB34BR.
)rom the said SBC ?rders% it is ,nmista1a+le that -etitioner was ,nder
receivershi-. &nd from the tenor and contents of said ?rders% it is -ossi+le
that -etitioner has no li8,id asset which it co,ld ,se to -ost the re8,ired
amo,nt of +ond. &lso% it is 8,ite ,nderstanda+le that +eca,se of
-etitioner6s Anancial state% it cannot raise the amo,nt of more than /:
million within a -eriod of $ days from recei-t of the La+or &r+iter6s
C,dgment.
=owever% the NLRC ignored -etitioner6s allegations and instead remained
adamant that since the amo,nt of +ond is A7ed +y law% -etitioner m,st
-ost an additional +ond of more than /: million. This% to ,s% is an ,tter
disregard of the -rovision of the La+or Code and of the NLRC Revised R,les
of /roced,re allowing the red,ction of +ond in meritorio,s cases. 2hile the
NLRC tried to correct this error in its 5arch (% ($$: Resol,tion +y f,rther
e7-laining that it was not -ers,aded +y -etitioner6s alleged inca-a+ility of
-osting the re8,ired amo,nt of +ond for fail,re to s,+mit Anancial
statement% list of so,rces of income and other details with res-ect to the
alleged receivershi-% we still And the hasty denial of the motion to red,ce
+ond not -ro-er.
Notwithstanding -etitioner6s fail,re to s,+mit its Anancial statement and
list of so,rces of income and to give more details relative to its
receivershi-% it was nevertheless a+le to show thro,gh the a+ovementioned
SBC ?rders that it was indeed ,nder a state of receivershi-. This sho,ld
have +een s,9cient reason for the NLRC to not o,trightly deny -etitioner6s
motion. &s to the lac1ing doc,ments and details on the receivershi-% it is
tr,e that they are needed +y the NLRC in determining -etitioner6s ca-acity
to -ost the re8,ired amo,nt of +ond. =owever% their a+sence sho,ld not
lead to the o,tright denial of the motion since as earlier disc,ssed% the
NLRC is not -recl,ded from cond,cting a -reliminary determination on the
merit or lac1 of merit of a motion to red,ce +ond. =ere% considering the
clear showing of -etitioner6s state of receivershi-% the NLRC sho,ld have
cond,cted s,ch -reliminary determination and therein re8,ire the
s,+mission of said doc,ments and other necessary evidence +efore
-roceeding to resolve the s,+Cect motion. &fter all% the -resent case falls
,nder those cases where the +ond re8,irement on a--eal may +e rela7ed
considering that ;< there was s,+stantial com-liance with the R,lesD ;(<
the s,rro,nding facts and circ,mstances constit,te meritorio,s gro,nds to
red,ce the +ondD and ;:< the -etitioner% at the very least% e7hi+ited its
willingness and>or good faith +y -osting a -artial +ond d,ring the
reglementary -eriod. &lso% s,ch a -roced,re wo,ld +e in 1ee-ing with the
La+or Code6s mandate to ,se every and all reasona+le means to ascertain
the facts in each case s-eedily and o+Cectively% witho,t regard to
technicalities of law or -roced,re% all in the interest of d,e -rocess. 2e th,s
And error on the -art of the NLRC when it denied -etitioner6s 5otion to
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LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
Red,ce Bond and li1ewise on the -art of the C& when it a9rmed said
denial.
3n view of the foregoing% a remand of this case to the NLRC for the cond,ct
of -reliminary determination of the merit or lac1 of merit of -etitioner6s
5otion to Red,ce Bond is -ro-er.
BPI EMPLOYEES UNION . METRO MANILA a*+ &ENAIDA UY vs. BANK
OF THE PHILIPPINE ISLANDS
G.R. No. P'!""% SB/TB5BBR (% ($
)&CTS*
/etitioner Uy was a +an1 teller of the res-ondent B/3. She was se-arated
from her Co+ allegedly +eca,se of ins,+ordination% disres-ect and a+sence
witho,t leave. She together with the Union% Aled a case for illegal dismissal
against res-ondent in the 4ol,ntary &r+itrator. The 4& r,led in favo,r of
her% ordering the res-ondent to reinstate her and award f,ll +ac1wages.
Both a--ealed to the C& which a9rmed the 4&Is decision with
modiAcations. Still ,nsatisAed% Uy and the Union went to SC and alleged
that B/3Is remedy is not a certiorari -etition ,nder R,le !# of the R,les of
Co,rt +,t an a--eal from C,dgments% Anal orders and resol,tions of
vol,ntary ar+itrators ,nder R,le @: of the R,les of Co,rt. They also
contended that B/3Is -etition is wanting in s,+stance.
3SSUB*
2?N B/3Is remedy of certiorari -etition ,nder R,le !# is -ro-er
SC RUL3NG*
SBS. Section % R,le @ of the R,les of Co,rt e7-licitly -rovides that no
a--eal may +e ta1en from an order of e7ec,tion% the remedy of an
aggrieved -arty +eing an a--ro-riate s-ecial civil action ,nder R,le !# of
the R,les of Co,rt. Th,s% B/3 correctly availed of the remedy
of certiorari ,nder R,le !# of the R,les of Co,rt when it assailed the
Decem+er !% ($$# order of e7ec,tion of the 4ol,ntary &r+itrator.
DUP SOUND PHILS. a*+(,- MANUEL TAN vs. COURT OF APPEALS
a*+ CIRILO A. PIAL
G.R. No. !':P% N?4B5BBR (% ($
)&CTS*
/rivate res-ondent% /ial is an em-loyee of herein -etitioner DU/ So,nd
/hils. ;DU/<D -etitioner Tan is the owner and manager of DU/. /ial was given
the Co+ of Emastering ta-eED his main f,nction was to adC,st the so,nd level
and intensity of the m,sic to +e recorded as well as arrange the se8,ence
of the songs to +e recorded in the cassette ta-es. /ial got a+sent from wor1
+eca,se he got sic1. The following day when he was ready for wor1% he was
informed +y the o9ce secretary not to re-ort for wor1 ,ntil s,ch time that
they will advise him to do so. &fter three wee1s witho,t receiving any
notice% /ial again called ,- their o9ce. This time the o9ce secretary
advised him to loo1 for another Co+ +eca,se% -er instr,ction of Tan% he is no
longer allowed to wor1 at DU/. /ial Aled a com-laint for illegal dismissal
and -rayed for the -ayment of his ,n-aid service incentive leave -ay% f,ll
+ac1wages% se-aration -ay% moral and e7em-lary damages as well as
attorney6s fees.
/etitioners DU/ and Tan denied the material allegations of /ialD that the
latter failed to re-ort for wor1 following an altercation with his s,-ervisor
the -revio,s day and that /ial called ,- their o9ce and informed the o9ce
secretary that he will +e going +ac1 to wor1 on Se-tem+er P% ($$.
=owever% he failed to re-ort for wor1 on the said date. /etitioners were
s,+se8,ently s,r-rised when they learned that /ial Aled a com-laint for
illegal dismissal against themD /ial was never dismissed% instead% it was his
,nilateral decision not to wor1 at DU/ anymore.
The La+or &r+iter rendered a decision declaring /ial to have +een illegally
dismissed and ordering DU/ and Tan to reinstate him to his former -osition
and -ay him +ac1wages% cost of living allowance% service incentive leave
-ay and attorney6s fees. ?n a--eal% the NLRC modiAed the decision +y
deleting the award of +ac1wages and attorney6s fees. The NLRC r,led that
there was no illegal dismissal on the -art of DU/ and Tan% +,t neither was
there a+andonment on the -art of /ial. /ial then Aled a s-ecial civil action
for certiorari with the C&. The C& set aside the decision of the NLRC and
reinstated the decision of the L&.
3SSUB*
2hether or not /ial was illegally dismissed.
SC RUL3NG*
This Co,rt cannot give credence to -etitioners6 claim that -rivate
res-ondent a+andoned his Co+. /ial was illegally dismissed. The settled r,le
in la+or cases is that the em-loyer has the +,rden of -roving that the
P# F / a g e
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University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
em-loyee was not dismissed% or% if dismissed% that the dismissal was not
illegal% and fail,re to discharge the same wo,ld mean that the dismissal is
not C,stiAed and% therefore% illegal.3n the instant case% what +etrays
-etitioners6 claim that -rivate res-ondent was not dismissed from his
em-loyment +,t instead a+andoned his Co+ is their fail,re to -rove that the
latter indeed sto--ed re-orting for wor1 witho,t any C,stiAa+le ca,se or a
valid leave of a+sence.
3f -rivate res-ondent indeed a+andoned his Co+% -etitioners sho,ld have
aJorded him d,e -rocess +y serving him written notices% as well as a
chance to e7-lain his side% as re8,ired +y law. 3t is settled that%
-roced,rally% if the dismissal is +ased on a C,st ca,se ,nder &rticle ('( of
the La+or Code% the em-loyer m,st give the em-loyee two written notices
and a hearing or o--ort,nity to +e heard if re8,ested +y the em-loyee
+efore terminating the em-loyment* a notice s-ecifying the gro,nds for
which dismissal is so,ght% a hearing or an o--ort,nity to +e heard and%
after hearing or o--ort,nity to +e heard% a notice of the decision to
dismiss. &gain% -etitioners failed to do these. Th,s% the foregoing +olsters
-rivate res-ondent6s claim that he did not a+andon his wor1 +,t was% in
fact% dismissed.
Neither may -rivate res-ondent6s ref,sal to re-ort for wor1 s,+se8,ent to
the L&6s iss,ance of an order for his reinstatement +e considered as
another a+andonment of his Co+. 3t is a settled r,le that fail,re to re-ort for
wor1 after a notice to ret,rn to wor1 has +een served does not necessarily
constit,te a+andonment. &s deAned ,nder esta+lished C,ris-r,dence%
a+andonment is the deli+erate and ,nC,stiAed ref,sal of an em-loyee to
res,me his em-loyment. 3t is a form of neglect of d,ty% hence% a C,st ca,se
for termination of em-loyment +y the em-loyer. )or a valid Anding of
a+andonment% these two factors sho,ld +e -resent* ;< the fail,re to re-ort
for wor1 or a+sence witho,t valid or C,stiAa+le reasonD and ;(< a clear
intention to sever em-loyer0em-loyee relationshi-% with the second as the
more determinative factor which is manifested +y overt acts from which it
may +e ded,ced that the em-loyee has no more intention to wor1. The
intent to discontin,e the em-loyment m,st +e shown +y clear -roof that it
was deli+erate and ,nC,stiAed. 3n the instant case% -rivate res-ondent
claimed that his s,+se8,ent ref,sal to re-ort for wor1 des-ite the La+or
&r+iter6s order for his reinstatement is d,e to the fact that he was
s,+se8,ently made to -erform the Co+ of a E+odegeroE of which he is
,nfamiliar and which is totally diJerent from his -revio,s tas1 of
Emastering ta-e.E 5oreover% he was assigned to a diJerent wor1-lace%
which is a wareho,se% where he was isolated from all other em-loyees. The
Co,rt notes that -etitioners failed to ref,te the foregoing claims of -rivate
res-ondent
Under the e7isting law% an em-loyee who is ,nC,stly dismissed from wor1
shall +e entitled to reinstatement witho,t loss of seniority rights. &rticle
(P" of the La+or Code clearly -rovides that an em-loyee who is dismissed
witho,t C,st ca,se and witho,t d,e -rocess is entitled to +ac1wages and
reinstatement or -ayment of se-aration -ay in lie, thereof. &rticle ((: of
the same Code also -rovides that an em-loyee entitled to reinstatement
shall either +e admitted +ac1 to wor1 ,nder the same terms and conditions
-revailing -rior to his dismissal or se-aration% or% at the o-tion of the
em-loyer% merely reinstated in the -ayroll. 3t is esta+lished in C,ris-r,dence
that reinstatement means restoration to a state or condition from which
one had +een removed or se-arated. The -erson reinstated ass,mes the
-osition he had occ,-ied -rior to his dismissal. Reinstatement -res,--oses
that the -revio,s -osition from which one had +een removed still e7ists% or
that there is an ,nAlled -osition which is s,+stantially e8,ivalent or of
similar nat,re as the one -revio,sly occ,-ied +y the em-loyee.
This Co,rt has r,led in many instances that reinstatement is no longer
via+le where% among others% the relations +etween the em-loyer and the
em-loyee have +een so severely strained% that it is not in the +est interest
of the -arties% nor is it advisa+le or -ractical to order reinstatement% or
where the em-loyee decides not to +e reinstated. 3n the instant case% the
res,lting circ,mstances show that reinstatement wo,ld +e im-ractical and
wo,ld hardly -romote the +est interest of the -arties. Resentment and
enmity +etween -etitioners and -rivate res-ondent necessarily strained
the relationshi- +etween them or even -rovo1ed anti-athy and antagonism
as shown +y the acts of the -arties s,+se8,ent to the order of
reinstatement. Besides% -rivate res-ondent e7-ressly -rayed for an award
of se-aration -ay in lie, of reinstatement from the very start of the
-roceedings +efore the La+or &r+iter. By so doing% he forecloses
reinstatement as a relief +y im-lication.
2here reinstatement is no longer via+le as an o-tion% se-aration -ay
e8,ivalent to one ;< month salary for every year of service sho,ld +e
awarded as an alternative. This has +een the consistent r,ling in the award
of se-aration -ay to illegally dismissed em-loyees in lie, of reinstatement.
P! F / a g e
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University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
HYPTE R. AUERO VS. PHILIPPINE COMMUNICATIONS SATELLITE
CORPORATION
G.R. No. ":@'@% .&NU&RS '% ($(
)&CTS*
/etitioner started wor1ing for /hilcomsat in "!P as an acco,ntant. ?n
&,g,st #% ($$ or after :@ years of service% he a--lied for early retirement
and the same was a--roved on Se-tem+er #% ($$. D,ring that time% he
was the Senior 4ice0/resident. =e e7ec,ted a Deed of Release andY,itclaim
in /hilcomsatIs favor on Se-tem+er (% ($$( with arecei-t from the latter
of a chec1 in the amo,nt of / "%@:"% :(P.".&fter almost : years% -etitioner
Aled a com-laint for ,n-aid retirement +eneAts claiming that the act,al
amo,nt of his retirement -ay is / @% $#% $##.$$ and the / "% @:"% :(P."
that he received as s,--osed settlement is ,nconsciona+le. Th,s% his
8,itclaim m,st +e declared as n,ll and void. =e said that he had no choice
+,t to acce-t said amo,nt +eca,se he was in dire need thereof and he was
ready to ret,rn to his hometown so he signed the 8,itclaim des-ite the
deAciency as no money wo,ld +e released if he did not e7ec,te a release
and waiver in /hilcomsatIs favor. &ccording to him% the letterof
/hilcomsatIschairman and -resident addressed to UC/B for the release of /
"%@:"%:(P." to him and / @%#P#%P(P.$" to /hilcomsat% which -redated the
e7ec,tion of his 8,itclaim% indicates thecom-anyIs -re0conceived -lans to
de-rive him of a -ortion of his retirement -ay. The L& decided in favor of
the -etitioner and ordered /hilcomsat to -ay him / @%#P#%P(P.$"and /
(P@%'$#.$$ as +alance of his retirement +eneAts and salary for the -eriod
from &,g,st # to Se-tem+er #% ($$. /etitionerIs com-laint for
,n-aidretirement +eneAts and salary was dismissed +eca,se he failed to
-rove that /hilcomsat em-loyed means to vitiate his consent to
the 8,itclaim. /hilcomsatIs a--eal to the NLRC from L&Is decision was Aled
and its s,rety +ond -osted+eyond the -rescri+ed -eriod of $ days +,t
since it was only one day delayed% the NLRC disregard the -roced,ral la-se
U -roceeded with the a--eal. /etitioner later Aled for a -etition for
certiorari acc,sing NRLC with grave a+,se of discretion for -roceeding
des-ite res-ondentIs +elated a--eal. =e claimed that when /hilcomsat
Aledits a--eal and -osted its s,rety +ond% L&Is decision +ecame Anal and
e7ec,tory and the fail,re of /hilcomsatIs co,nsel to verify the co-y does
not constit,te e7c,sa+le negligence. The C& however% fo,nd no merit in
the claim of -etitioner and r,led that the NLRC was correct in ,-holding the
validity of the 8,itclaim +eca,se the terms of the Deed of Release and
Y,itclaim were reasona+le and there was no showing that /hilcomsat
em-loyed coercion% fra,d or ,nd,e inT,ence ,-on -etitioner to com-el him
to sign the same.
3SSUBS*
. 2hether or notthe delay in the Aling of /hilcomsatIs a--eal and -osting
of s,rety +ond isine7c,sa+leD and
(. 2hether or notthe 8,itclaim e7ec,ted +y the -etitioner in /hilcomsatIs
favor is valid% there+yforeclosing his right to instit,te any claim against
/hilcomsat
SC RUL3NG*
The Co,rt r,lesin /hilcomsatIs favor since -roced,ral r,les may +e waived
or dis-ensed with in a+sol,tely meritorio,s cases. &ccording to /hilcomsat%
when -etitioner made the e7ec,tion of the 8,itclaim% it was vol,ntary. =is
ed,cational attainment and the -osition he occ,-ied also militate against
his claim that he was -ress,red or coerced into signing the 8,itclaim.
&+sent any evidence that any vices of consent is -resent and considering
the -etitionerIs -ositionand ed,cation% the 8,itclaim e7ec,ted +y the
-etitioner constit,tes a valid and +inding agreement.
Since -etitionerIs claim of fra,d and +ad faith against /hilcomsat is
,ns,+stantiated% this Co,rt
th,s% Ands the 8,itclaim to +e legitimate waiver. The fact,al iss,es were
determined +y the NLRC and were a9rmed +y the C&. /etition is denied.
TIMOTEO H. SARONA VS.NATIONAL LABOR RELATIONS
COMMISSION, ROYALE SECURITY AGENCY AND CESAR S. TAN
G.R. No. '#('$% .&NU&RS '% ($(
)&CTS*
/etitioner% a sec,rity g,ard in Sce-tre since &-ril "P!% was as1ed +y
Sce-treIs o-erations manager on .,ne ($$:% to s,+mit a resignation letter
as a re8,irement for an a--lication in Royale and to All ,- an em-loyment
a--lication form for the said com-any. =e was then assigned at =ighlight
5etal Craft 3nc. from .,ly (" to &,g,st '% ($$: and was later transferred to
2ide 2ide 2orld B7-ress 3nc. ?n Se-tem+er ($$:% he was informed that
his assignment at 222B 3nc. was withdrawn +eca,se Royale has +een
allegedly re-laced +y another sec,rity agency which he later discovered to
+e ,ntr,e. Nevertheless% he was once again assigned at =ighlight 5etal
sometime in Se-tem+er ($$: and when he re-orted at RoyaleIs o9ce on
?cto+er % ($$:% he was informed that he wo,ld no longer +e given any
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University of San Carlos College of Law
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The Diamond Batch
assignment as instr,cted +y Sce-treIs general manager. =e th,s Aled a
com-laint for illegal dismissal. The L& r,led in -etitionerIs favor as he
fo,nd him illegally dismissed and was not convinced +y the res-ondentIs
claim on -etitionerIs a+andonment.
Res-ondents were ordered to -ay +ac1wages com-,ted from the day he
was dismissed ,- to the -rom,lgation of his decision on 5ay % ($$#.The
L& also ordered for the -ayment of se-aration -ay +,t ref,sed to -ierce
RoyaleIs cor-orate veil.
Res-ondents a--ealed to the NLRC claiming that the L& acted with grave
a+,se of discretion ,-on r,ling on the illegal dismissal of -etitioner. NLRC
-artially a9rmed the L&Is decision with regard to -etitionerIs illegal
dismissal and se-aration -ay +,t modiAed the amo,nt of +ac1wages and
limited it to only : months of his last month salary red,cing /"#% !$$ to
/#% !$$ since he wor1ed for Royale for only month and : days.
/etitioner did not a--eal to L& +,t raised the validity of L&Is Andings on
-iercing RoyaleIs cor-orate -ersonality and com-,tation of his se-aration
-ay and s,ch -etition was dismissed +y the NLRC. /etitioner elevated
NLRCIs decision to the C& on a -etition for certiorari% and the C& disagreed
with the NLRCIs decision of not -roceeding to review the evidence for
determining if Royale is Sce-treIs alter ego that wo,ld warrant the -iercing
of its cor-orate veil.
3SSUBS*
2hether or not RoyaleIs cor-orate Action sho,ld +e -ierced for the -,r-ose
of com-elling it to recogniRe the -etitionerIs length of service with Sce-tre
and for holding it lia+le for the +eneAts that have accr,ed to him arising
from his em-loyment with Sce-treD and
2hether or not -etitionerIs +ac1wages sho,ld +e limited to his salary for :
months
SC RUL3NG*
The doctrine of -iercing the cor-orate veil is a--lica+le on alter ego cases%
where a cor-oration is merely a farce since it is a mere alter ego or
+,siness cond,it of a -erson% or where the cor-oration is so organiRed and
controlled and its aJairs are so cond,cted as to ma1e it merely an
instr,mentality% agency% cond,it or adC,nct of another cor-oration. The way
on how -etitioner was made to resign from Sce-tre then later on made an
em-loyee of Royale% reTects the ,se of the legal Action of the se-arate
cor-orate -ersonality and is an im-lication of contin,ed em-loyment.
Royale is a contin,ation or s,ccessor or Sce-tre since the em-loyees of
Sce-tre and of Royale are the same and said com-anies have the same
-rinci-al -lace of +,siness.
Beca,se -etitionerIs rights were violated and his em-loyer has not
changed% he is entitled to se-aration -ay which m,st +e com-,ted from
the time he was hired ,ntil the Anality of this decision. Royale is also
ordered to -ay him +ac1wages from his dismissal on ?cto+er % ($$: ,ntil
the Anality of this decision. =owever% the amo,nt already received +y
-etitioner from the res-ondents shall +e ded,cted. =e is also awarded
moral and e7em-lary damages amo,nting to / (#% $$$.$$ each for his
dismissal which was tainted with +ad faith and fra,d. /etition is granted.
C&Is decision is reversed and set aside.
SALENGA, ET. AL., vs. CA
G.R. No. P@"@% )BBRU&RS % ($(
)&CTS*
/resident>Chief B7ec,tive ?9cer ;CB?< R,fo Colayco iss,ed an ?rder
informing -etitioner that% -,rs,ant to the decision of the +oard of directors
of res-ondent CDC% the -osition of head e7ec,tive assistant the -osition
held +y -etitioner was declared red,ndant. /etitioner Aled a Com-laint for
illegal dismissal with a claim for reinstatement and -ayment of +ac1 wages%
+eneAts% and moral and e7em-lary damages against res-ondent CDC and
Colayco. Res-ondents% re-resented +y the ?9ce of the Government
Cor-orate Co,nsel ;?GCC<% alleged that the NLRC had no C,risdiction to
entertain the case on the gro,nd that -etitioner was a cor-orate o9cer
and% th,s% his dismissal was an intra0cor-orate matter falling -ro-erly
within the C,risdiction of the Sec,rities and B7change Commission ;SBC<. L&
Darl,cio rendered a Decision in favor of -etitioner. )rom the decision% the
?CGCC Aled an a--eal with the National La+or Relations Commission
;NLRC< via a 5emorand,m of &--eal veriAed and certiAed +y =ilana
Tim+ol0Roman% the e7ec,tive vice -resident of res-ondent CDC. The
-etitioner o--osed the a--eal on the gro,nd that the 5emorand,m of
&--eal and .oint &9davit were not accom-anied +y a +oard resol,tion from
res-ondentIs +oard of directors a,thoriRing either Tim+ol0Roman or &tty.
5allare% or +oth% to -,rs,e the case or to Ale the a--eal on +ehalf of
res-ondent.
P' F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
3SSUB*
2hether or not the NLRC has C,risdiction to entertain the a--eal.
SC RUL3NG*
NLRC has no C,risdiction to entertain the a--eal. 3t is clear from the NLRC
R,les of /roced,re that a--eals m,st +e veriAed and certiAed against
for,m0sho--ing +y the -arties0in0interest themselves. & cor-oration can
only e7ercise its -owers and transact its +,siness thro,gh its +oard of
directors and thro,gh its o9cers and agents when a,thoriRed +y a +oard
resol,tion or its +ylaws. &+sent the re8,isite +oard resol,tion% neither
Tim+ol0Roman nor &tty. 5allari% who signed the 5emorand,m of &--eal
and .oint &9davit of Declaration allegedly on +ehalf of res-ondent
cor-oration% may +e considered as the Ka--ellantO and Kem-loyerO referred
to +y R,le 43% Sections @ to ! of the NLRC R,les of /roced,re. The co,rt
cannot agree with the ?GCCIs attem-t to down-lay this -roced,ral Taw +y
claiming that% as the stat,torily assigned co,nsel for G?CCs% it does not
need s,ch a,thoriRation. 3n Constantino0David v. /angandaman0Gania% @#!
/hil. (P:% ("@0("' ;($$:<% the co,rt e7ha,stively e7-lained why it was
necessary for government agencies or instr,mentalities to e7ec,te the
veriAcation and the certiAcation against for,m0sho--ing thro,gh their d,ly
a,thoriRed re-resentatives. The -,r-ose of veriAcation is to sec,re an
ass,rance that the allegations in the -leading are tr,e and correct and
have +een Aled in good faith. Unless e8,ita+le circ,mstances which are
manifest from the record of a case -revail% it therefore +ecomes necessary
for the concerned government agency or its a,thoriRed re-resentatives to
certify for non0for,m sho--ing if only to +e s,re that no other similar case
or incident is -ending +efore any other co,rt.
&nent the cor-orationIs lia+ility% the decision of the L& still stands. 3n the
case at +ar% res-ondents failed to add,ce any evidence showing that the
-osition of =ead B7ec,tive &ssistant is s,-erT,o,s. There is no evidence on
record to show that the -osition of =ead B7ec,tive &ssistant was a+olished
+y the Board of Directors in its meetings. =ence% the gro,nd of red,ndancy
is merely a device made +y res-ondent Colayco in order to ease o,t the
com-lainant from the res-ondent cor-oration. 5oreover% the com-lainant
was not accorded his right to d,e -rocess -rior to his termination. =e was
not given the o--ort,nity to +e heard and defend himself. =owever% the
co,rt notes that with regards to res-ondent ColaycoIs solidary lia+ility with
the cor-oration% -etitioner nota+ly in the case at hand% did not 8,estion
the r,ling made +y NLRC in Anding that res-ondent Colayco may not +e
held solidarily res-onsi+le to him. &s a res,lt% it dro--ed him as a
res-ondent. Based on the foregoing% all other s,+se8,ent -roceedings
regarding the iss,e of -etitionerIs dismissal are n,ll and void for having
+een cond,cted witho,t C,risdiction.
LOCKHEED DETECTIVE AND WATCHMAN AGENCY, INC vs.
UNIVERSITY OF THE PHILIPPINES%
G.R. No. '#"'% &/R3L '% ($(
)&CTS*
/etitioner entered into a contract for sec,rity services with res-ondent
University of the /hili--ines and they were +oth s,ed +y several sec,rity
g,ards in ""' for -ayment of ,nder-aid wages and other +eneAts. The
la+or ar+iter fo,nd the claims meritorio,s and held +oth -etitioner and
res-ondent solidarily lia+le as Co+ contractor and -rinci-al. U-on a--eal +y
+oth% the decision was only modiAed +y dismissing some claims ;-remi,m
-ay and service incentive leave -ay< for lac1 of +asis +,t they were still
held solidarily lia+le. &n 5R on this was also denied +y the NLRC. The NLRC
decision +ecame Anal and e7ec,tor on ($$( and a writ of e7ec,tion was
iss,ed +,t later 8,ashed +y the L& on motion of U/ d,e to the dis-,tes
regarding the amo,nt of the award. B,t% s,ch order 8,ashing the writ was
reversed +y the NLRC.
U/ moved to reconsider the NLRC resol,tion +,t it was ,-held with the
modiAcation that the satisfaction of the C,dgment award in favor of
Loc1heed will +e only against the f,nds of U/ which are not identiAed as
-,+lic f,nds. The order and resol,tion +ecame Anal and an alias writ of
e7ec,tion was iss,ed. /,rs,ant to s,ch order% a notice of garnishment was
iss,ed to /NB for the satisfaction of the award. U/ Aled a motion to 8,ash
the writ of garnishment and arg,ed that the f,nds are -,+lic in nat,re and
are earmar1ed for ed,cational -,r-oses. &fter $ days from the recei-t of
the notice% /NB released the garnished f,nds in favor of the NLRC. U/ Aled
a -etition for certiorari +efore the C& on the garnishment order which was
initially ,-held +y the C& +,t ,-on reconsideration% it reversed itself and
r,led in favor of U/ after a--lying the -rinci-les in the NB& case. Th,s%
Loc1heed Aled the -etition +efore the SC.
3SSUB*
2?N the money claim against U/% +eing a Government instr,mentality%
sho,ld have +een co,rsed to the C?& Arst.
P" F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
SC RUL3NG*
Ses. This Co,rt held that li1e in the NBD case% U/ is a C,ridical -ersonality
se-arate and distinct from the government and has the ca-acity to s,e and
+e s,ed and +eing s,ch% it cannot evade e7ec,tion% and its f,nds may +e
s,+Cect to garnishment or levy. =owever% +efore e7ec,tion may +e had% a
claim for -ayment of the C,dgment award m,st Arst +e Aled with the C?&.
Under Commonwealth &ct No. :(P as amended +y Section (! of /.D. No.
@@#% it is the C?& which has -rimary C,risdiction to e7amine% a,dit and
settle Eall de+ts and claims of any sortE d,e from or owing the Government
or any of its s,+divisions% agencies and instr,mentalities% incl,ding
government0owned or controlled cor-orations and their s,+sidiaries. 2ith
res-ect to money claims arising from the im-lementation of Re-,+lic &ct
No. !P#'% their allowance or disallowance is for C?& to decide% s,+Cect only
to the remedy of a--eal +y -etition for certiorari to this Co,rt.
&s to the fait accom-li arg,ment of Loc1heed% contrary to its claim that
there is nothing that can +e done since the f,nds of U/ had already +een
garnished% since the garnishment was erroneo,sly carried o,t and did not
go thro,gh the -ro-er -roced,re ;the Aling of a claim with the C?&<% U/ is
entitled to reim+,rsement of the garnished f,nds -l,s interest of !Q -er
ann,m% to +e com-,ted from the time of C,dicial demand to +e rec1oned
from the time U/ Aled a -etition for certiorari +efore the C& which occ,rred
right after the withdrawal of the garnished f,nds from /NB.
/etitioner Loc1heed Detective and 2atchman &gency% 3nc. was ordered to
reim+,rse University of the /hili--ines the amo,nt of /(%$!(%:"'.P -l,s
interest of !Q -er ann,m% to +e com-,ted from Se-tem+er (% ($$# ,- to
the Anality of the decision% and (Q interest on the entire amo,nt from
date of Anality of the co,rtIs decision ,ntil f,lly -aid.
ESTATE OF NELSON R. DULAY, REPRESENTED BY HIS WIFE MERRIDY
ANE P. DULAY, PETITIONER, VS.ABOITI& EBSEN MARITIME, INC.
AND GENERAL CHARTERERS, INC., RESPONDENTS.
G.R. No. P(!@(% .,ne :% ($(

)&CTS*
Nelson R. D,lay was em-loyed +y General Charterers 3nc. ;GC3<% a
s,+sidiary of &+oitiR .e+sen 5aritime 3nc. since "'!. ?n &,g,st :% ($$$%
or (# days after the com-letion of his em-loyment contract% Nelson died
d,e to ac,te renal fail,re secondary to se-ticemia. NelsonIs widow% 5erridy
.ane% thereafter claimed for death +eneAts thro,gh the grievance
-roced,re of the Collective Bargaining &greement ;CB&< +etween &5?SU/
and GC3. =owever% on .an,ary ("% ($$% the grievance -roced,re was
Kdeclared deadloc1edO as -etitioners ref,sed to grant the +eneAts so,ght
+y the widow.
/etitioner contends that Section $ of Re-,+lic &ct ;R.&.< '$@(% otherwise
1nown as the 5igrant 2or1ers and ?verseas )ili-inos &ct of ""#% vests
C,risdiction on the a--ro-riate +ranches of the NLRC to entertain dis-,tes
regarding the inter-retation of a collective +argaining agreement involving
migrant or overseas )ili-ino wor1ers. ?n their -art% res-ondents insist that
in the -resent case% &rticle (P% -aragra-h ;c< as well as &rticle (! of the
La+or Code remain to +e the governing -rovisions of law with res-ect to
,nresolved grievances arising from the inter-retation and im-lementation
of collective +argaining agreements. Under these -rovisions of law%
C,risdiction remains with vol,ntary ar+itrators.
3SSUB*
2hether or not the C& committed error in r,ling that the La+or &r+iter has
no C,risdiction over the case.
RUL3NG*
The -etition is witho,t merit. 3t is tr,e that R.&. '$@( is a s-ecial law
governing overseas )ili-ino wor1ers. =owever% a caref,l reading of this
s-ecial law wo,ld readily show that there is no s-eciAc -rovision
there,nder which -rovides for C,risdiction over dis-,tes or ,nresolved
grievances regarding the inter-retation or im-lementation of a CB&.
Section $ of R.&. '$@(% which is cited +y -etitioner% sim-ly s-ea1s% in
general% of Kclaims arising o,t of an em-loyer0em-loyee relationshi- or +y
virt,e of any law or contract involving )ili-ino wor1ers for overseas
de-loyment incl,ding claims for act,al% moral% e7em-lary and other forms
of damages.O ?n the other hand% &rticles (P;c< and (! of the La+or Code
are very s-eciAc in stating that vol,ntary ar+itrators have C,risdiction over
cases arising from the inter-retation or im-lementation of collective
+argaining agreements. Stated diJerently% the instant case involves a
sit,ation where the s-ecial stat,te ;R.&. '$@(< refers to a s,+Cect in
general% which the general stat,te ;La+or Code< treats in -artic,lar.
3n the -resent case% the +asic iss,e raised +y 5erridy .ane in her com-laint
Aled with the NLRC is* which -rovision of the s,+Cect CB& a--lies insofar as
death +eneAts d,e to the heirs of Nelson are concerned. The Co,rt agrees
with the C& in holding that this iss,e clearly involves the inter-retation or
'$ F / a g e
USC L&2. Batch ($:. $$ G H
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The Diamond Batch
im-lementation of the said CB&. Th,s% the s-eciAc or s-ecial -rovisions of
the La+or Code govern.

3n any case% the Co,rt agrees with -etitioner6s contention that the CB& is
the law or contract +etween the -arties. 3t is settled that when the -arties
have validly agreed on a -roced,re for resolving grievances and to s,+mit
a dis-,te to vol,ntary ar+itration then that -roced,re sho,ld +e strictly
o+served.
3t may not +e amiss to -oint o,t that the a+ove8,oted -rovisions of the
CB& are in consonance with R,le 433% Section P of the -resent ?mni+,s
R,les and Reg,lations 3m-lementing the 5igrant 2or1ers and ?verseas
)ili-inos &ct of ""#% as amended +y Re-,+lic &ct No. $$((% which states
that KMfNor ?)2s with collective +argaining agreements% the case shall +e
s,+mitted for vol,ntary ar+itration in accordance with &rticles (! and (!(
of the La+or Code.O
?n the +asis of the foregoing% the Co,rt Ands no error in the r,ling of the
C& that the vol,ntary ar+itrator has C,risdiction over the instant case.
2=BRB)?RB% the -etition is DBN3BD. The Decision and Resol,tion of the
Co,rt of &--eals in C&0G.R. S/ No. P!@'" dated .,ly % ($$# and &-ril '%
($$!% res-ectively% are &))3R5BD. S? ?RDBRBD.
PRUDENTIAL GUARANTEE V. NLRC
G.R. N?. '#::#% .UNB :% ($(
)&CTS*
4allota commenced his em-loyment with res-ondent /r,dential G,arantee
and &ss,rance% 3nc. ;/G&3< on 5ay !% ""# as a .,nior /rogrammer. ?n
Novem+er % ($$#% /G&3Is =,man Reso,rce 5anager% &tty. .oa8,in R. Rillo
informed Union /resident% 5i1e &-ostol that /G&3 was going to cond,ct an
on0the0s-ot sec,rity chec1 in the 3nformation and Technology ;3T<
De-artment. &tty. Rillo also re8,ested that Union re-resentatives witness
the ins-ection to which &-ostol agreed.
The ins-ection team -roceeded to the 3T De-artment and initiated the s-ot
chec1 of 3T De-artment com-,ters% +eginning with the one assigned to
4allota. &fter e7-loring the contents of all the folders and s,+folders in the
K5y Doc,mentsO folder% G,tierreR a--arently did not And anything ,n,s,al
with 4allotaIs com-,ter however% RetiRos insisted and too1 over the
ins-ection ,ntil she fo,nd a folder named K5&&.O & co-y of the contents of
the 5&& folder was saved in a To--y dis1.
?n Novem+er @% ($$#% 4allota received a memorand,m directing him to
e7-lain within P( ho,rs why highly conAdential Ales were stored in his
com-,ter. =e was then informed and -laced ,nder -reventive s,s-ension
for :$ days which was e7tended for another :$ days.
3n a letter dated Decem+er !% ($$#% 4allota re8,ested a conference% to +e
attended +y a Union re-resentative and co,nsel. 3n re-ly% /G&3 sent 4allota
another memorand,m% which% among others% set a new deadline for 4allota
to s,+mit his re-ly and evidence in his defense. 3n com-liance with the
deadline set% 4allota s,+mitted his re-ly0memorand,m.
5eanwhile% the Union sent a letter to /G&3 /resident /hili- X. Rico ;Rico<
re8,esting that a grievance committee +e convened and that the contents
of the com-,ters of other 3T -ersonnel +e similarly -rod,ced. The re8,est
for the convening of a grievance committee was ignored. ?n Decem+er (%
($$#% 4allota was given a notice of termination of his em-loyment eJective
.an,ary $% ($$! on the gro,nd of loss of tr,st and conAdence.
Th,s% -etitioner Aled a com-laint for illegal dismissal.
The L& held that /G&3 failed to meet its +,rden of evidence% and the
conTicting claims of the -arties were resolved in favor of 4allota for fail,re
of /G&3 to add,ce s,+stantial evidence to s,--ort its claim. The L& li1ewise
r,led that 4allota was denied d,e -rocess since the res-ondents ref,sed to
cond,ct a hearing% des-ite 4allotaIs re8,est% to thresh o,t the matters
raised +y him in his memoranda.
3SSUB*
2=BT=BR ?R N?T T=B =?N?R&BLB C?URT ?) &//B&LS C?553TTBD
GR&4B &BUSB ?) D3SCRBT3?N 3N G343NG L3BBR&L3TS T? /R34&TB
RBS/?NDBNTSM6N )?UR BL&T&NT 43?L&T3?NS ?) T=B NLRC RULBS ?)
/R?CBDURB.
Mnote* another iss,e was 2?N there were circ,mstances C,stifying the
dismissal of 4allota 000 no longer disc,ssed as the case fell ,nder the to-ic
NLRC r,les of -roced,reN
RUL3NG*
' F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
)irst% the allegation of grave a+,se of discretion is mis-laced% as this is an
iss,e a--ro-riate for a -etition for certiorari ,nder R,le !#% not a -etition
for review on certiorari ,nder R,le @#. There is no 8,estion that grave
a+,se of discretion or errors of C,risdiction may +e corrected only +y the
s-ecial civil action of certiorari. S,ch s-ecial remedy does not avail in
instances of error of C,dgment which can +e corrected +y a--eal or +y a
-etition for review. Beca,se the -etitioners availed of the remedy ,nder
R,le @#% reco,rse to R,le !# cannot +e allowed either as an add0on or as a
s,+stit,te for a--eal.
Whether the procedural due process reEuirements for termination were
oser%ed!
The -etitioners allege that 4allota was denied d,e -rocess of law% as the
records of the case clearly show that his re8,est for an administrative
hearing was denied witho,t reason +y /G&3. Citing R,le % Section (;d< of
the 3m-lementing R,les of Boo1 43 of the La+or Code% the -etitioners arg,e
that a hearing or conference m,st +e cond,cted to aJord the em-loyee an
o--ort,nity to res-ond to the charge% and to -resent or re+,t evidence
-resented against him. The -etitioners are of the -osition that the
,nC,stiAed ref,sal of /G&3 to cond,ct a hearing violated the said -rovision
of the R,les im-lementing the La+or Code% as well as 4allotaIs right to
defend himself +efore an im-artial investigating +ody.
The Co,rt e7-lained the conce-t of the o--ort,nity to +e heard in the case
of /ereR v. /hili--ine Telegra-h and Tele-hone Com-any*
)his interpretation of Section 3(d)0 Rule + of the +mplementing Rules of #ook C+ of
the Laor 'ode reasonaly implements the Fample opportunity to e heardG
standard under Article 3HH() of the Laor 'ode without unduly restricting the
language of the law or e8cessi%ely urdening the employer! )his not only respects
the power %ested in the Secretary of Laor and Employment to promulgate rules and
regulations that will lay down the guidelines for the implementation of Article 3HH()!
&ore importantly0 this is faithful to the mandate of Article D of the Laor 'ode that
FIaJll douts in the implementation and interpretation of the pro%isions of Ithe Laor
'odeJ0 including its implementing rules and regulations shall e resol%ed in fa%or of
laor!G

3n s,m% the following are the g,iding -rinci-les in connection with the
hearing re8,irement in dismissal cases*

;a< Kam-le o--ort,nity to +e heardO means any meaningf,l o--ort,nity
;ver+al or written< given to the em-loyee to answer the charges
against him and s,+mit evidence in s,--ort of his defense% whether in
a hearing% conference or some other fair% C,st and reasona+le way.
;+< a formal hearing or conference +ecomes mandatory only when
re8,ested +y the em-loyee in writing or s,+stantial evidentiary
dis-,tes e7ist or a com-any r,le or -ractice re8,ires it% or when
similar circ,mstances C,stify it.
;c< the Kam-le o--ort,nity to +e heardO standard in the La+or Code
-revails over the Khearing or conferenceO re8,irement in the
im-lementing r,les and reg,lations.

3n this case% the two0notice re8,irement was com-lied with. By the
-etitionersI own admission% /G&3 iss,ed to 4allota a written Notice of
Charges U /reventive S,s-ension. &fter an e7change of memoranda% /G&3
then informed 4allota of his dismissal in its decision dated Decem+er (%
($$#.
Given% however% that the -etitioners e7-ressly re8,ested a conference or a
convening of a grievance committee% following the Co,rtIs r,ling in the
/ereR case% which was later cited in the recent case of Lo-eR v. &lt,ras
Gro,- of Com-anies% s,ch formal hearing +ecame mandatory. &fter /G&3
failed to a9rmatively res-ond to s,ch re8,est% it follows that the hearing
re8,irement was not com-lied with and% therefore% 4allota was denied his
right to -roced,ral d,e -rocess.
3n light of the a+ove disc,ssion% 4allota is entitled to reinstatement and
+ac1wages% rec1oned from the date he was illegally dismissed ,ntil the
Anality of this decision in accordance with C,ris-r,dence.
Mnote f,rther disc,ssion +,t not related to the to-ic assigned* 3n view of the
strained relations +etween 4allota and /G&3% however% it is not in the +est
interest of the -arties% nor is it advisa+le or -ractical to order
reinstatement. 2here reinstatement is no longer via+le as an o-tion%
se-aration -ay e8,ivalent to one ;< month salary for every year of service
sho,ld +e awarded as an alternative.

/RD ALERT SECURITY AND DETECTIVE SERVICES, INC.
vs.ROMUALDO NAVIA
.UNB :% ($(
'( F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
)&CTS*
The la+or ar+iter iss,ed a decision that NaviaIs dismissal was illegal. :rd
&lert a--ealed to the National La+or Relations Commission ;NLRC< which
a9rmed the r,ling of the la+or ar+iter.
:rd &lert Aled an a--eal with the C& with a -rayer for the iss,ance of a
tem-orary restraining order. The C& denied the a--ealD :rd &lert moved for
a motion for reconsideration +,t the motion was also denied.
The writ of e7ec,tion
?n .an,ary ("% ($$"% the NLRC iss,ed an Bntry of .,dgment certifying that
the NLRC resol,tion dated ?cto+er "% ($$' has +ecome Anal and
e7ec,tory. Th,s% Navia Aled with the la+or ar+iter an e70-arte motion for
recom-,tation of +ac1 wages and an e70-arte motion for e7ec,tion +ased
on the recom-,ted +ac1 wages.
The la+or ar+iter iss,ed a writ of e7ec,tion to enforce the recom-,ted
monetary awards.
:rd &lert a--ealed the recom-,ted amo,nt stated in the writ of e7ec,tion
to the NLRC. :rd &lert also alleged that the writ was iss,ed with grave
a+,se of discretion since there was already a notice of reinstatement sent
to Navia.
The NLRC dismissed the a--eal% r,ling that :rd &lert is g,ilty of +ad faith
since there was no earnest eJort to reinstate Navia. The NLRC also r,led
that there was no notice or reinstatement sent to NaviaIs co,nsel.
:rd &lert Aled a -etition for certiorari with the C& which fo,nd the -etition
witho,t merit +eca,se Navia had not +een reinstated either -hysically or in
the -ayroll.
3SSUB*
whether the C& erred in r,ling that the NLRC did not commit any grave
a+,se of discretion.
=BLD*
No.
&rticle ((: of the La+or Code -rovides that in case there is an order of
reinstatement% the em-loyer m,st admit the dismissed em-loyee ,nder the
same terms and conditions% or merely reinstate the em-loyee in the
-ayroll. The order shall +e immediately e7ec,tory. Th,s% :rd &lert cannot
esca-e lia+ility +y sim-ly invo1ing that Navia did not re-ort for wor1. The
law states that the em-loyer m,st still reinstate the em-loyee in the
-ayroll. 2here reinstatement is no longer via+le as an o-tion% se-aration
-ay e8,ivalent to one ;< month salary for every year of service co,ld +e
awarded as an alternative.#
Since the -roceedings +elow indicate that :rd &lert failed to add,ce
additional evidence to show that it tried to reinstate Navia% either -hysically
or in the -ayroll% we ado-t as correct the Anding that there was no earnest
eJort to reinstate Navia. The C& was correct in a9rming the C,dgment of
the NLRC in this regard.
2e also ta1e note that :rd &lert resorted to legal tactics to fr,strate the
e7ec,tion of the la+or ar+iterIs orderD for a+o,t fo,r ;@< years% it evaded the
o+ligation to reinstate Navia. By so doing% :rd &lert has made a moc1ery of
C,stice. 2e th,s And it -ro-er% ,nder the circ,mstances% to im-ose tre+le
costs against :rd &lert for its ,tter disregard to com-ly with the writ of
e7ec,tion. To reiterate% no indication e7ists showing that :rd &lert e7erted
any eJorts to reinstate NaviaD worse% :rd &lertIs lame e7c,se of having
sent a notice of reinstatement to a certain EBiRnarE only com-o,nded the
intent to mislead the co,rts.
&lso% the main iss,e of this case% Anding Navia to have +een illegally
dismissed% has already attained Anality. Litigation m,st end and terminate
sometime and somewhere% and it is essential for an eJective and e9cient
administration of C,stice that% once a C,dgment has +ecome Anal% the
winning -arty +e not de-rived of the fr,its of the verdict.! The order is to
reinstate NaviaD sadly% the mere e7ec,tion of this C,dgment has to even
reach the highest co,rt of the land% there+y fr,strating the entire C,dicial
-rocess. This C,stiAes the tre+le costs we now im-ose against :rd &lert.
RADIO MINDANAO NETWORK, INC. AND ERIC S. CANOY VS.
DOMINGO &. YBAROLA, ET AL.
G.R. N?. "'!!(. SB/TB5BBR (% ($(
)&CTS*
Res-ondents Domingo W. S+arola% .r. and &lfonso B. Rivera% .r. were hired on
.,ne #% "PP and .,ne % "':% res-ectively% +y R5N. They event,ally
': F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
+ecame acco,nt managers% soliciting advertisements and servicing vario,s
clients of R5N.
=owever% the res-ondentsI services were terminated as a res,lt of R5NIs
reorganiRation>restr,ct,ringD they were given their se-aration -ay
/!:%(#$.$$ for S+arola% and /@'%(#$.$$ for Rivera. Sometime in ($$(%
they e7ec,ted release>8,itclaim a9davits.
DissatisAed with their se-aration -ay% the res-ondents Aled se-arate
com-laints ;which were later consolidated< against R5N and its /resident%
Bric S. Canoy% for illegal dismissal with several money claims% incl,ding
attorneyIs fees. They indicated that their monthly salary rates were
/!$%$$$.$$ for S+arola and /@$%$$$.$$ for Rivera.
La+or &r+iter /atricio Li+o0on dismissed the illegal dismissal com-laint% +,t
ordered the -ayment of additional se-aration -ay to the res-ondents
/@"$%$!!.$$ for S+arola and /@("%#P.## for Rivera.
?n a--eal +y the -etitioners to the National La+or Relations Commission
;NLRC<% the NLRC set aside the la+or ar+iterIs decision and dismissed the
com-laint for lac1 of merit. B,t the NLRC ,-held the validity of the
res-ondentsI 8,itclaim a9davits as they failed to show that they were
forced to e7ec,te the doc,ments.
)rom the NLRC% the res-ondents so,ght relief from the C& thro,gh a
-etition for certiorari ,nder R,le !# of the R,les of Co,rt. 3n its decision% the
C& granted the -etition and set aside the assailed NLRC dis-ositions.
3SSUBS*
Sho,ld the commissions earned +y the res-ondents +e incl,ded in the
com-,tation of their se-aration -ayL
2ere the 8,itclaims iss,ed +y the res-ondents invalidL
RUL3NG*
The Co,rt is not convinced with -etitioners claim that the commissions
were not -art of the salaries. 3f these commissions had +een really -roAt0
sharing +on,ses to the res-ondents% they sho,ld have received the same
amo,nts% yet% as the NLRC itself noted% S+arola and Rivera received
/:P(%P:. and /#'!%""'.#$ commissions% res-ectively% in($$(. The
variance in amo,nts the res-ondents received as commissions s,--orts
the C&Is Anding that the salary str,ct,re of the res-ondents was s,ch that
they only received a minimal amo,nt as g,aranteed wageD a greater -art
of their income was derived from the commissions they get from soliciting
advertisementsD these advertisements are the K-rod,ctsO they sell. &s the
C& a-tly noted% this 1ind of salary str,ct,re does not detract from the
character of the commissions +eing -art of the salary or wage -aid to the
em-loyees for services rendered to the com-any
2ith regards to the 8,itclaims% -etitionersI reliance on o,r r,ling in Talam v.
National La+orRelations Commission% regarding the K-ro-er a--reciation of
8,itclaims%Oas they -,t it% is mis-laced. 2hile Talam% in the cited case% and
S+arola and Rivera% in this case% are not ,nlettered em-loyees% their
sit,ations diJer in all other res-ects.
3n Talam% the em-loyee received a val,a+le consideration for his less than
two years of service with the com-anyD he was not shortchanged and no
essential ,nfairness too1 -lace. 3n the case at +ar% as the C& noted% the
se-aration -ay the res-ondents each received was deAcient +y at least
/@$$%$$$.$$D th,s% they were given only half of the amo,nt they were
legally entitled to. To +e s,re% a settlement ,nder these terms is not and
cannot +e a reasona+le one% given es-ecially the res-ondentsI length of
service (# years for S+arola and " years for Rivera. The C& was correct
when it o-ined that the res-ondents were in dire straits when they
e7ec,ted the release>8,itclaim a9davits. 2itho,t Co+s and with families to
s,--ort% they dallied in e7ec,ting the 8,itclaim instr,ment% +,t were
event,ally forced to sign given their circ,mstances.
PORTILLO V. LIET&
?CT?BBR $% ($(
)&CTS*
& letter agreement was e7ec,ted +etween individ,al res-ondent R,dolf
LietR ;R,dolf< and /ortillo% where the /ortillo was hired +y R,dolf LietR
;LietR% 3nc.< ,nder the condition that /ortillo will not engage in any other
gainf,l em-loyment +y yo,rself or with any other com-any either directly
or indirectly witho,t written consent of LietR% 3nc. and +reach thereof will
render /ortillo lia+le for damages.
/ortillo was -romoted to Sales Re-resentative and received a
corres-onding increase in +asic monthly salary and sales 8,ota. 3n this
regard% /ortillo signed another letter agreement containing a EGoodwill
Cla,se*E
'@ F / a g e
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University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
+t remains understood and you agreed that0 on the termination of your employment
y act of either you or ILiet:0 +nc!J0 and for a period of three (B) years thereafter0 you
shall not engage directly or indirectly as employee0 manager0 proprietor0 or solicitor
for yourself or others in a similar or competiti%e usiness or the same character of
work which you were employed y ILiet:0 +nc!J to do and perform!
Three years after% /ortillo resigned. D,ring her e7it interview% she declared
that she intended to engage in +,siness ] a rice dealershi-% selling rice in
wholesale. LietR 3nc acce-ted and reminded her of the goodwill cla,se.
S,+se8,ently% LietR% 3nc. learned that /ortillo had +een hired +y Bd Xeller
/hili--ines% Limited. Bd Xeller Limited is -,r-ortedly a direct com-etitor of
LietR% 3nc. 5eanwhile% /ortillo6s demands from LietR% 3nc. for the -ayment of
her remaining salaries and commissions went ,nheeded. LietR% 3nc. gave
/ortillo the r,n aro,nd% on the -rete7t that her salaries and commissions
were still +eing com-,ted.
/ortillo Aled com-laint with NLRC. LietR 3nc admitted lia+ility for money
claims +,t claims that it sho,ld +e oJset with /ortilloIs lia+ility for damages
for violating goodwill cla,se.
3SSUB*
whether /ortillo6s money claims for ,n-aid salaries may +e oJset against
res-ondents6 claim for li8,idated damages.
RUL3NG*
&s early as Singa-ore &irlines Limited v. /aVo% we esta+lished that not all
dis-,tes +etween an em-loyer and his em-loyee;s< fall within the
C,risdiction of the la+or tri+,nals. 2e diJerentiated +etween a+andonment
-er se and the manner and conse8,ent eJects of s,ch a+andonment and
r,led that the Arst% is a la+or case% while the second% is a civil law case.
2e thereafter r,led that the Ereasona+le ca,sal connection with the
em-loyer0em-loyee relationshi-E is a re8,irement not only in em-loyees6
money claims against the em-loyer +,t is% li1ewise% a condition when the
claimant is the em-loyer.
3n Dai0Chi Blectronics 5an,fact,ring Cor-oration v. 4illarama% .r.% which
reiterated the San 5ig,el r,ling and allied C,ris-r,dence% we -rono,nced
that a non0com-ete cla,se% as in the EGoodwill Cla,seE referred to in the
-resent case% with a sti-,lation that a violation thereof ma1es the
em-loyee lia+le to his former em-loyer for li8,idated damages% refers to
-ost0em-loyment relations of the -arties.
That the EGoodwill Cla,seE in this case is li1ewise a -ost0em-loyment iss,e
sho,ld +roo1 no arg,ment. There is no dis-,te as to the cessation of
/ortillo6s em-loyment with LietR% 3nc. She sim-ly claims her ,n-aid salaries
and commissions% which LietR% 3nc. does not contest. &t that C,nct,re%
/ortillo was no longer an em-loyee of LietR% 3nc. The EGoodwill Cla,seE or
the ENon0Com-ete Cla,seE is a contract,al ,nderta1ing eJective after the
cessation of the em-loyment relationshi- +etween the -arties. 3n
accordance with C,ris-r,dence% +reach of the ,nderta1ing is a civil law
dis-,te% not a la+or law case.
3t is clear% therefore% that while /ortillo6s claim for ,n-aid salaries is a
money claim that arises o,t of or in connection with an em-loyer0em-loyee
relationshi-% LietR% 3nc.6s claim against /ortillo for violation of the goodwill
cla,se is a money claim +ased on an act done after the cessation of the
em-loyment relationshi-. &nd% while the C,risdiction over /ortillo6s claim is
vested in the la+or ar+iter% the C,risdiction over LietR% 3nc.6s claim rests on
the reg,lar co,rts.
3n the case at +ar% the diJerence in the nat,re of the credits that one has
against the other% conversely% the nat,re of the de+t one owes another%
which diJerence in t,rn res,lts in the diJerence of the for,m where the
diJerent credits can +e enforced% -revents the a--lication of com-ensation.
Sim-ly% the la+or tri+,nal in an em-loyee6s claim for ,n-aid wages is
witho,t a,thority to allow the com-ensation of s,ch claims against the -ost
em-loyment claim of the former em-loyer for +reach of a -ost em-loyment
condition. The la+or tri+,nal does not have C,risdiction over the civil case of
+reach of contract.
There is no ca,sal connection +etween the -etitioner em-loyees6 claim for
,n-aid wages and the res-ondent em-loyers6 claim for damages for the
alleged EGoodwill Cla,seE violation. /ortillo6s claim for ,n-aid salaries did
not have anything to do with her alleged violation of the em-loyment
contract as% in fact% her se-aration from em-loyment is not ErootedE in the
alleged contract,al violation. She resigned from her em-loyment. She was
not dismissed. /ortillo6s entitlement to the ,n-aid salaries is not even
contested. 3ndeed% LietR% 3nc.6s arg,ment a+o,t legal com-ensation
necessarily admits that it owes the money claimed +y /ortillo.
'# F / a g e
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University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
The alleged contract,al violation did not arise d,ring the e7istence of the
em-loyer0em-loyee relationshi-. 3t was a -ost0em-loyment matter% a -ost0
em-loyment violation.
ACE NAVIGATION CO. INC. VS. FERNANDE&
G.R. N?. "P:$"% ?CT?BBR $% ($(
)&CTS*
?n ?cto+er "% ($$'% seaman Teodorico )ernandeR ;)ernandeR<% assisted +y
his wife% Glenita )ernandeR% Aled with the National La+or Relations
Commission ;NLRC< a com-laint for disa+ility +eneAts% with -rayer for
moral and e7em-lary damages% -l,s attorneyIs fees% against &ce
Navigation Co.% 3nc.% 4ela 3nternational 5arine Ltd.% and>or Rodolfo
/amint,an ;-etitioners<.
The -etitioners moved to dismiss the com-laint% contending that the la+or
ar+iter had no C,risdiction over the dis-,te. They arg,ed that e7cl,sive
original C,risdiction is with the vol,ntary ar+itrator or -anel of vol,ntary
ar+itrators% -,rs,ant to Section (" of the /?B& Standard Bm-loyment
Contract ;/?B&0SBC<% since the -arties are covered +y the &5?SU/0TCC or
&5?SU/04BL& ;as later cited +y the -etitioners< collective +argaining
agreement ;CB&<. Under Section @ of the CB&% a dis-,te +etween a
seafarer and the com-any shall +e settled thro,gh the grievance
machinery and mandatory vol,ntary ar+itration.
)ernandeR o--osed the motion. =e arg,ed that inasm,ch as his com-laint
involves a money claim% original and e7cl,sive C,risdiction over the case is
vested with the la+or ar+iter.
?n Decem+er "% ($$'% La+or &r+iter Romelita N. RioTorido denied the
motion to dismiss% holding that ,nder Section $ of Re-,+lic &ct ;R.&.< No.
'$@(% the 5igrant 2or1ers and ?verseas )ili-inos &ct of ""#% the la+or
ar+iter has original and e7cl,sive C,risdiction over money claims arising o,t
of an em-loyer0em-loyee relationshi- or +y virt,e of any law or contract%
notwithstanding any -rovision of law to the contrary.
The -etitioners a--ealed to the NLRC% +,t the la+or agency denied the
a--eal. 3t agreed with the la+or ar+iter that the case involves a money
claim and is within the C,risdiction of the la+or ar+iter% in accordance with
Section $ of R.&. No. '$@(. &dditionally% it declared that the denial of the
motion to dismiss is an interloc,tory order which is not a--eala+le.
&ccordingly% it remanded the case to the la+or ar+iter for f,rther
-roceedings. The -etitioners moved for reconsideration% +,t the NLRC
denied the motion% -rom-ting the -etitioners to elevate the case to the C&
thro,gh a -etition for certiorari ,nder R,le !# of the R,les of Co,rt.
Thro,gh its decision of Se-tem+er ((% ($$% the C& denied the -etition on
-roced,ral and s,+stantive gro,nds.
?n the merits of the case% the C& +elieved that the -etition cannot also
-ros-er. 3t reCected the -etitionersI s,+mission that the grievance and
vol,ntary ar+itration -roced,re of the -artiesI CB& has C,risdiction over the
case% to the e7cl,sion of the la+or ar+iter and the NLRC. &s the la+or ar+iter
and the NLRC did% it o-ined that ,nder Section $ of R.&. No. '$@(% the
la+or ar+iter has the original and e7cl,sive C,risdiction to hear )ernandeRIs
money claims.
),rther% the C& clariAed that while the law allows -arties to s,+mit to
vol,ntary ar+itration other la+or dis-,tes% incl,ding matters falling within
the original and e7cl,sive C,risdiction of the la+or ar+iters ,nder &rticle (P
of the La+or Code as this Co,rt recogniRed in 4ivero v. Co,rt of &--eals%
the -artiesI s,+mission agreement m,st +e e7-ressed in ,ne8,ivocal
lang,age. 3t fo,nd no s,ch ,ne8,ivocal lang,age in the &5?SU/>TCC CB&
that the -arties agreed to s,+mit money claims or% more s-eciAcally%
claims for disa+ility +eneAts to vol,ntary ar+itration.
3SSUB*
2ho has the original and e7cl,sive C,risdiction over )ernandeRIs disa+ility
claim ] the la+or ar+iter ,nder Section $ of R.&. No. '$@(% as amended%
or the vol,ntary ar+itration mechanism as -rescri+ed in the -artiesI CB&
and the /?B&0SBCL
=BLD*
The answer lies in the StateIs la+or relations -olicy laid down in the
Constit,tion and Teshed o,t in the ena+ling stat,te% the La+or Code.
Section :% &rticle \333 ;on Social .,stice and =,man Rights< of the
Constit,tion declares*
8 8 8 8
)he State shall promote the principle of shared responsiility etween workers and
employers and the preferential use of %oluntary modes in settling disputes0 including
conciliation0 and shall enforce their mutual compliance therewith to foster industrial
peace!
'! F / a g e
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University of San Carlos College of Law
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The Diamond Batch
&rticle (!$ of the La+or Code ;Grievance machinery and vol,ntary
ar+itration< states*
)he parties to a 'ollecti%e #argaining Agreement shall include therein pro%isions
that will ensure the mutual oser%ance of its terms and conditions! )hey shall
estalish a machinery for the ad$ustment and resolution of grie%ances arising from
the interpretation or implementation of their 'ollecti%e #argaining Agreement and
those arising from the interpretation or enforcement of company personnel policies!
&rticle (! of the La+or Code ;.,risdiction of 4ol,ntary &r+itrators or -anel
of 4ol,ntary &r+itrators<% on the other hand% reads in -art*
)he Coluntary Aritrator or panel of Coluntary Aritrators shall ha%e original and
e8clusi%e $urisdiction to hear and decide all unresol%ed grie%ances arising from the
interpretation or implementation of the 'ollecti%e #argaining Agreement and those
arising from the interpretation or enforcement of company personnel policiesI!J
&rticle (!( of the La+or Code ;.,risdiction over other la+or dis-,tes<
declares*
)he Coluntary Aritrator or panel of Coluntary Aritrators0 upon agreement of the
parties0 shall also hear and decide all other laor disputes including unfair laor
practices and argaining deadlocks!
),rther% the /?B&0SBC% which governs the em-loyment of )ili-ino seafarers%
-rovides in its Section (" on Dis-,te Settlement /roced,res*
+n cases of claims and disputes arising from this employment0 the parties co%ered y
a collecti%e argaining agreement shall sumit the claim or dispute to the original
and e8clusi%e $urisdiction of the %oluntary aritrator or panel of %oluntary aritrators!
+f the parties are not co%ered y a collecti%e argaining agreement0 the parties may
at their option sumit the claim or dispute to either the original and e8clusi%e
$urisdiction of the (ational Laor Relations 'ommission ;(LR')0 pursuant to Repulic
Act (RA) 4/D3 otherwise known as the "ecision == K!R! (o! =?HB/? &igrant Workers
and ,%erseas Lilipinos Act of =??M or to the original and e8clusi%e $urisdiction of the
%oluntary aritrator or panel of %oluntary aritrators! +f there is no pro%ision as to the
%oluntary aritrators to e appointed y the parties0 the same shall e appointed
from the accredited %oluntary aritrators of the (ational 'onciliation and &ediation
#oard of the "epartment of Laor and Employment! Iemphasis oursJ
2e And merit in the -etition.
Under the a+ove08,oted constit,tional and legal -rovisions% the vol,ntary
ar+itrator or -anel of vol,ntary ar+itrators has original and e7cl,sive
C,risdiction over )ernandeRIs disa+ility claim. There is no dis-,te that the
claim arose o,t of )ernandeRIs em-loyment with the -etitioners and that
their relationshi- is covered +y a CB& ] the &5?SU/>TCC or the &5?SU/0
4BL& CB&. The CB& -rovides for a grievance -roced,re for the resol,tion of
grievances or dis-,tes which occ,r d,ring the em-loyment relationshi-
and% li1e the grievance machinery created ,nder &rticle (! of the La+or
Code% it is a two0tiered mechanism% with vol,ntary ar+itration as the last
ste-.
Contrary to the C&Is reading of the CB&Is &rticle @% there is ,ne8,ivocal or
,nmista1a+le lang,age in the agreement which mandatorily re8,ires the
-arties to s,+mit to the grievance -roced,re any dis-,te or ca,se of action
they may have against each other.
Read in its entirety% the CB&Is &rticle @ ;Grievance /roced,re<
,nmista1a+ly reTects the -artiesI agreement to s,+mit any ,nresolved
dis-,te at the grievance resol,tion stage to mandatory vol,ntary
ar+itration ,nder &rticle @.P;h< of the CB&. &nd% it sho,ld +e added that% in
com-liance with Section (" of the /?B&0SBC which re8,ires that in cases of
claims and dis-,tes arising from a seafarerIs em-loyment% the -arties
covered +y a CB& shall s,+mit the claim or dis-,te to the original and
e7cl,sive C,risdiction of the vol,ntary ar+itrator or -anel of vol,ntary
ar+itrators. Since the -arties ,sed ,ne8,ivocal lang,age in their CB& for
the s,+mission of their dis-,tes to vol,ntary ar+itration ;a condition laid
down in 4ivero for the recognition of the s,+mission to vol,ntary ar+itration
of matters within the original and e7cl,sive C,risdiction of la+or ar+iters<%
we And that the C& committed a reversi+le error in its r,lingD it disregarded
the clear mandate of the CB& +etween the -arties and the /?B&0SBC for
s,+mission of the -resent dis-,te to vol,ntary ar+itration.
3t +ears stressing at this -oint that we are ,-holding the C,risdiction of the
vol,ntary ar+itrator or -anel of vol,ntary ar+itrators over the -resent
dis-,te% not only +eca,se of the clear lang,age of the -artiesI CB& on the
matterD more im-ortantly% we so ,-hold the vol,ntary ar+itratorIs
C,risdiction% in recognition of the StateIs e7-ress -reference for vol,ntary
modes of dis-,te settlement% s,ch as conciliation and vol,ntary ar+itration
as e7-ressed in the Constit,tion% the law and the r,les.
3n closing% we 8,ote with a--roval a most recent Co,rt -rono,ncement on
the same iss,e% th,s 3t is settled that when the -arties have validly agreed
on a -roced,re for resolving grievances and to s,+mit a dis-,te to
vol,ntary ar+itration then that -roced,re sho,ld +e strictly o+served.:
;em-hasis o,rs<
'P F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
2=BRB)?RB% -remises considered% the -etition is GR&NTBD. The assailed
decision and resol,tion of the Co,rt of &--eals are SBT &S3DB. Teodorico
)ernandeR6s disa+ility claim is RB)BRRBD to the Grievance Resol,tion
bCommittee of the -arties6 collective +argaining agreement and>or the
5andatory &r+itration Committee% if warranted.
XXI. RIGHT TO SELF-ORGANIZATION
XXII. RIGHTS OF LEGITIMATE LABOR ORGANIZATIONS
XXIII. REVISED GUIDELINES OF THE NCMB
XXIV.UNFAIR LABOR PRACTICE
PARK HOTEL VS. SORIANO
G.R. N?. P'% SB/TB5BBR $% ($(
)&CTS*
/etitioners Gregg =ar+,tt ;=ar+,tt< and Bill /ercy ;/ercy< are the General
5anager and owner% res-ectively% of /ar1 =otel. /ercy% =ar+,tt and &tty.
Ro+erto Bnri8,eR are also the o9cers and stoc1holders of B,rgos
Cor-oration ;B,rgos<% a sister com-any of /ar1 =otel.
Res-ondent 5anolo Soriano ;Soriano< was hired +y /ar1 =otel in .,ly ""$
as 5aintenance Blectrician% and then transferred to B,rgos in ""(.
Res-ondent Lester GonRales ;GonRales< was em-loyed +y B,rgos as
Doorman% and later -romoted as S,-ervisor. Res-ondent Solanda Badilla
;Badilla< was a +artender of .6s /layho,se o-erated +y B,rgos.
Res-ondents were dismissed from wor1 for allegedly stealing com-any
-ro-erties. &s a res,lt% res-ondents Aled com-laints for illegal dismissal%
,nfair la+or -ractice% and -ayment of moral and e7em-lary damages and
attorney6s fees% +efore the La+or &r+iter ;L&<. 3n their com-laints%
res-ondents alleged that the real reason for their dismissal was that they
were organiRing a ,nion for the com-any6s em-loyees.
The L&% the NLRC and the C& were ,nanimo,s in Anding -etitioners lia+le
for illegal dismissal and ,nfair la+or -ractice +eca,se the res-ondents were
dismissed witho,t d,e -rocess and that the main ca,se of their termination
was that they were organiRing a ,nion s,--ressing their right to self0
organiRation. 3n fact% the theft case Aled +y B,rgos against Soriano and
GonRales were dismissed +y the 5a1ati City /rosec,torIs ?9ce for
ins,9ciency of evidence.
RUL3NG*
SC agreed with the L&% the NLRC and the C& e7ce-t on the Anding that /ar1
=otel was solidarily lia+le with B,rgos% the sister com-any. SC said that
res-ondents K,tterly failed to -rove +y com-etent evidence that /ar1 =otel
was a mere instr,mentality% agency% cond,it or adC,nct of B,rgos% or that
its se-arate cor-orate veil had +een ,sed to cover any fra,d or illegality
committed +y B,rgos against the res-ondents. &ccordingly% /ar1 =otel and
B,rgos cannot +e considered as one and the same entity% and /ar1 =otel
cannot +e held solidary lia+le with B,rgos.O
&lso% SC also stated that /ar1 =otel was no longer the em-loyer of Soriano
at the time he was dismissed in ""P. =owever KSection : of the
Cor-oration Code ma1es a director -ersonally lia+le for cor-orate de+ts if
he willf,lly and 1nowingly votes for or assents to -atently ,nlawf,l acts of
the cor-oration. 3t also ma1es a director -ersonally lia+le if he is g,ilty of
gross negligence or +ad faith in directing the aJairs of the cor-oration.
Th,s% /ercy and =ar+,tt% having acted in +ad faith in directing the aJairs of
B,rgos% are Cointly and severally lia+le with the latter for res-ondents6
dismissal.O
2ith res-ect to the iss,e of illegal dismissal% the SC had this to say* KThe
re8,isites for a valid dismissal are* ;a< the em-loyee m,st +e aJorded d,e
-rocess% i.e.% he m,st +e given an o--ort,nity to +e heard and defend
himselfD and ;+< the dismissal m,st +e for a valid ca,se as -rovided in
&rticle ('( of the La+or Code% or for any of the a,thoriRed ca,ses ,nder
&rticles (': and ('@ of the same Code.O
K3n the case +efore ,s% +oth elements are com-letely lac1ing. Res-ondents
were dismissed witho,t any C,st or a,thoriRed ca,se and witho,t +eing
given the o--ort,nity to +e heard and defend themselves. The law
mandates that the +,rden of -roving the validity of the termination of
em-loyment rests with the em-loyer. )ail,re to discharge this evidentiary
+,rden wo,ld necessarily mean that the dismissal was not C,stiAed and%
therefore% illegal. Uns,+stantiated s,s-icions% acc,sations% and concl,sions
of em-loyers do not -rovide for legal C,stiAcation for dismissing em-loyees.
3n case of do,+t% s,ch cases sho,ld +e resolved in favor of la+or% -,rs,ant
to the social C,stice -olicy of la+or laws and the Constit,tion.O
'' F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
K&nent the ,nfair la+or -ractice% &rticle (@' ;a< of the La+or Code considers
it an ,nfair la+or -ractice when an em-loyer interferes% restrains or coerces
em-loyees in the e7ercise of their right to self0organiRation or the right to
form an association. 3n order to show that the em-loyer committed ,nfair
la+or -ractice ,nder the La+or Code% s,+stantial evidence is re8,ired to
s,--ort the claim. S,+stantial evidence has +een deAned as s,ch relevant
evidence as a reasona+le mind might acce-t as ade8,ate to s,--ort a
concl,sion. 3n the case at +ar% res-ondents were indeed ,nceremonio,sly
dismissed from wor1 +y reason of their intent to form and organiRe a
,nion.O
So% K3n cases when an em-loyee is ,nC,stly dismissed from wor1% he shall
+e entitled to reinstatement witho,t loss of seniority rights and other
-rivileges% incl,sive of allowances% and other +eneAts or their monetary
e8,ivalent from the time the com-ensation was withheld ,- to the time of
act,al reinstatement.O
K3n the case at +ar% the Co,rt Ands that it wo,ld +e +est to award
se-aration -ay instead of reinstatement% in view of the -assage of a long
-eriod of time since res-ondents6 dismissal. 7 7 7 7 7 7 7 7 7.O
XXV. OTHER IMPORTANT LABOR PROVISIONS
1. CONTRACTING ARRANGEMENT
MARIALY O. SY, ET AL., PETITIONERS, VS. FAIRLAND KNITCRAFT CO.,
INC., RESPONDENT.
G.R. '"!#'% DBCB5BBR (% ($

The iss,es of L&B?R0?NLS C?NTR&CT3NG and the ac8,isition of a la+or
tri+,nal of .UR3SD3CT3?N over the -erson of a res-ondent are the matters
,- for consideration in these consolidated /etitions for Review
on 'ertiorari!
)&CTU&L*
)airland is a domestic cor-oration engaged in garments +,siness% while
S,san de Leon ;S,san< is the owner>-ro-rietress of 2eesan
Garments ;2eesan<. ?n the other hand% the com-laining wor1ers ;wor1ers<
are sewers% trimmers% hel-ers% a g,ard and a secretary who were hired +y
2eesan.
3SSUBS* 3n G.R. No. '"!#'% S,san im-,tes ,-on the C& the following
errors*
3. T=&T /BT3T3?NBR 3S & L&B?R0?NLS C?NTR&CT?R 0 &CT3NG &S
&N &GBNT ?) RBS/?NDBNT )&3RL&ND.
33. T=&T T=B 3ND343DU&L /R34&TB RBS/?NDBNTS 2BRB 3LLBG&LLS
D3S53SSBD.
SC RUL3NG*
2e grant the wor1ersI -etition ;G.R. No. '("#< +,t deny the -etition of
S,san ;G.R. No. '"!#'<.
Susan1Weesan is a mere LA#,R*,(LN ',()RA'),R!
KThere is L&B?R0?NLS C?NTR&CT3NG when the contractor or s,+contractor
merely recr,its% s,--lies or -laces wor1ers to -erform a Co+% wor1 or service
for a -rinci-al.
3n la+or0only contracting% the following elements are -resent*
;a< The -erson s,--lying wor1ers to an em-loyer does not have
s,+stantial ca-ital or investment in the form of tools%
e8,i-ment% machineries% wor1 -remises% among othersD and
;+< The wor1ers recr,ited and -laced +y s,ch -erson are
-erforming activities
which are directly related to the -rinci-al +,siness of the
em-loyer.O

=ere% there is no 8,estion that the wor1ers% maCority of whom are sewers%
were recr,ited +y S,san>2eesan and that they -erformed activities which
are directly related to )airlandIs -rinci-al +,siness of garments.
2hat m,st +e determined is whether S,san>2eesan has SUBST&NT3&L
C&/3T&L ?R 3N4BST5BNT in the form of tools% e8,i-ment% machineries%
wor1 -remises% among others.
0 nothing in the records show that 0 2eesan has investment in the form of tools%
e8,i-ment or machineries.
0 The records show that )airland has to f,rnish 2eesan with sewing machines
for it to +e a+le to -rovide the sewing needs of the former.
0 &lso% save for the Balance Sheets -,r-ortedly s,+mitted +y 2eesan to the B,rea,
of 3nternal Reven,e ;B3R<
indicating its A7ed assets ;factory e8,i-ment< in the amo,nt of /(@:%$$$.$$%
2eesan was ,na+le to show that 0 a-art from the +orrowed sewing machines% it
owned and -ossessed
any other tools% e8,i-ment% and machineries necessary to its +eing a contractor or
s,+0contractor for garments.
'" F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
0 Neither was 2eesan a+le to -rove that it has s,+stantial ca-ital for its +,siness.

Li1ewise signiAcant is the fact that 0 there is do,+t as to who really owns
the 2?RX /RB53SBS occ,-ied +y 2eesan.
0 the wor1 -remises ,tiliRed +y 2eesan is owned +y )airland% which signiAcantly% was
not in the +,siness of renting -ro-erties.
0 there was no showing that S,san>2eesan -aid any rentals for the ,se of the
-remises.
0 S,san had a 5ayorIs /ermit for 2eesan indicating P# Ricafort Street%
Tondo% 5anila as its address.
0 /etitioner tried to dis-rove this +y -resenting a -,r-orted Contract of Lease with
another entity% De L,7e Shirt )actory Co.% 3nc.
=owever% there is no com-etent -roof it -aid the s,--osed rentals to said
aownerI.
C,rio,sly% ,nder the item aRent B7-ensesI in its a,dited Anancial
statement% only e8,i-ment rental was listed therein witho,t any
dis+,rsement>e7-ense for rental of factory -remises%
0 T=US% the place where they reported to and performed sewing $os for petitioner
ISusanJ and Lairland
at (o! H=M Ricafort St!0 )ondo0 &anila0 elonged to Lairland! (Emphasis supplied!)

FItJhe presumption is that a contractor is a LA#,R*,(LN ',()RA'),R
<(LESS such contractor o%ercomes the urden of pro%ing that it has
sustantial capital0 in%estment0 tools and the like!G
I
&s S,san>2eesan was not a+le to add,ce evidence that 2eesan had any
s,+stantial ca-ital% investment or assets to -erform the wor1 contracted
for% the -res,m-tion that 2eesan is a la+or0only contractor stands.
The National La+or Relations Commission and the Co,rt of &--eals did not
err in their Andings of 3LLBG&L D3S53SS&L.

&rticle (': of the La+or Code 0 allows as a mode of termination of em-loyment 0
the clos,re or termination of +,siness.
KClos,re or cessation of +,siness
0 is the com-lete or -artial cessation of the o-erations and>or sh,t0down of
the esta+lishment of the em-loyer.
0 3t is carried o,t to either stave oJ the Anancial r,in or -romote the
+,siness interest of the em-loyer.O
0 KThe decision to close +,siness Mor to tem-orarily s,s-end o-erationN is a
management -rerogative
e7cl,sive to the em-loyer% the e7ercise of which no co,rt or tri+,nal can
meddle with%
0 B\CB/T only when the em-loyer fails to -rove com-liance with the
RBYU3RB5BNTS ?) &RT. (':% to wit*
a< that the clos,re>cessation of +,siness is ona 2de0 i!e.% its -,r-ose is
to advance the interest of the em-loyer
and not to defeat or circ,mvent the rights of em-loyees ,nder the
law or a valid agreement7
+< that written notice was served on the em-loyees and the D?LB at
least one month +efore the intended date of clos,re or cessation of
+,sinessD and
c< in case of clos,re>cessation of +,siness not d,e to Anancial losses%
that the em-loyees aJected have +een given se-aration -ay
e8,ivalent to ` month -ay for every year of service or one month
-ay% whichever is higher.O

=ere% 2eesan Aled its BST&BL3S=5BNT TBR53N&T3?N RB/?RT
0 allegedly d,e to serio,s +,siness losses and other economic
reasons. =owever% we are mindf,l of the do,+tf,l character of 2eesanIs
a--lication for clos,re given the circ,mstances s,rro,nding the same.
)irst% named wor1ers Sy% et al.% Aled +efore the La+or &r+iter their
com-laint for ,nder-ayment of salary% non0-ayment of +eneAts% damages
and attorneyIs fees against 2eesan
0 S,mmons was accordingly iss,ed and same was received +y S,san.
0 5eanwhile% other wor1ers followed s,it and Aled their res-ective com-laints.
0 Shortly thereafter or merely eight days after the Aling of the last com-laint%
2eesan Aled with the D?LB0NCR its Bsta+lishment Termination Re-ort.
Second% the 3ncome Ta7 Ret,rns for the years ($$$% ($$ and ($$(
attached to the Bsta+lishment Termination Re-ort%
0 altho,gh +earing the stam-ed recei-t of the Reven,e District ?9ce
where they were -,r-ortedly Aled%
contain no signat,re or initials of the receiving o9cer. The same holds
tr,e with 2eesanIs a,dited Anancial statements.
0 This engenders do,+t as to whether these doc,ments were indeed Aled
with the -ro-er a,thorities.
Third% there was no showing that 2eesan served ,-on the wor1ers written
notice at least one month
+efore the intended date of clos,re of +,siness% as re8,ired ,nder &rt. (':
of the La+or Code.
"$ F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
0 3n fact% the wor1ers alleged that when 2eesan Aled its Bsta+lishment
Termination Re-ort%
it already closed the wor1 -remises and did not anymore allow them to
re-ort for wor1.
0 This is the reason why the wor1ers amended their com-laint to incl,de
the charge of illegal dismissal.
M'N


FItJhe urden of pro%ing that 8 8 8 a )E&P,RARN S<SPE(S+,( +S #,(A L+"E falls
upon the employer!G
I43J

Clearly here% S,san>2eesan was not a+le to discharge this +,rden. S,san
failed to -rove that the s,s-ension of o-erations of 2eesan was ona
2de and that it com-lied with the mandatory re8,irement of notice ,nder
the lawD failed to discharge her +,rden of -roving that the termination of
the wor1ers was for a lawf,l ca,se.
Therefore% the NLRC and the C& did not err in their Andings that the
wor1ers were illegally dismissed +y S,san>2eesan.

RE6 Lairland9s claim of
PRES'R+P)+,(
the Co,rt notes that the records are +ereft of anything that -rovides for
s,ch alleged contract,al relationshi- and the -eriod covered +y it. &+sent
anything to s,--ort )airlandIs claim% same deserves scant consideration.

3nterestingly% we noticed )airlandIs letter
N
dated .an,ary :% ($$: informing
2eesan that it wo,ld tem-orarily not +e availing of the latterIs sewing
services and at the same time re8,esting for the ret,rn of the sewing
machines it lent to 2eesan. &ss,ming said letter to +e tr,e% why was
)airland terminating 2eesanIs services only on .an,ary :% ($$: when it is
now claiming that its contract,al relationshi- with the latter only lasted
,ntil ""PL Th,s% we And the contentions rather a+str,se.
RB* )3N&L3TS ?) NLRC DBC3S3?ND RBCB3/T BS C?UNSBL
C& =BLD* 3N L&B?R C&SBS% +oth the -arty and his co,nsel m,st +e d,ly served
their se-arate co-ies of the order% decision or resol,tion
0 Unli1e 3N ?RD3N&RS /R?CBBD3NGS where notice to co,nsel is deemed
notice to the -arty.
&rticle ((@ of the La+or Code. B7ec,tion of decisions% orders or
awards.
;a< \ \ \
. . . it shall +e the d,ty of the res-onsi+le o9cer to se-arately
f,rnish immediately the co,nsels of record and the -arties
with co-ies of said decision% orders or awards. )ail,re to
com-ly with the d,ty -rescri+ed herein shall s,+Cect s,ch
res-onsi+le o9cer to a--ro-riate administrative sanctions 7
7 7 ;Bm-hasis in the original<.
. . . since )airland and its co,nsel were not se-arately f,rnished with a
co-y of the NLRC Resol,tion denying the motions for reconsideration of its
Decision% said Decision cannot +e enforced against )airland00which held
that S,san>2eesan and )airland solidarily lia+le to the wor1ers% as it has
not attained Anality.
SC =BLD*
2e cannot agree.
&rticle ((@ of the La+or Code
0 does not govern the -roced,re for Aling a -etition for certiorari
with the Co,rt of &--eals from the decision of the NLRC
0 +,t rather% it refers to the e8ecution of O2nal decisions0 orders or
awards9
and re8,ires the sheriJ or a d,ly de-,tiRed o9cer to f,rnish +oth
the -arties and their co,nsel
with co-ies of the decision or award for that -,r-ose.
0 There is no reference% e7-ress or im-lied% to the -eriod to a--eal
or to Ale a -etition for certiorari
as indeed the ca-tion is ae7ec,tion of decisions% orders or
awardsI.
0 Ta1en in -ro-er conte7t% &rticle ((@ contem-lates 0 the f,rnishing
of co-ies of aAnal decisions% orders or awardsI
and co,ld not have +een intended to refer to 0 the -eriod for
com-,ting the -eriod for a--eal to the Co,rt of &--eals
from a non0Anal C,dgment or order.
The -eriod or manner of aa--ealI from the NLRC to the Co,rt of &--eals is
governed +y R,le !#
0 -,rs,ant to the r,ling of the Co,rt in the case of St. 5artin
),neral =omes vs. NLRC.
0 Section @ of R,le !#% as amended% states that
the a-etition may +e Aled not later than si7ty ;!$< days from
notice of the C,dgment% or resol,tion so,ght to +e assailedI.
" F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch

Corollarily% Section @% R,le 333 of the New R,les of /roced,re of the NLRC*
0 a;)<or the -,r-oses of com-,ting the /BR3?D ?) &//B&L%
the same shall +e co,nted from recei-t of s,ch decisions% awards
or orders +y the co,nsel of record.I
&ltho,gh this r,le e7-licitly contem-lates an a--eal +efore the La+or
&r+iter and the NLRC%
0 we do not see any cogent reason why the same r,le sho,ld not
a--ly to
-etitions for certiorari Aled with the Co,rt of &--eals from
decisions of the NLRC.
0 This -roced,re is in line with the esta+lished r,le that 0 notice to
counsel is notice to party
and when a -arty is re-resented +y co,nsel% notices sho,ld +e
made ,-on the co,nsel of record at his given address
to which notices of all 1inds emanating from the co,rt sho,ld +e
sent.
0 3t is to +e noted also that Section P of the NLRC R,les of
/roced,re -rovides that
0 O(A)ttorneys and other representati%es of parties shall ha%e
authority to ind their clients in all matters of procedure99
0 a -rovision which is similar to Section (:% R,le :' of the R,les of
Co,rt.
0 5ore im-ortantly% Section (% R,le : of the ""P R,les of Civil
/roced,re 0 analogo,sly -rovides that
0 if any party has appeared y counsel0 ser%ice upon him shall e
made upon his counsel!

To stress% &rticle ((@ contem-lates the f,rnishing of co-ies of Anal
decisions% orders or awards
oth to the -arties and their co,nsel in connection with the e7ec,tion of
s,ch Anal decisions% orders or awards.
0 =owever% for the -,r-ose of com-,ting the -eriod for Aling an a--eal
from the NLRC to the C&%
same shall +e co,nted from recei-t of the decision% order or award +y the
co,nsel of record
-,rs,ant to the esta+lished r,le that 0 notice to counsel is notice to
party!
0 &nd since the -eriod for Aling of an a--eal is rec1oned from the co,nselIs
recei-t of the decision% order or award%
0 it necessarily follows that the rec1oning -eriod for their Anality is li1ewise
the co,nselIs date of recei-t thereof%
if a -arty is re-resented +y co,nsel.
0 =ence% the Kdate of recei-tO referred to in Sec. @% R,le 433 of the then in
force New R,les of /roced,re of the NLRC
decisions0 resolutions or orders of the (LR' shall ecome e8ecutory after
=/ calendar days from receipt of the same0
refers to the date of recei-t +y co,nsel.
0 Th,s the said NLRC Decision +ecame Anal% as to )airland% $ calendar
days after &tty. TecsonIs recei-t thereof.
3n s,m% we hold that the La+or &r+iter had validly ac8,ired .UR3SD3CT3?N
over )airland and its manager% De++ie%
0 thro,gh the a--earance of &tty. Geronimo as their co,nsel
and li1ewise% thro,gh the latterIs Aling of -leadings on their +ehalf.
Lairland is Weesan9s principal!
. . . other telling facts that )airland is S,san>2eesanIs -rinci-al% to wit*
;< aside from sewing machines% )airland also lent 2eesan other e8,i-ment
s,ch as Are e7ting,ishers% o9ce ta+les and chairs% and -lastic chairsD
M$"N

;(< no -roof evidencing the contract,al arrangement +etween 2eesan and
)airland was ever s,+mitted +y )airlandD
;:< while +oth 2eesan and )airland assert that the former had other clients
aside from the latter%
no -roof of 2eesanIs contract,al relationshi- with its other alleged client
is e7tant on the recordsD and
;@< there is no showing that any of the wor1ers were assigned to other clients
aside from )airland.
5oreover% as fo,nd +y the NLRC% the manner of wor1 and the movement of
the wor1ers were s,+Cect to )airlandIs control.
Kfact,al Andings of 8,asi0C,dicial agencies li1e the NLRC% when a9rmed
+y the Co,rt of &--eals% as in the -resent case%
are concl,sive ,-on the -arties and +inding on this Co,rt.O
M$N

"( F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
4iewed in its entirety% we th,s declare that )airland is the -rinci-al of the
la+or0only contractor% 2eesan.

)airland% therefore% as the -rinci-al em-loyer% is solidarily lia+le with
S,san>2eesan% the la+or0only contractor%
for the rightf,l claims of the em-loyees.
Under this set0,-%
S,san>2eesan% as the Ela+or0onlyE contractor% is deemed an agent of the
-rinci-al% )airland%
and the law ma1es the -rinci-al res-onsi+le to the em-loyees of the
Ela+or0onlyE contractor
as if the -rinci-al itself directly hired or em-loyed the em-loyees.
MN
POLYFOAM%RGC INTERNATIONAL CORPORATION AND PRECILLA
GRAMAE VS. EDGARDO CONCEPCION
G.R. N?.P(:@" .UNB :% ($(
)&CTS*
?n )e+r,ary '% ($$$% res-ondent Aled a Com-laint for illegal dismissal%
non0-ayment of wages% -remi,m -ay for rest day% se-aration -ay% service
incentive leave -ay% :th month -ay% damages% and attorneyIs fees against
/olyfoam and 5s. Natividad Cheng ;Cheng<. Res-ondent alleged that he
was hired +y /olyfoam as an Kall0aro,ndO factory wor1er and served as
s,ch for almost si7 years. ?n .an,ary @% ($$$% he allegedly discovered
that his time card was not in the rac1 and was later informed +y the
sec,rity g,ard that he co,ld no longer -,nch his time card. 2hen he
-rotested to his s,-ervisor% the latter allegedly told him that the
management decided to dismiss him d,e to an infraction of a com-any
r,le. Res-ondentIs co,nsel later wrote a letter to /olyfoamIs manager
re8,esting that res-ondent +e re0admitted to wor1% +,t the re8,est
remained ,nheeded -rom-ting the latter to Ale the com-laint for illegal
dismissal.
?n &-ril ('% ($$$% GramaCe Aled a 5otion for 3ntervention claiming to +e
the real em-loyer of res-ondent. ?n the other hand% /olyfoam and Cheng
Aled a 5otion to Dismiss on the gro,nds that the NLRC has no C,risdiction
over the case% +eca,se of the a+sence of em-loyer0em-loyee relationshi-
+etween /olyfoam and res-ondent and that the money claims had already
-rescri+ed.
3SSUBS*
2hether or not GramaCe is an inde-endent Co+ contractorD
2hether or not an em-loyer0em-loyee relationshi- e7ists +etween
/olyfoam and res-ondentD and
2hether or not res-ondent was illegally dismissed from em-loyment.
SC RUL3NG*
Krama$e is a Laor*,nly 'ontractor
The test of inde-endent contractorshi- is Kwhether one claiming to +e an
inde-endent contractor has contracted to do the wor1 according to his own
methods and witho,t +eing s,+Cect to the control of the em-loyer% e7ce-t
only as to the res,lts of the wor1.O The totality of the facts and the
s,rro,nding circ,mstances of the case are to +e considered. &--lying the
foregoing% GramaCe is not an inde-endent Co+ contractor% +,t a Kla+or0onlyO
contractor.
)irst% GramaCe has no s,+stantial ca-ital or investment. The -res,m-tion is
that a contractor is a la+or0only contractor ,nless he overcomes the +,rden
of -roving that it has s,+stantial ca-ital% investment% tools% and the li1e.
Neither GramaCe nor /olyfoam -resented evidence showing GramaCeIs
ownershi- of the e8,i-ment and machineries ,sed in the -erformance of
the alleged contracted Co+. Considering that these machineries are fo,nd
in /olyfoamIs -remises% there can +e no other logical concl,sion +,t that
the tools and e8,i-ment ,tiliRed +y GramaCe and her Kem-loyeesO are
owned +y /olyfoam. Neither did /olyfoam nor GramaCe show that the latter
had clients other than the former.
Second% GramaCe did not carry on an inde-endent +,siness or ,nderta1e
the -erformance of its service contract according to its own manner and
method% free from the control and s,-ervision of its -rinci-al% /olyfoam% its
a--arent role having +een merely to recr,it -ersons to wor1 for /olyfoam.
/rior to his termination% res-ondent had +een -erforming the same Co+ in
/olyfoamIs +,siness for almost si7 ;!< years. =e was even f,rnished a co-y
of /olyfoamIs K5ga &lit,nt,nin at Xaram-atang /ar,sa%O which em+odied
/olyfoamIs r,les on attendance% the manner of -erforming the em-loyeeIs
d,ties% ethical standards% cleanliness% health% safety% -eace and
order. These r,les carried with them the corres-onding -enalties in case of
violation.
An Employer*Employee Relationship E8ists #etween Respondent and
Polyfoam
": F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
& Anding that a contractor is a Kla+or0onlyO contractor% as o--osed to
-ermissi+le Co+ contracting% is e8,ivalent to declaring that there is an
em-loyer0em-loyee relationshi- +etween the -rinci-al and the em-loyees
of the s,--osed contractor% and the Kla+or0onlyO contractor is considered
as a mere agent of the -rinci-al% the real em-loyer. 3n this case% /olyfoam
is the -rinci-al em-loyer and GramaCe is the la+or0only
contractor. /olyfoam and GramaCe are% therefore% solidarily lia+le for the
rightf,l claims of res-ondent.
Respondent Was +llegally "ismissed Lrom Employment
Res-ondent insisted that he was dismissed from em-loyment witho,t C,st
or lawf,l ca,se and witho,t d,e -rocess. /olyfoam did not oJer any
e7-lanation of s,ch dismissal. 3t% instead% e7-lained that res-ondentIs real
em-loyer is GramaCe. GramaCe% on the other hand% denied the claim of
illegal dismissal. She shifted the +lame on res-ondent claiming that the
latter in fact a+andoned his wor1.
&+andonment cannot +e inferred from the act,ations of res-ondent. 2hen
he discovered that his time card was oJ the rac1% he immediately in8,ired
from his s,-ervisor. =e later so,ght the assistance of his co,nsel% who
wrote a letter addressed to /olyfoam re8,esting that he +e re0admitted to
wor1. 2hen said re8,est was not acted ,-on% he Aled the instant illegal
dismissal case. These circ,mstances clearly negate the intention to
a+andon his wor1.
/etitioners failed to show any valid or a,thoriRed ca,se ,nder the La+or
Code which allowed it to terminate the services of res-ondent. Neither was
it shown that res-ondent was given am-le o--ort,nity to contest the
legality of his dismissal. No notice of termination was given to him. Clearly%
res-ondent was not aJorded d,e -rocess. =aving failed to esta+lish
com-liance with the re8,irements of termination of em-loyment ,nder the
La+or Code% the dismissal of res-ondent was tainted with illegality.
DIGITEL TELECOM PHILS. VS. DIGITEL EMPLOYEES UNION
G.R. '@"$:0$@% ?ct. $% ($(
)&CTS*
Digitel Bm-loyees Union ;Union< is the e7cl,sive +argaining agent of all
ran1 and Ale em-loyees of Digitel in ""@. The Union and Digitel then
commenced collective +argaining negotiations which res,lted in a
+argaining deadloc1. The Union threatened to go on stri1e% +,t then &cting
La+or Secretary Lag,esma ass,med C,risdiction over the dis-,te and
event,ally directed the -arties to e7ec,te a CB&.=owever% no CB& was
forged +etween Digitel and the Union. The Union later +ecame dormant.
$ years thereafter or on ($$@% Digitel received from Bs-lana% who claimed
to +e /resident of the Union% a letter containing the list of o9cers% CB&
-ro-osals and gro,nd r,les. Digitel demanded that the latter com-ly with
the -rovisions of the UnionIs Constit,tion and By0laws on ,nion
mem+ershi- and election of o9cers.
?n @ Novem+er ($$@% Bs-lana Aled a case for /reventive 5ediation +efore
the NC5B +ased on DigitelIs violation of the d,ty to +argain. The ,nion
Aled a notice of stri1e. ?n ($$#% S?LB% Sto. Tomas iss,ed an ?rder
ass,ming C,risdiction over the la+or dis-,te.
D,ring the -endency of the controversy% Digiserv% a non0-roAt enter-rise
engaged in call center servicing% Aled with the D?LB an Bsta+lishment
Termination Re-ort stating that it will cease its +,siness o-eration. The
clos,re aJected at least $$ em-loyees% @( of whom are mem+ers of the
res-ondent Union. &lleging that the aJected em-loyees are its mem+ers
and in reaction to DigiservIs action% Bs-lana and his gro,- Aled another
Notice of Stri1e for ,nion +,sting% illegal loc10o,t% and violation of the
ass,m-tion order.
?n 5ay ($$#% the S?LB ordered the second notice of stri1e s,+s,med +y
the -revio,s &ss,m-tion ?rder.
5eanwhile% on @ 5arch ($$#% Digitel Aled a -etition with the BLR see1ing
cancellation of the UnionIs registration on the following gro,nds* < fail,re
to Ale the re8,ired re-orts from ""@0($$@D (< misre-resentation of its
alleged o9cersD :< mem+ershi- of the Union is com-osed of ran1 and Ale%
s,-ervisory and managerial em-loyeesD and @< s,+stantial n,m+er of
,nion mem+ers are not Digitel em-loyees.
The RD of the D?LB dismissed the -etition for lac1 of merit.
The Regional Director held that Digitel failed to add,ce s,+stantial
evidence to -rove misre-resentation and the mi7ing of non0Digitel
em-loyees with the Union. )inally% he declared that the incl,sion of
s,-ervisory and managerial em-loyees with the ran1 and Ale em-loyees is
no longer a gro,nd for cancellation of the UnionIs certiAcate of registration.
"@ F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
The a--eal Aled +y Digitel with the BLR was event,ally dismissed for lac1
of merit.
The S?LB directed Digitel to commence the CB& negotiation with the
Union.
Digitel moved for reconsideration on the contention that the -endency of
the -etition for cancellation of the UnionIs certiAcate of registration is a
-reC,dicial 8,estion. The 5R was denied.
Digitel Aled a -etition+efore the C&.
3n accordance with ?rder of the Secretary of La+or% the ,nfair la+or -ractice
iss,e was certiAed for com-,lsory ar+itration +efore the NLRC which
dismissed the ,nfair la+or -ractice charge against Digitel +,t declaring the
dismissal of the : em-loyees of Digiserv as illegal and ordering their
reinstatement.
Digitel Aled another -etition in ($$! +efore the Co,rt of &--eals%
challenging the a+ove NLRC Decision and Resol,tion and arg,ing mainly
that Digiserv em-loyees are not em-loyees of Digitel. C& dismissed the
-etition s,staining the Anding that Digiserv is engaged in la+or0only
contracting and that its em-loyees are act,ally em-loyees of Digitel. &n
5R Aled +y the Com-any was dismissed. =ence% this -etition for review on
certiorari.
3SSUBS*
< whether the Secretary of La+or erred in iss,ing the ass,m-tion order
des-ite the -endency of the -etition for cancellation of ,nion registrationD
(< whether Digiserv is a legitimate contractorD
:< whether there was a valid dismissal.
RUL3NG*
The -endency of a -etition for cancellation of ,nion registration does not
-recl,de collective +argaining.
3f a certiAcation election may still +e ordered des-ite the -endency of a
-etition to cancel the ,nionIs registration certiAcate more so sho,ld the
collective +argaining -rocess contin,e des-ite its -endency. 2e m,st
em-hasiRe that the maCority stat,s of the res-ondent Union is not aJected
+y the -endency of the /etition for Cancellation -ending against it. Unless
its certiAcate of registration and its stat,s as the certiAed +argaining agent
are revo1ed% the Com-any is% +y e7-ress -rovision of the law% d,ty +o,nd
to collectively +argain with the Union.
Digiserv is a la+or0only contractor.
La+or0only contracting is e7-ressly -rohi+ited +y &rt $! of o,r La+or Code.
00deAning la+or0only contracting as Ks,--lying wor1ers to an em-loyer
MwhoN does not have s,+stantial ca-ital or investment in the form of tools%
e8,i-ment% machineries% wor1 -remises% among others% and the wor1ers
recr,ited and -laced +y s,ch -erson are -erforming activities which are
directly related to the -rinci-al +,siness of s,ch em-loyer.O
Section #% R,le 43330&% Boo1 333 of the 3RR as amended +y D? No. '0$(*
Section #. /rohi+ition against la+or0only contracting. c La+or0only
contracting is here+y declared -rohi+ited. )or this -,r-ose% la+or0only
contracting shall refer to an arrangement where the contractor or
s,+contractor merely recr,its% s,--lies or -laces wor1ers to -erform a Co+%
wor1 or service for a -rinci-al% and any of the following elements are
-resent*
i< The contractor or s,+contractor does not have s,+stantial ca-ital or
investment which relates to the Co+% wor1 or service to +e -erformed and
the em-loyees recr,ited% s,--lied or -laced +y s,ch contractor or
s,+contractor are -erforming activities which are directly related to the
main +,siness of the -rinci-alD or
ii< The contractor does not e7ercise the right to control over the
-erformance of the wor1 of the contract,al em-loyee.
The law and its im-lementing r,les allow contracting arrangements for the
-erformance of s-eciAc Co+s% wor1s or services. =owever% in order for s,ch
o,tso,rcing to +e valid% it m,st +e made to an inde-endent contractor
+eca,se the c,rrent la+or r,les e7-ressly -rohi+it la+or0only contracting.
There is no showing that Digiserv has s,+stantial investment in the form of
ca-ital% e8,i-ment or tools. Under the 3m-lementing R,les% s,+stantial
ca-ital or investment refers to Kca-ital stoc1s and s,+scri+ed ca-italiRation
in the case of cor-orations% tools% e8,i-ment% im-lements% machineries and
wor1 -remises% act,ally and directly ,sed +y the contractor or
s,+contractor in the -erformance or com-letion of the Co+% wor1 or service
contracted o,t.O
"# F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
The NLRC% as echoed +y the Co,rt of &--eals% did not And s,+stantial
DigiservIs a,thoriRed ca-ital stoc1 of /5. 3t -ointed o,t that /(#$X had
+een s,+scri+ed and /!(%#$$. There was no increase in ca-italiRation for
the last $ years. 3n the &mended &rticles of 3ncor-oration% the -rimary
-,r-ose of Digiserv is to -rovide man-ower services.
The legitimate Co+ contractor -rovides services while the la+or0only
contractor -rovides only man-ower. The legitimate Co+ contractor
,nderta1es to -erform a s-eciAc Co+ for the -rinci-al em-loyer while the
la+or0only contractor merely -rovides the -ersonnel to wor1 for the
-rinci-al em-loyer.O The services -rovided +y em-loyees of Digiserv are
directly related to the +,siness of Digitel.
Digiserv does not e7ercise control over the aJected em-loyees. The NLRC
highlighted the fact that Digiserv shared the same =,man Reso,rces%
&cco,nting% &,dit and Legal De-artments with Digitel which manifested
that it was Digitel who e7ercised control over the -erformance of the
aJected em-loyees.
The NLRC also relied on the letters of commendation% -la8,es of
a--reciation and certiAcation iss,ed +y Digitel to the C,stomer Service
Re-resentatives as evidence of control.
Th,s% the dismissed em-loyees are deemed em-loyees of their -rinci-al
em-loyer Digitel.

Section P of the 3m-lementing R,les holds that la+or0only contracting wo,ld
give rise to* ;< the creation of an em-loyer0em-loyee relationshi- +etween
the -rinci-al and the em-loyees of the contractor or s,+0contractorD and
;(< the solidary lia+ility of the -rinci-aland the contractor to the em-loyees
in the event of any violation of the La+or Code.
)he aAected employees were illegally dismissed!
3t is ,ndis-,ted that the remaining aJected em-loyees% e7ce-t for two ;(<%
were already hired +y D3G3TBL even +efore the e7istence of D3G3SBR4. 3t is
e8,ally ,ndis-,ted that the remaining% aJected em-loyees contin,o,sly
held the -osition of C,stomer Service Re-resentative% which was earlier
1nown as Tra9c ?-erator% from the time they were a--ointed on 5arch %
""@ ,ntil they were terminated on 5ay :$% ($$#.
)or a valid retrenchment% the following elements m,st +e -resent*
;< That retrenchment is reasona+ly necessary and li1ely to -revent
+,siness losses which% if already inc,rred% are not merely de
minimis% +,t s,+stantial% serio,s% act,al and real% or if only
e7-ected% are reasona+ly imminent as -erceived o+Cectively and in
good faith +y the em-loyerD
;(< That the em-loyer served written notice +oth to the em-loyees and
to the De-artment of La+or and Bm-loyment at least one month
-rior the intended date of retrenchmentD
;:< That the em-loyer -ays the retrenched em-loyees se-aration -ay
e8,ivalent to one ;< month -ay or at least ` month -ay for every
year of service% whichever is higherD
;@< That the em-loyer e7ercises its -rerogative to retrench em-loyees
in good faith for the advancement of its interest and not to defeat
or circ,mvent the em-loyeesI right to sec,rity of ten,reD and
;#< That the em-loyer ,sed fair and reasona+le criteria in ascertaining
who wo,ld +e dismissed and who wo,ld +e retained among the
em-loyees% s,ch as stat,s% e9ciency% seniority% -hysical Atness%
age% and Anancial hardshi- for certain wor1ers.
?nly the Arst : elements of a valid retrenchment had +een here
satisAed. 3ndeed% it is management -rerogative to close a
de-artment of the com-any. DigitelIs decision to o,tso,rce the call
center o-eration of the com-any is a valid reason to close down the
o-erations of a de-artment ,nder which the aJected em-loyees
were em-loyed.
The instant case is all a+o,t the fo,rth element% SC held that there
was no good faith in the retrenchment.
The eJects of the ass,m-tion order iss,ed +y the Secretary of
La+or are two0fold. 3t enCoins an im-ending stri1e on the -art of the
em-loyees and orders the em-loyer to maintain the stat,s 8,o.

There is no do,+t that Digitel deAed the ass,m-tion order +y a+r,-tly
closing down Digiserv. The clos,re of a de-artment is not illegal -er se.
2hat ma1es it ,nlawf,l is when the clos,re is ,nderta1en in +ad faith. Bad
faith was evidenced +y the timing of and reasons for the clos,re and the
s,+se8,ent o-ening.
Bad faith was manifested +y the timing of the clos,re of Digiserv and the
rehiring of some em-loyees to 3nteractive Technology Sol,tions% 3nc. ;30
tech<% a cor-orate arm of Digitel. The ass,m-tion order directs em-loyees
"! F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
to ret,rn to wor1% and the em-loyer to reinstate the em-loyees. The
e7istence of the ass,m-tion order sho,ld have -rom-ted Digitel to o+serve
the stat,s 8,o. 3nstead% Digitel -roceeded to close down Digiserv. The
Secretary of La+or had to s,+s,me the second notice of stri1e in the
ass,m-tion order. This order notwithstanding% Digitel -roceeded to dismiss
the em-loyees.
The timing of the creation of 30tech is d,+io,s. 3t was incor-orated while
the la+or dis-,te within Digitel was -ending. The former head of Digiserv%
is also an o9cer of 30tech. Th,s% when Digiserv was closed down% some of
the em-loyees -res,ma+ly non0,nion mem+ers were rehired +y 30tech.
Th,s% the clos,re of Digiserv -ending the e7istence of an ass,m-tion order
co,-led with the creation of a new cor-oration -erforming similar
f,nctions as Digiserv leaves no iota of do,+t that the target of the clos,re
are the ,nion mem+er0em-loyees. These fact,al circ,mstances -rove that
Digitel terminated the services of the aJected em-loyees to defeat their
sec,rity of ten,re. The termination of service was not a valid
retrenchmentD it was an illegal dismissal of em-loyees.
2. WORER!S PREFERENCE
". ATTY!S FEES AND APPEARANCE OF LAWYERS
KAISAHAN AT KAPATIRAN NG MGA MANGGAGAWA V. MANILA
WATER COMPANY
GR N?. P@P"% N?4B5BBR !% ($
)&CTS*
The Union is the d,ly0recogniRed +argaining agent of the ran10and0Ale
em-loyees of the res-ondent 5anila 2ater Com-any% 3nc. ;'ompany< while
Borela is the Union /resident. ?n )e+r,ary (% ""P% the 5etro-olitan
2aterwor1s and Sewerage System ;&WSS< entered into a Concession
&greement ;Agreement< with the Com-any to -rivatiRe the o-erations of
the 52SS. &rticle !..: of the &greement -rovides that Kthe
Concessionaire shall grant MitsN em-loyees +eneAts no less favora+le than
those granted to 52SS em-loyees at the time of MtheirN se-aration from
52SS.O &mong the +eneAts enCoyed +y the em-loyees of the 52SS were
the amelioration allowance ;AA< and the cost0of0living allowance ;',LA<
granted in &,g,st "P"% -,rs,ant to Letter of 3m-lementation No. "P
iss,ed +y the ?9ce of the /resident.

The -ayment of the && and the C?L& was discontin,ed -,rs,ant to
Re-,+lic &ct No. !P#'% otherwise 1nown as the KSalary StandardiRation
Law%O which integrated the allowances into the standardiRed salary.
Nonetheless% in ($$% the Union demanded from the Com-any the -ayment
of the && and the C?L& d,ring the renegotiation of the -artiesI Collective
Bargaining &greement ;'#A<. The Com-any initially t,rned down this
demand% however% it s,+se8,ently agreed to an amendment of the CB&.

Thereafter% the Com-any integrated the && into the monthly -ayroll of all
its em-loyees +eginning &,g,st % ($$(% -ayment of the && and the C?L&
after an a--ro-riation was made and a--roved +y the 52SS Board of
Tr,stees. The Com-any% however% did not s,+se8,ently incl,de the C?L&
since the Commission on &,dit disa--roved its -ayment +eca,se the
Com-any had no f,nds to cover this +eneAt.

&s a res,lt% the Union and Borela Aled on &-ril #% ($$: a com-laint against
the Com-any for -ayment of the &&% C?L&% moral and e7em-lary damages%
legal interest% and attorneyIs fees +efore the National La+or Relations
Commission ;(LR'<.

The La+or &r+iter r,led in favor of the -etitioners and ordered the -ayment
of their && and C?L&% si7 -ercent ;!Q< interest of the total amo,nt
awarded% and ten -ercent ;$Q< attorneyIs fees. ?n a--eal +y the
Com-any% the NLRC a9rmed with modiAcation the L&Is decision. 3t set
aside the award of the C?L& +eneAts +eca,se the claim was not -roven
and esta+lished% +,t ordered the Com-any to -ay the -etitioners their
accr,ed && of a+o,t /$P%:$$%$$$.$$ in l,m- s,m and to contin,e -aying
the && starting &,g,st % ($$(. 3t also ,-held the award of $Q attorneyIs
fees to the -etitioners.

3n its 5otion for /artial Reconsideration of the NLRCIs Decem+er "% ($$:
decision% the Com-any -ointed o,t that the award of ten -ercent ;$Q<
attorneyIs fees to the -etitioners is already -rovided for in their Decem+er
"% ($$: 5emorand,m of &greement ;&,A< which mandated that
attorneyIs fees shall +e ded,cted from the && and CB& receiva+les.
The NLRC s,+se8,ently denied +oth -artiesI 5otions for /artial
Reconsideration% -rom-ting the Com-any to elevate t0e 1ase t, t0e
"P F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
CA #$% a 2et3t3,* 4,- &'()$*(%($ 5*+e- R5le 67 ,4 t0e R5les ,4
C,5-t.
3n its Decision -rom,lgated on 5arch !% ($$!% the C& modiAed the assailed
NLRC r,lings +y deleting KMtNhe order for res-ondent 52C3 to -ay
attorneyIs fees e8,ivalent to $Q of the total C,dgment awards.O The C&
recogniRed the +inding eJect of the 5?& +etween the Com-any and the
UnionD it stressed that any f,rther award of attorneyIs fees is ,nfo,nded
considering that it did not And anything in the &greement that is contrary
to law% morals% good c,stoms% -,+lic -olicy or -,+lic order.
3SSUBS*
;< 2hether the C& can review the fact,al Andings of the NLRC in a R,le !#
-etitionD and
;(< 2hether the NLRC gravely a+,sed its discretion in awarding ten -ercent
;$Q< attorneyIs fees to the -etitioners.
RUL3NG*
2e agree with the -etitioners that as a r,le% the C& cannot ,nderta1e a re0
assessment of the evidence -resented in the case in certiorari -roceedings
,nder R,le !# of the R,les of Co,rt.
=owever% the r,le admits of e7ce-tions. 3n &ercado %! A&A 'omputer
'ollege*ParaPaEue 'ity0 +nc.% we held that the C& may e7amine the fact,al
Andings of the NLRC to determine whether or not its concl,sions are
s,--orted +y s,+stantial evidence% whose a+sence C,stiAes a Anding of
grave a+,se of discretion. 2e r,led*
We agree with the petitioners that0 as a rule in certiorari proceedings under Rule
.M of the Rules of 'ourt0 the 'A does not assess and weigh each piece of
e%idence introduced in the case! )he 'A only e8amines the factual 2ndings of
the (LR' to determine whether or not the conclusions are supported y
sustantial e%idence whose asence points to gra%e ause of discretion
amounting to lack or e8cess of $urisdiction! +n the recent case of Protacio %!
Laya&ananghayaQ 'o!0 we emphasi:ed that6

Howe%er0 as an e8ception0 the appellate court may e8amine and
measure the factual 2ndings of the (LR' if the same are not supported
y sustantial e%idence! )he 'ourt has not hesitated to a-rm the
appellate court9s re%ersals of the decisions of laor triunals if they are
not supported y sustantial e%idence! (italics and emphasis supplied7
citation omitted)

3n the -resent case% we are therefore tas1ed to determine whether the C&
correctly r,led that the NLRC committed grave a+,se of discretion in
awarding $Q attorneyIs fees to the -etitioners.
&rticle of the La+or Code% as amended% governs the grant of attorneyIs
fees in la+or cases*

&rt. . Attorney9s fees!* ;a< 3n cases of ,nlawf,l withholding of
wages% the c,l-a+le -arty may +e assessed attorneyIs fees e8,ivalent
to ten -ercent of the amo,nt of wages recovered.
;+< 3t shall +e ,nlawf,l for any -erson to demand or acce-t% in any
C,dicial or administrative -roceedings for the recovery of wages%
attorneyIs fees which e7ceed ten -ercent of the amo,nt of wages
recovered.


Section '% R,le 4333% Boo1 333 of its 3m-lementing R,les also
-rovides% %i:!*
Section '. Attorney9s fees! @ &ttorneyIs fees in any C,dicial or
administrative -roceedings for the recovery of wages shall not e7ceed
$Q of the amo,nt awarded. The fees may +e ded,cted from the total
amo,nt d,e the winning -arty.

2e e7-lained in P'L Shipping Philippines0 +nc! %! (ational Laor Relations
'ommission
M:@N
that there are two commonly acce-ted 1,*1e2ts ,4
att,-*e89s 4ees . the ordinary and e7traordinary. 3n its ,-+3*a-8
1,*1e2t% an attorneyIs fee is the reasona+le com-ensation -aid to a
lawyer +y his client for the legal services the former rendersD com-ensation
is -aid for the cost and>or res,lts of legal services -er agreement or as may
+e assessed. 3n its e:t-a,-+3*a-8 1,*1e2t% att,-*e89s 4ees a-e
+ee;e+ 3*+e;*3t8 4,- +a;a<es ,-+e-e+ =8 t0e 1,5-t t, =e 2a3+ =8
t0e l,s3*< 2a-t8 t, t0e >3**3*< 2a-t8. The instances when these may
+e awarded are en,merated in &rticle (($' of the Civil Code% s-eciAcally in
its -aragra-h P on actions for recovery of wages% and is +%,%-.' /*) )*
)0' .%1,'( -2) )* )0' &.$'/)% 5*less t0e 1l3e*t a*+ 03s la>8e- 0ave
a<-ee+ t0at t0e a>a-+ s0all a11-5e t, t0e la>8e- as a++3t3,*al ,-
2a-t ,4 1,;2e*sat3,*.
M:#N

2e also held in P'L Shipping that &rticle of the La+or Code% as
amended% contem-lates the e:t-a,-+3*a-8 1,*1e2t of attorneyIs fees
and that A-t31le ??? 3s a* e:1e2t3,* t, t0e +e1la-e+ 2,l318 ,4 st-31t
"' F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
1,*st-51t3,* 3* t0e a>a-+ ,4 att,-*e89s 4ees. Alt0,5<0 a* e:2-ess
@*+3*< ,4 4a1ts a*+ la> 3s st3ll *e1essa-8 t, 2-,ve t0e ;e-3t ,4 t0e
a>a-+, t0e-e *ee+ *,t =e a*8 s0,>3*< t0at t0e e;2l,8e- a1te+
;al313,5sl8 ,- 3* =a+ 4a3t0 >0e* 3t >3t00el+ t0e >a<es. 3n carrying
o,t and inter-reting the La+or Code6s -rovisions and im-lementing
reg,lations% the em-loyee6s welfare sho,ld +e the -rimary and -aramo,nt
consideration. This 1ind of inter-retation gives meaning and s,+stance to
the li+eral and com-assionate s-irit of the law as em+odied in &rticle @ of
the La+or Code ;which -rovides that EMaNll do,+ts in the im-lementation
and inter-retation of the -rovisions of Mthe La+or CodeN% incl,ding its
im-lementing r,les and reg,lations% shall +e resolved in favor of la+orE<
and &rticle P$( of the Civil Code ;which -rovides that EMiNn case of do,+t%
all la+or legislation and all la+or contracts shall +e constr,ed in favor of the
safety and decent living for the la+orerO<.

2e similarly so r,led in R)K 'onstruction0 +nc! %! Lacto
M:PN
and in ,rti: %! San
&iguel 'orporation!
M:'N
3n R)K 'onstruction% we s-eciAcally stated*
Settled is the rule that in actions for reco%ery of wages0 or where an employee
was forced to litigate and0 thus0 incur e8penses to protect his rights and
interests0 a monetary award y way of attorney9s fees is $usti2ale under Article
=== of the Laor 'ode7 Section 40 Rule C+++0 #ook +++ of its +mplementing Rules7
and paragraph H0 Article 33/4 of the 'i%il 'ode! T0' %1%(3 *4 %))*(/',!5
4''5 $5 +(*+'(6 %/3 )0'(' /''3 /*) -' %/, 50*1$/7 )0%) )0' '8+.*,'(
%&)'3 8%.$&$*25., *( $/ -%3 4%$)0 10'/ $) 1$)00'.3 )0' 1%7'5. T0'('
/''3 */., -' % 50*1$/7 )0%) )0' .%142. 1%7'5 1'(' /*) +%$3
%&&*(3$/7.,.
IB?J
(emphasis ours)
)rom this -ers-ective and the a+ove -recedents% we concl,de that the C&
erred in r,ling that a Anding of the em-loyerIs malice or +ad faith in
withholding wages m,st -recede an award of attorneyIs fees ,nder &rticle
of the La+or Code. To reiterate% a -lain showing that the lawf,l wages
were not -aid witho,t C,stiAcation is s,9cient.

3n the -resent case% we And it ,ndis-,ted that the ,nion mem+ers are
entitled to their && +eneAts and that these +eneAts were not -aid +y the
Com-any. That the Com-any had no f,nds is not a defense as this was not
an ins,-era+le ca,se that was cited and -ro-erly invo1ed. &s a
conse8,ence% the ,nion mem+ers re-resented +y the Union were
com-elled to litigate and inc,r legal e7-enses. ?n these +ases% we And no
di9c,lty in ,-holding the NLRCIs award of ten -ercent ;$Q< attorneyIs
fees.
The more signiAcant iss,e in this case is the eJect of the 5?& -rovision
that attorneyIs fees shall +e ded,cted from the && and CB& receiva+les. 3n
this regard% the C& held that the additional grant of $Q attorneyIs fees +y
the NLRC violates &rticle of the La+or Code% considering that the 5?&
+etween the -arties already ens,red the -ayment of $Q attorneyIs fees
ded,cti+le from the && and CB& receiva+les of the UnionIs mem+ers. 3n
addition% the Com-any also arg,es that the UnionIs demand% together with
the NLRC award% is ,nconsciona+le as it re-resents ($Q of the amo,nt d,e
or a+o,t /(.@ million.

3n )raders Royal #ank Employees <nion*+ndependent %! (LR'%
M@N
we
e7-o,nded on the conce-t of attorneyIs fees in the conte7t of &rticle of
the La+or Code% as follows*
+n the 2rst place0 the fees mentioned here are the e8traordinary attorney9s fees
reco%erale as $/3'8/$), 4*( 3%8%7'5 525)%$/'3 -, %/3 +%,%-.' )* )0'
+('#%$.$/7 +%()9,:! +n the second place6 )0' )'/ +'(&'/) (=/R) attorney9s
fees pro%ided for in Article === of the Laor 'ode and Section ==0 Rule C+++0 #ook
+++ of the +mplementing Rules $5 )0' 8%;$828 *4 )0' %1%(3 )0%) 8%, )025
-' 7(%/)'3! A()$&.' 111 )025 <;'5 */., )0' .$8$) */ )0' %8*2/) *4
%))*(/',!5 4''5 )0' #$&)*($*25 +%(), 8%, ('&*#'( in any $udicial or
administrati%e proceedings and it does not e%en pre%ent the (LR' from 28ing
an amount lower than the ten percent (=/R) ceiling prescried y the article
when circumstances warrant it!
ID3J
(emphases ours7 citation omitted)

3n the -resent case% the ten -ercent ;$Q< attorneyIs fees awarded +y the
NLRC on the +asis of &rticle of the La+or Code accr,e to the UnionIs
mem+ers as indemnity for damages and not to the UnionIs co,nsel as
com-ensation for his legal services% 5*less, t0e8 a<-ee+ t0at t0e
a>a-+ s0all =e <3ve* t, t0e3- 1,5*sel as a++3t3,*al ,- 2a-t ,4 03s
1,;2e*sat3,*A 3* t03s 1ase the Union +o,nd itself to -ay $Q attorneyIs
fees to its co,nsel ,nder the 5?& and also gave ,- the attorneyIs fees
awarded to the UnionIs mem+ers in favor of their co,nsel. This is
s,--orted +y BorelaIs a9davit which stated that KMtNhe $Q attorneyIs fees
-aid +y the mem+ers>em-loyees is se-arate and distinct from the
o+ligation of the com-any to -ay the $Q awarded attorneyIs fees which
we also gave to o,r co,nsel as -art of o,r contingent fee agreement.O The
limit to this agreement is that the 3*+e;*3t8 4,- +a;a<es 3;2,se+ =8
t0e NLRC ,* t0e l,s3*< 2a-t8 #$.'., t0e C,;2a*8< cannot e7ceed ten
-ercent ;$Q<.

"" F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
/ro-erly viewed from this -ers-ective% the award cannot +e ta1en to mean
an additional grant of attorneyIs fees% in violation of the ten -ercent ;$Q<
limit ,nder &rticle of the La+or Code since it rests on an entirely
diJerent legal o+ligation than the one contracted ,nder the 5?&. Sim-ly
stated% t0e att,-*e89s 4ees 1,*t-a1te+ 5*+e- t0e MOA +, *,t -e4e-
t, t0e a;,5*t ,4 att,-*e89s 4ees a>a-+e+ =8 t0e NLRCA t0e MOA
2-,v3s3,* ,* att,-*e89s 4ees +,es *,t 0ave a*8 =ea-3*< at all t,
t0e att,-*e89s 4ees a>a-+e+ =8 t0e NLRC 5*+e- A-t31le ??? ,4 t0e
La=,- C,+e. Based on these considerations% it is clear that the C& erred in
r,ling that the L&Is award of attorneyIs fees violated the ma7im,m limit of
ten -ercent ;$Q< A7ed +y &rticle of the La+or Code.

Under this inter-retation% the Com-anyIs arg,ment that the attorneyIs fees
are ,nconsciona+le as they re-resent ($Q of the amo,nt d,e or
a+o,t /(.@ million is more a--arent than real. Since the attorneyIs fees
awarded +y the L& -ertained to the UnionIs mem+ers as indemnity for
damages% it was totally within their right to waive the amo,nt and give it to
their co,nsel as -art of their contingent fee agreement. Beyond the limit
A7ed +y &rticle of the La+or Code% s,ch as +etween the lawyer and the
client% the attorneyIs fees may e7ceed ten -ercent ;$Q< on the +asis
of Euantum meruit% as in the -resent case.
XXVI. MISCELLANEOUS PROVISIONS
1. SPECIAL TYPES OF WORERS
ATLANTA INDUSTRIES, INC. a*+(,- ROBERT CHAN, Pet3t3,*e-s, vs.
APRILITO R. SEBOLINO, KHIM V. COSTALES, ALVIN V. ALMOITE, a*+
OSEPH S. SAGUN, Res2,*+e*ts.
G.R. No. 'P:($% .an,ary (!% ($
)&CTS*
&lfredo Se+olino and his co0res-ondents Ales several com-laints for illegal
dismissal% reg,lariRation% ,nder-ayment% non-ayment of wages and other
money claims% as well as claims for moral and e7em-lary damages and
attorneyIs fees against the -etitioners &tlanta 3nd,stries% 3nc. ;&tlanta< and
its /resident and Chief ?-erating ?9cer. &tlanta is a domestic cor-oration
engaged in the man,fact,re of steel -i-es.
The com-lainants alleged that they had attained reg,lar stat,s as they
were allowed to wor1 with &tlanta for more than si7 ;!< months from the
start of a -,r-orted a--renticeshi- agreement +etween them and the
com-any. They claimed that they were illegally dismissed when the
a--renticeshi- agreement e7-ired.
3n defense% &tlanta and Chan arg,ed that the wor1ers were not entitled to
reg,lariRation and to their money claims +eca,se they were engaged as
a--rentices ,nder a government0a--roved a--renticeshi- -rogram. The
com-any oJered to hire them as reg,lar em-loyees in the event vacancies
for reg,lar -ositions occ,r in the section of the -lant where they had
trained. They also claimed that their names did not a--ear in the list of
em-loyees ;5aster List< -rior to their engagement as a--rentices.
3SSUB*
2hether or not Se+olino and co0res-ondents are em-loyees of &tlanta.
RUL3NG*
The C& correctly r,led that the fo,r were illegally dismissed +eca,se ;<
they were already em-loyees when they were re8,ired to ,ndergo
a--renticeshi- and ;(< a--renticeshi- agreements were invalid.
Based on com-any o-erations at the time material to the case% Costales%
&lmoite% Se+olino and Sag,n were already rendering service to the
com-any as em-loyees +efore they were made to ,ndergo a--renticeshi-.
The com-any itself recogniRed the res-ondentsI stat,s thro,gh relevant
o-erational records.
The C& correctly recogniRed the a,thenticity of the o-erational doc,ments%
for the fail,re of &tlanta to raise a challenge against these doc,ments
+efore the la+or ar+iter% the NLRC and the C& itself. The a--ellate co,rt%
th,s% fo,nd the said doc,ments s,9cient to esta+lish the em-loyment of
the res-ondents +efore their engagement as a--rentices.
The fact that Costales% &lmoite% Se+olino and Sag,n were already rendering
service to the com-any when they were made to ,ndergo a--renticeshi-
;as esta+lished +y the evidence< renders the a--renticeshi- agreements
irrelevant as far as the fo,r are concerned. This reality is highlighted +y the
C& Anding that the res-ondents occ,-ied -ositions s,ch as machine
o-erator% scaleman and e7tr,der o-erator 0 tas1s that are ,s,ally
$$ F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
necessary and desira+le in &tlantaIs ,s,al +,siness or trade as
man,fact,rer of -lastic +,ilding materials. These tas1s and their nat,re
characteriRed the fo,r as reg,lar em-loyees ,nder &rticle ('$ of the La+or
Code. Th,s% when they were dismissed witho,t C,st or a,thoriRed ca,se%
witho,t notice% and witho,t the o--ort,nity to +e heard% their dismissal was
illegal ,nder the law.
Bven if the com-anyIs need to train its em-loyees thro,gh a--renticeshi-
is recogniRed% only the Arst a--renticeshi- agreement can +e considered
for the -,r-ose. 2ith the e7-iration of the Arst agreement and the
retention of the em-loyees% &tlanta had% to all intents and -,r-oses%
recogniRed the com-letion of their training and their ac8,isition of a reg,lar
em-loyee stat,s. To foist ,-on them the second a--renticeshi- agreement
for a second s1ill which was not even mentioned in the agreement itself% is
a violation of the La+or CodeIs im-lementing r,les and is an act manifestly
,nfair to the em-loyees% to say the least.
2. EMPLOYMENT OF WOMEN
". =CHILDREN
>. =HOUSEHELPERS
?. =HOMEWORERS
@. =NON-RESIDENT ALIENS
WPP MARKETING COMMUNICATIONS INC., ET. AL., vs. GALERA
G.R. No. !"($P% 5&RC= (#% ($$
)&CTS*
/etitioner is .ocelyn Galera% an &merican citiRen who was recr,ited from the
US +y -rivate res-ondent .ohn Steedman% Chairman02// 2orldwide and
Chief B7ec,tive ?9cer of 5indshare% Co.% a cor-oration +ased in =ong
Xong% China% to wor1 in the /hili--ines for -rivate res-ondent 2//
5ar1eting Comm,nications% 3nc. ;2//<. ?n Decem+er @% ($$$% G&LBR&
alleged she was ver+ally notiAed +y -rivate STBBD5&N that her services
had +een terminated from -rivate res-ondent 2//. & termination letter
followed the ne7t day. ?n : .an,ary ($$% Galera Aled a com-laint for
illegal dismissal% holiday -ay% service incentive leave -ay% :th month -ay%
incentive -lan% act,al and moral damages% and attorney6s fees against 2//
and>or .ohn Steedman ;Steedman<% 5ar1 2e+ster ;2e+ster< and Nominada
Lansang ;Lansang<. The La+or &r+iter6s R,ling for illegal dismissal and
damages in favor of G&LBR&. The )irst Division of the NLRC reversed the
r,ling of &r+iter 5adriaga. Set it was reversed again +y C&.
3SSUBS*
2hether Galera is an Bm-loyee or a Cor-orate ?9cer.
2hether 2// illegally dismissed Galera.
SC RUL3NG*
Bm-loyee. Galera% on the +elief that she is an em-loyee% Aled her
com-laint +efore the La+or &r+iter. ?n the other hand% 2//% Steedman%
2e+ster and Lansang contend that Galera is a cor-orate o9cerD hence% any
controversy regarding her dismissal is ,nder the C,risdiction of the Regional
Trial Co,rt. 2e agree with Galera. Cor-orate o9cers are given s,ch
character either +y the Cor-oration Code or +y the cor-oration6s +y0laws.
Galera6s a--ointment as a cor-orate o9cer ;4ice0/resident with the
o-erational title of 5anaging Director of 5indshare< d,ring a s-ecial
meeting of 2//6s Board of Directors is an a--ointment to a non0e7istent
cor-orate o9ce. &t the time of Galera6s a--ointment% 2// already had one
4ice0/resident in the -erson of 2e+ster and all Ave directorshi- -ositions
-rovided in the +y0laws are already occ,-ied. &nother indicator that she
was a reg,lar em-loyee and not a cor-orate o9cer is Section @ of the
contract% which clearly states that she is a -ermanent em-loyee ] not a
4ice0/resident or a mem+er of the Board of Directors. &nother convincing
indication that she was only a reg,lar em-loyee and not a cor-orate o9cer
is the disci-linary -roced,re% which states that her right of redress is
thro,gh 5indshare6s Chief B7ec,tive ?9cer for the &sia0/aciAc. This im-lies
that she was not ,nder the disci-linary control of -rivate res-ondent 2//6s
Board of Directors ;B?D<% which sho,ld have +een the case if in fact she
was a cor-orate o9cer +eca,se only the Board of Directors co,ld a--oint
and terminate s,ch a cor-orate o9cer.
2//6s dismissal of Galera lac1ed +oth s,+stantive and -roced,ral d,e
-rocess. &-art from Steedman6s letter dated # Decem+er ($$$ to Galera%
2// failed to -rove any C,st or a,thoriRed ca,se for Galera6s dismissal.
Steedman6s letter to Galera reads* The o-erations are c,rrently in a
sham+le. There is lac1 of leadershi- and conAdence in yo,r a+ilities from
within% o,r agency -artners and some clients. 5ost of the staJ 3 s-o1e with
felt they got more g,idance and direction from 5inda than yo,rself. 3n yo,r
role as 5anaging Director% that is C,st not acce-ta+le. 3 +elieve yo,r
-riorities are mismanaged. The recent sit,ation where yo, felt an internal
strategy meeting was more im-ortant than a new +,siness -itch is a good
$ F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
e7am-le. So, failed to lead and advise on the two new +,siness -itches. 3n
+oth cases% those involved sort ;sic< 5inda6s in-,t. &s 3 disc,ssed with yo,
+ac1 in .,ly% my directive was for yo, to lead and review all +,siness
-itches. 3t is o+vio,s MthatN conf,sion e7isted internally right ,- ,ntil the
day of the -itch. The 8,ality o,t-,t is still not to an acce-ta+le standard%
which was also -art of my directive that yo, needed to foc,s on +ac1 in
.,ly. 3 do not +elieve yo, ,nderstand the +asic s1ills and ind,stry
1nowledge re8,ired to r,n a media s-ecial o-eration.
2//% Steedman% 2e+ster% and Lansang% however% failed to s,+stantiate the
allegations in Steedman6s letter. Galera% on the other hand% -resented
doc,mentary evidence (( in the form of congrat,latory letters% incl,ding
one from Steedman% which contents are diametrically o--osed to the #
Decem+er ($$$ letter. The law f,rther re8,ires that the em-loyer m,st
f,rnish the wor1er so,ght to +e dismissed with two written notices +efore
termination of em-loyment can +e legally eJected* ;< notice which
a--rises the em-loyee of the -artic,lar acts or omissions for which his
dismissal is so,ghtD and ;(< the s,+se8,ent notice which informs the
em-loyee of the em-loyer6s decision to dismiss him. )ail,re to com-ly with
the re8,irements taints the dismissal with illegality. (: 2//6s acts clearly
show that Galera6s dismissal did not com-ly with the two0notice r,le.
A. =STUDENTS & WORING SCHOLARS
B. =ACADEMIC & NON-ACADEMIC PERSONNEL IN PRIVATE
EDUCATIONAL INSTITUTIONS
MERCADO ET. AL., vs. AMA COMPUTER COLLEGE%PARABA!UE CITY
G.R. No. ':#P(% &/R3L :% ($$
)&CTS*
The -etitioners were fac,lty mem+ers who started teaching at &5&CC on
5ay (#% ""'. The -etitioners e7ec,ted individ,al TeacherIs Contracts for
each of the trimesters that they were engaged to teach% with the following
common sti-,lation*
)he )EA'HER has agreed to accept a non*tenured appointment to work in the
'ollege of 888 eAecti%e 888 to 888 or for the duration of the last term that the
)EA'HER is gi%en a teaching load ased on the assignment duly appro%ed y the
"EA(1SACP*',,!
)or the school year ($$$0($$% &5&CC im-lemented new fac,lty screening
g,idelines% set forth in its G,idelines on the 3m-lementation of &5&CC
)ac,lty /lantilla. Under the new screening g,idelines% teachers were to +e
hired or maintained +ased on e7tensive teaching e7-erience% ca-a+ility%
-otential% high academic 8,aliAcations and research +ac1gro,nd. The
-etitioners failed to o+tain a -assing rating +ased on the -erformance
standardsD hence &5&CC did not give them any salary increase. ?n
Se-tem+er P% ($$$% the -etitioners individ,ally received a memorand,m
from &5&CC% thro,gh =,man Reso,rces S,-ervisor 5ary Grace Beronia%
informing them that with the e7-iration of their contract to teach% their
contract wo,ld no longer +e renewed.
3SSUB*
Sho,ld the teachersI -ro+ationary stat,s +e disregarded sim-ly +eca,se
the contracts were A7ed0termL
SC RUL3NG*
The La+or Code is s,--lemented with res-ect to the -eriod of -ro+ation +y
s-ecial r,les fo,nd in the 5an,al of Reg,lations for /rivate Schools. ?n the
matter of -ro+ationary -eriod% Section "( of these reg,lations -rovides*
S'&)$*/ C2.P(*-%)$*/%(, P'($*3. @ Su$ect in all instances to compliance
with the "epartment and school reEuirements0 the proationary period for
academic personnel shall not e more than three (B) consecuti%e years of
satisfactory ser%ice for those in the elementary and secondary le%els0 si8
(.) consecuti%e regular semesters of satisfactory ser%ice for those in the
tertiary le%el0 and nine (?) consecuti%e trimesters of satisfactory ser%ice for
those in the tertiary le%el where collegiate courses are oAered on a
trimester asis!
)or the entire d,ration of this three0year -eriod% the teacher remains ,nder
-ro+ation. U-on the e7-iration of his contract of em-loyment% +eing sim-ly
on -ro+ation% he cannot a,tomatically claim sec,rity of ten,re and com-el
the em-loyer to renew his em-loyment contract.
?ther than on the -eriod% the following 8,oted -ortion of &rticle (' of the
La+or Code still f,lly a--lies*
8 8 8 )he ser%ices of an employee who has een engaged on a
proationary asis may e terminated for a $ust cause when he fails to
Eualify as a regular employee in accordance with reasonale standards
made known y the employer to the employee at the time of his
$( F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
engagement! An employee who is allowed to work after a proationary
period shall e considered a regular employee!
&5&CCIs right to academic freedom is -artic,larly im-ortant in the -resent
case% +eca,se of the new screening g,idelines for &5&CC fac,lty -,t in
-lace for the school year ($$$0($$. 2e agree with the C& that &5&CC has
the inherent right to esta+lish high standards of com-etency and e9ciency
for its fac,lty mem+ers in order to achieve and maintain academic
e7cellence. 3f we -ierce the veil% so to s-ea1% of the -artiesI so0called A7ed0
term em-loyment contracts% what ,ndenia+ly comes o,t at the core is a
A7ed0term contract conveniently ,sed +y the school to deAne and reg,late
its relations with its teachers d,ring their -ro+ationary -eriod. To +e s,re%
nothing is illegitimate in deAning the school0teacher relationshi- in this
manner. The school% however% cannot forget that its system of A7ed0term
contract is a system that o-erates d,ring the -ro+ationary -eriod and for
this reason is s,+Cect to the terms of &rticle (' of the La+or Code. Given
the clear constit,tional and stat,tory intents% we cannot +,t concl,de that
in a sit,ation where the -ro+ationary stat,s overla-s with a A7ed0term
contract not s-eciAcally ,sed for the A7ed term it oJers% &rticle (' sho,ld
ass,me -rimacy and the A7ed0-eriod character of the contract m,st give
way. This concl,sion is immeas,ra+ly strengthened +y the -etitionersI and
the &5&CCIs hardly concealed e7-ectation that the em-loyment on
-ro+ation co,ld lead to -ermanent stat,s% and that the contracts are
renewa+le ,nless the -etitioners fail to -ass the schoolIs standards.
To highlight what we mean +y a A7ed0term contract s-eciAcally ,sed for the
A7ed term it oJers% a re-lacement teacher% for e7am-le% may +e contracted
for a -eriod of one year to tem-orarily ta1e the -lace of a -ermanent
teacher on a one0year st,dy leave. The e7-iration of the re-lacement
teacherIs contracted term% ,nder the circ,mstances% leads to no
-ro+ationary stat,s im-lications as she was never em-loyed on
-ro+ationary +asisD her em-loyment is for a s-eciAc -,r-ose with -artic,lar
foc,s on the term and with every intent to end her teaching relationshi-
with the school ,-on e7-iration of this term. 2hile we can grant that the
standards were d,ly comm,nicated to the -etitioners and co,ld +e a--lied
+eginning the st trimester of the school year ($$$0($$% glaring and very
+asic ga-s in the schoolIs evidence still e7ist. The e7act terms of the
standards were never introd,ced as evidenceD neither does the evidence
show how these standards were a--lied to the -etitioners. 2itho,t these
-ieces of evidence ;eJectively% the Anding of C,st ca,se for the non0renewal
of the -etitionersI contracts<% we have nothing to consider and -ass ,-on
as valid or invalid for each of the -etitioners. 3nevita+ly% the non0renewal
;or eJectively% the termination of em-loyment of em-loyees on
-ro+ationary stat,s< lac1s the s,--orting Anding of C,st ca,se that the law
re8,ires and% hence% is illegal.
C. MEDICAL6 DENTAL6 & OCCUPATIONAL SAFETY
10. MIGRANT WORER!S ACTDRECRUITMENT AND
PLACEMENT
PANGANIBAN V. TARA TRADING
G.R. N?. 'P$:(% ?CT?BBR '% ($(
)his is a petition for re%iew under Rule DM of the Rules of 'ourt challenging
the "ecision of the 'A0 and its Resolution0 re%ersing the "ecision of the
(LR' which a-rmed the decision of the Laor Ariter (LA) fa%oring the
petitioner!

)&CTS*
/etitioner was hired +y res-ondent Tara Trading Shi-management%
3nc. ()ara)0 in +ehalf of its foreign -rinci-al% res-ondent Shinline SDN
B=D(Shinline) to wor1 as an ?iler on +oard 54 KThailine #O with a monthly
salary of US^@$".$$.

Sometime in &-ril ($$!% -etitioner +egan e7hi+iting signs of mental
insta+ility. =e was re-atriated on 5ay (@% ($$! for f,rther medical
eval,ation and management. /etitioner was referred +y res-ondents to
the 5etro-olitan 5edical Center where he was diagnosed to +e s,Jering
from K+rief -sychotic disorder.O
Des-ite his s,--osed total and -ermanent disa+ility and des-ite re-eated
demands for -ayment of disa+ility com-ensation% res-ondents allegedly
failed and ref,sed to com-ly with their contract,al o+ligations.

=ence% -etitioner Aled a Com-laint against res-ondents -raying for the
-ayment of US^!$%$$$.$$ as total and -ermanent disa+ility +eneAts%
reim+,rsement of medical and hos-ital e7-enses% moral and e7em-lary
damages% and attorneyIs fees e8,ivalent to $Q of total claims.

The L& ruled in fa%or of the petitioner.
$: F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
Res-ondents a--ealed to the NLRC. ?n 5arch (#% ($$'% the NLRC
a9rmed the decision of the L&. The a--eal of res-ondents was dismissed
for lac1 of merit. The motion for reconsideration was li1ewise denied.

&ggrieved% res-ondents Aled a /etition for Certiorari with -rayer for the
iss,ance of a writ of -reliminary inC,nction and>or tem-orary restraining
order with the C&. 3n their -etition% res-ondents -resented the following
gro,nds*

A! Pulic respondent gra%ely aused its discretion and committed serious error in
ruling that the petitioners are liale to pri%ate respondent for the payment of
disaility compensation in the amount of <SS ./0///!// considering the facts as
orne out y the e%idence on record and the applicale laws!

?n ?cto+er ("% ($$'% the C& re%ersed the decision of the NLRC.

/etitionerIs 5otion for Reconsideration was denied +y the C& in its
Resol,tion dated 5arch @% ($$".
3SSUBS*
3. T=B C?URT ?) &//B&LS C?553TTBD SBR3?US BRR?R ?) L&2 3N
3GN?R3NG T=B ?4BR2=BL53NG B43DBNCB T=&T SU//?RTS /BT3T3?NBRIS
BNT3TLB5BNT T? 5&\35U5 D3S&B3L3TS BBNB)3TS 3N T=B &5?UNT ?)
USD!$%$$$.$$
33. T=B =?N?R&BLB C?URT ?) &//B&LS C?553TTBD GR&4B &BUSB ?)
D3SCRBT3?N 3N DBNS3NG T=B C?5/L&3N&NTIS D3S&B3L3TS BBNB)3TS
S?LBLS BBC&USB T=B C?5/&NS0DBS3GN&TBD /=SS3C3&N =&S DBCL&RBD
/BT3T3?NBRIS 3LLNBSS &S N?T 2?RX0RBL&TBD


RUL3NG*
The Co,rt denies the -etition.

The -ivotal iss,e to +e resolved is whether or not the C& is correct in
denying -etitionerIs entitlement to f,ll and total disa+ility +eneAts
amo,nting to US^!$%$$$.$$ and attorneyIs fees in the amo,nt of
US^!%$$$.$$.

The Co,rt resolves the iss,e in the a9rmative.

3t need not +e overem-hasiRed that in the a+sence of s,+stantial evidence%
wor1ing conditions cannot +e acce-ted to have ca,sed or at least
increased the ris1 of contracting the disease% in this case% +rief -sychotic
disorder. S,+stantial evidence is more than a mere scintilla. The evidence
m,st +e real and s,+stantial% and not merely a--arentD for the d,ty to
-rove wor10ca,sation or wor10aggravation im-osed +y law is real and not
merely a--arent.

Bven in case of death of a seafarer% the grant of +eneAts in favor of the
heirs of the deceased is not a,tomatic. &s in the case of Ri%era v. Wallem
&aritime Ser%ices0 +nc.% witho,t a -ost0medical e7amination or its
e8,ivalent to show that the disease for which the seaman died was
contracted d,ring his em-loyment or that his wor1ing conditions increased
the ris1 of contracting the ailment% the em-loyer>s cannot +e made lia+le
for death com-ensation.
3n fact% in &auhay Shipping Ser%ices0 +nc! %! (LR'% the Co,rt held that the
death of a seaman even d,ring the term of em-loyment does not
a,tomatically give rise to com-ensation. Several factors m,st +e ta1en
into acco,nt s,ch as the circ,mstances which led to the death% the
-rovisions of the contract% and the right and o+ligation of the em-loyer and
the seaman with d,e regard to the -rovisions of the Constit,tion on the
d,e -rocess and e8,al -rotection cla,ses.
/etitioner -oints o,t that his illness is wor10related sim-ly +eca,se had it
+een a land0+ased em-loyment% -etitioner wo,ld have easily gone home
and attended to the needs of his family.

The Co,rt cannot s,+mit to this arg,ment. This is not the Kwor10relatedO
instance contem-lated +y the -rovisions of the em-loyment contract in
order to +e entitled to the +eneAts. ?therwise% every seaman wo,ld
a,tomatically +e entitled to com-ensation +eca,se the nat,re of his wor1
is not land0+ased and the s,+mission of the seaman to the com-any0
designated -hysician as to the nat,re of the illness s,Jered +y him wo,ld
C,st +e an e7ercise of f,tility.


The fact is that the -etitioner failed to esta+lish% +y s,+stantial evidence%
that his +rief -sychotic disorder was ca,sed +y the nat,re of his wor1 as
oiler of the com-any0owned vessel. 3n fact% he failed to ela+orate on the
nat,re of his Co+ or to s-ecify his f,nctions as oiler of res-ondent com-any.
The Co,rt% therefore% has di9c,lty in Anding any lin1 +etween his -osition
as oiler and his illness.
$@ F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch

The Co,rt cannot give less im-ortance either to the fact that -etitioner was
a seaman for $ years serving $ to '0month contracts and never did he
have any -ro+lems with his earlier contracts. The Co,rt can only s,rmise
that the +rief -sychotic disorder s,Jered +y him was +ro,ght a+o,t +y a
family -ro+lem. =is da,ghter was sic1 and% as a seafarer% he co,ld not C,st
decide to go home and +e with his family. Bven the -sychiatric re-ort
-re-ared +y the eval,ating -rivate -sychiatrist of -etitioner shows that the
hos-italiRation of -etitionerIs yo,ngest da,ghter ca,sed him -oor slee-
and a--etite. Later% he started hearing voices and develo-ed fearf,lness.

&ltho,gh strict r,les of evidence are not a--lica+le in claims for
com-ensation and disa+ility +eneAts% the Co,rt cannot C,st disregard the
-rovisions of the /?B& SBC. SigniAcantly% a seaman is a contract,al and not
a reg,lar em-loyee. =is em-loyment is contract,ally A7ed for a certain
-eriod of time. /etitioner and res-ondents entered into a contract of
em-loyment. 3t was a--roved +y the /?B& on ?cto+er (#% ($$# and% th,s%
served as the law +etween the -arties. Undis-,tedly% Section ($0B of the
/?B& &mended Standard Terms and Conditions Governing the Bm-loyment
of )ili-ino Seafarers on Board ?cean0Going 4essels ;/?B&0SBC< -rovides for
com-ensation and +eneAts for inC,ry or illness s,Jered +y a seafarer. 3t
says that% in order to claim disa+ility +eneAts ,nder the Standard
Bm-loyment Contract% it is the acom-any0designatedI -hysician who m,st
-roclaim that the seaman s,Jered a -ermanent disa+ility% whether total or
-artial% d,e to either inC,ry or illness% d,ring the term of the latterIs
em-loyment.
3n this case% the Andings of res-ondentsI designated -hysician that
-etitioner has +een s,Jering from +rief -sychotic disorder and that it is not
wor10related m,st +e res-ected.

Lastly% it a--ears -remat,re at this time to consider -etitionerIs disa+ility
as -ermanent and total +eca,se the severity of his ailment has not +een
esta+lished with Anality to render him already inca-a+le of -erforming the
wor1 of a seafarer. 3n fact% the medical e7-ert termed his condition
as rief psychotic disorder. The Co,rt also ta1es note% as the C& correctly
did% that -etitioner did not Anish his treatment with the com-any0
designated -hysician% hence% there is no Anal eval,ation yet on -etitioner.
&ll told% no reversi+le error was committed +y the C& in rendering the
assailed Decision and iss,ing the 8,estioned Resol,tion.
YAP VS. THENAMARIS SHIP9S MANAGEMENT AND INTERMARE
MARITIME AGENCIES, INC.
G.R. N?. P"#:(% 5&S :$% ($
T0e D,1t-3*e ,4 O2e-at3ve Fa1t
)&CTS*
/etitioner Cla,dio S. Sa- was em-loyed as electrician of the vessel% 5>T
SB&SC?UT on @ &,g,st ($$ +y 3ntermare 5aritime &gencies% 3nc. in
+ehalf of its -rinci-al% 4,lt,re Shi--ing Limited. The contract of
em-loyment entered into +y Sa- and Ca-t. )rancisco B. &dviento% the
General 5anager of 3ntermare% was for a d,ration of ( months. ?n (:
&,g,st ($$% Sa- +oarded 5>T SB&SC?UT and commenced his Co+ as
electrician. =owever% on or a+o,t $' Novem+er ($$% the vessel was sold.
The /hili--ine ?verseas Bm-loyment &dministration ;/?B&< was informed
a+o,t the sale on $! Decem+er ($$ in a letter signed +y Ca-t. &dviento.
Sa-% along with the other crewmem+ers% was informed +y the 5aster of
their vessel that the same was sold and will +e scra--ed. They were also
informed a+o,t the Ad%isory sent +y Ca-t. Constatino,% which states%
among others*
K _/LB&SB &SX SR ?))3CBRS &ND R&T3NGS 3) T=BS 23S= T? BB
TR&NS)BRRBD T? ?T=BR 4BSSBLS &)TBR 4BSSBL S DBL34BRS ;GRBBX 43&
&T=BNS0/=3L3/3N?S 43& 5&N3L&_
_)?R CRB2 N?T 23S= TR&NS)BR T? DBCL&RB T=B3R /R?S/BCTBD T35B
)?R RBB5B&RX&T3?N 3N ?RDBR T? SC=BDULB T=B5 &CCLS_O
Sa- received his seniority +on,s% vacation +on,s% e7tra +on,s along with
the scra--ing +on,s. =owever% with res-ect to the -ayment of his wage% he
ref,sed to acce-t the -ayment of one0month +asic wage. =e insisted that
he was entitled to the -ayment of the ,ne7-ired -ortion of his contract
since he was illegally dismissed from em-loyment. =e alleged that he
o-ted for immediate transfer +,t none was made.
Res-ondents% for their -art% contended that Sa- was not illegally dismissed.
They alleged that following the sale of the 5>T SB&SC?UT% Sa- signed oJ
from the vessel on $ Novem+er ($$ and was -aid his wages
corres-onding to the months he wor1ed or ,ntil $ Novem+er ($$ -l,s his
seniority +on,s% vacation +on,s and e7tra +on,s. They f,rther alleged that
Sa-Is em-loyment contract was validly terminated d,e to the sale of the
$# F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
vessel and no arrangement was made for Sa-Is transfer to ThenamarisI
other vessels.
3SSUB* 2?N -etitioner is entitled to the -ayment of the ,ne7-ired -ortion
of his contract since he was illegally dismissed from em-loyment.
RUL3NG*
The S,-reme Co,rt r,led that% Under Section $ of Re-,+lic &ct '$@(% the
lia+ility of the em-loyer for illegal termination of the em-loyment of an
overseas wor1er is* his salaries for the ,ne7-ired -ortion of his em-loyment
contract or for three ;:< months for every year of the ,ne7-ired term%
whichever is less. ;3ncidentally% this same -rovision was also incor-orated
in Re-,+lic &ct $$(( 1nown as the &mended 5igrant 2or1ers &ct<. The
S,-reme Co,rt ,-held the r,ling on illegal dismissal +,t r,led that seafarer
sho,ld +e -aid his salaries for the ,ne7-ired -ortion of the em-loyment
contract. Th,s% seafarer sho,ld +e -aid his remaining nine monthsI salary
and not C,st three months as r,led +y the Co,rt of &--eals.
The doctrine of o-erative fact serves as an e7ce-tion to the
aforementioned general r,le. 3n Planters Products0 +nc! %! Lertiphil
'orporation% the Co,rt held*
)he doctrine of operati%e fact0 as an e8ception to the general rule0 only
applies as a matter of eEuity and fair play! +t nulli2es the eAects of an
unconstitutional law y recogni:ing that the e8istence of a statute prior to
a determination of unconstitutionality is an operati%e fact and may ha%e
conseEuences which cannot always e ignored! )he past cannot always e
erased y a new $udicial declaration!
The doctrine is a--lica+le when a declaration of ,nconstit,tionality will
im-ose an ,nd,e +,rden on those who have relied on the invalid law. Th,s%
it was a--lied to a criminal case when a declaration of ,nconstit,tionality
wo,ld -,t the acc,sed in do,+le Ceo-ardy or wo,ld -,t in lim+o the acts
done +y a m,nici-ality in reliance ,-on a law creating it.
)ollowing Serrano% the Co,rt held that this case sho,ld not +e incl,ded in
the aforementioned e7ce-tion. &fter all% it was not the fa,lt of -etitioner
that he lost his Co+ d,e to an act of illegal dismissal committed +y
res-ondents. To r,le otherwise wo,ld +e ini8,ito,s to -etitioner and other
?)2s% and wo,ld% in eJect% send a wrong signal that -rinci-als>em-loyers
and recr,itment>manning agencies may violate an ?)2Is sec,rity of ten,re
which an em-loyment contract em+odies and act,ally -roAt from s,ch
violation +ased on an ,nconstit,tional -rovision of law.
SKIPPERS UNITED PACIFIC, INC. vs. DO&A, ET. AL.
G.R. No. P###'% )BBRU&RS '% ($(
)&CTS*
S1i--ers United /aciAc% 3nc. de-loyed% in +ehalf of S1i--ers% De Gracia%
Lata% and &-rosta to wor1 on +oard the vessel 54 2isdom Star. De Gracia%
et al. claimed that S1i--ers failed to remit their res-ective allotments for
almost Ave months% com-elling them to air their grievances with the
Romanian Seafarers )ree Union.?n ! Decem+er ""'% 3T) 3ns-ector &drian
5ihalcioi, of the Romanian Seafarers Union sent Ca-tain Savvas of Cosmos
Shi--ing a fa7 letter% relaying the com-laints of his crew% namely* home
allotment delay% ,n-aid salaries ;only advances<% late -rovisions% lac1 of
la,ndry services ;only one washing machine<% and lac1 of maintenance of
the vessel ;-erforated and ,nre-aired dec1<.To date% however% S1i--ers
only failed to remit the home allotment for the month of Decem+er
""'.?n (' .an,ary """% De Gracia% et al. were ,nceremonio,sly
discharged from 54 2isdom Stars and immediately re-atriated.U-on
arrival in the /hili--ines% De Gracia% et al. Aled a com-laint for illegal
dismissal with the La+or &r+iter on @ &-ril """ and -rayed for -ayment of
their home allotment for the month of Decem+er ""'% salaries for the
,ne7-ired -ortion of their contracts% moral damages% e7em-lary damages%
and attorney6s fees.
S1i--ers% on the other hand% claims% as evidenced +y a tele7 re-ort to
S1i--ers that on : Decem+er ""'% De Gracia% smelling strongly of alcohol%
went to the ca+in of Ga+riel ?lesRe1% 5aster of 54 2isdom Stars% and was
r,de% sho,ting noisily to the master. 3t also claims that on (( .an,ary """%
fo,r )ili-ino seafarers% namely &-rosta% De Gracia% Lata and DoRa% arrived in
the master6s ca+in and demanded immediate re-atriation +eca,se they
were not satisAed with the shi-% as evidenced +y a tele7 of Cosmoshi- 54
2isdom to S1i--ers% which however +ears conTicting dates of (( .an,ary
""' and (( .an,ary """. S1i--ers also claims that% d,e to the
disem+ar1ation of De Gracia% et al.% P other seafarers disem+ar1ed ,nder
a+normal circ,mstsances% which was again evidenced +y a fa7 of
Cosmoshi- 54 2isdom to S1i--ers% which +ears conTicting dates of (@
.an,ary ""' and (@ .an,ary """. S1i--ers% in its /osition /a-er% also
admitted non0-ayment of home allotment for the month of Decem+er
$! F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
""'% +,t -rayed for the oJsetting of s,ch amo,nt with the re-atriation
e7-enses. Since De Gracia% et al. -re0terminated their contracts% S1i--ers
claims they are lia+le for their re-atriation e7-ensesin accordance with
Section ";G< of /hili--ine ?verseas Bm-loyment &dministration ;/?B&<
5emorand,m Circ,lar No. ##% series of ""! and f,rther -rayed for moral
and e7em-lary damages.
L& dismissed De Gracia% et al.6s com-laint for illegal dismissal +eca,se the
seafarers vol,ntarily -re0terminated their em-loyment contracts +y
demanding for immediate re-atriation d,e to dissatisfaction with the shi-.
The La+or &r+iter held that s,ch vol,ntary -re0termination of em-loyment
contract is a1in to resignation% a form of termination +y em-loyee of his
em-loyment contract ,nder &rticle ('# of the La+or Code. The La+or
&r+iter gave weight and credi+ility to the tele7 of the master of the vessel
to S1i--ers. NRLC a9rmed L&Is decision. C& reversed the decisions of the
La+or &r+iter and NLRC.
3SSUB*
2hether or not the seafarers were illegally dismissed or was there
vol,ntary -re0termination of em-loyment contract.
SC RUL3NG*
)or a wor1er6s dismissal to +e considered valid% it m,st com-ly with +oth
-roced,ral and s,+stantive d,e -rocess. The legality of the manner of
dismissal constit,tes -roced,ral d,e -rocess% while the legality of the act of
dismissal constit,tes s,+stantive d,e -rocess.
/roced,ral d,e -rocess in dismissal cases consists of the twin re8,irements
of notice and hearing. The em-loyer m,st f,rnish the em-loyee with two
written notices +efore the termination of em-loyment can +e eJected* ;<
the Arst notice a--rises the em-loyee of the -artic,lar acts or omissions for
which his dismissal is so,ghtD and ;(< the second notice informs the
em-loyee of the em-loyer6s decision to dismiss him. Before the iss,ance of
the second notice% the re8,irement of a hearing m,st +e com-lied with +y
giving the wor1er an o--ort,nity to +e heard. 3t is not necessary that an
act,al hearing +e cond,cted.
S,+stantive d,e -rocess% on the other hand% re8,ires that dismissal +y the
em-loyer +e made ,nder a C,st or a,thoriRed ca,se ,nder &rticles ('( to
('@ of the La+or Code.
3n this case% there was no written notice f,rnished to De Gracia% et al.
regarding the ca,se of their dismissal. Cosmoshi- f,rnished a written
notice ;tele7< to S1i--ers% the local manning agency% claiming that De
Gracia% et al. were re-atriated +eca,se the latter vol,ntarily -re0terminated
their contracts. This tele7 was given credi+ility and weight +y the La+or
&r+iter and NLRC in deciding that there was -re0termination of the
em-loyment contract Ea1in to resignationE and no illegal dismissal.
=owever% as correctly r,led +y the C&% the tele7 message is Ea +iased and
self0serving doc,ment that does not satisfy the re8,irement of s,+stantial
evidence.E 3f% indeed% De Gracia% et al. vol,ntarily -re0terminated their
contracts% then De Gracia% et al. sho,ld have s,+mitted their written
resignations.
&rticle ('# of the La+or Code recogniRes termination +y the em-loyee of
the em-loyment contract +y Eserving written notice on the em-loyer at
least one ;< month in advance.E Given that -rovision% the law
contem-lates the re8,irement of a written notice of resignation. 3n the
a+sence of a written resignation% it is safe to -res,me that the em-loyer
terminated the seafarers. 3n addition% the tele7 message relied ,-on +y the
La+or &r+iter and NLRC +ore conTicting dates of (( .an,ary ""' and ((
.an,ary """% giving do,+t to the veracity and a,thenticity of the
doc,ment. 3n (( .an,ary ""'% De Gracia% et al. were not even em-loyed
yet +y the foreign -rinci-al. )or these reasons% the dismissal of De Gracia%
et al. was illegal.
?n the iss,e of home allotment -ay% S1i--ers eJectively admitted non0
remittance of home allotment -ay for the month of Decem+er ""' in its
/osition /a-er. S1i--ers so,ght the re-atriation e7-enses to +e oJset with
the home allotment -ay. =owever% since De Gracia% et al.6s dismissal was
illegal% their re-atriation e7-enses were for the acco,nt of S1i--ers and
co,ld not +e oJset with the home allotment -ay.
Contrary to the claim of the La+or &r+iter and NLRC that the home
allotment -ay is in Ethe nat,re of e7traordinary money where the +,rden of
-roof is shifted to the wor1er who m,st -rove he is entitled to s,ch
monetary +eneAt%E Section ' of /?B& 5emorand,m Circ,lar No. ##% series
of ""!% states that the allotment act,ally constit,tes at least eighty
-ercent ;'$Q< of the seafarer6s salary. /aragra-h ( of the em-loyment
contracts of De Gracia% Lata and &-rosta incor-orated the -rovisions of
a+ove 5emorand,m Circ,lar No. ##% series of ""!% in the em-loyment
contracts. Since said memorand,m states that home allotment of seafarers
$P F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
act,ally constit,tes at least eighty -ercent ;'$Q< of their salary% home
allotment -ay is not in the nat,re of an e7traordinary money or +eneAt% +,t
sho,ld act,ally +e considered as salary. . )or this reason% s,ch non0
remittance of home allotment -ay sho,ld +e considered as ,n-aid salaries%
and S1i--ers shall +e lia+le to -ay the home allotment -ay of De Gracia% et
al. for the month of Decem+er ""'.
C& decision is &))3R5BD and S1i--ers United /aciAc% 3nc. and S1i--ers
5aritime Services 3nc.% Ltd. are Cointly and severally lia+le for -ayment of
the following* < Unremitted home allotment -ay for the month of
Decem+er ""' in its e8,ivalent rate in /hili--ine /esos at the time of
termination on (' .an,ary """D (< Salary for the ,ne7-ired -ortion of the
em-loyment contract or its c,rrent e8,ivalent in /hili--ine /esosD :<
&ttorney6s fees and litigation e7-enses e8,ivalent to $Q of the total
claims.
INTERNATIONAL MANAGEMENT SERVICES vs. LOGARTA
G.R. No. !:!#P% &/R3L '% ($(
)&CTS*
Recr,itment agency% 3nternational 5anagement Services ;35S<% owned and
o-erated +y 5arilyn C. /asc,al% de-loyed res-ondent Roel /. Logarta to
wor1 for /etrocon &ra+ia Limited ;/etrocon< in &l1ho+ar% Xingdom of Sa,di
&ra+ia% in connection with general engineering services of /etrocon for the
Sa,di &ra+ian ?il Com-any ;Sa,di &ramco<. Res-ondent was em-loyed for
a -eriod of two ;(< years% commencing on ?cto+er (% ""P% with a monthly
salary of eight h,ndred US Dollars ;US^'$$.$$<.
?n &-ril ("% ""'% Sa,di &ramco notiAed /etrocon that d,e to changes in
the general engineering services wor1 forecast for ""'% the man0ho,rs
that were formerly allotted to /etrocon is going to +e red,ced +y @$Q
which constrained /etrocon to red,ce its -ersonnel.
Th,s% on .,ne % ""'% /etrocon gave res-ondent a written notice informing
the latter that d,e to the lac1 of -roCect wor1s related to his e7-ertise% he is
given a :$0day notice of termination% and that his last day of wor1 with
/etrocon will +e on .,ly % ""'. /etrocon also informed res-ondent that all
d,e +eneAts in accordance with the terms and conditions of his
em-loyment contract will +e -aid to res-ondent% incl,ding his tic1et +ac1
to the /hili--ines.
Before his de-art,re from Sa,di &ra+ia% res-ondent received his Anal
-aychec1 from /etrocon amo,nting SRP%@''.#P.
U-on his ret,rn% res-ondent Aled a com-laint with the Regional &r+itration
Branch 433% National La+or Relations Commission ;NLRC<% Ce+, City% against
-etitioner as the recr,itment agency which em-loyed him for em-loyment
a+road. 3n Aling the com-laint% res-ondent so,ght to recover his ,nearned
salaries covering the ,ne7-ired -ortion of his em-loyment contract with
/etrocon on the gro,nd that he was illegally dismissed.
The La+or &r+iter rendered C,dgment in favor of the res-ondent and
ordered -etitioner to -ay the -eso e8,ivalent of US^#%!$$.$$ +ased on the
rate at the time of act,al -ayment% as -ayment of his wages for the
,ne7-ired -ortion of his contract of em-loyment. The NLRC on a--eal
a9rmed the La+or &r+iterIs decision +,t red,ced the award to only
US^@%'$$.$$ or its -eso e8,ivalent at the time of -ayment. The C& li1ewise
dismissed the -etition and a9rmed the NLRC decision.
3SSUB*
2hether or not res-ondents dismissal thro,gh retrenchment illegal.
SC RUL3NG*
No
Retrenchment is the red,ction of wor1 -ersonnel ,s,ally d,e to -oor
Anancial ret,rns% aimed to c,t down costs for o-eration -artic,larly on
salaries and wages. 3t is one of the economic gro,nds to dismiss em-loyees
and is resorted +y an em-loyer -rimarily to avoid or minimiRe +,siness
losses.
Retrenchment -rograms are -,rely +,siness decisions within the -,rview of
a valid and reasona+le e7ercise of management -rerogative. 3t is one way
of downsiRing an em-loyer6s wor1force and is often resorted to +y the
em-loyer d,ring -eriods of +,siness recession% ind,strial de-ression% or
seasonal T,ct,ations% and d,ring l,lls in -rod,ction occasioned +y lac1 of
orders% shortage of materials% conversion of the -lant for a new -rod,ction
-rogram% or introd,ction of new methods or more e9cient machinery or
a,tomation. 3t is a valid management -rerogative% -rovided it is done in
good faith and the em-loyer faithf,lly com-lies with the s,+stantive and
-roced,ral re8,irements laid down +y law and C,ris-r,dence.
$' F / a g e
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The Diamond Batch
/hili--ine Law recogniRes retrenchment as a valid ca,se for the dismissal
of a migrant or overseas )ili-ino wor1er ,nder &rticle (': of the La+or
Code.
Th,s% retrenchment is a valid e7ercise of management -rerogative s,+Cect
to the strict re8,irements set +y C,ris-r,dence% to wit*
a< That the retrenchment is reasona+ly necessary and li1ely to
-revent +,siness losses which% if already inc,rred% are not
merely de minimis% +,t s,+stantial% serio,s% act,al and real% or
if only e7-ected% are reasona+ly imminent as -erceived
o+Cectively and in good faith +y the em-loyerD
+< That the em-loyer served written notice +oth to the em-loyees
and to the De-artment of La+or and Bm-loyment at least one
month -rior to the intended date of retrenchmentD
c< That the em-loyer -ays the retrenched em-loyees se-aration
-ay e8,ivalent to one month -ay or at least >( month -ay for
every year of service% whichever is higherD
d< That the em-loyer e7ercises its -rerogative to retrench
em-loyees in good faith for the advancement of its interest and
not to defeat or circ,mvent the em-loyees6 right to sec,rity of
ten,reD and
e< That the em-loyer ,sed fair and reasona+le criteria in
ascertaining who wo,ld +e dismissed and who wo,ld +e
retained among the em-loyees% s,ch as stat,s%_e9ciency%
seniority% -hysical Atness% age% and Anancial hardshi- for
certain wor1ers.
&--lying the a+ove0stated re8,isites for a valid retrenchment in the case at
+ar% it is a--arent that the Arst% fo,rth and Afth re8,irements were
com-lied with +y res-ondent6s em-loyer. =owever% the second and third
re8,isites were a+sent when /etrocon terminated the services of
res-ondent.
&s a-tly fo,nd +y the NLRC and C,stly s,stained +y the C&% /etrocon
e7ercised its -rerogative to retrench its em-loyees in good faith and the
considera+le red,ction of wor1 allotments of /etrocon +y Sa,di &ramco was
s,9cient +asis for /etrocon to red,ce the n,m+er of its -ersonnel.
&s for the notice re8,irement% however% contrary to -etitioner6s contention%
-ro-er notice to the D?LB within :$ days -rior to the intended date of
retrenchment is necessary and m,st +e com-lied with des-ite the fact that
res-ondent is an overseas )ili-ino wor1er. 3n the -resent case% altho,gh
res-ondent was d,ly notiAed of his termination +y /etrocon :$ days +efore
its eJectivity% no allegation or -roof was advanced +y -etitioner to
esta+lish that /etrocon ever sent a notice to the D?LB :$ days +efore the
res-ondent was terminated. Th,s% this re8,irement of the law was not
com-lied with.
3n the case at +ar% des-ite the fact that res-ondent was em-loyed +y
/etrocon as an ?)2 in Sa,di &ra+ia% still +oth he and his em-loyer are
s,+Cect to the -rovisions of the La+or Code when a--lica+le. The +asic
-olicy in this C,risdiction is that all )ili-ino wor1ers% whether em-loyed
locally or overseas% enCoy the -rotective mantle of /hili--ine la+or and
social legislations.
&lso% res-ondent is entitled to the -ayment of his se-aration -ay. =owever%
this Co,rt disagrees with the concl,sion of the La+or &r+iter% the NLRC and
the C&% that res-ondent sho,ld +e -aid his se-aration -ay in accordance
with the -rovision of Section $ of R.&. No. '$@(. & -lain reading of the said
-rovision clearly reveals that it a--lies only to an illegally dismissed
overseas contract wor1er or a wor1er dismissed from overseas em-loyment
witho,t C,st% valid or a,thoriRed ca,se.
n the case at +ar% notwithstanding the fact that res-ondent6s termination
from his em-loyment was -roced,rally inArm% having not com-lied with the
notice re8,irement% nevertheless the same remains to +e for a C,st% valid
and a,thoriRed ca,se% i.e.% retrenchment as a valid e7ercise of
management -rerogative. To stress% des-ite the em-loyer6s fail,re to
com-ly with the one0month notice to the D?LB -rior to res-ondent6s
termination% it is only a -roced,ral inArmity which does not render the
retrenchment illegal. 3n &ga+on v. NLRC% this Co,rt r,led that when the
dismissal is for a C,st ca,se% the a+sence of -ro-er notice sho,ld not n,llify
the dismissal or render it illegal or ineJect,al. 3nstead% the em-loyer sho,ld
indemnify the em-loyee for violation of his stat,tory rights.
Conse8,ently% it is &rticle (': of the La+or Code and not Section $ of R.&.
No. '$@( that is controlling. Th,s% res-ondent is entitled to -ayment of
se-aration -ay e8,ivalent to one ;< month -ay% or at least one0half ;>(<
month -ay for every year of service% whichever is higher. Considering that
res-ondent was em-loyed +y /etrocon for a -eriod of eight ;'< months% he
is entitled to receive one ;< month -ay as se-aration -ay. 3n addition%
-,rs,ant to c,rrent C,ris-r,dence% for fail,re to f,lly com-ly with the
stat,tory d,e -rocess of s,9cient notice% res-ondent is entitled to nominal
damages in the amo,nt /#$%$$$.$$.
$" F / a g e
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The Diamond Batch
PERT(CPM MANPOWER E'PONENT CO., INC., VS. ARMANDO A.
VINUY A, ET AL.
G.R. N?. "P#('% SB/TB5BBR #% ($(
)&CTS*
?n 5arch #% ($$'% res-ondents &rmando &. 4in,ya together with his co0
wor1ers ;res-ondents< Aled a com-laint for illegal dismissal against the
-etitioner /ert>C/5 5an-ower B7-onent Co.% 3nc. ;agency<. The
res-ondents alleged that the agency de-loyed them +etween 5arch ("%
($$P and 5ay (% ($$P to wor1 as al,min,m fa+ricator>installer for the
agencyIs -rinci-al% 5etal Sol,tion LLC ;5odern 5etal< in D,+ai% United &ra+
Bmirates. The res-ondentsI em-loyment contracts% /?B&0a--roved two0
year em-loyment% nine ho,rs a day% salary of %:#$ &BD with overtime -ay%
food allowance free ho,sing and la,ndry.
The res-ondents claimed that they were shoc1ed to And o,t what their
wor1ing and living conditions were in D,+ai. They were re8,ired to wor1
from !*:$ a.m. to !*:$ -.m.% with a +rea1 of only one ho,r to one and a half
ho,rs. 2hen they rendered overtime wor1% they were most of the time
either ,nder-aid or not -aid at all. S,+standard ho,sing% air -oll,ted and
no -ota+le water.
Defenses raised +y the agency that the res-ondents were not illegally
dismissedD they vol,ntarily resigned from their em-loyment to see1 a
+etter -aying Co+. 3t claimed that the res-ondents% while still wor1ing for
5odern 5etal% a--lied with another com-any which oJered them a higher
-ay which did not materialiRe. The agency f,rther alleged that the
res-ondents even vol,ntarily signed a9davits of 8,itclaim and release
after they resigned. 3t th,s arg,ed that their claim for +eneAts% ,nder
Section $ of Re-,+lic &ct No. ;R.&.< '$@(% damages and attorneyIs fees is
,nfo,nded.
)he 'ompulsory Aritration Rulings
?n &-ril :$% ($$'% La+or &r+iter r,led in favor of the agency and held that
there was no illegal dismissal +asing the decision the 8,it claims signed +y
the wor1ers.
The NLRC granted the a--eal. 3t r,led that the res-ondents had +een
illegally dismissed. 3t stressed that it is illegal for an em-loyer to re8,ire its
em-loyees to e7ec,te new em-loyment -a-ers% es-ecially those which
-rovide +eneAts that are inferior to the /?B&0a--roved contracts% reCected
the 8,itclaim and release e7ec,ted +y the res-ondents in D,+ai. 3t +elieved
that the res-ondents e7ec,ted the 8,itclaim doc,ments ,nder d,ress as
they were afraid that they wo,ld not +e allowed to ret,rn to the /hili--ines.
)he 'A "ecision *** The C& dismissed the -etition for lac1 of merit. 3t
,-held the NLRC r,ling that the res-ondents were illegally dismissed. 3t
fo,nd no grave a+,se of discretion in the NLRCIs reCection of the
res-ondentsI resignation letters% and the accom-anying 8,itclaim and
release a9davits% as -roof of their vol,ntary termination of em-loyment.
The C& stressed that the Aling of a com-laint for illegal dismissal is
inconsistent with resignation
3SSUBS*
. C& in a9rming the NLRCIs Anding that the res-ondents were
illegally dismissedD
(. holding that the com-romise agreements +efore the /?B& -ertain
only to the res-ondentsI charge of recr,itment violations against
the agencyD
:. a9rming the NLRCIs award to the res-ondents of their salaries for
the ,ne7-ired -ortion of their em-loyment contracts% -,rs,ant to
the Serrano r,ling.
SC RUL3NG*
2e And no merit in the -etition. The C& committed no reversi+le error and
neither did it commit grave a+,se of discretion in a9rming the NLRCIs
illegal dismissal r,ling.
The agency and its -rinci-al% 5odern 5etal% committed Tagrant violations
of the law on overseas em-loyment% as well as +asic norms of decency and
fair -lay in an em-loyment relationshi-% -,shing the res-ondents to loo1
for a +etter em-loyment and% ,ltimately% to resign from their Co+s.
F3-st. The agency and 5odern 5etal are g,ilty of contract s,+stit,tion.
Bm-loyees were hired for a longer three0year -eriod and a red,ced salary%
from %:#$&BD to %$$$ &BD% among other -rovisions. Then% on 5ay #%
($$P% they were re8,ired to sign new em-loyment contracts:: reTecting
the same terms contained in their a--ointment letters% e7ce-t that this
time% they were hired as Kordinary la+orer%O no longer al,min,m
$ F / a g e
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University of San Carlos College of Law
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The Diamond Batch
fa+ricator>installer. The res-ondents com-lained with the agency a+o,t the
contract s,+stit,tion% +,t the agency ref,sed or failed to act on the matter.
'learly0 the agency and &odern &etal committed a prohiited practice and
engaged in illegal recruitment under the law! Article BD of the Laor 'ode
pro%ides6
Art! BD! Prohiited Practices! +t shall e unlawful for any indi%idual0 entity0
licensee0 or holder of authority6
(i) )o sustitute or alter employment contracts appro%ed and %eri2ed y
the "epartment of Laor from the time of actual signing thereof y the
parties up to and including the periods of e8piration of the same without
the appro%al of the Secretary of LaorI!J
Lurther0 Article B4 of the Laor 'ode0 as amended y R!A! 4/D30BM de2ned
Fillegal recruitmentG to include the following act6
(i) )o sustitute or alter to the pre$udice of the worker0 employment
contracts appro%ed and %eri2ed y the "epartment of Laor and
Employment from the time of actual signing thereof y the parties upto
and including the period of the e8piration of the same without the appro%al
of the "epartment of Laor and EmploymentI!J
Se1,*+. The agency and 5odern 5etal committed +reach of contract
.&ggravating the contract s,+stit,tion im-osed ,-on them +y their
em-loyer% the res-ondents were made to s,Jer s,+standard ;shoc1ing% as
they -,t it< wor1ing and living arrangements. Both the original contracts
the res-ondents signed in the /hili--ines and the a--ointment letters
iss,ed to them +y 5odern 5etal in D,+ai -rovided for free ho,sing and
trans-ortation to and from the Co+site. The original contract mentioned free
and s,ita+le ho,sing.
&s earlier -ointed o,t% the res-ondents were made to wor1 from !*:$a.m.
to !*:$ -.m.% with a meal +rea1 of one to one and a half ho,rs% and their
overtime wor1 was mostly not -aid or ,nder-aid. Their living 8,arters were
cram-ed as they shared them with (P other wor1ers. The lodging ho,se
was in SharCah% far from the Co+site in D,+ai% leaving them only three to
fo,r ho,rs of slee- every wor1day +eca,se of the long ho,rs of travel to
and from their -lace of wor1% not to mention that there was no -ota+le
water in the lodging ho,se which was located in an area where the air was
-oll,ted.
T03-+. 2ith their original contracts s,+stit,ted and their o--ressive
wor1ing and living conditions ,nmitigated or ,nresolved% the res-ondentsI
decision to resign is not s,r-rising. They were com-elled +y the dismal
state of their em-loyment to give ,- their Co+sD eJectively% they were
constr,ctively dismissed.
& constr,ctive dismissal or discharge is Ka 8,itting +eca,se contin,ed
em-loyment is rendered im-ossi+le% ,nreasona+le or ,nli1ely% as% an oJer
involving a demotion in ran1 and a dimin,tion in -ay.O
2itho,t do,+t% the res-ondentsI contin,ed em-loyment with 5odern 5etal
had +ecome ,nreasona+le. & reasona+le mind wo,ld not a--rove of a
s,+stit,ted contract that -ays a diminished salary ] from :#$ &BD a
month in the original contract to %$$$ &BD to %($$ &BD in the
a--ointment letters% a diJerence of #$ &BD to (#$ &BD ;not C,st #$ &BD
as the agency claimed< or an e7tended em-loyment ;from ( to : years< at
s,ch inferior terms% or a Kfree and s,ita+leO ho,sing which is ho,rs away
from the Co+ site% cram-ed and crowded% witho,t -ota+le water and
e7-osed to air -oll,tion.
2e th,s cannot acce-t the agencyIs insistence that the res-ondents
vol,ntarily resigned since they -ersonally -re-ared their resignation. 2e
li1ewise And the a9davits of 8,itclaim and release which the res-ondents
e7ec,ted s,s-ect. ?+vio,sly% the a9davits were -re-ared as a follow
thro,gh of the res-ondentsI s,--osed vol,ntary resignation. Unli1e the
resignation letters% the res-ondents had no hand in the -re-aration of the
a9davits. They m,st have +een -re-ared +y a re-resentative of 5odern
5etal as they a--ear to come from a standard form and were a--arently
introd,ced for only one -,r-ose ] to lend credence to the resignation
letters.
F,5-t0. The com-romise agreements ;with 8,itclaim and release< +etween
the res-ondents and the agency +efore the /?B& did not foreclose their
em-loyer0em-loyee relationshi- claims +efore the NLRC.
The com-romise agreement% a--arently% was intended +y the agency as a
settlement with the res-ondents and others with similar claims% which
e7-lains the incl,sion of the two ;Nangolinolaand Gatchalian< who were not
involved in the case with the NLRC. Under the circ,mstances% we cannot
see how the com-romise agreements can +e considered to have f,lly
settled the res-ondentsI claims +efore the NLRC illegal dismissal and
F / a g e
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The Diamond Batch
monetary +eneAts arising from em-loyment. 2e th,s And no reversi+le
error nor grave a+,se of discretion in the reCection +y the NLRC and the C&
of said agreements.
F34t0. The agencyIs o+Cection to the a--lication of the Serrano r,ling in the
-resent case is of no moment. 3ts arg,ment that the r,ling cannot +e given
retroactive eJect% +eca,se it is c,rative and remedial% is ,ntena+le. 3t
-oints o,t the Serrano r,ling which declared ,nconstit,tional the s,+Cect
cla,se in Section $% -aragra-h # of R.&. '$@(% limiting to three months the
-ayment of salaries to illegally dismissed ?verseas )ili-ino 2or1ers.
Unda,nted% the agency -osits that in any event% the Serrano r,ling has
+een n,lliAed +y R.&. No. $$((% entitled KAn Act Amending Repulic Act
(o!4/D30 ,therwise Tnown as the &igrant Workers and ,%erseas Lilipinos
Act of =??M0 As Amended0 Lurther +mpro%ing the Standard of Protection
and Promotion of the Welfare of &igrant Workers0 )heir Lamilies and
,%erseas Lilipinos in "istress0 and Lor ,ther Purposes.O 3t arg,es that R.&.
$$((% which la-sed into law ;witho,t the Signat,re of the /resident< on
5arch '% ($$% restored the s,+Cect cla,se in the #
th
-aragra-h% Section $
of R.&. '$@(. The amendment% contained in Section P of R.&. $$((% reads
as follows*
3n case of termination of overseas em-loyment witho,t C,st% valid or
a,thoriRed ca,se as deAned +y law or contract% or any ,n
a,thoriRedded,ctions from the migrant wor1erIs salary% the wor1er shall +e
entitled to the f,ll reim+,rsement KofO his -lacement fee and the
ded,ctions made with interest at twelve -ercent ;(Q< per annum % -l,s his
salaries for the ,ne7-ired -ortion of his em-loyment contract or for three
;:< months for every year of the ,ne7-ired term% whichever is less.
This arg,ment fails to -ers,ade ,s. Laws shall have no retroactive eJect%
,nless the contrary is -rovided. By its very nat,re% the amendment
introd,ced +y R.&. $$(( ] restoring a -rovision of R.&. '$@( declared
,nconstit,tional ] cannot +e given retroactive eJect% not only +eca,se
there is no e7-ress declaration of retroactivity in the law% +,t +eca,se
retroactive a--lication will res,lt in an im-airment of a right that had
accr,ed to the res-ondents +y virt,e of the Serrano r,ling 0 entitlement to
their salaries for the ,ne7-ired -ortion of their em-loyment contracts.
2hether or not R.&. $$(( is constit,tional is not for ,s to r,le ,-on in the
-resent case as this isb an iss,e that is not s8,arely +efore ,s. 3n other
words% this is an iss,e that awaits its -ro-er day in co,rtD in the meanwhile%
we ma1e no -rono,ncement on it.
C& decision a9rmed% -etition dismissed.
XXVII. SOCIAL LEGISLATION
SSS V. ALBA
G.R. N?. !#@'(% .ULS (:% ($$'
)&CTS*
Sometime in ""% -etitioner &-olonio Lam+oso ;Lam+oso< Aled a claim for
retirement +eneAt +efore the Social Sec,rity System ;SSS<. =owever% his
claim was denied on the gro,nd that he co,ld not 8,alify for monthly
-ension ,nder Re-,+lic &ct ;R.&.< No. ! ;the Social Sec,rity &ct of "#@<
as he then had only thirty0nine ;:"< -aid contri+,tions. Lam+oso a--ealed
the denial of his claim +y Aling a -etition +efore the Commission wherein
he alleged that he sho,ld +e entitled to monthly retirement -ension.
&-olonio Lam+oso herein alleged that he wor1ed in =da. La Roca ;owned
+y )ar &l+a< from "!$ to "P: as aca+o%I in =da. &li+asao from "P: to
"P" as overseer and in =da. Xamandag from "P" to "'@D that the latter
two ;(< haciendas are +oth owned +y Ramon S. BenedictoD and that when
he Aled a claim for retirement -ension +eneAt with the SSS% however% the
same was denied on the gro,nd that he had :" monthly contri+,tions to
his credit.
The Commission ordered )ar &l+a to -ay to the SSS the delin8,ent monthly
contri+,tions of &-olonio Lam+oso from .,ne '% "!$ to &-ril "P:D
Ramon Benedicto to -ay to SSS the delin8,ent monthly contri+,tions d,e
the -etitioner for the -eriod 5ay "P: to "'@. The SSS% on the other hand%
is ordered to -ay &-olonio Lam+oso his retirement +eneAt ,-on the Aling of
the claim therefor% s,+Cect to e7isting r,les and reg,lations% and to inform
this Commission of its com-liance herewith.
&l+a s,+se8,ently Aled a /etition for Review +efore the Co,rt of &--eals.
The Co,rt of &--eals reversed and set aside +oth the resol,tion and the
order of the Commission. 3t held that )ar &l+a cannot +e considered as an
em-loyer of Lam+oso -rior to "P$ +eca,se as administrator of the family0
owned hacienda% he is not an em-loyer ,nder Section ';c< of the Social
Sec,rity &ct of "#@ who carries on a Etrade or +,siness% ind,stry%
,nderta1ing or activity of any 1ind and ,ses the services of another -erson
( F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
who is ,nder his orders as regards the em-loyment%E ,nli1e ,nder &rticle
((;e< of the La+or Code which deAnes an em-loyer as% among others% any
-erson acting directly or indirectly in the interest of the em-loyer. &s s,ch%
the a--ellate co,rt declared% )ar &l+a had no o+ligation to remit to SSS the
monthly contri+,tions of Lam+oso -rior to "P$.
3SSUB*
2hether an administrator co,ld +e considered an em-loyer within the
sco-e of the Social Sec,rity &ct of "#@.
=BLD*
2e answer in the a9rmative.
)irst% the Co,rt o+serves that )ar &l+a was no ordinary administrator. =e
was no less than the son of the haciendaIs owner and as s,ch he was an
owner0in0waiting -rior to his fatherIs death. =e was a mem+er of the
ownerIs family assigned to actively manage the o-erations of the hacienda.
&s he stood to +eneAt from the haciendaIs s,ccessf,l o-eration% he
inel,cta+ly too1 his Co+ and his fatherIs wishes to heart. &s em-hasiRed +y
the Commission his and the ownerIs interests in the +,siness were -lainly
and ine7trica+ly lin1ed +y Alial +ond. =e more than C,st acted in the
interests of his father as em-loyer% and co,ld himself -ass oJ as the
em-loyer% the one carrying on the ,nderta1ing.
Second% nomenclat,re aside% )ar &l+a was not merely an administrator of
the hacienda. &--lying the control test which is ,sed to determine the
e7istence of em-loyer0em-loyee relationshi- for -,r-oses of com-,lsory
coverage ,nder the SSS law% )ar &l+a is technically Lam+osoIs em-loyer.
The essential elements of an em-loyer0em-loyee relationshi- are* ;a< the
selection and engagement of the em-loyeeD ;+< the -ayment of wagesD ;c<
the -ower of dismissalD and ;d< the -ower of control with regard to the
means and methods +y which the wor1 is to +e accom-lished% with the
-ower of control +eing the most determinative factor.
Lam+oso testiAed that he was selected and his services were engaged +y
)ar &l+a himself. Corollarily% )ar &l+a held the -rerogative of terminating
Lam+osoIs em-loyment. Lam+oso also testiAed in a direct manner that he
had +een -aid his wages +y )ar &l+a. This testimony was seconded +y
Lam+osoIs co0wor1er% Rodolfo Sales. &nent the -ower of control with regard
to the wor1 of the em-loyee% the element refers merely to the e7istence of
the -ower and not the act,al e7ercise thereof. 3t is not essential for the
em-loyer to act,ally s,-ervise the -erformance of d,ties of the em-loyeeD
it is s,9cient that the former has a right to wield the -ower.
Third% not to +e forgotten is the deAnition of an em-loyer ,nder &rticle
!P;f< of the La+or Code which deals with em-loyeesI com-ensation and
state ins,rance f,nd. The said -rovision of the law deAnes an em-loyer as
Eany -erson% nat,ral or C,ridical% em-loying the services of the em-loyee.E
3t also deAnes a -erson as Eany individ,al% -artnershi-% Arm% association%
tr,st% cor-oration or legal re-resentative thereof.E /lainly% )ar &l+a% as the
hacienda administrator% acts as the legal re-resentative of the em-loyer
and is th,s an em-loyer within the meaning of the law lia+le to -ay the SS
contri+,tions.
)inally% the Co,rt +elieves that Section ';c< of the Social Sec,rity &ct of
"#@ is +road eno,gh to incl,de those -ersons acting directly or indirectly
in the interest of the em-loyer. &s -ointed o,t +y the Co,rt of &--eals% that
the said -rovision does not contain the deAnitive -hrase contained in
&rticle ((;e< of the La+or Code sho,ld not +e ta1en to mean that
administrators s,ch as )ar &l+a% whose interests are closely lin1ed with his
father0em-loyer% do not come within the -,rview of the law. 3f ,nder &rticle
((;e<% -ersons acting in the interest of the em-loyer% directly or indirectly%
are o+liged to follow the government la+or relations -olicy% it co,ld +e
reasona+ly concl,ded that s,ch -ersons may li1ewise +e held lia+le for the
remittance of SS contri+,tions which is an o+ligation created +y law and an
is em-loyeeIs right -rotected +y law.
MARLENE L. RODRIN vs. GOVERNMENT SERVICE INSURANCE
SYSTEM
G.R. No. !(':P% .,ly ('% ($$'
)&CTS*
/etitioner 5arlene L. Rodrin Aled a claim for com-ensation +eneAts ,nder
/residential Decree !(!% as amended% relative to the death of her h,s+and
S/? )eli7+erto 5. Rodrin +efore the GS3S.
3n a letter dated Decem+er ($% ($$$% the Government Service 3ns,rance
System denied -etitioner6s claim for com-ensation +eneAts ,nder
/residential Decree !(!% as amended% on the gro,nd that the death of
S/? )eli7+erto 5. Rodrin did not arise o,t nor was it in the co,rse of his
em-loyment.
: F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
U-on a--eal to the BCC% the Commission a9rmed the decision of the GS3S.
C& had dismissed the /etition for Review Aled +y Rodrin and it li1ewise
denied her 5otion for Reconsideration.
3SSUB*
2hether the death of Senior /olice ?9cer ;S/?< Rodrin is com-ensa+le
,nder the -rovisions of /residential Decree ;/.D.< No. !(! as amended.
=BLD*
The Co,rt Ands the death of S/? Rodrin com-ensa+le ,nder the
-rovisions of /D !(! as amended.
)or the com-ensa+ility of an inC,ry to an em-loyee which res,lts in his
disa+ility or death% Section ;a<% R,le 333 of the &mended R,les on
Bm-loyees6 Com-ensation im-oses the following conditions*
. The em-loyee m,st have +een inC,red at the -lace where his wor1
re8,ired him to +eD
(. The em-loyee m,st have +een -erforming his o9cial f,nctionsD and
:. 3f the inC,ry was s,stained elsewhere% the em-loyee m,st have +een
e7ec,ting an order of the em-loyer.
The Arst condition has +een met +y -etitioner. The GS3S and the BCC as
well as the C& acce-ted the claim that S/? Rodrin may have +een in the
line of d,ty or on a s,rveillance mission at the time and -lace of his
shooting. The BCC conceded that there was no 8,estion that S/? Rodrin
was a mem+er of the /N/ at the time of his deathD and that +eing so% he
was considered to +e at his -lace of wor1 regardless of whether or not he
was Eon or oJ0d,ty.E Both assertions are correctly +ased on this Co,rt6s
r,ling in Government Service 3ns,rance System v. Co,rt of &--eals that
mem+ers of the national -olice% ,nless they are on o9cial leave% are% +y
the nat,re of their f,nctions% technically on d,ty (@ ho,rs a day% +eca,se
-olicemen are s,+Cect to call at any time and may +e as1ed +y their
s,-eriors or +y any distressed citiRen to assist in maintaining the -eace
and sec,rity of the comm,nity.
&nent the second and third conditions% the GS3S% BCC and the C& fo,nd that
S/? Rodrin% at the time of his death% was not in the -erformance of his
o9cial d,ties -,rs,ant to an o9cial order from his s,-erior.
The GS3S and the BCC concl,ded that the death of S/? Rodrin is not
com-ensa+le ,nder the -rovisions of /.D. No. !(! as his death did not arise
from% nor was it in the co,rse of% his em-loyment. =owever% +oth the GS3S
and the BCC did not ela+orate on how they arrived at s,ch a concl,sion. ?n
the other hand% the C& itself fo,nd that -etitioner s,9ciently esta+lished
that her h,s+and was on a mission and was cond,cting s,rveillance when
he was 1illedD +,t% nonetheless% the C& concl,ded that S/? Rodrin was not
-erforming his o9cial f,nctions nor was he e7ec,ting an order for his
em-loyer at the time of his death.
Section :;m<% R,le : of the R,les of Co,rt -rovides the -res,m-tion that
o9cial d,ty has +een reg,larly -erformed. The said R,le treats this
-res,m-tion as satisfactory ,nless contradicted and overcome +y other
evidence.
The Co,rt is not -ers,aded +y the contention of the ?SG and the GS3S that
S/? Rodrin6s reason or reasons for intending to go to San /edro% Lag,na
involved a -,rely -rivate matter% as this is -,re s-ec,lation. There is
nothing in the X,sang Loo+ na Salaysay of his +rothers0in0law to indicate
that their +,siness in going to San /edro was not related to S/? RodrinIs
wor1 as an intelligence o9cer. 3t sho,ld +e noted that% at the time of his
death% he came from Carmona% Cavite which is a -lace s-eciAed in the
Letter0?rders from his s,-erior. 5oreover% he was 1illed in BiVan% which is
also a -lace s-eciAed in the said Letter0?rders. ),rthermore% he was 1illed
on .,ly @% ($$$ which is within the -eriod a,thoriRed +y the s,+Cect Letter0
?rders for him to cond,ct s,rveillance% monitoring and arrest. ?ther than
the fact the S/? Rodrin had intended to go to San /edro% Lag,na% a -lace
which is not covered +y his Letter0?rders% there is no +asis to concl,de that
S/? Rodrin6s +,siness in going to San /edro was -rivate in nat,re and was
not related to his Co+ as an intelligence o9cer of the /N/. 3ntelligence wor1
covers a +road s-ectr,m of activities that% more often than not% wo,ld
necessarily involve secret -lans or ,ne7-ected co,rses of action to attain
its o+Cectives.
2ith res-ect to the contention that San /edro% Lag,na was a -lace which
was not covered +y the s,+Cect Letter0?rders% the Co,rt ta1es cogniRance
of the fact that the nat,re of wor1 of a -olice o9cer who is an intelligence
o-erative does not conAne him to s-eciAc -laces and ho,rs% more so with
res-ect to a -olice o9cer involved in intelligence wor1. =is actions may not
+e com-artmentaliRed% as they de-end to a large e7tent on the e7igencies
of the assignment given him. 3n the -resent case% the fact that the Letter0
@ F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
?rders indicated the -ossi+le location of the criminal s,s-ects he was
tas1ed to a--rehend does not limit the cond,ct of his o-eration within the
+o,ndaries of these -laces. =e was not -revented from immediately going
to other locations if he had gathered information that these criminal
elements were in said -laces. =ence% to concl,de that S/? Rodrin was not
in the -erformance of his o9cial d,ty sim-ly +eca,se% at the time of his
death% he was then on his way to a -lace which was not s-eciAed in the
s,+Cect Letter0?rders is a+sol,tely erroneo,s. 3n the a+sence of s,9cient
evidence to -rove otherwise% the -res,m-tion that S/? Rodrin was in the
reg,lar -erformance of his o9cial d,ty when he was 1illed remains.
3n addition% res-ondents% incl,ding the C&% dwelt on s-ec,lations and
s,rmises when they concl,ded that S/? Rodrin was not -erforming his
o9cial f,nctions when he was shot. The fact that the BiVan /olice failed to
state in their 3nvestigation Re-ort dated .,ly P% ($$$ that S/? Rodrin was
on o9cial mission when he was 1illed does not militate against the claim of
herein -etitioner. The 3nvestigation Re-ort of the BiVan /olice foc,sed only
on the shooting incident and the circ,mstances s,rro,nding the death of
S/? Rodrin. The a+sence of any statement or indication which shows that
S/? Rodrin was then on o9cial mission does not mean that he% in fact%
was not in the co,rse of -erforming his d,ties as o,tlined in the s,+Cect
Letter0?rders.
There is no evidence to -rove the claims of res-ondents that the matter
S/? Rodrin was attending to when he was shot to death was intrinsically
-rivate and ,no9cial in nat,re. The fact remains that he died at a -lace
and within the time s-eciAed in his Letter0?rders. Th,s% in the a+sence of
contrary evidence% /? Rodrin is -res,med to +e in the -erformance of his
o9cial d,ties at the time of his death.
The arg,ment that the ca,se of S/? Rodrin6s death was not in any way
related to his mission as o,tlined in the s,+Cect Letter0?rders is not
-la,si+le.
3n the -resent case% evidence shows that% at the time that S/? Rodrin was
g,nned down% he was -erforming his d,ty as a -olice o9cer. The
3nvestigation Re-ort of the BiVan /N/ as well as the X,sang Loo+ na
Salaysay of +oth the +rothers0in0law of S/? Rodrin show that when the
latter was shot to death he was in the co,rse of in8,iring why the sec,rity
g,ards of the s,+division they were -assing thro,gh were aiming their
g,ns at them. &t that -oint% it cannot +e denied that he was ca,ght in a
sit,ation where he co,ld not avoid e7ercising his a,thority and d,ty as
-oliceman to maintain -eace and sec,rity of the comm,nity. 2hile his main
mission was to a--rehend certain criminal elements named in the s,+Cect
Letter0?rders% he was not e7c,sed from -erforming his +asic f,nction as a
-eace o9cer. =is act of trying to And o,t the reason why the sec,rity
g,ards were acting hostile cannot +e said to +e foreign and ,nrelated to his
Co+ as a mem+er of the -olice force.
)inally it is well to echo the Co,rt6s r,ling in Bm-loyeesI Com-ensation
Commission v. Co,rt of &--eals% wherein it was held that*
7 7 7 in case of do,+t% the sym-athy of the law on social sec,rity is toward
its +eneAciaries% and the law% +y its own terms% re8,ires a constr,ction of
,tmost li+erality in their favor. )or this reason% this Co,rt lends a very
sym-athetic ear to the cries of the -oor widows and or-hans of -olice
o9cers. 3f we m,st demand 0 as we o,ght to strict acco,nta+ility from o,r
-olicemen in safeg,arding -eace and order day and night% we m,st also to
the same e7tent +e ready to com-ensate their loved ones who% +y their
,ntimely death% are left witho,t any means of s,--orting themselves.
GSIS VS CASCO
G.R. N?.P:@:$% .ULS ('% ($$'
)&CTS*
Teacher Casco was diagnosed to +e hy-ertensive in ""@ and e7-erienced
attac1s in ""# and """ which forced him to retire from the government
service at an early age. =e re8,ested GS3S to convert his /ermanent /artial
Disa+ility ;//D< to /ermanent Total Disa+ility ;/TD< -,rs,ant to /D !(! +,t
the same was denied.
3SSUB*
2?N res-ondentIs claim for conversion of //D to /TD sho,ld +e granted.
RUL3NG*
The Co,rt held that denying res-ondent Casco the /TD +eneAts to which he
is indis-,ta+ly entitled% who had rendered more than ( years of service
+,t was forced to retire d,e to his ailment% wo,ld +e contrary to the s-irit
of /D !(! and the social C,stice -rinci-le enshrined in the Constit,tion.
SSS V. DE LOS SANTOS
G.R. N?. !@P"$.&UGUST ("% ($$'
# F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
)&CTS*
Res-ondent Gloria de los Santos and &ntonio de los Santos were married in
"!@. Then% she left &ntonio and contracted another marriage with a
certain Domingo. Sometime in "!"% Gloria went +ac1 to &ntonio and lived
with him ,ntil "':. They had three children.
3n "':% Gloria left &ntonio and went to the US. 3n "'!% she Aled for
divorce against &ntonio with the S,-erior Co,rt of ?range% Sta. &na%
California. The divorce was granted. Thereafter% +oth of them contracted
s,+se8,ent marriages. &ntonio married Cirila% and their ,nion -rod,ced
one child% 5ay0&nn. ?n the other hand% Gloria married an &merican citiRen
in the US.
3n "'"% &ntonio amended his records at ;SSS<. =e changed his
+eneAciaries from 5rs. 5argarita de los Santos to CirilaD from Gloria to 5ay0
&nnD and from Brlinda to &rmine de los Santos.
&ntonio retired in ""!% and from then on +egan receiving monthly
-ension. =e died in """. U-on his death% Cirila a--lied for and +egan
receiving his SSS -ension +eneAt .?n the other hand% res-ondent Aled a
claim for &ntonioIs death +eneAts with the SSS. =er claim was denied
+eca,se she was not a 8,aliAed +eneAciary of &ntonio.
These circ,mstances are s,9cient gro,nd for denial as the SSS law
s-eciAcally deAnes +eneAciaries as Ethe de-endent s-o,se% ,ntil he or she
remarries% the de-endent legitimate% legitimated or legally ado-ted and
illegitimate children who shall +e the -rimary +eneAciary.E 7 7 7(
Gloria elevated her claim to the ;SSC<. =owever% her -etition was
dismissed. C& a9rmed SSCIs resol,tion.
3SSUB*
2?N RBS/?NDBNT 3S ST3LL YU&L3)3BD &S & /R35&RS BBNB)3C3&RS ?)
DBCB&SBD SSS 5B5BBR &NT?N3?% UNDBR SBCT3?N (0B 3N RBL&T3?N T?
SBCT3?N ';e< and ;1< ?) T=B SS L&2.
=BLD*
The rec1oning -oint in determining the +eneAciaries of the deceased
&ntonio sho,ld +e the time of his death. There is no need to loo1 into the
time of his retirement% as was the co,rse followed +y the SSC in resolving
the claim of res-ondent.
3n deciding that death +eneAts sho,ld not +e denied to the wife who was
married to the deceased retiree only after the latterIs retirement% this Co,rt
in Dycaico reasoned*
7 7 7 3n -artic,lar% the -roviso was a--arently intended to -revent sham
marriages or those contracted +y -ersons solely to ena+le one s-o,se to
claim +eneAts ,-on the antici-ated death of the other s-o,se.
7 7 7 =owever% classifying de-endent s-o,ses and determining their
entitlement to s,rvivorIs -ension +ased on whether the marriage was
contracted +efore or after the retirement of the other s-o,se% regardless of
the d,ration of the said marriage% +ears no relation to the achievement of
the -olicy o+Cective of the law% i.e.% E-rovide meaningf,l -rotection to
mem+ers and their +eneAciaries against the haRard of disa+ility% sic1ness%
maternity% old age% death and other contingencies res,lting in loss of
income or Anancial +,rden.E 7 7 7
&s fo,nd +y +oth the SSC and the C&% the divorce o+tained +y res-ondent
against the deceased &ntonio was not +inding in this C,risdiction. Under
/hili--ine law% only aliens may o+tain divorces a+road% -rovided they are
valid according to their national law. The divorce was o+tained +y
res-ondent Gloria while she was still a )ili-ino citiRen and th,s covered +y
the -olicy against a+sol,te divorces. 3t did not sever her marriage ties with
&ntonio.
=owever% altho,gh res-ondent was the legal s-o,se of the deceased% 2e
And that she is still dis8,aliAed to +e his -rimary +eneAciary ,nder the SS
Law. She fails to f,lAll the re8,irement of de-endency ,-on her deceased
h,s+and &ntonio.
Social Sec,rity System v. &g,as is instr,ctive in determining the e7tent of
the re8,ired Ede-endencyE ,nder the SS Law. 3n &g,as% the Co,rt r,led that
altho,gh a h,s+and and wife are o+liged to s,--ort each other% whether
one is act,ally de-endent for s,--ort ,-on the other cannot +e -res,med
from the fact of marriage alone.
777
de-endent as Eone who derives his or her main s,--ort from another.
5eaning% relying on% or s,+Cect to% someone else for s,--ortD not a+le to
e7ist or s,stain oneself% or to -erform anything witho,t the will% -ower% or
aid of someone else.E 3t sho,ld +e noted that the GS3S law li1ewise deAnes
ade-endent s-o,se as Ethe legitimate s-o,se de-endent for s,--ort ,-on
the mem+er or -ensioner.E 3n that case% the Co,rt fo,nd it o+vio,s that a
! F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
wife who a+andoned the family for more than P years ,ntil her h,s+and
died% and lived with other men% was not de-endent on her h,s+and for
s,--ort% Anancial or otherwise% d,ring that entire -eriod. =ence% the Co,rt
denied her claim for death +eneAts.
3n Ane% these ,ncontroverted facts remove her from 8,alifying as a -rimary
+eneAciary of her deceased h,s+and.
2=BRB)?RB% the -etition is GR&NTBD and the a--ealed
Decision RB4BRSBD and SBT &S3DB. The Resol,tion of the Social Sec,rity
Commission is RB3NST&TBD.
BECMEN SERVICE E'PORTER AND PROMOTION, INC., vs.
CUARESMA
G.R. Nos. '("P'0P"% &-ril P% ($$"
)&CTS*
.asmin C,aresma ;.asmin< was de-loyed +y Becmen Service B7-orter and
/romotion% 3nc. ;Becmen< to serve as assistant n,rse in &l0Bir1 =os-ital in
the Xingdom of Sa,di &ra+ia ;XS&<% for a contract d,ration of three years%
with a corres-onding salary of US^(@P.$$ -er month. ?ver a year later% she
died allegedly of -oisoning.
.essie )aCardo% a co0wor1er of .asmin% narrated that .asmin was fo,nd dead
+y a female cleaner lying on the Toor inside her dormitory room with her
mo,th foaming and smelling of -oison.
.asminIs +ody was re-atriated to 5anila. The following day% the City =ealth
?9cer of Ca+anat,an City cond,cted an a,to-sy and the res,lting medical
re-ort indicated that .asmin died ,nder violent circ,mstances% and not
-oisoning as originally fo,nd +y the XS& e7amining -hysician.
.asminIs remains were e7h,med and e7amined +y the National B,rea, of
3nvestigation ;NB3<. The to7icology re-ort of the NB3% however% tested
negative for non0volatile% metallic -oison and insecticides.
The C,aresmas Aled a com-laint against Becmen and its -rinci-al in the
XS&% RaCa+ U Silsilah Com-any ;RaCa+<% claiming death and ins,rance
+eneAts% as well as moral and e7em-lary damages for .asminIs death.
3n their com-laint% the C,aresmas claim that .asminIs death was wor10
related% having occ,rred at the em-loyerIs -remises% that ,nder .asminIs
contract with Becmen% she is entitled to Ei8ama ins,ranceE coverageD that
.asmin is entitled to com-ensatory damages.
Becmen and RaCa+ insist that .asmin committed s,icide% citing a -rior
,ns,ccessf,l s,icide attem-t sometime in 5arch or &-ril ""' and relying
on the medical re-ort of the e7amining -hysician of the &l0Bir1 =os-ital.
They li1ewise deny lia+ility +eca,se the C,aresmas already recovered
death and other +eneAts. They insist that the C,aresmas are not entitled to
Ei8ama ins,ranceE +eca,se this refers to the Eiss,anceE not ins,rance of
i8ama% or residency>wor1 -ermit re8,ired in the XS&.
Becmen Aled a manifestation and motion for s,+stit,tion alleging that
RaCa+ terminated their agency relationshi- and had a--ointed 2hite )alcon
Services% 3nc. ;2hite )alcon< as its new recr,itment agent in the /hili--ines.
Th,s% 2hite )alcon was im-leaded as res-ondent as well% and it ado-ted
and reiterated BecmenIs arg,ments in the -osition -a-er it s,+se8,ently
Aled.
The La+or &r+iter ;L&< r,led against the C,aresmas giving weight on the
evidence that .asmine died of -oisoning% th,s% she commited s,icide.
?n the other hand% NLRC reversed the decicion of L& and +elieved on the
Andings that on the evidence add,ced% was the victim of com-ensa+le
wor10connected criminal aggression.
3SSUB*
. 2hether the a+sence of any ins,rance -rovisions in case of death
-recl,de the C,aresmas from recovery for monetary +eneAt.
(. 2hether the fail,re of the em-loyer to assist in ,nravelling the
case and f,rther averting lia+ility violates the social legislation
laws.
:. 2hether S-o,ses C,aresmas are entitled to moral and e7em-lary
damages.
RUL3NG*
NO% it will not -recl,de recovery. The terms and conditions of .asminIs ""!
Bm-loyment &greement does not incl,de -rovisions for ins,rance% or for
accident% death or other +eneAts that the C,aresmas see1 to recover% and
which the la+or tri+,nals and a--ellate co,rt granted varia+ly in the g,ise
of com-ensatory damages.
P F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
=owever% the a+sence of -rovisions for social sec,rity and other +eneAts
does not ma1e .asminIs em-loyment contract inArm. Under XS& law% her
foreign em-loyer is not o+liged to -rovide her these +eneAtsD and neither is
.asmin entitled to minim,m wage ,nless of co,rse the XS& la+or laws
have +een amended to the o--osite eJect% or that a +ilateral wage
agreement has +een entered into.
.asmineIs death was not wor1 connected. &t the time of her death% she was
not on d,ty% or else evidence to the contrary wo,ld have +een add,ced.
Neither was she within hos-ital -remises at the time. 3nstead% she was at
her dormitory room on -ersonal time when she died. Neither has it +een
shown% nor does the evidence s,ggest% that at the time she died% .asmin
was -erforming an act reasona+ly necessary or incidental to her
em-loyment as n,rse% +eca,se she was at her dormitory room.
3t is not fair to re8,ire em-loyers to answer even for their em-loyeesI
-ersonal time away from wor1% which the latter are free to s-end of their
own choosing. 2hether they choose to s-end their free time in the -,rs,it
of safe or -erilo,s ,nderta1ings% in the com-any of friends or strangers%
lovers or enemies% this is not one area which their em-loyers sho,ld +e
made acco,nta+le for. 2hile we have em-hasiRed the need to o+serve
o9cial wor1 time strictly% what an em-loyee does on free time is +eyond
the em-loyerIs s-here of in8,iry.
2hile the Eem-loyerIs -remisesE may +e deAned very +roadly not only to
incl,de -remises owned +y it% +,t also -remises it leases% hires% s,--lies or
,ses% we are not -re-ared to r,le that the dormitory wherein .asmin stayed
sho,ld constit,te em-loyerIs -remises as wo,ld allow a Anding that death
or inC,ry therein is considered to have +een inc,rred or s,stained in the
co,rse of or arose o,t of her em-loyment. There are certainly
e7ce-tions% +,t they do not a--ear to a--ly here. 5oreover% a com-lete
determination wo,ld have to de-end on the ,ni8,e circ,mstances
o+taining and the overall fact,al environment of the case% which are here
lac1ing.
YES. Under Re-,+lic &ct No. '$@( ;R.&. '$@(<% or the 5igrant 2or1ers and
?verseas )ili-inos &ct of ""#% the State shall% at all times% ,-hold the
dignity of its citiRens whether in co,ntry or overseas% in general% and
)ili-ino migrant wor1ers% in -artic,lar. The State shall -rovide ade8,ate and
timely social% economic and legal services to )ili-ino migrant wor1ers. The
rights and interest of distressed overseas )ili-inos% in general% and )ili-ino
migrant wor1ers% in -artic,lar% doc,mented or ,ndoc,mented% are
ade8,ately -rotected and safeg,arded.
Becmen and 2hite )alcon% as licensed local recr,itment agencies%
misera+ly failed to a+ide +y the -rovisions of R.&. '$@(. Recr,itment
agencies are e7-ected to e7tend assistance to their de-loyed ?)2s%
es-ecially those in distress. 3nstead% they a+andoned .asminIs case and
allowed it to remain ,nsolved to f,rther their interests and avoid
antici-ated lia+ility which -arents or relatives of .asmin wo,ld certainly
e7act from them. They willf,lly ref,sed to -rotect and tend to the welfare
of the deceased .asmin% treating her case as C,st one of those ,nsolved
crimes that is not worth wasting their time and reso,rces on. The evidence
does not even show that Becmen and RaCa+ lifted a Anger to -rovide legal
re-resentation and see1 an investigation of .asminIs case. 2orst of all% they
,nnecessarily tram-led ,-on the -erson and dignity of .asmin +y standing
-at on the arg,ment that .asmin committed s,icide% which is a grave
acc,sation given its ,n0Christian nat,re.
3n 3nterorient 5aritime Bnter-rises% 3nc. v. NLRC% a seaman who was +eing
re-atriated after his em-loyment contract e7-ired% failed to ma1e his
Bang1o1 to 5anila connecting Tight as he +egan to wander the streets of
Bang1o1 aimlessly. =e was shot to death +y Thai -olice fo,r days after% on
acco,nt of r,nning am,c1 with a 1nife in hand and threatening to harm
any+ody within sight. The em-loyer% s,ed for death and other +eneAts as
well as damages% inter-osed as defense the -rovision in the seafarer
agreement which -rovides that Eno com-ensation shall +e -aya+le in
res-ect of any inC,ry% inca-acity% disa+ility or death res,lting from a willf,l
act on his own life +y the seaman.E The Co,rt reCected the defense on the
view% among others% that the recr,itment agency sho,ld have o+served
some -reca,tionary meas,res and sho,ld not have allowed the seaman%
who was later on fo,nd to +e mentally ill% to travel home alone% and its
fail,re to do so rendered it lia+le for the seamanIs death. 2e r,led therein
that
)he foreign employer may not ha%e een oligated y its contract to
pro%ide a companion for a returning employee0 ut it cannot deny that it
was e8pressly tasked y its agreement to assure the safe return of said
worker! )he uncaring attitude displayed y petitioners who0 knowing fully
well that its employee had een suAering from some mental disorder0
ne%ertheless still allowed him to tra%el home alone0 is appalling to say the
least! Such attitude harks ack to another time when the landed gentry
' F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
practically owned the serfs0 and disposed of them when the latter had
grown old0 sick or otherwise lost their usefulness! (Emphasis supplied)
2hether em-loyed locally or overseas% all )ili-ino wor1ers enCoy the
-rotective mantle of /hili--ine la+or and social legislation% contract
sti-,lations to the contrary notwithstanding. This -rono,ncement is in
1ee-ing with the +asic -,+lic -olicy of the State to aJord -rotection to
la+or% -romote f,ll em-loyment% ens,re e8,al wor1 o--ort,nities
regardless of se7% race or creed% and reg,late the relations +etween
wor1ers and em-loyers. This r,ling is li1ewise rendered im-erative +y
&rticle P of the Civil Code which states that laws which have for their
o+Cect -,+lic order% -,+lic -olicy and good c,stoms shall not +e rendered
ineJective +y laws or C,dgments -rom,lgated% or +y determinations or
conventions agreed ,-on in a foreign co,ntry.
The relations +etween ca-ital and la+or are so im-ressed with -,+lic
interest% and neither shall act o--ressively against the other% or im-air the
interest or convenience of the -,+lic. 3n case of do,+t% all la+or legislation
and all la+or contracts shall +e constr,ed in favor of the safety and decent
living for the la+orer.
YES. The C,aresmas are entitled to moral damages% which Becmen and
2hite )alcon are Cointly and solidarily lia+le to -ay% together with
e7em-lary damages for wanton and o--ressive +ehavior% and +y way of
e7am-le for the -,+lic good.
/rivate em-loyment agencies are held Cointly and severally lia+le with the
foreign0+ased em-loyer for any violation of the recr,itment agreement or
contract of em-loyment. This Coint and solidary lia+ility im-osed +y law
against recr,itment agencies and foreign em-loyers is meant to ass,re the
aggrieved wor1er of immediate and s,9cient -ayment of what is d,e
him. 3f the recr,itment>-lacement agency is a C,ridical +eing% the cor-orate
o9cers and directors and -artners as the case may +e% shall themselves +e
Cointly and solidarily lia+le with the cor-oration or -artnershi- for the
aforesaid claims and damages.
2hite )alconIs ass,m-tion of BecmenIs lia+ility does not a,tomatically
res,lt in BecmenIs freedom or release from lia+ility. This has +een r,led
in &BD ?verseas 5an-ower Cor-oration v. NLRC. 3nstead% +oth Becmen and
2hite )alcon sho,ld +e held lia+le solidarily% witho,t -reC,dice to each
having the right to +e reim+,rsed ,nder the -rovision of the Civil Code that
whoever -ays for another may demand from the de+tor what he has -aid.
GOVERNMENT SERVICE INSURANCE SYSTEM V. SALVADOR A. DE
CASTRO
G.R. N?. '#$:#% .ULS #% ($$"
)&CTS*
Res-ondent De Castro rendered service in the /hili--ine &ir )orce ;/&)<
from &-ril % "P@ ,ntil his retirement on 5arch (% ($$!.
?n Decem+er ((% ($$@% De Castro was admitted at the 4. L,na General
=os-ital% &)/ 5edical Center d,e to chest -ains. =e also ,nderwent
coronary angiogram -roced,re which showed that he had signiAcant sim-le
vessel coronary artery disease ;C&D<. =e was diagnosed to +e s,Jering
from ;< @\0D( 0 Coronary artery disease and ;(< @$$0#:: 0 =y-ertensive
cardiovasc,lar disease.
De Castro retired from the service on 5arch (% ($$! with a ECertiAcate of
Disa+ility Discharge.E ?n this +asis% he Aled a claim for -ermanent total
disa+ility +eneAts with the GS3S.
3n a decision dated .,ne ($% ($$!% the GS3S denied De Castro6s claim +ased
on the Anding that De Castro6s illnesses were non0occ,-ational. De Castro
a--ealed to the Bm-loyees6 Com-ensation Commission ;BCC<. The BCC
a9rmed the r,ling of the GS3S and denied the claim des-ite the
o+servation that C&D is an occ,-ational disease +eca,se of Ethe -resence
of factors which are not wor10related% s,ch as smo1ing and alcohol
cons,m-tion.E De Castro so,ght relief from the C& thro,gh a -etition for
review ,nder R,le @: of the R,les of Co,rt. The C& granted the -etition.
The C& e7-lained that it is not necessary that there +e -roof of ca,sal
relation +etween the wor1 and the illness which res,lted in De Castro6s
disa+ility. =ence% this -etition.
3SSUBS*
;< 2?N the diseases of the res-ondent are wor1 related and com-ensa+le.
RUL3NG*
;< SBS.
" F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
The ailments that -reci-itated De Castro6s se-aration from the military
service 0 C&D and hy-ertensive cardiovasc,lar disease are occ,-ational
diseases. No less than the BCC itself conArmed the stat,s of these ailments
when it declared that EContrary to the r,ling of the System% C&D is a form
of cardiovasc,lar disease which is incl,ded in the list of ?cc,-ational
Diseases.E B,t des-ite the com-ensa+le character of his ailments% +oth the
GS3S and the BCC fo,nd De Castro6s C&D to +e non0wor1 related and%
therefore% non0com-ensa+le.
3n any determination of com-ensa+ility% the nat,re and characteristics of
the Co+ are as im-ortant as raw medical Andings and a claimant6s -ersonal
and social history. This is a +asic legal reality in wor1ers6 com-ensation law.
2e are therefore s,r-rised that the BCC and the GS3S sim-ly +r,shed aside
the disa+ility certiAcation that the military iss,ed with res-ect to De
Castro6s disa+ility% +ased mainly on their -rimacy as the agencies with
e7-ertise on wor1ers6 com-ensation and disa+ility iss,es.
2hile BCC and GS3S are admittedly the government entities with
C,risdiction over the administration of wor1ers6 disa+ility com-ensation and
can th,s claim -rimacy in these areas% they cannot however claim
infalli+ility% -artic,larly when they ,se wrong or limited considerations in
determining com-ensa+ility. This holds tr,e in this case where neither the
GS3S nor the BCC cond,cted a medical e7amination of De Castro on their
ownD they merely relied on the res,lts of De Castro6s medical e7amination
cond,cted at the 4. L,na General =os-ital% a government military hos-ital.
3t was from these same medical Andings that the GS3S and BCC derived
their concl,sion that De Castro6s drin1ing and smo1ing ha+its and -ersonal
lifestyle ca,sed his ailments.
3nto7ication which does not inca-acitate the em-loyee from following his
occ,-ation is not s,9cient to defeat the recovery of com-ensation%
altho,gh into7ication may +e a contri+,tory ca,se to his inC,ry. 2hile
smo1ing may contri+,te to the develo-ment of a heart ailment% heart
ailment may +e ca,se +y other factors s,ch as wor1ing and living ,nder
stressf,l conditions. Th,s% the -erem-tory -res,m-tion that -etitioner6s
ha+it of smo1ing heavily was the wilf,ll act which ca,ses his illness and
res,lting disa+ility% witho,t more% cannot s,9ce to +ar -etitioner6s claim for
disa+ility +eneAts.
2e consider it signiAcant that De Castro entered military service as a At
and healthy new soldier. 2e note% too% De Castro6s service record and the
medals% awards% and commendations he earned% all attesting to :( years of
very active and -rod,ctive service in the military. Th,s% the C&D and the
hy-ertension came while he was engaged in these endeavors. To say% as
the GS3S and the BCC did% that his ailments are concl,sively non0wor1
related +eca,se he smo1ed and dran1% is to close o,r eyes to the rigors of
military service and to the demands of De Castro6s s-eciAc -ositions in the
military service% and to single o,t factors that wo,ld deny the res-ondent6s
claim. This is far from the +alancing that the GS3S invo1es +etween
sym-athy for the wor1ingman and the e8,ally vital interest of denying
,nderserving claims. Th,s% +ased on the totality of the circ,mstances
s,rro,nding De Castro6s case% we are convinced that his long years of
military service% with its attendant stresses and -ress,res% contri+,ted in
no small meas,re to the ailments that led to his disa+ility retirement. 2e%
therefore% agree with the C& when it concl,ded that De Castro6s Eillness
was contracted d,ring and +y reason of his em-loyment% and any non0wor1
related factor that contri+,ted to its aggravation is immaterial.E
2e close +y reiterating that what the law re8,ires is a reasona+le wor1
connection and not direct ca,sal relation. /ro+a+ility% not the ,ltimate
degree of certainty% is the test of -roof in com-ensation -roceedings. )or%
in inter-reting and carrying o,t the -rovisions of the La+or Code and its
3m-lementing R,les and Reg,lations% the -rimordial and -aramo,nt
consideration is the em-loyee6s welfare. To safeg,ard the wor1er6s rights%
any do,+t on the -ro-er inter-retation and a--lication m,st +e resolved in
favor of la+or.
2e reiterate these same -rinci-les in the -resent case. &ccordingly% we
hold that De Castro6s ailments 0 C&D and hy-ertensive cardiovasc,lar
disease 0 are wor10connected ,nder the circ,mstances of the -resent case
and are% therefore% com-ensa+le.
2=BRB)?RB% -remises considered% the -etition for review on certiorari Aled
+y the Government Service 3ns,rance System ;GS3S< is here+y DBN3BD for
lac1 of merit. The challenged decision and resol,tion of the Co,rt of
&--eals in C&0G.R. S/ No. $$:P# are here+y &))3R5BD. S? ?RDBRBD.
GREAT SOUTHERN MARITIME SERVICES CORP. a*+ IMC SHIPPING
CO., PTE. LTD.,
vs. LEONILA SURIGAO 4,- He-sel4 a*+ I* Be0al4 ,4 He- M3*,-
C03l+-e*, Na;el8 KAYE ANGELI a*+ MIRIAM, B,t0 S5-*a;e+
SURIGAO
($ F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
G.R. No. ':!@!% Se-tem+er '% ($$"
)&CTS*
MRes-ondent Leonila S,rigaoIsN h,s+and% the late Salvador 5. S,rigao% was
hired as )itter +y M-etitionerN Great So,thern 5aritime Services
Cor-oration% for and in +ehalf of Mco0-etitionerN 35C Shi--ing Co. /te.% Ltd.
;Singa-ore< for a -eriod of ten ;$< months. 3n his -re0em-loyment medical
e7amination% he was fo,nd At for sea d,ty. Th,s% on &-ril ("% ($$% he
commenced his wor1 a+oard 54 Selendang Nilam.
=owever% on &,g,st ((% ($$% as -er Shi- 5asterIs advice% a doctor was
sent on +oard the vessel to medically attend to Salvador d,e to com-laints
of e7tensive ne,ro dermatitis% nec1 region viral% aetiology% ,rticaria% mac,lo
-o-,lar% rash e7tending to the face% chest and a+domen. &fter e7amination%
Salvador was advised to ta1e a +lood test. =is condition having worsened%
he was conAned at the Seven =ills =os-ital. Not long thereafter% the Shi-
5aster decided to sign him oJ from the vessel on &,g,st (#% ($$ for
treatment in the hos-ital and for re-atriation ,-on certiAcation of the
doctor that he was At to travel.
/rior to his re-atriation% tho,gh% or on &,g,st (!% ($$% at aro,nd seven
oIcloc1 in the morning% Salvador was fo,nd dead inside the +athroom of his
hos-ital room. Later% his +ody was transferred to a government hos-ital%
the Ling George =os-ital 5ort,ary =all% for -ost0mortem e7amination. The
/ost05ortem CertiAcate iss,ed +y the De-artment of )orensic 5edicine%
4isa1ha-atnam City% stated that the ca,se of death of Salvador was
as-hy7ia d,e to hanging.
&s an heir of the deceased seaman% -etitioner% for in +ehalf of her minor
children% Aled for death com-ensation +eneAts ,nder the terms of the
standard em-loyment contract% +,t her claims were denied +y the
M-etitionersN.
3SSUBS* 2=BT=BR ?R N?T /R34&TB RBS/?NDBNT 3S BNT3TLBD T? DB&T=
BBNB)3TS )?R T=B DB&T= ?) =BR =USB&ND UNDBR T=B /?B& ST&ND&RD
B5/L?S5BNT C?NTR&CT )?R SB&)&RBRS.
=BLD*
The -ertinent -rovisions of the Standard Terms and Conditions Governing
the Bm-loyment of )ili-ino Seafarers ?n0Board ?cean0Going 4essels% or the
/?B& Standard Bm-loyment Contract% which Salvador and the -etitioners
incor-orated into their contract% -rovide that*
SE')+,( 3/! ',&PE(SA)+,( A(" #E(EL+)S
A! ',&PE(SA)+,( A(" #E(EL+)S L,R "EA)H
=! +n case of death of the seafarer during the term of his contract0 the employer shall
pay his ene2ciaries the Philippine 'urrency eEui%alent to the amount of Lifty
)housand <S dollars (<SSM/0///) and an additional amount of Se%en )housand <S
dollars (<SSH0///) to each child under the age of twenty*one (3=) ut not e8ceeding
four (D) children at the e8change rate pre%ailing during the time of payment!
8 8 8 8
"! (o compensation and ene2ts shall e payale in respect of any in$ury0
incapacity0 disaility or death of the seafarer resulting from his willful or criminal act
or intentional reach of his duties0 pro%ided howe%er0 that the employer can pro%e
that such in$ury0 incapacity0 disaility or death is directly attriutale to the seafarer!
The general r,le is that the em-loyer is lia+le to -ay the heirs of the
deceased seafarer for death +eneAts once it is esta+lished that he died
d,ring the eJectivity of his em-loyment contract. =owever% the em-loyer
may +e e7em-ted from lia+ility if he can s,ccessf,lly -rove that the
seafarerIs death was ca,sed +y an inC,ry directly attri+,ta+le to his
deli+erate or willf,l act. 3n s,m% res-ondentsI entitlement to any death
+eneAts de-ends on whether the evidence of the -etitioners s,9ces to
-rove that the deceased committed s,icideD the +,rden of -roof rests on
his em-loyer.
/etitioners insist that res-ondents are not entitled to death +eneAts
+eca,se Salvador committed s,icide. &s -roof% they -resented the Death
CertiAcate iss,ed +y Dr. B,tchi RaC, stating that Salvador was s,s-ected to
have committed s,icideD the -ost0mortem e7amination res,lts stating that
the deceased a--eared to have died of E&S/=S\3& DUB T? =&NG3NGED the
3ndian /olice 3n8,est Re-ort also stating that he died d,e to hangingD the
a9davit of the n,rse on d,ty of Seven =ills hos-ital% 5s. /. 4. Ramanamma%
wherein she stated that as the entrance doors to the +athroom main room
was +olted from the inside and no other -erson was in the near -hysical
vicinity of the deceased% it was concl,ded that seafarer committed s,icideD
as well as -hotos ta1en immediately after the discovery of the +ody with a
+elt aro,nd his nec1. They contend that the a--ellate co,rt erred in
disregarding these -ieces of evidence which convincingly r,le o,t
s,s-icions of fo,l -lay.
The -etition is im-ressed with merit.
2e And the foregoing circ,mstances as constit,ting s,+stantial evidence
s,--orting a concl,sion that SalvadorIs death was attri+,ta+le to himself*
( F / a g e
USC L&2. Batch ($:. $$ G H
University of San Carlos College of Law
LABOR LAW REVIEW CASE DIGESTS
The Diamond Batch
. Salvador was last seen alive +y the attending n,rse in Room No.
!" at a+o,t @*$$ a.m. of &,g,st (!% ($$D
(. &t !*:$ a.m. of the same day% when no one answered to the
re-eated 1noc1s of the attending n,rse% the hos-ital staJ forci+ly
o-ened the main door of the roomD
:. Things inside the room were fo,nd in orderD
@. The +athroom door was loc1ed from inside and the hos-ital staJ
gained entrance therein only thro,gh a closed door with a mesh
leading to the ceiling of the +athroomD
#. The window in the +athroom has grillsD
!. Salvador was fo,nd dead inside with a +elt tied aro,nd his nec1D
P. & +ro1en -i-e and showerhead were fo,nd near the +odyD and
'. The -ost0mortem e7amination res,lt stating an o-inion on the
ca,se of death as &s-hy7ia d,e to hanging.
The -ost0mortem e7amination concl,sively esta+lished that the tr,e ca,se
of death was as-hy7ia or s,Jocation. The a--ellate co,rtIs r,ling that while
it may +e consistent with the theory that the deceased hanged himself +,t
it does not r,le o,t the -ossi+ility that he might have died of other
ca,ses% does not -ers,ade. &side from +eing -,rely s-ec,lative% we And it
hard to +elieve that someone strangled Salvador inside the +athroom then
loc1ed the door thereof on his way o,t ,ndetected. &s shown +y the
evidence -resented +y the -etitioners% the +athroom door was loc1ed or
+olted from the inside and co,ld not +e o-ened from o,tside. 3n order to
gain entrance% the hos-ital staJ had to -ass thro,gh a closed door with a
mess leading to the ceiling of the +athroom. Bntry co,ld not li1ewise +e
eJected thro,gh the +athroom window as it has grills.
5oreover% the concl,sion that Salvador co,ld not have hanged himself to
the showerhead as he was fo,nd lying on the Toor with a +elt tied aro,nd
his nec1D or that he co,ld not have died since the -i-e +ro1e down and he
fell therefrom% are +ased on s-ec,lations and hy-othetical in nat,re. This
conf,sion co,ld have +een avoided had +oth the Co,rt of &--eals and the
La+or &r+iter considered the most logical -ossi+ility that Salvador died
hanging on the showerhead +efore the -i-e +ro1e down d,e to his +ody
weight% and th,s% e7-laining why he was fo,nd on the Toor with the +elt
still on his nec1 and +ro1en -i-e and showerhead near his lifeless +ody.
That the -ost0mortem e7amination% the CertiAcation of Dr. RaC, and the
-olice in8,est re-ort% all stated that SalvadorIs ca,se of death was
as-hy7ia d,e to hanging% and not d,e to any other inC,ry% lead to a fair and
C,st concl,sion that Salvador was already dead +efore the showerhead
+ro1e.
3n 5a+,hay Shi--ing Services% 3nc. v. National La+or Relations
Commission% the Co,rt held that the death of a seaman even d,ring the
term of em-loyment does not a,tomatically give rise to com-ensation. The
circ,mstances which led to the death as well as the -rovisions of the
contract% and the right and o+ligation of the em-loyer and the seaman
m,st +e ta1en into consideration% in consonance with the d,e -rocess and
e8,al -rotection cla,ses of the Constit,tion.
3t is tr,e that the +eneAcent -rovisions of the Standard Bm-loyment
Contract are li+erally constr,ed in favor of )ili-ino seafarers and their
de-endents. 2e commiserate with res-ondents for the ,nfort,nate fate
that +efell their loved oneD however% we And that the fact,al circ,mstances
in this case do not C,stify the grant of death +eneAts as -rayed for +y them
as +eneAciaries of Salvador.
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