1.) Capitol Medical vs. NLRC, 457 SCRA 235/ G.R. No.

147080 April 26, 2005

FACTS
The petitioners refusal to negotiate for a collective bargaining agreement (CBA) resulted in a union-led
strike on April 15, 1993.
The Capitol Medical Center Employees Association-Alliance of Filipino Workers, the Union, had to
contend with another union, the Capitol Medical Center Alliance of Concerned Employees (CMC-ACE), which
demanded for a certification election among the rank-and-file employees of the petitioner. Med-Arbiter Brigida
Fadrigon granted the petition, and the matter was appealed to the Secretary of Labor and Employment (SOLE).
Undersecretary Bienvenido E. Laguesma rendered a Resolution granting the appeal. He, likewise, denied the motion
filed by the petitioner and the CMC-ACE. The latter thereafter brought the matter to the Court which rendered
judgment affirming the resolution of Undersecretary Laguesma, thus: (1) Dismissing the petition for certification
election filed by the Capitol Medical Center Alliance of Concerned Employees-United Filipino Services Workers for
lack of merit; and; (2) Directing the management of the Capitol Medical Center to negotiate a CBA with the Capitol
Medical Center Employees Association-Alliance of Filipino Workers, the certified bargaining agent of the rank-andfile employees.
The decision of the Court became final and executory. Thereafter, in a Letter dated October 3, 1997
addressed to Dr. Thelma N. Clemente, the President and Director of the petitioner, the Union requested for a meeting
to discuss matters pertaining to a negotiation for a CBA, conformably with the decision of the Court.4 However, in a
Letter to the Union dated October 10, 1997, Dr. Clemente rejected the proposed meeting, on her claim that it was a
violation of Republic Act No. 6713 and that the Union was not a legitimate one. On October 15, 1997, the petitioner
filed a Petition for the Cancellation of the Unions Certificate of Registration with the Department of Labor and
Employment (DOLE) on the following grounds: (1) Respondent has failed for several years to submit annually its
annual financial statements and other documents as required by law. For this reason, respondent has long lost its
legal personality as a union; (2) Respondent also engaged in a strike which has been declared illegal by the NLRC.
The Union alleged as grounds for the projected strike the following acts of the petitioner: (a) refusal to bargain; (b)
coercion on employees; and (c) interference/restraint to self-organization.
A series of conferences was conducted before the NCMB (National Capital Region), but no agreement was reached.
On November 6, 1997, the petitioner even filed a Letter with the Board requesting that the notice of strike be
dismissed;8 the Union had apparently failed to furnish the Regional Branch of the NCMB with a copy of a notice of
the meeting where the strike vote was conducted.
On November 20, 1997, the Union submitted to the NCMB the minutes9 of the alleged strike vote purportedly held
on November 10, 1997 at the parking lot in front of the petitioners premises, at the corner of Scout Magbanua
Street and Panay Avenue, Quezon City. It appears that 178 out of the 300 union members participated therein, and
the results were as follows: 156 members voted to strike; 14 members cast negative votes; and eight votes were
spoiled.
On November 28, 1997, the officers and members of the Union staged a strike.
The Labor Arbiter found and declared in his decision that no secret voting ever took place in the parking lot fronting
the hospital on November 10, 1997 by and among the 300 members of the respondent Union. Erwin Barbacena, the
overseer of the only parking lot fronting the hospital, and security guards Simon Ting-zon and Reggie Barawid,
declared in their respective affidavits that no secret voting ever took place on November 10, 1997; 17 employees of
the petitioner also denied in their respective statements that they were not members of the respondent Union, and

were asked to merely sign attendance papers and unnumbered votes. The NLRC and the CA declared in their
respective decisions that the affidavits of the petitioners 17 employees had no probative weight because the said
employees merely executed their affidavits out of fear of losing their jobs. The NLRC and the CA anchored their
conclusion on their finding that the affidavits of the employees were uniform and pro forma.
ISSUES
(1)Whether the respondent Capitol Medical Center Employees Association-Alliance of Filipino Workers (the
Union, for brevity) was the exclusive bargaining agent of the rank-and-file employees of the petitioner Capitol
Medical Center, Inc.?; (2) WON the strike staged by the Union is legal?
HELD
NO. The Supreme Court agree with the finding of the Labor Arbiter that no secret balloting to strike was
conducted by the respondent Union on November 10, 1997 at the parking lot in front of the hospital, at the corner of
Scout Magbanua Street and Panay Avenue, Quezon City. It was agreed with the petitioner that the respondent Union
failed to comply with the second paragraph of Section 10, Rule XXII of the Omnibus Rules of the NLRC which
reads: Section 10. Strike or lockout vote.A decision to declare a strike must be approved by a majority of the
total union membership in the bargaining unit concerned obtained by secret ballot in meetings or referenda called for
the purpose. A decision to declare a lockout must be approved by a majority of the Board of Directors of the
employer, corporation or association or the partners obtained by a secret ballot in a meeting called for the purpose.
The regional branch of the Board may, at its own initiative or upon the request of any affected party, supervise the
conduct of the secret balloting. In every case, the union or the employer shall furnish the regional branch of the
Board and notice of meetings referred to in the preceding paragraph at least twenty-four (24) hours before
such meetings as well as the results of the voting at least seven (7) days before the intended strike or lockout,
subject to the cooling-off period provided in this Rule. Although the second paragraph of Section 10 of the said Rule
is not provided in the Labor Code of the Philippines, nevertheless, the same was incorporated in the Omnibus Rules
Implementing the Labor Code and has the force and effect of law.
RULING
The petition is GRANTED. The Decisions of the Court of Appeals and NLRC are SET ASIDE AND REVERSED.
The Decision of the Labor Arbiter is REINSTATED.

A union is mandated to notify the NCMB (National Conciliation Mediation Board) of an impending dispute in a
particular bargaining unit via a notice of strike. Thereafter, the NCMB, through its conciliator-mediators, shall call
the parties to a conference at the soonest possible time in order to actively assist them in exploring all possibilities
for amicable settlement. In the event of the failure in the conciliation/mediation proceedings, the parties shall be
encouraged to submit their dispute for voluntary arbitration. However, if the parties refuse, the union may hold a
strike vote, and if the requisite number of votes is obtained, a strike may ensue. The purpose of the strike vote is to
ensure that the decision to strike broadly rests with the majority of the union members in general and not with a mere
minority, and at the same time, discourage wildcat strikes, union bossism and even corruption. A strike vote report
submitted to the NCMB at least seven days prior to the intended date of strike ensures that a strike vote was, indeed,
taken. In the event that the report is false, the seven-day period affords the members an opportunity to take the
appropriate remedy before it is too late. The 15 to 30 day cooling-off period is designed to afford the parties the
opportunity to amicably resolve the dispute with the assistance of the NCMB conciliator/mediator, while the
seven-day strike ban is intended to give the DOLE an opportunity to verify whether the projected strike really
carries the imprimatur of the majority of the union members.

The requirement of giving notice of the conduct of a strike vote to the NCMB at least 24 hours before the meeting
for the said purpose is designed to (a) inform the NCMB of the intent of the union to conduct a strike vote; (b) give
the NCMB ample time to decide on whether or not there is a need to supervise the conduct of the strike vote to
prevent any acts of violence and/or irregularities attendant thereto; and (c) should the NCMB decide on its own
initiative or upon the request of an interested party including the employer, to supervise the strike vote, to give it
ample time to prepare for the deployment of the requisite personnel, including peace officers if need be. Unless and
until the NCMB is notified at least 24 hours of the unions decision to conduct a strike vote, and the date, place, and
time thereof, the NCMB cannot determine for itself whether to supervise a strike vote meeting or not and insure its
peaceful and regular conduct. The failure of a union to comply with the requirement of the giving of notice to the
NCMB at least 24 hours prior to the holding of a strike vote meeting will render the subsequent strike staged by the
union illegal.

2.) Lapanday Workers Union & et. al. vs. National Labor Relations Commission, 248 SCRA 95/ G.R. Nos.
95494-97.September 7, 1995
FACTS
Petitioner Lapanday Agricultural Workers Union (Union for brevity) and petitioners-workers of
Lapanday Agricultural and Development Corporation and CADECO Agro Development Philippines, Inc., seek to
reverse the consolidated Decision, dated August 29, 1990, rendered by public respondent NLRC, declaring their
strike illegal and ordering the dismissal of their leaders. Private respondents are sister companies engaged in the
production of bananas. Their agricultural establishments are located in Davao City.
On the other hand, petitioner Lapanday Workers Union (Union) is the duly certified bargaining agent of the rank
and file employees of private respondents. The Union is affiliated with the KMU-ANGLO (Alliance of Nationalist
and Genuine Labor Organization). The other petitioners are all members of the Union.
The records show that petitioner Union has a collective bargaining agreement with private respondents, covering the
period from December 5, 1985 to November 30, 1988. A few months before the expiration of their CBA, private
respondents initiated certain management policies which disrupted the relationship of the parties.
Private respondents contracted Philippine Eagle Protectors and Security Agency, Inc., to provide security services
for their business premises. Their contract also called for the protection of the lives and limbs of private respondents
officers, employees and guests within company premises. The Union branded the security guards posted within the
company premises as private respondents goons and special forces. It also accused the guards of intimidating
and harassing their members.
The Union filed on August 25, 1988, a Notice of Strike with the National Conciliation and Mediation Board
(NCMB). It accused the company of unfair labor practices consisting of coercion of employees, intimidation of
union members and union-busting.2 These were the same issues raised by the Union during the August 2, 1988
labor-management meeting.
On August 29, 1988, the NCMB called a conciliation conference. The conference yielded the following agreement:
(1) Union officers, including the officials of KMU-ANGLO, and the Executive Director of the NCMB would attend
the HDIR seminar on September 5, 1988; and;
(2) A committee shall convene on September 10, 1988, to establish guidelines governing the guards.
The Union officials did attend the September 5, 1988 seminar. While they no longer objected to the
continuation of the seminar, they reiterated their demand for the deletion of the discussion pertaining to the KMUANGLO.
On September 14, 1988, private respondents filed separate charges against the Union and its members for illegal
strike, unfair labor practice and damages, with prayer for injunction.

On October 3, 1988, a strike vote was conducted among the members of the Union and those in favor of the strike
won overwhelming support from the workers. The result of the strike vote was then submitted to the NCMB on
October 10, 1988. Two days later, or on October 12, 1988, the Union struck.
On the bases of the foregoing facts, Labor Arbiter Antonio Villanueva ruled that the Union staged an illegal strike.
Petitioners now claim that public respondent NLRC gravely abused its discretion in: a) declaring that their
activities, from September 9, 1988 to October 12, 1988, were strike activities; and b) declaring that the strike staged
on October 12, 1988 was illegal.
The critical issue is the legality of the strike held on October 12, 1988. The applicable laws are Articles 263 and 264
of the Labor Code, as amended by E.O. No. 111, dated December 24, 1986.
Paragraphs (c) and (f) of Article 263 of the Labor Code, as amended by E.O. 111.
ISSUES: (1) WON the strike conducted by the union on October 12, 1988 is valid? (2) WON union members who
were merely instigated to participate in the illegal strike should be treated differently from their leaders?
HELD
1) NO. Applying the law to the case at bar, the court ruled that strike conducted by the union on October 12, 1988 is
plainly illegal as it was held within the seven (7) day waiting period provided for by paragraph (f), Article 263 of the
Labor Code, as amended. The haste in holding the strike prevented the Department of Labor and Employment from
verifying whether it carried the approval of the majority of the union members;
2) YES. The Supreme Court, likewise, agreed with the public respondent that the union members who were merely
instigated to participate in the illegal strike should be treated differently from their leaders. Part of their benign
consideration for labor is the policy of reinstating rank-and-file workers who were merely misled in supporting
illegal strikes. Nonetheless, these reinstated workers shall not be entitled to backwages as they should not be
compensated for services skipped during the illegal strike.
RULING: The petition is dismissed for failure to show grave abuse of discretion on the part of the public
respondent.

3) San Miguel Corporation vs. National Labor Relations Commission, 403 SCRA 418/ G.R. No. 119293. June
10, 2003
FACTS
Petitioner San Miguel Corporation (SMC) and respondent Ilaw at Buklod ng Manggagawa (IBM), exclusive
bargaining agent of petitioners daily-paid rank and file employees, executed a Collective Bargaining Agreement
(CBA) under which they agreed to submit all disputes to grievance and arbitration proceedings. The CBA also
included a mutually enforceable no-strike no-lockout agreement.
On April 11, 1994, IBM, through its vice-president Alfredo Colomeda, filed with the National Conciliation and
Mediation Board (NCMB) a notice of strike, docketed as NCMB-NCR-NS-04-180-94, against petitioner for
allegedly committing: (1) illegal dismissal of union members, (2) illegal transfer, (3) violation of CBA, (4)
contracting out of jobs being performed by union members, (5) labor-only contracting, (6) harassment of union
officers and members, (7) non-recognition of duly-elected union officers, and (8) other acts of unfair labor practice.4

The next day, IBM filed another notice of strike, this time through its president Edilberto Galvez, raising similar
grounds: (1) illegal transfer, (2) labor-only contracting, (3) violation of CBA, (4) dismissal of union officers and
members, and (5) other acts of unfair labor practice. This was docketed as NCMB-NCR-NS-04-182-94.
The Galvez group subsequently requested the NCMB to consolidate its notice of strike with that of the Colomeda
group, to which the latter opposed, alleging Galvezs lack of authority in filing the same.
Petitioner thereafter filed a Motion for Severance of Notices of Strike with Motion to Dismiss, on the grounds that
the notices raised non-strikeable issues and that they affected four corporations which are separate and distinct from
each other. After several conciliation meetings, NCMB Director Reynaldo Ubaldo found that the real issues
involved are non-strikeable. Hence on May 2, 1994, he issued separate letter-orders to both union groups, converting
their notices of strike into preventive mediation.
During the conciliation meetings, it was clearly established that the real issues involved are illegal dismissal, labor
only contracting and internal union disputes, which affect not only the interest of the San Miguel Corporation but
also the interests of the MAGNOLIA-NESTL CORPORATION, the SAN MIGUEL FOODS, INC., and the SAN
MIGUEL JUICES, INC.
Considering that San Miguel Corporation is the only impleaded employer-respondent, and considering further that
the aforesaid companies are separate and distinct corporate entities, we deemed it wise to reduce and treat your
Notice of Strike as Preventive Mediation case for the four (4) different companies in order to evolve voluntary
settlement of the disputes . . . . (Emphasis supplied)
Two days after the declaration of strike, or on June 6, 1994, petitioner filed with public respondent NLRC an
amended Petition for Injunction with Prayer for the Issuance of Temporary Restraining Order, Free Ingress and
Egress Order and Deputization Order. After due hearing and ocular inspection, the NLRC on June 13, 1994 resolved
to issue a temporary restraining order (TRO) directing free ingress to and egress from petitioners plants, without
prejudice to the unions right to peaceful picketing and continuous hearings on the injunction case.
ISSUE
WON the request by the petitioner for the issuance of injunction or restraining order may be validly
granted?
HELD
YES. Pursuant to Article 218 (e), the coercive measure of injunction may also be used to restrain an actual
or threatened unlawful strike. In the case of San Miguel Corporation v. NLRC, where the same issue of NLRCs duty
to enjoin an unlawful strike was raised, we ruled that the NLRC committed grave abuse of discretion when it denied
the petition for injunction to restrain the union from declaring a strike based on non- strikeable grounds. Further, in
IBM v. NLRC we held that it is the legal duty and obligation of the NLRC to enjoin a partial strike staged in
violation of the law. Failure to issue promptly an injunction by the public respondent was likewise held therein to be
an abuse of discretion.
Respondent however resorted to force without exhausting all available means within its reach. Such infringement of
the aforecited CBA provisions constitutes further justification for the issuance of an injunction against the strike. As
we said long ago: Strikes held in violation of the terms contained in a collective bargaining agreement are illegal
especially when they provide for conclusive arbitration clauses. These agreements must be strictly adhered to and
respected if their ends have to be achieved.
As to petitioners allegation of violation of the no-strike provision in the CBA, jurisprudence has enunciated that
such clauses only bar strikes which are economic in nature, but not strikes grounded on unfair labor practices. The

notices filed in the case at bar alleged unfair labor practices, the initial determination of which would entail factfinding that is best left for the labor arbiters. Nevertheless, our finding herein of the invalidity of the notices of strike
dispenses with the need to discuss this issue.
In the case at bar, petitioner sought a permanent injunction to enjoin the respondents strike. A strike is considered as
the most effective weapon in protecting the rights of the employees to improve the terms and conditions of their
employment. However, to be valid, a strike must be pursued within legal bounds. One of the procedural requisites
that Article 263 of the Labor Code and its Implementing Rules prescribe is the filing of a valid notice of strike with
the NCMB. Imposed for the purpose of encouraging the voluntary settlement of disputes, this requirement has been
held to be mandatory, the lack of which shall render a strike illegal.
RULING
The instant petition is hereby GRANTED. The decision and resolution of the NLRC in Injunction Case No. 0046894 are REVERSED and SET ASIDE. Petitioner and private respondent are hereby directed to submit the issues
raised in the dismissed notices of strike to grievance procedure and proceed with arbitration proceedings as
prescribed in their CBA, if necessary.

4.) Sarmiento vs. Tuico, 162 SCRA 676/ Nos. L-75271-73 June 27, 1988
FACTS
The case arose when on May 7, 1986, petitioner Asian Transmission Corporation terminated the services
of Catalino Sarmiento, vice-president of the Bisig ng Asian Transmission Labor Union (BATU), for allegedly
carrying a deadly weapon in the company premises. As a result, the BATU filed a notice of strike on May 26, 1986,
claiming that the ATC had committed an unfair labor practice. The conciliatory conference held on June 5, 1986,
failed to settle the dispute. The ATC then filed a petition asking the Ministry of Labor and Employment to assume
jurisdiction over the matter or certify the same to the NLRC for compulsory arbitration. Noting that the impending
strike would prejudice the national interest as well as the welfare of some 350 workers and their families, the
MOLE issued an order on June 3, 1986, certifying the labor dispute to the NLRC. At the same time, it enjoined the
management from locking out its employees and the union from declaring a strike or similar concerted action. This
order was reiterated on June 13, 1986, upon the representation of the ATC that some 40 workers had declared a
strike and were picketing the company premises. Proceedings could not continue in the NLRC, however, because of
the acceptance by President Aquino of the resignations of eight of its members, leaving only the vice-chair- man in
office. For this reason, the MOLE, on September 9, 1986, set aside the orders of June 9 and 13, 1986, and directly
assumed jurisdiction of the dispute, at the same time enjoining the company to accept all returning workers. This
order was itself set aside on November 24, 1986, upon motion of both the BATU and the ATC, in view of the
appointment of new commissioners in the NLRC. The MOLE then returned the case to the respondent NLRC and
directed it to expeditiously resolve all issues relating to the dispute, adding that the union and the striking workers
are ordered to return to work immediately. Conformably, the NLRC issued on January 13, 1987 the following
resolution, which it affirmed in its resolution of February 12, 1987, denying the motion for reconsideration.
Asian Transmission Corporation is an export-oriented enterprise and its annual export amounts to 90% of its sales
generating more than twelve (12) million dollars per year. The corporation employs three hundred fifty (350)
workers with a total monthly take home pay or approximately P1,300,000.00 a month.
ISSUE:

Whether or not a return-to-work order may be validly issued by the National Labor Relations
Commission pending determination of the legality of the strike; and
HELD
NO. It is contended by the ATC that the NLRC had no jurisdiction in issuing the return-to-work order and
that in any case the same should be annulled for being oppressive and violative of due process. The question of
competence is easily resolved. The authority for the order is found in Article 264(g) of the Labor Code, as amended
by B.P. Blg. 227.
Accordingly, the Court holds that the return-to-work order should benefit only those workers who complied
therewith and, regardless of the outcome of the compulsory arbitration proceedings, are entitled to be paid for work
they have actually performed. Conversely, those workers who refused to obey the said order and instead waged the
restrained strike are not entitled to be paid for work not done or to reinstatement to the positions they have
abandoned by their refusal to return thereto as ordered.
RULING:
The temporary restraining order of August 12, 1986, and September 21, 1986, are CONTINUED IN
FORCE until completion of the compulsory arbitration proceedings in the NLRC.

5.) Stamford Marketing Corp. vs. Julian, 423 SCRA 633/ G.R. No. 145496. February 24, 2004
FACTS
The instant controversy stemmed from a letter sent by Zoilo V. De La Cruz, Jr., president of the Philippine
Agricultural, Commercial and Industrial Workers Union (PACIWU-TUCP), on November 2, 1994, to Rosario A.
Apacible, the treasurer and general manager of herein petitioners Stamford Marketing Corporation, GSP
Manufacturing Corporation, Giorgio Antonio Marketing Corporation, Clementine Marketing Corporation, and
Ultimate Concept Phils., Inc. Said letter advised Apacible that the rank-and-file employees of the aforementioned
companies had formed the Apacible Enterprise Employees Union-PACIWU-TUCP. The union demanded that
management recognize its existence. Shortly thereafter, discord reared its ugly head, and rancor came hard on its
wake.
petitioner Stamford alleged that private respondent Julian was a supervising employee at the Patricks Boutique at
Shoemart (SM) Northmall. In October 1994, when she was four (4) to five (5) months pregnant, the management of
SM Northmall asked her to go on maternity leave, pursuant to company policy. Julian was then directed to report at
Stamfords Head Office for reassignment. She was also asked to submit a medical certificate to enable the company
to approximate her delivery date. Julian, however, allegedly failed to comply with these directives and instead,
ceased to report for work without having given notice. Stamford then allegedly asked Tejada to take over Julians
position, but the former inexplicably refused to comply with the management directive. Instead, like Julian, she
abandoned her work with nary a notice or an explanation.
On March 17, 1995, PACIWU-TUCP, filed on behalf of fifty (50) employees allegedly illegally dismissed for union
membership by the petitioners, a Complaint before the Arbitration Branch of NLRC, Metro Manila. PACIWUTUCP charged petitioners herein with unfair labor practice. The Complaint alleged that when Apacible received the
letter of PACIWU-TUCP, management began to harass the members of the local chapter, a move which culminated

in their outright dismissal from employment, without any just or lawful cause. It was a clear case of union-busting,
averred PACIWU-TUCP.
Petitioners argue that respondents were legally dismissed, pursuant to Article 26411 of the Labor Code in view of
the determination by the Labor Arbiter that the strike conducted by respondents are illegal and that illegal acts
attended the mass action. The respondents counter that the determination of the illegality of strike is inconsequential
as the conclusion by the appellate court on the illegality of dismissal was based on the petitioners non-compliance
with the due process requirements on terminating employees, which had nothing to do with the legality of the strike.
In the instant case, we find no reason to disagree with the findings of the NLRC that the strike conducted by the
respondent union is illegal. First, it has not been shown to the satisfaction of this Court that said union is a legitimate
labor organization, entitled under Article 263 (c) to file a notice of strike on behalf of its members. Second, the other
requirements under Article 263 (c) and (f) were not complied with by the striking union. On this matter, the record is
bare of any showing to the contrary. Hence, what is left for this Court to do is to determine the effects of the
illegality of the strike on respondents union officers and members, specifically (a) whether such would justify their
dismissal from employment, and (b) whether they ceased to be entitled to the monetary awards and other appropriate
reliefs and remedies.
While holding the strike illegal, the Court of Appeals nonetheless still ruled that the union officers and members
were illegally dismissed for non-observance of due process requirements and union busting by management. It
likewise gave no credence to the charge of abandonment against Julian and Tejada. Thus, it awarded separation pay
in lieu of reinstatement to all union officers including respondents Julian and Tejada and affirmed all other monetary
awards by the Labor Arbiter including backwages.
On this point, we affirm the findings of the appellate court that Julian and Tejada did not abandon their employment.
Petitioners utterly failed to show proof that Julian and Tejada had the intent to abandon their work and sever their
employment relationship with petitioners. It is established that an employee who forthwith takes steps to protest his
layoff cannot be said to have abandoned his work.20 However, we cannot sustain the appellate courts ruling that the
dismissal of Julian and Tejada was tantamount to unfair labor practice. There is simply nothing on record to show
that Julian and Tejada were discouraged or prohibited from joining any union. Hence, the petitioners cannot be held
liable for unfair labor practice.
ISSUES
(1) Whether the respondents union officers and members were validly and legally dismissed from employment
considering the illegality of the strike;
(2) Whether the respondents union officers and members are entitled to backwages, separation pay and
reinstatement, respectively?
HELD
1) YES. The dismissals per se are not invalid but only ineffectual in accordance with Serrano v. National Labor
Relations Commission. In said case, the court held that (1) the employers failure to comply with the notice
requirement does not constitute denial of due process, but mere failure to observe a procedure for termination of
employment which makes the termination merely ineffectual, and (2) the dismissal shall be upheld but the employer
must be sanctioned for non-compliance with the prescribed procedure.
2) As a sanction for non-compliance with notice requirements for lawful termination by the petitioners, only
backwages are AWARDED to the union officers computed from the time they were dismissed until the final entry of
judgment of this case. The court affirm the findings of the appellate court that Julian and Tejada did not abandon

their employment. Petitioners utterly failed to show proof that Julian and Tejada had the intent to abandon their work
and sever their employment relationship with petitioners. It is established that an employee who forthwith takes
steps to protest his layoff cannot be said to have abandoned his work.
RULING
The assailed Decision of the Court of Appeals, dated April 26, 2000 and its Resolution of October 11, 2000, in CAG.R. SP No. 53169 are AFFIRMED with MODIFICATION. Dismissal of the union officers is declared NOT
INVALID, and the award of separation pay to said union officers is hereby DELETED. However, as a sanction
for non-compliance with notice requirements for lawful termination by the petitioners, backwages are AWARDED
to the union officers computed from the time they were dismissed until the final entry of judgment of this case. The
rest of the dispositions of the Court of Appeals in its Decision of April 26, 2000, in CA-G.R. SP No. 53169, are
hereby AFFIRMED.
___________________________
6) St. Scholastica's College vs. Torres, 210 SCRA 565/ G.R. No. 100158 June 29, 1992
FACTS
On 20 July 1990, petitioner St. Scholasticas Collegeor COLLEGE and private respondent Samahan ng
Manggagawang Pang-Edukasyon sa Sta. Eskolastika-NAFTEU or UNION initiated negotiations for a first-ever
collective bargaining agreement. A deadlock in the negotiations prompted the UNION to file on 4 October 1990 a
Notice of Strike with the Department of Labor and Employment or DEPARTMENT.
On 5 November 1990, the UNION declared a strike which paralyzed the operations of the COLLEGE. Affecting as
it did the interest of the students, public respondent SECRETARY immediately assumed jurisdiction over the labor
dispute and issued on the same day, 5 November 1990, a return-to-work order. The following day, 6 November
1990, the UNION was served the Order. On 7 November 1990, instead of returning to work, the UNION filed a
motion for reconsideration of the return-to-work order questioning inter alia the assumption of jurisdiction by the
SECRETARY over the labor dispute.
On 9 November 1990, the COLLEGE sent individual letters to the striking employees enjoining them to return to
work not later than 8:00 oclock A.M. of 12 November 1990 and, at the same time, giving notice to some twentythree (23) workers that their return would be without prejudice to the filing of appropriate charges against them. In
response, the UNION presented a list of six (6) demands to the COLLEGE in a dialogue conducted on 11 November
1990. The most important of these demands was the unconditional acceptance back to work of the striking
employees. But these were flatly rejected.
Likewise, on 9 November 1990, respondent SECRETARY denied reconsideration of his return-to-work order and
sternly warned the striking employees to comply with its terms. On 12 November 1990, the UNION received the
Order.
On 23 November 1990, the COLLEGE mailed individual notices of termination to the striking employees, which
were received on 26 November 1990, or later. The UNION officers and members then tried to return to work but
were no longer accepted by the COLLEGE.
On 5 December 1990, a Complaint for Illegal Strike was filed against the UNION, its officers and several of its
members before the National Labor Relations Commission (NLRC).
On 12 April 1991, respondent SECRETARY issued the assailed Order which, inter alia, directed the reinstatement of
striking UNION members, premised on his finding that no violent or otherwise illegal act accompanied the conduct

of the strike and that a fledgling UNION like private respondent was naturally expected to exhibit unbridled if
inexperienced enthusiasm, in asserting its existence.2 Nevertheless, the aforesaid Order held UNION officers
responsible for the violation of the return-to-work orders of 5 and 9 November 1990, correspondingly, sustained
their termination.
Petitioner questions the assumption by respondent SECRETARY of jurisdiction to decide on termination disputes,
maintaining that such jurisdiction is vested instead in the Labor Arbiter pursuant to Art. 217 of the Labor Code, thus

Art. 217. Jurisdiction of Labor Arbiters and the Commission.(a) Except as otherwise provided under this
Code, the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide, within thirty (30) calendar
days after the submission of the case by the parties for decision without extension, the following cases involving all
workers, whether agricultural or non-agricultural: x x x x 2. Termination disputes x x x x 5. Cases arising from any
violation of Article 264 of this Code, including questions on the legality of strikes and lock-outs x x x x
Petitioner further contends that following the doctrine laid down in Sarmiento v. Tuico and Union of Filipro
Employees v. Nestl Philippines, Inc., workers who refuse to obey a return-to-work order are not entitled to be
paid for work not done, or to reinstatement to the positions they have abandoned by reason of their refusal to return
thereto as ordered.
Private respondent UNION maintains that the reason they failed to immediately comply with the return-to-work
order of 5 November 1990 was because they questioned the assumption of jurisdiction of respondent SECRETARY.
They were of the impression that being an academic institution, the school could not be considered an industry
indispensable to national interest, and that pending resolution of the issue, they were under no obligation to
immediately return to work.
This position of the UNION is simply flawed. Article 263 (g) of the Labor Code provides that if a strike has already
taken place at the time of assumption, all striking x x x employees shall immediately return to work. This means
that by its very terms, a return-to-work order is immediately effective and executory notwithstanding the filing of a
motion for reconsideration (University of Sto. Tomas v. NLRC).9 It must be strictly complied with even during the
pendency of any petition questioning its validity (Union of Filipro Employees v. Nestl Philippines, Inc., supra).
After all, the assumption and/or certification order is issued in the exercise of respondent SECRETARYs
compulsive power of arbitration and, until set aside, must therefore be immediately complied with.
The rationale for this rule is explained in University of Sto. Tomas v. NLRC, supra, citing Philippine Airlines
Employees Association v. Philippine Airlines, Inc.,10 thus
To say that its (return-to-work order) effectivity must wait affirmance in a motion for reconsideration is not only to
emasculate it but indeed to defeat its import, for by then the deadline fixed for the return to work would, in the
ordinary course, have already passed and hence can no longer be affirmed insofar as the time element is
concerned.
Thus, we held in Sarmiento v. Tuico, supra, that by insisting on staging the restrained strike and defiantly picketing
the company premises to prevent the resumption of operations, the strikers have forfeited their right to be
readmitted, having abandoned their positions, and so could be validly replaced.
The PAL v. Secretary of Labor and Employment, supra, which was cited by petitioner. But the conflict is only
apparent, not real.
To recall, We ruled in the latter case that the jurisdiction of the Secretary of Labor and Employment in assumption
and/or certification cases is limited to the issues that are involved in the disputes or to those that are submitted to

him for resolution. The seeming difference is, however, reconcilable. Since the matter on the legality or illegality of
the strike was never submitted to him for resolution, he was thus found to have exceeded his jurisdiction when he
restrained the employer from taking disciplinary action against employees who staged an illegal strike.
ISSUES
(1) Whether striking union members terminated for abandonment of work after failing to comply with
return-to-work orders of the Secretary of Labor and Employment (SECRETARY, for brevity) should by law be
reinstated? (2) Whether respondent SECRETARY has the power to assume jurisdiction over a labor dispute with
respect to the matter of termination of union members?
HELD
1) NO. The respective liabilities of striking union officers and members who failed to immediately comply with the
return-to-work order is outlined in Art. 264 of the Labor Code which provides that any declaration of a strike or
lockout after the Secretary of Labor and Employment has assumed jurisdiction over the labor dispute is considered
an illegal act. Any worker or union officer who knowingly participates in a strike defying a return-to-work order
may, consequently, be declared to have lost his employment status.
The court held in Sarmiento v. Tuico, supra, that by insisting on staging the restrained strike and defiantly picketing
the company premises to prevent the resumption of operations, the strikers have forfeited their right to be
readmitted, having abandoned their positions, and so could be validly replaced.
2) YES. The assumption of jurisdiction by the Secretary of Labor and Employment over labor disputes involving
academic institutions was already upheld in Philippine School of Business Administration v. Noriel 11 where the
court ruled thus:
There is no doubt that the on-going labor dispute at the school adversely affects the national interest. The school is
a duly registered educational institution of higher learning with more or less 9,000 students. The on-going work
stoppage at the school unduly prejudices the students and will entail great loss in terms of time, effort and money to
all concerned. More important, it is not amiss to mention that the school is engaged in the promotion of the
physical, intellectual and emotional well-being of the countrys youth.
RULING
The Petition for Certiorari is hereby GRANTED. The Order of 12 April 1991 and the Resolution of 31 May 1991
both issued by respondent Secretary of Labor and Employment are SET ASIDE insofar as they order the
reinstatement of striking union members terminated by petitioner, and the temporary restraining order We issued on
June 26, 1991, is made permanent.

7) MSF Tire and Rubber, Inc. vs. Court of Appeals, 311 SCRA 784/ G.R. No. 128632 August 5, 1999
FACTS
A labor dispute arose between Philtread Tire and Rubber Corporation (Philtread) and private respondent,
Philtread Tire Workers Union (Union), as a result of which the Union filed on May 27, 1994 a notice of strike in
the National Conciliation and Mediation BoardNational Capital Region charging Philtread with unfair labor
practices for allegedly engaging in union-busting for violation of the provisions of the collective bargaining

agreement. This was followed by picketing and the holding of assemblies by the Union outside the gate of
Philtreads plant at Km. 21, East Service Road, South Superhighway, Muntinlupa, Metro Manila. Philtread, on the
other hand, filed a notice of lock-out on May 30, 1994 which it carried out on June 15, 1994. In an order, dated
September 4, 1994,2 then Secretary of Labor Nieves Confesor assumed jurisdiction over the labor dispute and
certified it for compulsory arbitration. She enjoined the Union from striking and Philtread from locking out members
of the Union.
Philtread entered into a Memorandum of Agreement with Siam Tyre Public Company Limited (Siam Tyre), a
subsidiary of Siam Cement. Under the Memorandum of Agreement, Philtreads plant and equipment would be sold
to a new company (petitioner MSF Tire and Rubber, Inc.), 80% of which would be owned by Siam Tyre and 20% by
Philtread, while the land on which the plant was located would be sold to another company (Sucat Land
Corporation), 60% of which would be owned by Philtread and 40% by Siam Tyre.
On June 13, 1995, the Union moved to dismiss the complaint alleging lack of jurisdiction on the part of the trial
court. It insisted that the parties were involved in a labor dispute and that petitioner, being a mere alter ego of
Philtread, was not an innocent bystander.
ISSUE
Whether petitioner has shown a clear legal right to the issuance of a writ of injunction under the
innocent bystander rule?
HELD
NO. Petitioner asserts that its status as an innocent bystander with respect to the labor dispute between
Philtread and the Union entitles it to a writ of injunction from the civil courts and that the appellate court erred in not
upholding its corporate personality as independent of Philtreads. In Philippine Association of Free Labor Unions
(PAFLU) v. Cloribel, this Court, through Justice J.B.L. Reyes, stated the innocent bystander rule as follows: The
right to picket as a means of communicating the facts of a labor dispute is a phase of the freedom of speech
guaranteed by the constitution. If peacefully carried out, it cannot be curtailed even in the absence of employeremployee relationship. The right is, however, not an absolute one. While peaceful picketing is entitled to protection
as an exercise of free speech, we believe the courts are not without power to confine or localize the sphere of
communication or the demonstration to the parties to the labor dispute, including those with related interest, and to
insulate establishments or persons with no industrial connection or having interest totally foreign to the context of
the dispute. Thus the right may be regulated at the instance of third parties or innocent bystanders if it appears that
the inevitable result of its exercise is to create an impression that a labor dispute with which they have no connection
or interest exists between them and the picketing union or constitutes an invasion of their rights.
Although, as petitioner contends, the corporate fiction may be disregarded where it is used to defeat public
convenience, justify wrong, protect fraud, defend crime, or where the corporation is used as a mere alter-ego or
business conduit,15 it is not these standards but those of the innocent bystander rule which govern whether or not
petitioner is entitled to an injunctive writ. Since petitioner is not an innocent bystander, the trial courts order,
dated July 2, 1996, is a patent nullity, the trial court having no jurisdiction to issue the writ of injunction. No motion
for reconsideration need be filed where the order is null and void.
RULING
The Petition for writ of preliminary injunction is hereby DENIED and the decision of the Court of Appeals is
AFFIRMED.

8.) Phil. Long Distance Telephone Co. vs. NLRC, 164 SCRA 671/ No. L-80609. August 23, 1988
Labor; Illegal Dismissal; Separation Pay; Rule in the Labor Code that a person dismissed for cause is not
entitled to separation pay; Exception is based upon equity considerations; Definition and concept of equity.
The rule embodied in the Labor Code is that a person dismissed for cause as defined therein is not entitled to
separation pay. The cases above cited constitute the exception, based upon considerations of equity. Equity has been
defined as justice outside law, being ethical rather than jural and belonging to the sphere of morals than of law. It is
grounded on the precepts of conscience and not on any sanction of positive law. Hence, it cannot prevail against the
expressed provision of the labor laws allowing dismissal of employees for cause and without any provision for
separation pay.
Grant of separation pay is not merely based on equity but on the provisions of the Constitution on the
promotion of social justice and protection of the rights of the workers.Strictly speaking, however, it is not
correct to say that there is no express justification for the grant of separation pay to lawfully dismissed employees
other than the abstract consideration of equity. The reason is that our Constitution is replete with positive commands
for the promotion of social justice, and particularly the protection of the rights of the workers. The enhancement of
their welfare is one of the
primary concerns of the present charter. In fact, instead of confining itself to the general commitment to the cause of
labor in Article II on the Declaration of Principles of State Policies, the new Constitution contains a separate article
devoted to the promotion of social justice and human rights with a separate sub-topic for labor. Article XIII
expressly recognizes the vital role of labor, hand in hand with management, in the advancement of the national
economy and the welfare of the people in general. The categorical mandates in the Constitution for the improvement
of the lot of the workers are more than sufficient basis to justify the award of separation pay in proper cases even if
the dismissal be for cause.
Award of separation pay distinguished; Grant of separation pay to the dismissed employee is just
where the separation was due to valid but inequitous causes as failure to comply with work standards; Grant
of award is based on the social justice policy even if separation is for cause.There should be no question that
where it comes to such valid but not iniquitous causes as failure to comply with work standards, the grant of
separation pay to the dismissed employee may be both just and compassionate, particularly if he has worked for
some time with the company. For example, a subordinate who has irreconcilable policy or personal differences with
his employer may be validly dismissed for demonstrated loss of confidence, which is an allowable ground. A
working mother who has to be frequently absent because she has also to take care of her child may also be removed
because of her poor attendance, this being another authorized ground. It is not the employees fault if he does not
have the necessary aptitude for his work but on the other hand the company cannot be required to maintain him just
the same at the expense of efficiency of its operations. He too may be validly replaced. Under these and similar
circumstances, however, the award to the employee of separation pay would be sustainable under the social justice
policy even if the separation is for cause.
Where the cause of separation is more serious than mere inefficiency, the award is not justified.But
where the cause of the separation is more serious that mere inefficiency, the generosity of the law must be more
discerning. There is no doubt it is compassionate to give separation pay to a salesman if he is dismissed for his
inability to fill his quota but surely he does not deserve such generosity if his offense is misappropriation of the
receipt of his sales. This is no longer mere incompetence but clear dishonesty. A security guard found sleeping on
the job is doubtless subject to dismissal but may be allowed separation pay since his conduct, while inept, is not
depraved. But if he was in fact not really sleeping but sleeping with a prostitute during his tour of duty and in the
company premises, the situation is changed completely. This is not only inefficiency but immorality and the grant of
separation pay would be entirely unjustified.
Henceforth, separation pay shall be allowed only in those instances where the employee is validly
dismissed for causes other than serious misconduct or those reflecting on his moral character; Where the
reason for the valid dismissal is habitual insubordination or an offense involving moral turpitude, the
employer may not be required to give the dismissed employee separation pay or financial assistance.We
hold that henceforth separation pay shall be allowed as a measure of social justice only in those instances where the
employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character.
Where the reason for the valid dismissal is, for example, habitual intoxication or an offense involving moral
turpitude, like theft or illicit sexual relations with a fellow worker, the employer may not be required to give the

dismissed employee separation pay, of financial assistance, or whatever other name it is called, on the ground of
social justice.
A contrary rule would have the effect of rewarding rather than punishing the erring employee for his
offense.A contrary rule would, as the petitioner correctly argues, have the effect of rewarding rather than
punishing the erring employee for his offense. And we do not agree that the punishment is his dismissal only and
that the separation pay has nothing to do with the wrong he has committed. Of course it has. Indeed, if the employee
who steals from the company is granted separation pay even as he is validly dismissed, it is not unlikely that he will
commit a similar offense in his next employment because he thinks he can expect a like leniency if he is again found
out. This kind of misplaced compassion is not going to do labor in general any good as it will encourage the
infiltration of its ranks by those who do not deserve the protection and concern of the Constitution.
The policy of social justice is not intended to countenance wrongdoing.The policy of social justice is
not intended to countenance wrongdoing simply because it is committed by the underprivileged. At best it may
mitigate the penalty but it certainly will not condone the offense. Compassion for the poor is an imperative of every
humane society but only when the recipient is not a rascal claiming an undeserved privilege. Social justice cannot
be permitted to be the refuge of scoundrels any more than can equity be an impediment to the punishment of the
guilty. Those who invoke social justice may do so only if their hands are clean and their motives blameless and not
simply because they happen to be poor. This great policy of our Constitution is not meant for the protection of those
who have proved they are not worthy of it, like the workers who have tainted the cause of labor with the blemishes
of their own character.
Grant of separation pay to the private respondent who has been dismissed for dishonesty, is justified;
Reason.Applying the above considerations, we hold that the grant of separation pay in the case at bar is
unjustified. The private respondent has been dismissed for dishonesty, as found by the labor arbiter and affirmed by
the NLRC and as she herself has impliedly admitted. The fact that she has worked with the PLDT for more than a
decade, if it is, to be considered at all, should be taken against her as it reflects a regrettable lack of loyalty that she
should have strengthened instead of betraying during all of her 10 years of service with the company. If regarded as
a justification for moderating the penalty of dismissal, it will actually become a prize for disloyalty, perverting the
meaning of social justice and undermining the efforts of labor to cleanse its ranks of all undesirables.
Separation pay, if found due under the circumstances of each case, should be computed at the rate of one
month salary for every year of service.The Court also rules that the separation pay, if found due under the
circumstance of each case, should be computed at the rate of one month salary for every year of service, assuming
the length of such service is deemed material. This is without prejudice to the application of special agreements
between the employer and the employee stipulating a higher rate of computation and providing for more benefits to
the discharged employee.
FACTS
Marilyn Abucay, a traffic operator of the Philippine Long Distance Telephone Company, was accused by
two complainants of having demanded and received from them the total amount of P3, 800.00 in consideration of
her promise to facili- tate approval of their applications for telephone installation.1 Investigated and heard, she was
found guilty as charged and accordingly separated from the service. She went to the Ministry of Labor and
Employment claiming she had been illegally removed. After consideration of the evidence and arguments of the
parties, the company was sustained and the complaint was dismissed for lack of merit.
Both the petitioner and the private respondent appealed to the National Labor Relations Board, which
upheld the said decision in toto and dismissed the appeals.4 The private respondent took no further action, thereby
impliedly accepting the validity of her dismissal. The petitioner, however, is now before us to question the
affirmance of the above-quoted award as having been made with grave abuse of discretion.
The position of the petitioner is simply stated: It is conceded that an employee illegally dismissed is entitled
to reinstatement and backwages as required by the labor laws. However, an employee dismissed for cause is entitled
to neither reinstatement nor backwages and is not allowed any relief at all because his dismissal is in accordance
with law. In the case of the private respondent, she has been awarded financial assistance equivalent to ten months
pay corresponding to her 10-year service in the company despite her removal for cause. She is, therefore, in effect
rewarded rather than punished for her dishonesty, and without any legal authorization or justification. The award is
made on the ground of equity and compassion, which cannot be a substitute for law. Moreover, such award puts a
premium on dishonesty and encourages instead of deterring corruption.

The public respondent claims that the employee is sufficiently punished with her dismissal. The grant of financial
assistance is not intended as a reward for her offense but merely to help her for the loss of her employment after
working faithfully with the company for ten years. In support of this position, the Solicitor General cites the cases of
Firestone Tire and Rubber Company of the Philippines v. Lariosa and Soco v. Mercantile Corporation of Davao,
where the employees were dismissed for cause but were nevertheless allowed separation pay on grounds of social
and compassionate justice. As the Court put it in the Firestone case:
In view of the foregoing, We rule that Firestone had valid grounds to dispense with the services of Lariosa and that
the NLRC acted with grave abuse of discretion in ordering his reinstatement. However, considering that Lariosa had
worked with the company for eleven years with no known previous bad record, the ends of social and
compassionate justice would be served if he is paid full separation pay but not reinstatement without backwages by
the NLRC.
ISSUE
WON the award of separation pay in the form of financial assistance to an employee who had been
dismissed for cause as found by the public respondent is proper?
HELD
NO. The court hold that the grant of separation pay in the case at bar is unjustified. The private respondent
has been dismissed for dishonesty, as found by the labor arbiter and affirmed by the NLRC and as she herself has
impliedly admitted. The fact that she has worked with the PLDT for more than a decade, if it is to be considered at
all, should be taken against her as it reflects a regrettable lack of loyalty that she should have strengthened instead of
betraying during all of her 10 years of service with the company. If regarded as a justification for moderating the
penalty of dismissal, it will actually become a prize for disloyalty, perverting the meaning of social justice and
undermining the efforts of labor to cleanse its ranks of all undesirables.
The Court also rules that the separation pay, if found due under the circumstances of each case, should be computed
at the rate of one month salary for every year of service, assuming the length of such service is deemed material.
This is without prejudice to the application of special agreements between the employer and the employee
stipulating a higher rate of computation and providing for more benefits to the discharged employee.
RULING
The petition is GRANTED. The challenged resolution of September 22, 1987, is AFFIRMED in toto
except for the grant of separation pay in the form of financial assistance, which is hereby DISALLOWED. The
temporary restraining order dated March 23, 1988, is LIFTED. It is so ordered.

9.) Mercado, Sr. vs. NLRC, 201 SCRA 332/ G.R. No. 79869. September 5, 1991

PROJECT EMPLOYEE OR SEASONAL EMPLOYEE

Labor Law; Evidence; Administrative decision in matters within the executives jurisdiction can only be set aside
upon proof of gross abuse of discretion, fraud or error of law.The invariable rule set by the Court in reviewing
administrative decisions of the Executive Branch of the Government is that the findings of fact made therein are
respected, so long as they are supported by substantial evidence, even if not overwhelming or preponderant; that it is
not for the reviewing court to weigh the conflicting evidence, determine the credibility of the witnesses or otherwise
substitute its own judgment for that of the administrative agency on the sufficiency of the evidence; that the
administrative decision in matters within the executives jurisdiction can only be set aside upon proof of gross abuse
of discretion, fraud, or error of law.
Findings of the Labor Arbiter in this case are ably supported by evidence.A careful examination of the
foregoing statements reveals that the findings of the Labor Arbiter in the case are ably supported by evidence. There
is, therefore, no circumstance that would warrant a reversal of the questioned decision of the Labor Arbiter as
affirmed by the National Labor Relations Commission.

Regular employee, definition of.The first paragraph answers the question of who are regular employees. It states
that, regardless of any written or oral agreement to the contrary, an employee is deemed regular where he is engaged
in necessary or desirable activities in the usual business or trade of the employer, except for project employees.
Who are deemed casual employees.The second paragraph of Art. 280 demarcates as casual employees, all
other employees who do not fall under the definition of the preceding paragraph. The proviso, in said second
paragraph, deems as regular employees those casual employees who have rendered at least one year of service
regardless of the fact that such service may be continuous or broken.
Project employee, definition of.A project employee has been defined to be one whose employment has been
fixed for a specific project or undertaking, the completion or termination of which has been determined at the time
of the engagement of the employee, or where the work or service to be performed is seasonal in nature and the
employment is for the duration of the season, as in the present case.
FACTS
Assailed in this petition for certiorari is the decision** of the respondent national Labor Relations Commission
(NLRC) dated 8 August 1984 which affirmed the decision of respondent Labor Arbiter Luciano P. Aquino with the
slight modification of deleting the award of financial assistance to petitioners, and the resolution of the respondent
NLRC dated 17 August 1987, denying petitioners motion for reconsideration.
This petition originated from a complaint for illegal dismissal, underpayment of wages; non-payment of overtime
pay, holiday pay, service incentive leave benefits, emergency cost of living allowances and 13th month pay, filed by
above-named petitioners.
Petitioners alleged in their complaint that they were agricultural workers utilized by private respondents in all the
agricultural phases of work on the 7 1/2 hectares of rice land and 10 hectares of sugar land owned by the latter; that
Fortunato Mercado, Sr. and Leon Santillan worked in the farm of private respondents since 1949, Fortunato
Mercado, Jr. and Antonio Mercado since 1972 and the rest of the petitioners since 1960 up to April 1979, when they
were all allegedly dismissed from their employment.
Private respondent Aurora Cruz in her answer to petitioners complaint denied that said petitioners were her regular
employees and instead averred that she engaged their services, through Spouses Fortunato Mercado, Sr. and Rosa
Mercado, their mandarols, that is, persons who take charge in supplying the number of workers needed by owners
of various farms, but only to do a particular phase of agricultural work necessary in rice production and/or sugar
cane production, after which they would be free to render services to other farm owners who need their services.
The other private respondents denied having any relationship whatsoever with the petitioners and state that they
were merely registered owners of the land in question included as co-respondents in this case.
Respondent Labor Arbiter Luciano P. Aquino ruled in favor of private respondents and held that petitioners were not
regular and permanent workers of the private respondents, for the nature of the terms and conditions of their hiring
reveal that they were required to perform phases of agricultural work for a definite period of time after which their
services would be available to any other farm owner.4 Respondent Labor Arbiter deemed petitioners contention of
working twelve (12) hours a day the whole year round in the farm, an exaggeration, for the reason that the planting
of rice and sugar cane does not entail a whole year as reported in the findings of the Chief of the NLRC Special Task
Force.
The NLRC ruled in favor of private respondents affirming the decision of the respondent Labor Arbiter, with the
modification of the deletion of the award for financial assistance to petitioners.
ISSUE
Whether or not petitioners are regular and permanent farm workers and therefore entitled to the benefits
which they pray for. And corollary to this, whether or not said petitioners were illegally dismissed by private
respondents?
HELD

NO. Petitioners being project employees or to use the correct term seasonal employees, their
employment legally ends upon completion of the project or the season. The termination of their employment
cannot and should not constitute an illegal dismissal.
RULING
The petition is DISMISSED. The decision of the National Labor Relations Commission affirming that of
the Labor Arbiter, under review, is AFFIRMED. No pronouncement as to costs.
_____________________________
10.) Abasolo vs. National Labor Relations Commission, 346 SCRA 293/ G.R. No. 118475 November 29, 2000

REGULAR SEASONAL EMPLOYEES (PETITIONERS)

Labor Law; Classification of Employment; Nature of ones employment does not depend solely on the will or
word of the employer nor on the procedure for hiring and the manner of designating the employee, but on the nature
of the activities to be performed by the employee, considering the employers nature of business and the duration
and scope of work to be done.The nature of ones employment does not depend solely on the will or word of the
employer. Nor on the procedure for hiring and the manner of designating the employee, but on the nature, of the
activities to be performed by the employee, considering the employers nature of business and the duration and
scope of work to be done.
Court has already settled that seasonal workers who are called to work from time to time and are temporarily laid
off during offseason are not separated from service in said period but are merely considered on leave until reemployed.In the case at bar, while it may appear that the work of petitioners is seasonal, inasmuch as petitioners
have served the company for many years, some for over 20 years, performing services necessary and indispensable
to LUTORCOs business, serve as badges of regular employment. Moreover, the fact that petitioners do not work
continuously for one whole year but only for the duration of the tobacco season does not detract from considering
them in regular employment since in a litany of cases this Court has already settled that seasonal workers who are
called to work from time to time and are temporarily laid off during off-season are not separated from service in said
period, but are merely considered on leave until re-employed.
FACTS
Private respondent La Union Tobacco Redrying Corporation (LUTORCO), which is owned by private
respondent See Lin Chan, is engaged in the business of buying, selling, redrying and processing of tobacco leaves
and its by-products. Tobacco season starts sometime in October of every year when tobacco farmers germinate their
seeds in plots until they are ready for replanting in November. The harvest season starts in mid-February. Then, the
farmers sell the harvested tobacco leaves to redrying plants or do the redrying themselves. The redrying plant of
LUTORCO receives tobacco for redrying at the end of February and starts redrying in March until August or
September.
Petitioners have been under the employ of LUTORCO for several years until their employment was abruptly
interrupted sometime in March 1993 when Compania General de Tabaccos de Filipinas (also known as
TABACALERA) took over LUTORCOs tobacco operations. New signboards were posted indicating a change of
ownership and petitioners were then asked by LUTORCO to file their respective applications for employment with
TABACALERA. Petitioners were caught unaware of the sudden change of ownership and its effect on the status of
their employment, though it was alleged that TABACALERA would assume and respect the seniority rights of the
petitioners.
On March 17, 1993, the disgruntled employees instituted before the NLRC Regional Arbitration Branch No. 1, San
Fernando, La Union a complaint for separation pay against private respondent LUTORCO on the ground that there
was a termination of their employment due to the closure of LUTORCO as a result of the sale and turnover to
TABACALERA. Other equally affected employees filed two additional complaints, also for separation pay, which
were consolidated with the first complaint.
Private respondent corporation raised as its defense that it is exempt from paying separation pay and denied that it
terminated the services of the petitioners; and that it stopped its operations due to the absence of capital and
operating funds caused by losses incurred from 1990 to 1992 and absence of operating funds for 1993, coupled with
adverse financial conditions and downfall of prices. It alleged further that LUTORCO entered into an agreement

with TABACALERA to take over LUTORCOs tobacco operations for the year 1993 in the hope of recovering from
its serious business losses in the succeeding tobacco seasons and to create a continuing source of income for the
petitioners. Lastly, it manifested that LUTORCO, in good faith and with sincerity, is willing to grant reasonable and
adjusted amounts to the petitioners, as financial assistance, if and when LUTORCO could recover from its financial
crisis.
On December 29, 1993, Labor Arbiter Ricardo N. Olairez rendered his decision dismissing the complaint
for lack of merit. In upholding private respondent LUTORCOs position, the Labor Arbiter declared that the
petitioners are not entitled to the benefits under Article 283 of the Labor Code since LUTORCO ceased to operate
due to serious business losses and, furthermore, TABACALERA, the new employer of the petitioner has assumed
the seniority rights of the petitioners and other employment liabilities of the LUTORCO.
Petitioners were not terminated from employment but petitioners instead refused to work with
TABACALERA, despite the notice to petitioners to return to work in view of LUTORCOs need for workers at its
Agoo plant which had approximately 300,000 kilos of Virginia tobacco for processing and redrying. Furthermore,
petitioners are not entitled to separation pay because petitioners are seasonal workers.
Petitioners vigorously maintain that they are regular workers of respondent LUTORCO since they worked
continuously for many years with LUTORCO, some of them even for over 20 years, and that they performed
functions necessary and desirable in the usual business of LUTORCO. According to them, the fact that some of
them work only during the tobacco season does not affect their status as regular workers since they have been
repeatedly called back to work for every season, year after year.18 Thus, petitioners take exception to the factual
findings and conclusions of the NLRC, stressing that the conclusions of the NLRC were based solely on the new
theory advanced by private respondent LUTORCO only on appeal, that is, that it was only LUTORCOs tobacco redrying operation that was sold, and hence, diametrically opposed to its theory before the Labor Arbiter, i.e., that it is
the entire company (LUTORCO) itself that was sold.
Private respondent LUTORCO, on the other hand, insists that petitioners employment was not terminated; that it
never ceased to operate, and that it was petitioners themselves who severed their employer-employee relationship
when they chose employment with TABACALERA because petitioners found more stability working with
TABACALERA than with LUTORCO.19 It likewise insists that petitioners are seasonal workers since almost all of
petitioners never continuously worked in LUTORCO for any given year20 and they were required to reapply every
year to determine who among them shall be given work for the season.
The public respondent NLRC in the case at bar erred in its total affirmance of the dismissal of the consolidated
complaint, for separation pay, against private respondents LUTORCO and See Lin Chan considering that petitioners
are regular seasonal employees entitled to the benefits of Article 283 of the Labor Code which applies to closures
or cessation of an establishment or undertaking, whether it be a complete or partial cessation or closure of business
operation.
ISSUES
(1) Whether petitioners employment with LUTORCO was terminated, and (2) Whether petitioners are
regular or seasonal workers, as defined by law?
HELD
1) NO. Court has already settled that seasonal workers who are called to work from time to time and are temporarily
laid off during offseason are not separated from service in said period but are merely considered on leave until reemployed.
2) Petitioner are regular workers. In the case at bar, while it may appear that the work of petitioners is seasonal,
inasmuch as petitioners have served the company for many years, some for over 20 years, performing services
necessary and indispensable to LUTORCOs business, serve as badges of regular employment. Moreover, the fact
that petitioners do not work continuously for one whole year but only for the duration of the tobacco season does not
detract from considering them in regular employment since in a litany of cases this Court has already settled that
seasonal workers who are called to work from time to time and are temporarily laid off during off-season are not
separated from service in said period, but are merely considered on leave until re-employed.
Private respondents reliance on the case of Mercardo v. NLRC is misplaced considering that since in said case of
Mercado, although the respondent company therein consistently availed of the services of the petitioners therein

from year to year, it was clear that petitioners therein were not in respondent companys regular employ. Petitioners
therein performed different phases of agricultural work in a given year. However, during that period, they were free
to contract their services to work for other farm owners, as in fact they did. Thus, the Court ruled in that case that
their employment would naturally end upon the completion of each project or phase of farm work for which they
have been contracted.
The test of whether or not an employee is a regular employee has been laid down in De Leon v. NLRC, in which
this Court held:
The primary standard, therefore, of determining regular employment is the reasonable connection between the
particular activity performed by the employee in relation to the usual trade or business of the employer. The test is
whether the former is usually necessary or desirable in the usual business or trade of the employer. The connection
can be determined by considering the nature of the work performed and its relation to the scheme of the particular
business or trade in its entirety. Also if the employee has been performing the job for at least a year, even if the
performance is not continuous and merely intermittent, the law deems repeated and continuing need for its
performance as sufficient evidence of the necessity if not indispensability of that activity to the business. Hence, the
employment is considered regular, but only with respect to such activity and while such activity exists.
RULING
The petition is hereby GRANTED, and the assailed Resolutions dated July 6, 1994 and September 23,
1994 of public respondent NLRC are REVERSED and SET ASIDE. Private respondent La Union Tobacco Redrying
Corporation is ORDERED: (a) to pay petitioners separation pay equivalent to one (1) month, or one-half (1/2)
month pay for each year that they rendered service, whichever is higher, provided that they rendered service
for at least six (6) months in a given year, and; (b) to pay ten percent (10%) of the total amount due to petitioners,
as and for attorneys fees. Consequently, public respondent NLRC is ORDERED to COMPUTE the total amount of
separation pay which each petitioner who has rendered service to private respondent LUTORCO for at least six (6)
months in a given year is entitled to receive in accordance with this decision, and to submit its compliance thereon
within forty-five (45) days from notice of this decision.
_____________________________
In the case of Philippine Tobacco Flue-Curing & Redrying Corporation v. NLRC this Court, when faced with
the question of whether the separation pay of a seasonal worker, who works for only a fraction of a year,
should be equated with the separation pay of a regular worker, resolved that question in this wise:
The amount of separation pay is based on two factors: the amount of monthly salary and the number of years of
service. Although the Labor Code provides different definitions as to what constitutes one year of service, Book
Six31 does not specifically define one year of service for purposes of computing separation pay. However,
Articles 283 and 284 both state in connection with separation pay that a fraction of at least six months shall be
considered one whole year. Applying this case at bar, we hold that the amount of separation pay which respondent
members x x x should receive is one-half (1/2) their respective average monthly pay during the last season they
worked multiplied by the number of years they actually rendered service, provided that they worked for at least six
months during a given year.
Thus, in the said case, the employees were awarded separation pay equivalent to one (1) month, or to one-half (1/2)
month pay for every year they rendered service, whichever is higher, provided they rendered service for at least six
(6) months in a given year. As explained in the text of the decision in the said case, month pay shall be
understood as average monthly pay during the last season they worked. An award of ten percent (10%) of the
total amount due petitioners as attorneys fees is legally and morally justifiable under Art. 111 of the Labor Code,33
Sec. 8, Rule VIII, Book III of its Implementing Rules,34 and par. 7, Art. 220835 of the Civil Code.

11.) Hacienda Fatima vs. National Federation of Sugarcane Workers-Food and General Trade, 396 SCRA
518/ G.R. No. 149440 January 28, 2003

REGULAR EMPLOYMENT

Labor Law; Employment; Regular Employee; Definition.[T]he test of whether or not an employee is a regular
employee has been laid down in De Leon v. NLRC, in which this Court held: The primary standard, therefore, of
determining regular employment is the reasonable connection between the particular activity performed by the
employee in relation to the usual trade or business of the employer. The test is whether the former is usually
necessary or desirable in the usual trade or business of the employer. The connection can be determined by
considering the nature of the work performed and its relation to the scheme of the particular business or trade in its
entirety. Also if the employee has been performing the job for at least a year, even if the performance is not
continuous and merely intermittent, the law deems repeated and continuing need for its performance as sufficient
evidence of the necessity if not indispensability of that activity to the business. Hence, the employment is considered
regular, but only with respect to such activity and while such activity exists. x x x x x x x x x x x x [T]he fact that
[respondents] do not work continuously for one whole year but only for the duration of the x x x season does not
detract from considering them in regular employment since in a litany of cases this Court has already settled that
seasonal workers who are called to work from time to time and are temporarily laid off during off-season are not
separated from service in said period, but merely considered on leave until re-employed.
Dismissals; The burden is on the employer to prove that the termination was for a valid and authorized cause .
Where there is no showing of clear, valid and legal cause for the termination of employment, the law considers
the matter a case of illegal dismissal and the burden is on the employer to prove that the termination was for a valid
and authorized cause. In the case at bar, petitioners failed to prove any such cause for the dismissal of respondents
who, as discussed above, are regular employees.
Appeals; Factual findings of labor officials, who are deemed to have acquired expertise in matters within their
respective jurisdictions, are generally accorded not only respect but even finality.We uphold the CAs affirmation
of the above findings. Indeed, factual findings of labor officials, who are deemed to have acquired expertise in
matters within their respective jurisdictions, are generally accorded not only respect but even finality. Their findings
are binding on the Supreme Court. Verily, their conclusions are accorded great weight upon appeal, especially when
supported by substantial evidence. Consequently, the Court is not duty-bound to delve into the accuracy of their
factual findings, in the absence of a clear showing that these were arbitrary and bereft of any rational basis.
FACTS
Although the employers have shown that respondents performed work that was seasonal in nature, they failed to
prove that the latter worked only for the duration of one particular season. In fact, petitioners do not deny that these
workers have served them for several years already. Hence, they are regularnot seasonalemployees.
The facts are summarized in the NLRC Decision as follows:
Contrary to the findings of the Labor Arbiter that complainants [herein respondents] refused to work and/or were
choosy in the kind of jobs they wanted to perform, the records is replete with complainants persistence and dogged
determination in going back to work.
Indeed, it would appear that respondents did not look with favor workers having organized themselves into a
union. Thus, when complainant union was certified as the collective bargaining representative in the certification
elections, respondents under the pretext that the result was on appeal, refused to sit down with the union for the
purpose of entering into a collective bargaining agreement. Moreover, the workers including complainants herein
were not given work for more than one month. In protest, complainants staged a strike which was however settled
upon the signing of a Memorandum of Agreement.
The CA affirmed that while the work of respondents was seasonal in nature, they were considered to be merely on
leave during the off-season and were therefore still employed by petitioners. Moreover, the workers enjoyed security
of tenure. Any infringement upon this right was deemed by the CA to be tantamount to illegal dismissal.
The appellate court found neither rhyme nor reason in petitioners argument that it was the workers themselves
who refused to or were choosy in their work. As found by the NLRC, the record of this case is replete with
complainants persistence and dogged determination in going back to work.6
The CA likewise concurred with the NLRCs finding that petitioners were guilty of unfair labor practice.
ISSUES

(1) Whether or not the Court of Appeals erred in holding that respondents, admittedly seasonal workers, were
regular employees, contrary to the clear provisions of Article 280 of the Labor Code, which categorically state that
seasonal employees are not covered by the definition of regular employees under paragraph 1, nor covered under
paragraph 2 which refers exclusively to casual employees who have served for at least one year;
(2) Whether or not the Court of Appeals erred in rejecting the ruling in Mercado, x x x, and relying instead on
rulings which are not directly applicable to the case at bench, viz., Philippine Tobacco, BacolodMurcia, and Gaco, x
x x;
(3) Whether or not the Court of Appeals committed grave abuse of discretion in upholding the NLRCs conclusion
that private respondents were illegally dismissed, that petitioner[s were] guilty of unfair labor practice, and that the
union be awarded moral and exemplary damages.
HELD
The Petition has no merit.
First Issue: Regular Employment
At -the outset, we must stress that only errors of law are generally reviewed by this Court in petitions for review on
certiorari of CA decisions.9 Questions of fact are not entertained.10 The Court is not a trier of facts and, in labor
cases, this doctrine applies with greater force.11 Factual questions are for labor tribunals to resolve.12 In the present
case, these have already been threshed out by the NLRC. Its findings were affirmed by the appellate court.
Contrary to petitioners contention, the CA did not err when it held that respondents were regular employees.
Article 280 of the Labor Code, as amended, states:
Art. 280. Regular and Casual Employment.The provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular
where the employee has been engaged to perform activities which are usually necessary or desirable in the usual
business or trade of the employer, except where the employment has been fixed for a specific project or undertaking
the completion or termination of which has been determined at the time of the engagement of the employee or where
the work or services to be performed is seasonal in nature and the employment is for the duration of the season.
The fact that respondentswith the exception of Luisa Rombo, Ramona Rombo, Bobong Abriga and Boboy Silva
repeatedly worked as sugarcane workers for petitioners for several years is not denied by the latter. Evidently,
petitioners employed respondents for more than one season. Therefore, the general rule of regular employment is
applicable.
Petitioners move actually amounted to unjustified dismissal of respondents, in violation of the Labor Code.
Where there is no showing of clear, valid and legal cause for the termination of employment, the law considers the
matter a case of illegal dismissal and the burden is on the employer to prove that the termination was for a valid and
authorized cause.16 In the case at bar, petitioners failed to prove any such cause for the dismissal of respondents
who, as discussed above, are regular employees.
Second Issue: Unfair Labor Practice
The NLRC also found herein petitioners guilty of unfair labor practice. It ruled as follows:
Indeed, from respondents refusal to bargain, to their acts of economic inducements resulting in the promotion of
those who withdrew from the union, the use of armed guards to prevent the organizers to come in, and the dismissal
of union officials and members, one cannot but conclude that respondents did not want a union in their haciendaa
clear interference in the right of the workers to self-organization.
The finding of unfair labor practice done in bad faith carries with it the sanction of moral and exemplary damages.
RULING
The Petition is hereby DENIED and the assailed Decision AFFIRMED. Costs against petitioners.
12.) Philippine Village Hotel vs. NLRC G R NO 105033
FACTS: Private respondents were employees of petitioner Philippine Village Hotel. However, on May 19, 1986,
petitioner had to close and totally discontinue its operations due to serious financial and business reverses resulting
in the termination of the services of its employees. Thereafter, the Philippine Village Hotel employees and workers
union filed against petitioner a complaint for separation pay, unfair labor practice and illegal lock-out. The Labor

Arbiter issued and order finding the losses suffered by petitioner to be actual, genuine and of such magnitude as to
validly terminate the services of private respondents but directed petitioner to give priority to the complainants
/herein private respondents0 in 1the2 hiring of personnel should they resume their business operations in the future.
The NLRC affirmed the validity of the closure of petitioner but ordered petitioner to pay private respondent
separation pay at the rate of 1/2 month pay every year of service. However, there is nothing in the records to show
that private respondents received their separation pay. Petitioner decided to have a one (1) month dry run operation
to ascertain the feasibility of resuming its business operations. In order to carry out its dry run operation, petitioner
hired casual workers, including private respondents, for a one (1) month period, or from February 1, to March 1,
1989 as evidenced by the latters Contract of employment.
After evaluating the individual performance of all the employees and upon the lapse of the contractual onemonth period or on March 2, 1989 petitioner terminated the services of private respondents. Private respondents and
Tupas Local Chapter No. 1362 filed a complaint against petitioner for illegal dismissal and unfair labor practice with
the NLRC+NCR Arbitration Branch which was dismissed. on appeal to NLRC, it reversed the decision of the Labor
Arbiter and ordered to reinstate the above-named complainants to their former or substantially equivalent positions
without loss of seniority rights plus full back wages from the time they were actually dismissed on 02 March 1989
up to the time of their actual reinstatement.
ISSUE: whether or not the private respondents are deemed to be regular employees.
RULING: In the instant case, private respondents were validly terminated by the petitioner when the latter had to
close its business due to financial losses. Following the directives of the NLRC to give priority in hiring private
respondents should it resume its business, petitioner hired private respondents during their one (1) month dry-run
operation. However, this does not mean that private respondents were deemed to have continued their regular
employment status, which they had enjoyed before their aforementioned termination due to petitioners financial
losses. As stated by the Labor Arbiter in his decision: It should be borne in mind that when complainants were first
terminated as a result of the companys cessation from operation in May 1986 the employer-employee relationship
between the parties herein was totally and completely severed. Such being the case, respondent acted well within its
discretion when in rehiring the complainants /herein private respondents it made them casual and for a specific
period. The complainants are no better than the new employees of respondent /petitioner for the matter of what
status or designation to be given them exclusively rests in the discretion of management.
The prior employment which was terminated cannot be joined or tacked to the new employment for purposes of
security of tenure. while it is true that security of tenure is a constitutionally guaranteed right of the employees, it
does not, however, mean perpetual employment for the employee because our law, while affording protection to the
employee, does not authorize oppression or destruction of an employer. The questioned of the order of NLRC is
hereby Set Aside.

13.) Brent School, Inc. vs. Zamora, 181 SCRA 702/ G.R. No. 48494. February 5, 1990
Labor Relations; Termination of Employment; R.A. 1052; Before the advent of the Labor Code, term
employment was impliedly but clearly recognized under R.A. 1052, as amended by R.A. 1787.The employment
contract between Brent School and Alegre was executed on July 18, 1971, at a time when the Labor Code of the
Philippines (P.D. 442) had not yset been promulgated. Indeed, the Code did not come into effect until November 1,
1974, some three years after the perfection of the employment contract, and rights and obligations thereunder had
arisen and been mutually observed and enforced. At that time, i.e., before the advent of the Labor Code, there was
no doubt whatever about the validity of term employment. It was impliedly but nonetheless clearly recognized by
the Termination Pay Law, R.A. 1052, as amended by R.A. 1787. Basically, this statute provided thatIn cases of
employment, without a definite period, in a commercial, industrial, or agricultural establishment or enterprise, the
employer or the employee may terminate at any time the employment with just cause; or without just cause in the
case of an employee by serving written notice on the employer at least one month in advance, or in the case of an
employer, by serving such notice to the employee at least one month in advance or one-half month for every year of
service of the employee, whichever is longer, a fraction of at least six months being considered as one whole year.
The employer, upon whom no such notice was served in case of termination of employment without just cause, may
hold the employee liable for damages. The employee, upon whom no such notice was served in case of termination

of employment without just cause, shall be entitled to compensation from the date of termination of his employment
in an amount equivalent to his salaries or wages corresponding to the required period of notice. There was, to repeat,
clear albeit implied recognition of the licitness of term employment. RA 1787 also enumerated what it considered to
be just causes for terminating an employment without a definite period, either by the employer or by the employee
without incurring any liability therefor.
The decisive determinant in term employment is not the nature of the activities performed by the
employee, but the day certain agreed upon by the parties for the commencement and termination of their
employment relationship.The question immediately provoked by a reading of Article 319 is whether or not a
voluntary agreement on a fixed term or period would be valid where the employee has been engaged to perform
activities which are usually necessary or desirable in the usual business or trade of the employer. The definition
seems a non sequitur. From the premisethat the duties of an employee entail activities which are usually
necessary or desirable in the usual business or trade of the employerthe conclusion does not necessarily follow
that the employer and employee should be forbidden to stipulate any period of time for the performance of those
activities. There is nothing essentially contradictory between a definite period of an employment contract and the
nature of the employees duties set down in that contract as being usually necessary or desirable in the usual
business or trade of the employer. The concept of the employees duties as being usually necessary or desirable in
the usual business or trade of the employer is not synonymous with or identical to employment with a fixed term.
Logically, the decisive determinant in term employment should not be the activities that the employee is called upon
to perform, but the day certain agreed upon by the parties for the commencement and termination of their
employment relationship, a day certain being understood to be that which must necessarily come, although it may
not be known when. Seasonal employment, and employment for a particular project are merely instances of
employment in which a period, where not expressly set down, is necessarily implied.
Stipulations in employment contracts providing for term employment or fixed period employment are
valid when the period where agreed upon knowingly, and voluntarily by the parties without force, duress or
improper pressure exerted on the employee; and when such stipulations were not designed to circumvent the laws on
security of tenure.Accordingly, and since the entire purpose behind the development of legislation culminating in
the present Article 280 of the Labor Code clearly appears to have been, as already observed, to prevent
circumvention of the employees right to be secure in his tenure, the clause in said article indiscriminately and
completely ruling out all written or oral agreements conflicting with the concept of regular employment as defined
therein should be construed to refer to the substantive evil that the Code itself has singled out: agreements entered
into precisely to circumvent security of tenure. It should have no application to instances where a fixed period of
employment was agreed upon knowingly and voluntarily by the parties, without any force, duress or improper
pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent, or where
it satisfactorily appears that the employer and employee dealt with each other on more or less equal terms with no
moral dominance whatever being exercised by the former over the latter. Unless thus limited in its purview, the law
would be made to apply to purposes other than those explicitly stated by its framers; it thus becomes pointless and
arbitrary, unjust in its effects and apt to lead to absurd and unintended consequences.
FACTS
The root of the controversy at bar is an employment contract in virtue of which Doroteo R. Alegre was
engaged as athletic director by Brent School, Inc. at a yearly compensation of P20,000.00. The contract fixed a
specific term for its existence, five (5) years, i.e., from July 18, 1971, the date of execution of the agreement, to July
17, 1976. Subsequent subsidiary agreements dated March 15, 1973, August 28, s1973, and September 14, 1974
reiterated the same terms and conditions, including the expiry date, as those contained in the original contract of July
18, 1971.
Some three months before the expiration of the stipulated period, or more precisely on April 20, 1976, Alegre was
given a copy of the report filed by Brent School with the Department of Labor advising of the termination of his
services effective on July 16, 1976. The stated ground for the termination was completion of contract, expiration of
the definite period of employment. And a month or so later, on May 26, 1976, Alegre accepted the amount of
P3,177.71, and signed a receipt therefor containing the phrase, in full payment of services for the period May 16, to
July 17, 1976 as full payment of contract.
Alegre argued that although his contract did stipulate that the same would terminate on July 17, 1976, since his
services were necessary and desirable in the usual business of his employer, and his employment had lasted for five

years, he had acquired the status of a regular employee and could not be removed except for valid cause.6 The
Regional Director considered Brent Schools report as an application for clearance to terminate employment (not a
report of termination), and accepting the recommendation of the Labor Conciliator, refused to give such clearance
and instead required the reinstatement of Alegre, as a permanent employee, to his former position without loss of
seniority rights and with full back wages. The Director pronounced the ground relied upon by the respondent
(Brent) in terminating the services of the complainant (Alegre) x x x (as) not sanctioned by P.D. 442, and, quite
oddly, as prohibited by Circular No. 8, series of 1969, of the Bureau of Private Schools.
Brent School filed a motion for reconsideration. The Regional Director denied the motion and forwarded the case to
the Secretary of Labor for review.8 The latter sustained the Regional Director.9 Brent appealed to the Office of the
President. Again it was rebuffed. That Office dismissed its appeal for lack of merit and affirmed the Labor
Secretarys decision, ruling that Alegre was a permanent employee who could not be dismissed except for just cause,
and expiration of the employment contract was not one of the just causes provided in the Labor Code for termination
of services.
ISSUE
Whether or not a voluntary agreement on a fixed term or period would be valid where the employee has
been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the
employer?
HELD
YES. Stipulations in employment contracts providing for term employment or fixed period
employment are valid when the period where agreed upon knowingly, and voluntarily by the parties without force,
duress or improper pressure exerted on the employee; and when such stipulations were not designed to circumvent
the laws on security of tenure.
RULING
The public respondents Decision complained of is REVERSED and SET ASIDE. Respondent Alegres contract of
employment with Brent School having lawfully terminated with and by reason of the expiration of the agreed term
of period thereof, he is declared not entitled to reinstatement and the other relief awarded and confirmed on appeal
in the proceedings below. No pronouncement as to costs. _______________________________
From the premisethat the duties of an employee entail activities which are usually necessary or
desirable in the usual business or trade of the employerthe conclusion does not necessarily follow that the
employer and employee should be forbidden to stipulate any period of time for the performance of those activities.
There is nothing essentially contradictory between a definite period of an employment contract and the nature of the
employees duties set down in that contract as being usually necessary or desirable in the usual business or trade of
the employer. The concept of the employees duties as being usually necessary or desirable in the usual
business or trade of the employer is not synonymous with or identical to employment with a fixed term.
Logically, the decisive determinant in term employment should not be the activities that the employee is called upon
to perform, but the day certain agreed upon by the parties for the commencement and termination of their
employment relationship, a day certain being understood to be that which must necessarily come, although it may
not be known when.19 Seasonal employment, and employment for a particular project are merely instances of
employment in which a period, where not expressly set down, is necessarily implied.
Of course, the term period has a definite and settled signification. It means, Length of existence; duration. A point
of time marking a termination as of a cause or an activity; an end, a limit, a bound; conclusion; termination. A series
of years, months or days in which something is completed. A time of definite length. x x x the period from one
fixed date to another fixed date x x.20 It connotes a space of time which has an influence on an obligation as a
result of a juridical act, and either suspends its demandableness or produces its extinguishment.21 It should be
apparent that this settled and familiar notion of a period, in the context of a contract of employment, takes no
account at all of the nature of the duties of the employee; it has absolutely no relevance to the character of his duties
as being usually necessary or desirable to the usual business of the employer, or not.
14.) Paguio vs. National Labor Relations Commission, 403 SCRA 190/ G.R. No. 147816 May 9, 2003

Labor Law; Employer-Employee Relationship; Regular Employees; Words and Phrases; The control test
assumes primacy in the overall consideration of the nature of an employment, whether regular or otherwise.A
regular employment, whether it is one or not, is aptly gauged from the concurrence, or the non-concurrence, of
the following factorsa) the manner of selection and engagement of the putative employee, b) the mode of payment
of wages, c) the presence or absence of the power of dismissal; and d) the presence or absence of the power to
control the conduct of the putative employee or the power to control the employee with respect to the means or
methods by which his work is to be accomplished. The control test assumes primacy in the overall consideration.
Under this test, an employment relation obtains where work is performed or services are rendered under the control
and supervision of the party contracting for the service, not only as to the result of the work but also as to the
manner and details of the performance desired.
Mass Media; Newspaper; An account executive responsible for soliciting advertisements is clearly necessary and
desirable, for the survival and continued operation of an employer in the newspaper business.That petitioner
performed activities which were necessary and desirable to the business of the employer, and that the same went on
for more than a year, could hardly be denied. Petitioner was an account executive in soliciting advertisements,
clearly necessary and desirable, for the survival and continued operation of the business of respondent
corporation. Robina Gokongwei, its President, herself admitted that the income generated from paid advertisements
was the lifeblood of the newspapers existence. Implicitly, respondentcorporation recognized petitioners invaluable
contribution to the business when it renewed, not just once but five times, its contract with petitioner.
A lawful dismissal must meet both substantive and procedural requirementsthe dismissal must be for a just or
authorized cause and must comply with the rudimentary due process of notice and hearing.The real question that
should thus be posed is whether or not petitioner has been justly dismissed from service. A lawful dismissal must
meet both substantive and procedural requirements; in fine, the dismissal must be for a just or authorized cause and
must comply with the rudimentary due process of notice and hearing. It is not shown that respondent company has
fully bothered itself with either of these requirements in terminating the services of petitioner. The notice of
termination recites no valid or just cause for the dismissal of petitioner nor does it appear that he has been given an
opportunity to be heard in his defense.
FACTS
On 22 June 1992, respondent Metromedia Times Corporation entered, for the fifth time, into an agreement with
petitioner Efren P. Paguio, appointing the latter to be an account executive of the firm.1 Again, petitioner was to
solicit advertisements for The Manila Times, a newspaper of general circulation, published by respondent
company. Petitioner, for his efforts, was to receive compensation consisting of a 15% commission on direct
advertisements less withholding tax and a 10% commission on agency advertisements based on gross revenues less
agency commission and the corresponding withholding tax. The commissions, released every fifteen days of each
month, were to be given to petitioner only after the clients would have paid for the advertisements. Apart from
commissions, petitioner was also entitled to a monthly allowance of P2,000.00 as long as he met the P30,000.00monthly quota.
Apart from vague allegations of misconduct on which he was not given the opportunity to defend himself, i.e.,
pirating clients from his co-executives and failing to produce results, no definite cause for petitioners termination
was given. Aggrieved, petitioner filed a case before the labor arbiter, asking that his dismissal be declared unlawful
and that his reinstatement, with entitlement to backwages without loss of seniority rights, be ordered. Petitioner also
prayed that respondent company officials be held accountable for acts of unfair labor practice, for P500,000.00
moral damages and for P200,000.00 exemplary damages.
In their defense, respondent Metromedia Times Corporation asserted that it did not enter into any agreement with
petitioner outside of the contract of services under Articles 1642 and 1644 of the Civil Code of the Philippines.4
Asserting their right to terminate the contract with petitioner, respondents pointed to the last provision thereof
stating that both parties could opt to end the contract provided that either party would serve, thirty days prior to the
intended date of termination, the corresponding notice to the other.
The labor arbiter found for petitioner and declared his dismissal illegal. The arbiter ordered respondent
Metromedia Times Corporation and its officers to reinstate petitioner to his former position, without loss of seniority
rights, and to pay him his commissions and other remuneration accruing from the date of dismissal on 15 August
1992 up until his reinstatement. He likewise adjudged that Liberato I. Gomez, general manager of respondent
corporation, be held liable to petitioner for moral damages in the amount of P20,000.00.

On appeal, the National Labor Relations Commission (NLRC) reversed the ruling of the labor arbiter and declared
the contractual relationship between the parties as being for a fixed-term employment. The NLRC declared a fixedterm employment to be lawful as long as it was agreed upon knowingly and voluntarily by the parties, without any
force, duress or improper pressure being brought to bear upon the worker and absent any other circumstances
vitiating his consent.5 The finding of the NLRC was primarily hinged on the assumption that petitioner, on account
of his educated stature, having indeed personally prepared his pleadings without the aid of counsel, was an unlikely
victim of a lopsided contract. Rejecting the assertion of petitioner that he was a regular employee, the NLRC held:
The decisive determinant would not be the activities that the employee (was) called upon to perform but rather, the
day certain agreed upon by the parties for the commencement and termination of their employment relationship, a
day certain being understood to be that which (would) necessarily come, although it (might) not be known when.
Petitioner appealed the ruling of the NLRC before the Court of Appeals which upheld in toto the findings of the
commission.
ISSUE
Whether or not petitioner has been justly dismissed from service?
HELD
NO. A lawful dismissal must meet both substantive and procedural requirements; in fine, the dismissal
must be for a just or authorized cause and must comply with the rudimentary due process of notice and hearing. It is
not shown that respondent company has fully bothered itself with either of these requirements in terminating the
services of petitioner. The notice of termination recites no valid or just cause for the dismissal of petitioner nor does
it appear that he has been given an opportunity to be heard in his defense.
That petitioner performed activities which were necessary and desirable to the business of the employer,
and that the same went on for more than a year, could hardly be denied. Petitioner was an account executive in
soliciting advertisements, clearly necessary and desirable, for the survival and continued operation of the business of
respondent corporation. Robina Gokongwei, its President, herself admitted that the income generated from paid
advertisements was the lifeblood of the newspapers existence. Implicitly, respondent corporation recognized
petitioners invaluable contribution to the business when it renewed, not just once but five times, its contract with
petitioner.
RULING
The instant petition is GRANTED. The decision of the Court of Appeals in CA-G.R. SP No. 527773 and that of the
National Labor Relations Commission are hereby SET ASIDE and that of the Labor Arbiter is REINSTATED except
with respect to the P20,000.00 moral damages adjudged against respondent Liberato I. Gomez which award is
deleted.

15.1) University of Sto. Tomas vs. NLRC, 182 SCRA 371/ G.R. No. 85519. February 15, 1990

Respondent did not become a permanent employee of petitioner UST

Labor Law; Teachers; Permanent Employment; Under the Manual of Regulations for Private Schools, a part-time
member of the faculty cannot acquire permanence in employment.The legal requisites, therefore, for acquisition
by a teacher of permanent employment, or security of tenure, are as follows: 1) the teacher is a full time teacher; 2)
the teacher must have rendered three (3) consecutive years of service; and 3) such service must have been
satisfactory. Now, the Manual of Regulations also states that a full-time teacher is one whose total working day is
devoted to the school, has no other regular remunerative employment and is paid on a regular monthly basis
regardless of the number of teaching hours (Par. 77); and that in college, the normal teaching load of a full-time
instructor shall be eighteen hours a week (par. 78). It follows that a part-time member of the faculty cannot acquire
permanence in employment under the Manual of Regulations in relation to the Labor Code.

Employment of private respondent, whose total working day was not devoted to the school alone, and who had
other regular remunerative employment, merely part-time, hence, he could not have and did not become a
permanent employee even after completion of three (3) years of service.It cannot be said that respondents total
working day was devoted to the school alone. It is clear from the record that he was practising his profession as a
doctor and maintaining a clinic in the hospital for this purpose during the time that he was given a teaching load. In
other words, he had another regular remunerative work aside from teaching. His total working day was not,
therefore, devoted to the school. Indeed, his salaries from teaching were computed by the respondent Commission
itself at only an average of P660.00 per month; he, therefore, had to have other sources of income, and this of course
was his self-employment as a practising psychiatrist. That the compensation for teaching had to be averaged also
shows that he was not paid on a regular monthly basis. Moreover, there is absolutely no evidence that he performed
other functions for the school when not teaching. All things considered, it would appear that teaching was only a
secondary occupation or side-line, his professional practice as a psychiatrist being his main vocation. x x x The
private respondent, therefore, could not be regarded as a full-time teacher in any aspect. He could not be regarded as
such because his total working day was not devoted to the school and he had other regular remunerative
employment. Moreover, his average teaching load was only 6.33 hours a week. In view of the explicit provisions of
the Manual of Regulations above-quoted, and the fact that private respondent was not a full-time teacher, he could
not have and did not become a permanent employee even after the completion of three (3) years of service.
Private respondents temporary appointment having lapsed, his reappointment is a matter addressed to the
discretion of said petitioner.Having found that private respondent did not become a permanent employee of
petitioner UST, it correspondingly follows that there was no duty on the part of petitioner UST to reappoint private
respondent as Instructor, the temporary appointment having lapsed. Such appointment is a matter addressed to the
discretion of said petitioner.
FACTS
The private respondent Dr. Basilio E. Borja was first appointed as affiliate faculty in the Faculty of
Medicine and Surgery at the University of Sto. Tomas (UST for short) on September 29, 1976. In the second
semester of the school year 1976-77 he was appointed instructor with a load of twelve (12) hours a week. He was
reappointed instructor for the school year 1977-78 with a load of nine (9) hours a week in the first semester and two
(2) hours a week in the second. On June 10, 1978 he was appointed as Instructor III for the school year 1978-79. His
load for the first semester was eight (8) hours a week, and for the second semester, seven (7) hours a week.
On March 19, 1979 Dean Gilberto Gamez observed that Dr. Borja should not be reappointed based on the
evaluation sheet that shows his sub-standard and inefficient performance. Nevertheless in view of the critical
shortage of staff members in the Department of Neurology and Psychiatry, Dr. Gamez recommended the
reappointment of Dr. Borja, after informing the latter of the negative feedbacks regarding his teaching and his
promise to improve his performance. Thus on July 27, 1979 he was extended a reappointment as Instructor III in the
school year 1979-80. He was given a load of six (6) hours a week. In all these appointments he was a part time
instructor.
At the end of the academic year, it appearing that Dr. Borja had not improved his performance in spite of his
assurances of improvement, his reappointment was not recommended.
In July, 1982 he filed a complaint in the National Labor Relations Commission (NLRC for short) for illegal
dismissal against the UST. After the submission of the pleadings and due proceedings the labor arbiter rendered a
decision on July 19, 1984, the dispositive part of which reads as follows:
WHEREFORE this Office finds in favor of the complainant. The respondents (sic) university are hereby ordered to
effect the immediate reinstatement of complainant to his former position with full backwages, rights and benefits
appertaining thereto. Respondent university is likewise ordered to pay the complainant the sum of FIVE HUNDRED
THOUSAND PESOS (P500,000.00) as and by way of moral damages and another 10% of the gross amount due
him, and as and by way of attorneys fees.
Respondents are hereby ordered to effect this decision immediately.
The UST appealed therefrom to the NLRC which in due course rendered a decision on September 30, 1988,
modifying the appealed decision
ISSUE
Whether or not the private respondent was a full-time or part-time member of the faculty during the three
(3) years that he served in the petitioner-universitys College of Medicine?

HELD
The Employment of private respondent, whose total working day was not devoted to the school alone, and
who had other regular remunerative employment, merely part-time, hence, he could not have and did not become a
permanent employee even after completion of three (3) years of service.
Having found that private respondent did not become a permanent employee of petitioner UST, it
correspondingly follows that there was no duty on the part of petitioner UST to reappoint private respondent as
Instructor, the temporary appointment having lapsed. Such appointment is a matter addressed to the discretion of
said petitioner.
The findings, therefore, of the public respondent NLRC that private respondent was constructively
terminated is without lawful basis. By the same token, the order for reinstatement of private respondent with
backwages plus an award of actual or compensatory, moral and exemplary damages must be struck down.
RULING
The petition is hereby GRANTED. The questioned orders of public respondent NLRC dated September 13,
1988 and public respondent labor arbiter Bienvenido S. Her-nandez dated July 19, 1988 are hereby SET ASIDE and
another judgment is hereby rendered DISMISSING the complaint of private respondent, without pronouncement as
to costs.

15.2) UST vs NLRC, 182 SCRA 371

FACTS:

University of Sto. Tomas (UST) terminated the employment of 16 union officers and directors of UST
Faculty Union for grave misconduct, serious disrespect to a superior and conduct unbecoming a faculty
member on the ground that "in publishing or causing to be published in Strike Bulletin No. 5 the libelous
and defamatory attacks against the Father Rector.

Some faculty members staged mass leaves of absence disrupting classes in all levels at the University.

The faculty union filed a complaint for illegal dismissal and unfair labor practice with the DOLE.

The labor arbiter, on a prima facie showing that the termination was causing a serious labor dispute,
certified the matter to the Secretary of DOLE for a possible suspension of the effects of termination.

Secretary Franklin Drilon issued an order to accept the 16 terminated employess back to work under the
same terms and conditions prevailing prior to their dismissal in the interest of industrial peace.

Secretary Drilon issued another order which certifies the labor dispute to the NLRC for compulsory
arbitration.

NLRC issued a resolution directing UST to comply and faithfully abide with the Orders of the Secretary
Drilon by immediately reinstating or readmitting the 16 faculty members under the same terms and
conditions prevailing prior to the present dispute or merely reinstate them in the payroll.

UST states that it has already actually reinstated 6 of the dismissed faculty members; As to 2 professors
whose teaching assignments were partially taken over by new faculty members, they were given back their
remaining teaching loads (not taken by new faculty members) but were given substantially equivalent
academic assignments corresponding to their teachings loads already taken over by new faculty members;
The remaining 7 faculty members were given substantially equivalent academic assignments in lieu of
actual teaching loads because all of their teaching loads originally assigned to them at the start of the first

semester were already taken over by new faculty members; 1 dismissed faculty had been "absent without
official leave" or AWOL.

SC issued a TRO enjoining NLRC from enforcing or executing the NLRC resolution.

UST argues that actual reinstatement of the dismissed faculty members whose teaching assignments were
previously taken over by new faculty members is not feasible nor practicable since this would compel UST
to violate and terminate its contracts with the faculty members who were assigned to and had actually taken
over the courses.

UST claims that to change the faculty member when the semester is about to end would seriously impair
and prejudice the welfare and interest of the students because dislocation, confusion and loss in momentum,
if not demoralization will surely ensue.

UST contended that it has the sole and exclusive right and prerogative to determine the nature and kind of
work of its employees and to control and manage its own operations.

ISSUE: May UST comply with the NLRC readmission order by granting substantially equivalent academic
assignments, in lieu of actual reinstatement, to dismissed faculty members?
RULING:

No. Pursuant to Article 263 (g), 1st paragraph, of the Labor Code, as amended by Section 27 of RA 6715,
the NLRC was charged with the task of implementing a valid return-to-work order of the Secretary of
Labor. As the implementing body, its authority did not include the power to amend the Secretary's order.

Since the Secretary's order specifically provided that the dismissed faculty members shall be readmitted
under the same terms and conditions prevailing prior to the present dispute, the NLRC should have directed
the actual reinstatement of the concerned faculty members. It therefore erred in granting the alternative
remedy of payroll reinstatement.

The grant of substantially equivalent academic assignments cannot be sustained. The giving of substantially
equivalent academic assignments, without actual teaching loads, cannot be considered a reinstatement
under the same terms and conditions prevailing before the strike.

The phrase "under the same terms and conditions" contemplates actual reinstatement or the return of actual
teaching loads to the dismissed faculty members.

Article 263(g) was devised to maintain the status quo between the workers and management in a labor
dispute causing or likely to cause a strike or lockout in an industry indispensable to the national
interest, pending adjudication of the controversy. The grant of substantially equivalent academic
assignments would evidently alter the existing status quo since the temporarily reinstated teachers will not
be given their usual teaching loads.

The order of NLRC did not amount to grave abuse of discretion. Such error is merely an error of judgment
which is not correctible by a special civil action for certiorari. The NLRC was only trying its best to work
out a satisfactory ad hoc solution to a festering and serious problem.

The hiring, firing, transfer, demotion and promotion of employees are traditionally identified as
management prerogatives. However, these are not absolute prerogatives. They are subject to limitations
found in law, a collective bargaining agreement, or general principles of fair play and justice.

Article 263(g) is one such limitation provided by law. To the extent that Art. 263(g) calls for the admission
of all workers under the same terms and conditions prevailing before the strike, UST is restricted from
exercising its generally unbounded right to transfer or reassign its employees.

The first semester is about to end and to change the faculty members around the time of final examinations
would adversely affect and prejudice the students whose welfare and interest we consider to be of
primordial importance and for whom both the University and the faculty union must subordinate their
claims and desires. The actual reinstatement of the non-reinstated faculty members may take effect at the
start of the second semester.

The contracts of new professors cannot prevail over the right to reinstatement of the dismissed personnel.

Petition is denied.

16.) Kimberly Independent Labor Union For Solidarity, Activism And Nationalism-Organized Labor
Association In Line Industries And Agriculture vs. Drilon, 185 SCRA 190/ G.R. No. 77629. May 9, 1990
Labor Law; Jurisdiction; Authority of former Minister Sanchez to assume jurisdiction over the issue of the
regularization of the 64 casual workers upheld.We uphold the authority of former Minister Sanchez to assume
jurisdiction over the issue of the regularization of the 64 casual workers, which fact is not even disputed by
KILUSAN-OLALIA as may be gleaned from its request for an interim order in the notice of strike case (BLR-NS-5164-86), asking that the regularization issue be immediately resolved. Furthermore, even the med-arbi-ter who
ordered the holding of the certification election refused to resolve the protest on the ground that the issue raised
therein correctly pertains to the jurisdiction of the then labor minister. No opposition was offered by KILUSANOLALIA. We hold that the issue of regularization was properly addressed to the discretion of said former minister.
Labor Relations; Former labor minister gravely abused his discretion in holding that those workers not
engaged in janitorial or yard maintenance service attained the status of regular employees only on November
13, 1986.We find and so hold that the former labor minister gravely abused his discretion in holding that those
workers not engaged in janitorial or yard maintenance service attained the status of regular employees only on
November 13, 1986, which thus deprived them of their constitutionally protected right to vote in the certification
election and choose their rightful bargaining representative.
Article 280 of the Labor Code provides for two kinds of regular employees.The law thus provides for
two kinds of regular employees, namely: (1) those who are engaged to perform activities which are usually
necessary or desirable in the usual business or trade of the employer; and (2) those who have rendered at least one
year of service, whether continuous or broken, with respect to the activity in which they are employed.
Individual petitioners adjudged to be regular employees fall under the second category.The individual
petitioners herein who have been adjudged to be regular employees fall under the second category. These are the
mechanics, electricians, machinists, machine shop helpers, warehouse helpers, painters, carpenters, pipefitters and
masons. It is not disputed that these workers have been in the employ of KIMBERLY for more than one year at the
time of the filing of the petition for certification election by KILUSAN-OLALIA.
It is more in keeping with the intent and spirit of the law to rule that the status of regular employment attached to the
casual worker on the day immediately after the end of his first year of service.Owing to their length of service
with the company, these workers became regular employees, by operation of law, one year after they were
employed by KIMBERLY through RANK. While the actual regularization of these employees entails the
mechanical act of issuing regular appointment papers and compliance with such other operating procedures as may
be adopted by the employer, it is more in keeping with the intent and spirit of the law to rule that the status of
regular employment attaches to the casual worker on the day immediately after the end of his first year of service.
To rule otherwise, and to instead make their regularization dependent on the happening of some contingency or the
fulfillment of certain requirements, is to impose a burden on the employee which is not sanctioned by law.

As long as the employee has rendered at least one year of service, he becomes a regular employee with respect
to the activity in which he is employed.That the first stated position is the situation contemplated and sanctioned
by law is further enhanced by the absence of a statutory limitation before regular status can be acquired by a casual
employee. The law is explicit. As long as the employee has rendered at least one year of service, he becomes a
regular employee with respect to the activity in which he is employed. The law does not provide the qualification
that the employee must first be issued a regular appointment or must first be formally declared as such before he can
acquire a regular status. Obviously, where the law does not distinguish, no distinction should be drawn.
FACTS
Kimberly-Clark Philippines, Inc. (KIMBERLY, for brevity) executed a three-year collective bargaining
agreement (CBA) with United Kimberly-Clark Employees Union-Philippine Transport and General Workers
Organization (UKCEU-PTGWO) which expired on June 30, 1986.
Within the 60-day freedom period prior to the expiration of and during the negotiations for the renewal of the
aforementioned CBA, some members of the bargaining unit formed another union called Kimberly Independent
Labor Union for Solidarity, Activism and Nationalism-Organized Labor Association in Line Industries and
Agriculture (KILUSAN-OLALIA).
On April 21, 1986, KILUSAN-OLALIA filed a petition for certification election in Regional Office No. IV,
Ministry of Labor and Employment (MOLE), docketed as Case No. RO4-OD-M-4-15-86.5 KIMBERLY and
UKCEU-PTGWO did not object to the
holding of a certification election but objected to the inclusion of the so-called contractual workers whose
employment with KIMBERLY was coursed through an independent contractor, Rank Manpower Company (RANK,
for short), as among the qualified voters.
Pending resolution of the petition for certification election by the med-arbiter, KILUSAN-OLALIA filed a
notice of strike on May 7, 1986 with the Bureau of Labor Relations, docketed as BLR Case No. NS-5-164-86,6
charging KIMBERLY with unfair labor practices based on the following alleged acts: (1) dismissal of union
members (KILUSAN-OLALIA); (2) non-regularization of casuals/contractuals with over six months service; (3)
non-implementation of appreciation bonus for 1982 and 1983; (4) non-payment of minimum wages (5) coercion of
employees; and (6) engaging in CBA negotiations despite the pendency of a petition for certification election. This
was later amended to withdraw the charge of coercion but to add, as new charges, the dismissal of Roque Jimenez
and the non-payment of backwages of the reinstated Emerito Fuentes. Conciliation proceedings conducted by the
bureau proved futile, and KILUSAN-OLALIA declared a strike at KIMBERLYs premises in San Pedro, Laguna on
May 23, 1986.
During the pre-election conference, 64 casual workers were challenged by KIMBERLY and UKCEU-PTGWO on
the ground that they are not employees of KIMBERLY but of RANK. It was agreed by all the parties that the 64
voters shall be allowed to cast their votes but that their ballots shall be segregated and subject to challenge
proceedings. The certification election was conducted on July 1, 1986.
On July 2, 1986, KILUSAN-OLALIA filed with the medarbiter a Protest and Motion to Open and Count
Challenged Votes12 on the ground that the 64 workers are employees of KIMBERLY within the meaning of Article
212(e) of the Labor Code. On July 7, 1986, KIMBERLY filed an opposition to the protest and motion, asserting that
there is no employer-employee relationship between the casual workers and the company, and that the med-arbiter
has no jurisdiction to rule on the issue of the status of the challenged workers which is one of the issues covered by
the assumption order. The med-arbiter opted not to rule on the protest until the issue of regularization has been
resolved by MOLE.
The petition of KILUSAN-OLALIA avers that the respondent Secretary of Labor and/or the former Minister of
Labor have acted with grave abuse of discretion and/or without jurisdiction in (1) ruling on the issue of bargaining
representation and declaring respondent UKCEU-PTGWO as the collective bargaining representative of all regular
rank-and-file employees of the respondent company; (2) holding that petitioners are not entitled to vote in the
certification election; (3) considering the regularization of petitioners (who are not janitors and maintenance
employees) to be effective only on the date of the disputed decision; (4) declaring petitioners who are assigned
janitorial and yard maintenance work to be employees of respondent RANK and not entitled to be regularized; (5)
not awarding to petitioners differential pay arising out of such illegal work scheme; and (6) ordering the mere
reinstatement of petitioner Jimenez.

ISSUES
(1) Whether or not former Minister Sanchez committed a grave abuse of discretion amounting to lack of
jurisdiction in declaring respondent UKCEU-PTGWO as the certified bargaining representative of the regular
employees of KIMBERLY, after ruling that the 64 casual workers, whose votes are being challenged, were not
entitled to vote in the certification election?;(2) WON said workers, not performing janitorial or yard maintenance
service, became regular employees of KIMBERLY and thus entitled to vote?
HELD
1) NO. KILUSAN-OLALIA contends that after finding that the 64 workers are regular employees of
KIMBERLY, Minister Sanchez should have remanded the representation case to the medarbiter, instead of
declaring UKCEU-PTGWO as the winner in the certification election and setting aside the med-arbiters
order which allowed the 64 casual workers to cast their votes.
Respondents argue that since the issues of regularization and representation are closely interrelated and that a
resolution of the former inevitably affects the latter, it was necessary for the former labor minister to take cognizance
of the representation issue; that no timely motion for reconsideration or appeal was made from his decision of
November 13, 1986 which has become final and executory; and that the aforesaid decision was impliedly accepted
by KILUSAN-OLALIA when it demanded from KIMBERLY the issuance of regular appointments to its affected
members in compliance with said decision, hence petitioner employees are now estopped from questioning the
legality thereof.
The Court uphold the authority of former Minister Sanchez to assume jurisdiction over the issue of the
regularization of the 64 casual workers, which fact is not even disputed by KILUSANOLALIA as may be gleaned
from its request for an interim order in the notice of strike case (BLR-NS-5-164-86), asking that the regularization
issue be immediately resolved. Furthermore, even the med-arbiter who ordered the holding of the certification
election refused to resolve the protest on the ground that the issue raised therein correctly pertains to the jurisdiction
of the then labor minister. No opposition was offered by KILUSAN-OLALIA. We hold that the issue of
regularization was properly addressed to the discretion of said former minister.
2)YES. On the basis of the foregoing circumstances, and as a consequence of their status as regular employees,
those workers not perforce janitorial and yard maintenance service were performace entitled to the payment of
salary differential, cost of living allowance, 13th month pay, and such other benefits extended to regular
employees under the CBA, from the day immediately following their first year of service in the company. These
regular employees are likewise entitled to vote in the certification election held in July 1, 1986. Consequently,
the votes cast by those employees not performing janitorial and yard maintenance service, which form part of
the 64 challenged votes, should be opened, counted and considered for the purpose of determining the certified
bargaining representative.
The court hold that the former labor minister gravely abused his discretion in holding that those workers
not engaged in janitorial or yard maintenance service attained the status of regular employees only on
November 13, 1986, which thus deprived them of their constitutionally protected right to vote in the
certification election and choose their rightful bargaining representative.
RULING
The judgment is hereby rendered in G.R. No. 77629:
1. Ordering the med-arbiter in Case No. R04-OD-M-4-15-86 to open and count the 64 challenged votes, and that the
union with the highest number of votes be thereafter declared as the duly elected certified bargaining representative
of the regular employees of KIMBERLY;
2. Ordering KIMBERLY to pay the workers who have been regularized their differential pay with respect to
minimum wage, cost of living allowance, 13th month pay, and benefits provided for under the applicable collective
bargaining agreement from the time they became regular employees.
All other aspects of the decision appealed from, which are not so modified or affected thereby, are hereby
AFFIRMED. The temporary restraining order issued in G.R. No. 77629 is hereby made permanent.

17.) Phil. National Bank vs. Padao, G.R. No. 180849, November 16, 2011
Facts:
On August 21, 1981, Padao was hired by PNB as a clerk at its Dipolog City Branch. He was later designated as a
credit investigator in an acting capacity on November 9, 1993. On March 23, 1995, he was appointed regular Credit
Investigator III, and was ultimately promoted to the position of Loan and Credit Officer IV.
Sometime in 1994, PNB became embroiled in a scandal involving behest loans. A certain Sih Wat Kai
complained to the Provincial Office of the Commission on Audit (COA) of Zamboanga del Norte that anomalous
loans were being granted by its officers: Assistant Vice President (AVP) and Branch Manager Aurelio De Guzman
(AVP de Guzman), Assistant Department Manager and Cashier Olson Sala (Sala), and Loans and Senior Credit
Investigator Primitivo Virtudazo (Virtudazo).
The questionable loans were reportedly being extended to select bank clients, among them Joseph Liong, Danilo
Dangcalan, Jacinto Salac, Catherine Opulentisima, and Virgie Pango. The expos triggered the conduct of separate
investigations by the COA and PNBs Internal Audit Department (IAD) from January to August 1995. Both
investigations confirmed that the collateral provided in numerous loan accommodations were grossly overappraised. The credit standing of the loan applicants was also fabricated, allowing them to obtain larger loan
portfolios from PNB. These borrowers eventually defaulted on the payment of their loans, causing PNB to suffer
millions in losses.
On June 14, 1996, Padao was administratively charged with Dishonesty, Grave Misconduct, Gross Neglect of Duty,
Conduct Prejudicial to the Best Interest of the Service, and violation of R.A. No. 3019.
The case against Padao was grounded on his having allegedly presented a deceptively positive status of the business,
credit standing/rating and financial capability of loan applicants Reynaldo and Luzvilla Baluma and eleven (11)
others. It was later found that either said borrowers businesses were inadequate to meet their loan obligations, or
that the projects they sought to be financed did not exist.
Padao was also accused of having over-appraised the collateral of the spouses Gardito and Alma Ajero, the spouses
Ibaba, and Rolly Pango.
On January 10, 1997, after due investigation, PNB found Padao guilty of gross and habitual neglect of duty and
ordered him dismissed from the bank.
ISSUE:
Won the court of appeals erred in treating the act of falsifying the credit and appraisal reports and that of merely
affixing ones signature in a false report prepared by another as one and the same degree of misconduct which
warrants legal dismissal.
HELD:
In this case, Padao was dismissed by PNB for gross and habitual neglect of duties under Article 282 (b) of the Labor
Code.
Thus, in cases of regular employment, the employer is prohibited from terminating the services of an employee
except for a just or authorized cause. Such just causes for which an employer may terminate an employee are
enumerated in Article 282 of the Labor Code:
(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or
representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;

(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized
representative;
(d) Commission of a crime or offense by the employee against the person of his employer or any immediate family
member of his family or his duly authorized representative; and
(e) Other causes analogous to the foregoing.
In this case, Padao was dismissed by PNB for gross and habitual neglect of duties under Article 282 (b) of the Labor
Code.
Gross negligence connotes want of care in the performance of ones duties, while habitual neglect implies repeated
failure to perform ones duties for a period of time, depending on the circumstances. Gross negligence has been
defined as the want or absence of or failure to exercise slight care or diligence, or the entire absence of care. It
evinces a thoughtless disregard of consequences without exerting any effort to avoid them.
Padaos repeated failure to discharge his duties as a credit investigator of the bank amounted to gross and habitual
neglect of duties under Article 282 (b) of the Labor Code. He not only failed to perform what he was employed to
do, but also did so repetitively and habitually, causing millions of pesos in damage to PNB. Thus, PNB acted within
the bounds of the law by meting out the penalty of dismissal, which it deemed appropriate given the circumstances.
However, Padao is not entitled to financial assistance. In Toyota Motor Phils. Corp. Workers Association v. NLRC,
the Court reaffirmed the general rule that separation pay shall be allowed as a measure of social justice only in those
instances where the employee is validly dismissed for causes other than serious misconduct, willful disobedience,
gross and habitual neglect of duty, fraud or willful breach of trust, commission of a crime against the employer or
his family, or those reflecting on his moral character. These five grounds are just causes for dismissal as provided in
Article 282 of the Labor Code.

18) Globe-Mackay Cable and Radio Corporation (GMCR) vs. NLRC, 206 SCRA 701/ G.R. No. 82511
March 3, 1992
Labor Laws; Preventive suspension.On the matter of preventive suspension, we find for petitioner GMCR. The
investigative findings of Mr. Maramara, which pointed to Delfin Saldivars acts in conflict with his position as
technical operations manager, necessitated immediate and decisive action on any employee closely associated with
Saldivar. The suspension of Salazar was further impelled by the discovery of the missing Fedders airconditioning
unit inside the apartment private respondent shared with Saldivar. Under such circumstances, preventive suspension
was the proper remedial recourse available to the company pending Salazars investigation. By itself, preventive
suspension does not signify that the company has adjudged the employee guilty of the charges she was asked to
answer and explain. Such disciplinary measure is resorted to for the protection of the companys property pending
investigation of any alleged malfeasance or misfeasance committed by the employee.
Employees illegally dismissed entitled to reinstatement and full backwages.To go back to the instant case, there
being no evidence to show an authorized, much less a legal, cause for the dismissal of private respondent, she had
every right, not only to be entitled to reinstatement, but as well, to full backwages. The intendment of the law in
prescribing the twin remedies of reinstatement and payment of backwages is, in the former, to restore the dismissed
employee to her status before she lost her job, for the dictionary meaning of the word reinstate is to restore to a
state, condition, position, etc. from which one had been removed and in the latter, to give her back the income lost
during the period of unemployment. Both remedies, looking to the past, would perforce make her whole.

Statutory construction; Plain-meaning rule.In the case at bar, the law is on the side of private respondent. In the
first place, the wording of the Labor Code is clear and unambiguous: An employee who is unjustly dismissed from
work shall be entitled to reinstatement . . . and to his full backwages . . . Under the principles of statutory
construction, if a statute is clear, plain and free from ambiguity, it must be given its literal meaning and applied
without attempted interpretation. This plain-meaning rule or verba legis derived from the maxim index animi sermo
est (speech is the index of intention) rests on the valid presumption that the words employed by the legislature in a
statute correctly express its intent or will and preclude the court from construing it differently. The legislature is
presumed to know the meaning of the words, to have used words advisedly, and to have expressed its intent by the
use of such words as are found in the statute. Verba legis non est recedendum, or from the words of a statute there
should be no departure. Neither does the provision admit of any qualification. If in the wisdom of the Court, there
may be a ground or grounds for non-application of the above-cited provision, this should be by way of exception,
such as when the reinstatement may be inadmissible due to ensuing strained relations between the employer and the
employee. In such cases, it should be proved that the employee concerned occupies a position where he enjoys the
trust and confidence of his employer; and that it is likely that if reinstated, an atmosphere of antipathy and
antagonism may be generated as to adversely affect the efficiency and productivity of the employee concerned.
Principle of strained relations.Obviously, the principle of strained relations cannot be applied
indiscriminately. Otherwise, reinstatement can never be possible simply because some hostility is invariably
engendered between the parties as a result of litigation. That is human nature. Besides, no strained relations should
arise from a valid and legal act of asserting ones right; otherwise an employee who shall assert his right could be
easily separated from the service, by merely paying his separation pay on the pretext that his relationship with his
employer had already become strained. Here, it has not been proved that the position of private respondent as
systems analyst is one that may be characterized as a position of trust and confidence such that if reinstated, it may
well lead to strained relations between employer and employee. Hence, this does not constitute an exception to the
general rule mandating reinstatement for an employee who has been unlawfully dismissed.
FACTS
For private respondent Imelda L. Salazar, it would seem that her close association with Delfin Saldivar
would mean the loss of her job. In May 1982, private respondent was employed by Globe-Mackay Cable and Radio
Corporation (GMCR) as general systems analyst. Also employed by petitioner as manager for technical operations
support was Delfin Saldivar with whom private respondent was allegedly very close.
Sometime in 1984, petitioner GMCR, prompted by reports that company equipment and spare parts worth thousands
of dollars under the custody of Saldivar were missing, caused the investigation of the latters activities. The report
dated September 25, 1984 prepared by the companys internal auditor, Mr. Agustin Maramara, indicated that
Saldivar had entered into a partnership styled Concave Commercial and Industrial Company with Richard A.
Yambao, owner and manager of Elecon Engineering Services (Elecon), a supplier of petitioner often recommended
by Saldivar. The report also disclosed that Saldivar had taken petitioners missing Fedders airconditioning unit for
his own personal use without authorization and also connived with Yambao to defraud petitioner of its property. The
airconditioner was recovered only after petitioner GMCR filed an action for replevin against Saldivar.
Petitioner company placed private respondent Salazar under preventive suspension for one (1) month, effective
October 9, 1984, thus giving her thirty (30) days within which to explain her side. But instead of submitting an
explanation, three (3) days later or on October 12, 1984, private respondent filed a complaint against petitioner for
illegal suspension, which she subsequently amended to include illegal dismissal, vacation and sick leave benefits,
13th month pay and damages, after petitioner notified her in writing that effective November 8, 1984, she was
considered dismissed in view of (her) inability to refute and disprove these findings.

After due hearing, the Labor Arbiter in a decision dated July 16, 1985, ordered petitioner company to reinstate
private respondent to her former or equivalent position and to pay her full backwages and other benefits she would
have received were it not for the illegal dismissal. Petitioner was also ordered to pay private respondent moral
damages of P50,000.00. On appeal, public respondent National Labor Relations Commission in the questioned
resolution dated December 29, 1987 affirmed the aforesaid decision with respect to the reinstatement of private
respondent but limited the backwages to a period of two (2) years and deleted the award for moral damages.
The suspension of Salazar was further impelled by the discovery of the missing Fedders airconditioning unit inside
the apartment private respondent shared with Saldivar. Under such circumstances, preventive suspension was the
proper remedial recourse available to the company pending Salazars investigation. By itself, preventive suspension
does not signify that the company has adjudged the employee guilty of the charges she was asked to answer and
explain. Such disciplinary measure is resorted to for the protection of the companys property pending investigation
of any alleged malfeasance or misfeasance committed by the employee.
Art. 279 of the Labor Code, as amended, provides:
Security of Tenure.In cases of regular employment, the employer shall not terminate the services of an employee
except for a just cause or when authorized by this Title. An employee who is unjustly dismissed from work shall be
entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of
allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was
withheld from him up to the time of his actual reinstatement.
ISSUE
WON the private respondent (Imelda L. Salazar) has been legally dismissed from her employment?
HELD
NO. In the case at bar, the law is on the side of private respondent. In the first place, the wording of the
Labor Code is clear and unambiguous: An employee who is unjustly dismissed from work shall be entitled to
reinstatement . . . and to his full backwages . . .Under the principles of statutory construction, if a statute is clear,
plain and free from ambiguity, it must be given its literal meaning and applied without attempted interpretation. This
plain-meaning rule or Xerbal egis derived from the maxim index animi sermo est (speech is the index of intention)
rests on the valid presumption that the words employed by the legislature in a statute correctly express its intent or
will and preclude the court from construing it differently. The legislature is presumed to know the meaning of the
words, to have used words advisedly, and to have expressed its intent by the use of such words as are found in the
statute.27 Verba legis non est recedendum, or from the words of a statute there should be no departure. Neither does
the provision admit of any qualification. If in the wisdom of the Court, there may be a ground or grounds for nonapplication of the above-cited provision, this should be by way of exception, such as when the reinstatement may be
inadmissible due to ensuing strained relations between the employer and the employee.
RULING
The assailed resolution of public respondent National Labor Relations Commission dated December 29,
1987 is hereby AFFIRMED. Petitioner GMCR is ordered to REINSTATE private respondent Imelda Salazar and to
pay her backwages equivalent to her salary for a period of two (2) years only.

19.) Guerrero vs. National Labor Relations Commission, 261 SCRA 301/ G.R. No. 119842. August 30, 1996

Labor Law; Dismissals; The right to terminate the services of employees to obviate or minimize business losses
may not be exercised arbitrarily or whimsically.The law gives an employer the right to terminate the services of
its employees to obviate or to minimize business losses. This right, however, may not be exercised arbitrarily or
whimsically.
Retrenchment; Requisites for a Valid Retrenchment.The requisites for valid retrenchment under the foregoing
provision are: (1) necessity of the retrenchment to prevent losses and proof of such losses; (2) written notice to the
employees and to the Department of Labor and Employment at least one month prior to the intended date of
retrenchment; and (3) payment of separation pay equivalent to one month pay or at least 1/2 month pay for every
year of service, whichever is higher.
Respondent company did not satisfy the legal requirements for a valid retrenchment.Considering the
circumstances in the case at bar, we find that respondent company did not satisfy the legal requirements for valid
retrenchment.
To justify the employees termination of service, the losses must be serious, actual and real and they must be
supported by sufficient and convincing evidence.First, respondent company did not present sufficient evidence to
prove the extent of its losses. To justify the employees termination of service, the losses must be serious, actual and
real, and they must be supported by sufficient and convincing evidence. The burden of proof rests on the employer.
Respondent company alleged that the strike paralyzed its operations and resulted in the withdrawal of its clients
orders. Respondent company, however, failed to prove its claim with competent evidence which would show that it
was indeed suffering from business losses so serious as would necessitate retrenchment or reduction of personnel.
The rule is that not every loss incurred or expected to be incurred by a company will justify retrenchment.We
reject respondent companys contention that it was not necessary to present proof of severity of the losses it
sustained since petitioners were aware of the strike and its adverse effects on the companys operations. The rule is
that not every loss incurred or expected to be incurred by a company will justify retrenchment. The losses must be
substantial and the retrenchment must be reasonably necessary to avert such losses.
Retrenchment is justified only when all other less drastic means have been tried and found insufficient.
Second, respondent company failed to prove that retrenchment was necessary to prevent further losses. There is no
showing in this case that respondent company has taken other measures to abate the losses it sustained because of
the strike. Retrenchment must be exercised only as a last resort, considering that it will lead to the loss of the
employees livelihood. Retrenchment is justified only when all other less drastic means have been tried and found
insufficient.
Employees who receive their separation pay are not barred from contesting the legality of their dismissal.
Finally, petitioners availment of the financial assistance given by respondent company did not estop them from
questioning.the legality of their separation from the company. When respondent company made the offer, petitioners
were made to believe that the company would cease to operate for an indefinite period of time. Hence, petitioners
were constrained to accept whatever relief the respondent company offered at that time. In De Leon vs. NLRC, we
held that employees who receive their separation pay are not barred from contesting the legality of their dismissal.
The acceptance of those benefits (will) not amount to estoppel.
FACTS
The petitioners are former employees of respondent R.O.H. Auto Products Phils., Inc., a corporation
engaged in the manufacture of automotive steel wheels.
On March 24, 1992, members of the union in respondent company went on strike. The petitioners, however, did not
participate in the strike.
Respondent company allegedly sustained huge losses as the strike virtually paralyzed its operations. To
prevent further losses, respondent proposed on April 22, 1992 to the nonstriking employees a financial assistance
in exchange for their resignation. Respondent company, nevertheless, assured them priority in hiring when positions
of equal stature and compensation become available.
On April 24, 1992, the petitioners availed of respondent companys offer. They signed individual Quitclaim
and Release deeds upon receipt of their separation pay. On May 3, 1992, the strike ended. The operations in

respondent company resumed and all the striking employees returned to their posts. The petitioners offered to reassume their former positions but respondent company refused to admit them. They filed separate complaints for
illegal dismissal.
In a consolidated Decision dated June 29, 1993, Labor Arbiter Geobel A. Bartolabac dismissed the complaints for
lack of merit. The NLRC affirmed the said decision.
ISSUE
WON petitioners availment of the financial assistance given by respondent company estop them from
questioning the legality of their separation from the company?
HELD
NO. Petitioners availment of the financial assistance given by respondent company did not estop them
from questioning the legality of their separation from the company. When respondent company made the offer,
petitioners were made to believe that the company would cease to operate for an indefinite period of time. Hence,
petitioners were constrained to accept whatever relief the respondent company offered at that time. In De Leon vs.
NLRC,14 we held that employees who receive their separation pay are not barred from contesting the legality of
their dismissal. The acceptance of those benefits (will) not amount to estoppel.
In the case at bar, the court find that respondent company did not satisfy the legal requirements for valid
retrenchment.
First, respondent company did not present sufficient evidence to prove the extent of its losses. To justify the
employees termination of service, the losses must be serious, actual and real, and they must be supported by
sufficient and convincing evidence. The burden of proof rests on the employer. Respondent company alleged that
the strike paralyzed its operations and resulted in the withdrawal of its clients orders. Respondent company,
however, failed to prove its claim with competent evidence which would show that it was indeed suffering from
business losses so serious as would necessitate retrenchment or reduction of personnel. As we held in Lopez Sugar
Corporation vs. Federation of Free Workers:
Lastly but certainly not the least important, alleged losses if already realized, and the expected imminent losses
sought to be forestalled, must be proved by sufficient and convincing evidence. The reason for requiring this
quantum of proof is readily apparent: any less exacting standard of proof would render too easy the abuse of this
ground for termination of services of employees. In Garcia v. National Labor Relations Commission, the Court said:
x x x But it is essentially required that the alleged losses in business operations must be prove[n]. Otherwise, said
ground for termination would be susceptible to abuse by scheming employers who might be merely feigning
business losses or reverses in their business ventures in order to ease out employees.
RULING
The assailed Decision is REVERSED and SET ASIDE. Respondents R.O.H. Auto Products Phils., Inc. and
Goeff Kemp are hereby ordered to REINSTATE the petitioners without loss of seniority rights and with full
backwages minus the amount received by them as financial assistance upon their separation.
-----------------------------------------------The requisites for valid retrenchment under the article 283 (now Article 289) of labor code are:
(1) necessity of the retrenchment to prevent losses and proof of such losses;
(2) written notice to the employees and to the Department of Labor and Employment at least one month prior
to the intended date of retrenchment; and
(3) payment of separation pay equivalent to one month pay or at least 1/2 month pay for every year of service,
whichever is higher.
20.) MAC ADAMS METAL ENGINEERING WORKERS UNION-INDEPENDENT vs. MAC ADAMS METAL
ENGINEERING
Closure of Establishment for a Lawful Cause; When Made
The owner, for any bona fide reason, can lawfully close shop at anytime. Just as no law forces anyone to go into
business, no law can compel anybody to continue in it. It would indeed be stretching the intent and spirit of the law
if SC were to unjustly interfere with the management's prerogative to close or cease its business operations, just
because said business operation or undertaking is not suffering from any loss or simply to provide the workers
continued employment. And since private respondents' cessation and closure of business was lawful, there was no

illegal dismissal to speak of. This fact negated the obligation to pay backwages. Instead private respondents were
required to give separation pay, which they already did, to all their regular employees.

21) North Davao Mining Corporation vs. NLRC, 254 SCRA 721/ G.R. No. 112546 March 13, 1996
Labor Law; Termination; Separation Pay; Art. 283 of the Labor Code does not obligate an employer to pay
separation benefits when the closure is due to losses.As already stated, Art. 283 of the Labor Code does not
obligate an employer to pay separation benefits when the closure is due to losses. In the case before us, the basis for
the claim of the additional separation benefit of 17.5 days is alleged discrimination, i.e., unequal treatment of
employees, which is proscribed as an unfair labor practice by Art. 248 (e) of said Code. Under the facts and
circumstances of the present case, the grant of a lesser amount of separation pay to private respondent was done, not
by reason of discrimination, but rather, out of sheer financial bankruptcya fact that is not controlled by

management prerogatives. Stated differently, the total cessation of operation due to mind-boggling losses was a
supervening fact that prevented the company from continuing to grant the more generous amount of separation pay.
The fact that North Davao at the point of its forced closure voluntarily paid any separation benefits at allalthough
not required by lawand 12.5 days worth at that, should have elicited admiration instead of condemnation. But to
require it to continue being generous when it is no longer in a position to do so would certainly be unduly
oppressive, unfair and most revolting to the conscience.
The law in protecting the rights of the laborer, authorizes neither oppression nor self-destruction of the employer.
As this Court held in Manila Trading & Supply Co. vs. Zulueta, and reiterated in San Miguel Corporation vs.
NLRC and later, in Allied Banking Corporation vs. Castro, (t)he law, in protecting the rights of the laborer,
authorizes neither oppression nor self-destruction of the employer.

FACTS
Petitioner North Davao Mining Corporation (North Davao) was incorporated in 1974 as a 100% privatelyowned company. Later, the Philippine National Bank (PNB) became part owner thereof as a result of a conversion
into equity of a portion of loans obtained by North Davao from said bank. On June 30, 1986, PNB transferred all its
loans to and equity in North Davao in favor of the national government which, by virtue of Proclamation No. 50
dated December 8, 1986, later turned them over to petitioner Asset Privatization Trust (APT). As of December 31,
1990 the national government held 81.8% of the common stock and 100% of the preferred stock of said company.
Respondent Wilfredo Guillema is one among several employees of North Davao who were separated by reason of
the companys closure on May 31, 1992, and who were the complainants in the cases before the respondent labor
arbiter.
On May 31, 1992, petitioner North Davao completely ceased operations due to serious business reverses.
From 1988 until its closure in 1992, North Davao suffered net losses averaging three billion pesos
(P3,000,000,000.00) per year, for each of the five years prior to its closure. All told, as of December 31, 1991, or
five months prior to its closure, its total liabilities had exceeded its assets by 20.392 billion pesos, as shown by its
financial statements audited by the Commission on Audit. When it ceased operations, its remaining employees were
separated and given the equivalent of 12.5 days pay for every year of service, computed on their basic monthly pay,
in addition to the commutation to cash of their unused vacation and sick leaves. However, it appears that, during the
life of the petitioner corporation, from the beginning of its operations in 1981 until its closure in 1992, it had been
giving separation pay equivalent to thirty (30) days pay for every year of service. Moreover, inasmuch as the region
where North Davao operated was plagued by insurgency and other peace and order problems, the employees had to
collect their salaries at a bank in Tagum, Davao del Norte, some 58 kilometers from their workplace and about 2 1/2
hours travel time by public transportation; this arrangement lasted from 1981 up to 1990.
Subsequently, a complaint was filed with respondent Labor Arbiter by respondent Wilfredo Guillema and
271 other separated employees for: (1) additional separation pay of 17.5 days for every year of service; (2) back
wages equivalent to two days a month; (3) transportation allowance; (4) hazard pay; (5) housing allowance; (6) food
allowance; (7) post-employment medical clearance; and (8) future medical allowance, all of which amounted to
P58,022,878.31 as computed by private respondent.5
On May 6, 1993, respondent Labor Arbiter rendered a decision ordering petitioner North Davao to pay the
complainants.
ISSUES
1. Whether or not an employer whose business operations ceased due to serious business losses or financial reverses
is obliged to pay separation pay to its employees separated by reason of such closure.
2. Whether or not time spent in collecting wages in a place other than the place of employment is compensable
notwithstanding that the same is done during official time.
3.Whether or not private respondents are entitled to transportation expenses in the absence of evidence that these
expenses were incurred.
HELD

The First Issue: Separation Pay

To resolve this issue, it is necessary to revisit the provision of law adverted to by the parties in their submissions,
namely, Art. 283 of the Labor Code, which reads as follows:
Art. 283. Closure of establishment and reduction of personnel.The employer may also terminate the
employment of any employee due to the installation of labor saving devices, redundancy, retrenchment to prevent
losses or the closing or cessation of operation of the establishment or undertaking unless the closing is for the
purpose of circumventing the provisions of this Title, by serving a written notice on the workers and the Ministry of
Labor and Employment at least one (1) month before the intended date thereof. In case of termination due to the
installation of labor saving devices or redundancy, the worker affected thereby shall be entitled to a separation pay
equivalent to at least his one (1) month pay or to at least one (1) month pay for every year of service, whichever is
higher. In case of retrenchment to prevent losses and in cases of closures or cessation of operations of establishment
or undertaking not due to serious business losses or financial reverses, the separation pay shall be equivalent to one
(1) month pay or at least one-half (1/2) month pay for every year of service, whichever is higher. A fraction of at
least six (6) months shall be considered one (1) whole year. (italics supplied)
The underscored portion of Art. 283 governs the grant of separation benefits in case of closures or cessation of
operation of business establishments NOT due to serious business losses or financial reverses x x x. Where,
however, the closure was due to business lossesas in the instant case, in which the aggregate losses amounted to
over P20 billionthe Labor Code does not impose any obligation upon the employer to pay separation benefits, for
obvious reasons. There is no need to belabor this point. Even the public respondents, in their Comment10 filed by
the Solicitor General, impliedly concede this point.
However, respondents tenaciously insist on the award of separation pay, anchoring their claim solely on petitioner
North Davaos long-standing policy of giving separation pay benefits equivalent to 30-days pay, which policy had
been in force in the years prior to its closure. Respondents contend that, by denying the same separation benefits to
private respondent and the others similarly situated, petitioners discriminated against them. They rely on this Courts
ruling in Businessday Information Systems and Services, Inc. (BISSI) vs. NLRC, (supra). In said case, petitioner,
BISSI, after experiencing financial reverses, decided as a retrenchment measure to lay-off some employees on
May 16, 1988 and gave them separation pay equivalent to one-half (1/2) month pay for every year of service. BISSI
retained some employees in an attempt to rehabilitate its business as a trading company.
The Second and Third Issues: Back Wages
and Transportation Allowance
Anent the award of back wages and transportation allowance, the issues raised in connection therewith are factual,
the determination of which is best left to the respondent NLRC. It is well settled that this Court is bound by the
findings of fact of the NLRC, so long as said findings are supported by substantial evidence.15
As the Solicitor General pointed out in his comment:
It is undisputed that because of security reasons, from the time of its operations, petitioner NDMC maintained its
policy of paying its workers at a bank in Tagum, Davao del Norte, which usually took the workers about two and a
half (2 1/2) hours of travel from the place of work and such travel time is not official.
Records also show that on February 12, 1992, when an inspection was conducted by the Department of Labor and
Employment at the premises of petitioner NDMC at Amacan, Maco, Davao del Norte, it was found out that
petitioners had violated labor standards law, one of which is the place of payment of wages.
RULING
The judgment is hereby rendered MODIFYING the assailed Resolution by SETTING ASIDE and deleting
the award for additional separation pay of 17.5 days for every year of service, and AFFIRMING it in all other
aspects.

22.) Phil. Long Distance Telephone Co. vs. NLRC, 164 SCRA 671/ No. L-80609. August 23, 1988
Labor; Illegal Dismissal; Separation Pay; Rule in the Labor Code that a person dismissed for cause is not
entitled to separation pay; Exception is based upon equity considerations; Definition and concept of equity.

The rule embodied in the Labor Code is that a person dismissed for cause as defined therein is not entitled to
separation pay. The cases above cited constitute the exception, based upon considerations of equity. Equity has been
defined as justice outside law, being ethical rather than jural and belonging to the sphere of morals than of law. It is
grounded on the precepts of conscience and not on any sanction of positive law. Hence, it cannot prevail against the
expressed provision of the labor laws allowing dismissal of employees for cause and without any provision for
separation pay.
Grant of separation pay is not merely based on equity but on the provisions of the Constitution on the
promotion of social justice and protection of the rights of the workers.Strictly speaking, however, it is not
correct to say that there is no express justification for the grant of separation pay to lawfully dismissed employees
other than the abstract consideration of equity. The reason is that our Constitution is replete with positive commands
for the promotion of social justice, and particularly the protection of the rights of the workers. The enhancement of
their welfare is one of the
primary concerns of the present charter. In fact, instead of confining itself to the general commitment to the cause of
labor in Article II on the Declaration of Principles of State Policies, the new Constitution contains a separate article
devoted to the promotion of social justice and human rights with a separate sub-topic for labor. Article XIII
expressly recognizes the vital role of labor, hand in hand with management, in the advancement of the national
economy and the welfare of the people in general. The categorical mandates in the Constitution for the improvement
of the lot of the workers are more than sufficient basis to justify the award of separation pay in proper cases even if
the dismissal be for cause.
Award of separation pay distinguished; Grant of separation pay to the dismissed employee is just
where the separation was due to valid but inequitous causes as failure to comply with work standards; Grant
of award is based on the social justice policy even if separation is for cause.There should be no question that
where it comes to such valid but not iniquitous causes as failure to comply with work standards, the grant of
separation pay to the dismissed employee may be both just and compassionate, particularly if he has worked for
some time with the company. For example, a subordinate who has irreconcilable policy or personal differences with
his employer may be validly dismissed for demonstrated loss of confidence, which is an allowable ground. A
working mother who has to be frequently absent because she has also to take care of her child may also be removed
because of her poor attendance, this being another authorized ground. It is not the employees fault if he does not
have the necessary aptitude for his work but on the other hand the company cannot be required to maintain him just
the same at the expense of efficiency of its operations. He too may be validly replaced. Under these and similar
circumstances, however, the award to the employee of separation pay would be sustainable under the social justice
policy even if the separation is for cause.
Where the cause of separation is more serious than mere inefficiency, the award is not justified.But
where the cause of the separation is more serious that mere inefficiency, the generosity of the law must be more
discerning. There is no doubt it is compassionate to give separation pay to a salesman if he is dismissed for his
inability to fill his quota but surely he does not deserve such generosity if his offense is misappropriation of the
receipt of his sales. This is no longer mere incompetence but clear dishonesty. A security guard found sleeping on
the job is doubtless subject to dismissal but may be allowed separation pay since his conduct, while inept, is not
depraved. But if he was in fact not really sleeping but sleeping with a prostitute during his tour of duty and in the
company premises, the situation is changed completely. This is not only inefficiency but immorality and the grant of
separation pay would be entirely unjustified.
Henceforth, separation pay shall be allowed only in those instances where the employee is validly
dismissed for causes other than serious misconduct or those reflecting on his moral character; Where the
reason for the valid dismissal is habitual insubordination or an offense involving moral turpitude, the
employer may not be required to give the dismissed employee separation pay or financial assistance.We
hold that henceforth separation pay shall be allowed as a measure of social justice only in those instances where the
employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character.
Where the reason for the valid dismissal is, for example, habitual intoxication or an offense involving moral
turpitude, like theft or illicit sexual relations with a fellow worker, the employer may not be required to give the
dismissed employee separation pay, of financial assistance, or whatever other name it is called, on the ground of
social justice.
A contrary rule would have the effect of rewarding rather than punishing the erring employee for his
offense.A contrary rule would, as the petitioner correctly argues, have the effect of rewarding rather than
punishing the erring employee for his offense. And we do not agree that the punishment is his dismissal only and
that the separation pay has nothing to do with the wrong he has committed. Of course it has. Indeed, if the employee

who steals from the company is granted separation pay even as he is validly dismissed, it is not unlikely that he will
commit a similar offense in his next employment because he thinks he can expect a like leniency if he is again found
out. This kind of misplaced compassion is not going to do labor in general any good as it will encourage the
infiltration of its ranks by those who do not deserve the protection and concern of the Constitution.
The policy of social justice is not intended to countenance wrongdoing.The policy of social justice is
not intended to countenance wrongdoing simply because it is committed by the underprivileged. At best it may
mitigate the penalty but it certainly will not condone the offense. Compassion for the poor is an imperative of every
humane society but only when the recipient is not a rascal claiming an undeserved privilege. Social justice cannot
be permitted to be the refuge of scoundrels any more than can equity be an impediment to the punishment of the
guilty. Those who invoke social justice may do so only if their hands are clean and their motives blameless and not
simply because they happen to be poor. This great policy of our Constitution is not meant for the protection of those
who have proved they are not worthy of it, like the workers who have tainted the cause of labor with the blemishes
of their own character.
Grant of separation pay to the private respondent who has been dismissed for dishonesty, is justified;
Reason.Applying the above considerations, we hold that the grant of separation pay in the case at bar is
unjustified. The private respondent has been dismissed for dishonesty, as found by the labor arbiter and affirmed by
the NLRC and as she herself has impliedly admitted. The fact that she has worked with the PLDT for more than a
decade, if it is, to be considered at all, should be taken against her as it reflects a regrettable lack of loyalty that she
should have strengthened instead of betraying during all of her 10 years of service with the company. If regarded as
a justification for moderating the penalty of dismissal, it will actually become a prize for disloyalty, perverting the
meaning of social justice and undermining the efforts of labor to cleanse its ranks of all undesirables.
Separation pay, if found due under the circumstances of each case, should be computed at the rate of one
month salary for every year of service.The Court also rules that the separation pay, if found due under the
circumstance of each case, should be computed at the rate of one month salary for every year of service, assuming
the length of such service is deemed material. This is without prejudice to the application of special agreements
between the employer and the employee stipulating a higher rate of computation and providing for more benefits to
the discharged employee.
FACTS
Marilyn Abucay, a traffic operator of the Philippine Long Distance Telephone Company, was accused by
two complainants of having demanded and received from them the total amount of P3, 800.00 in consideration of
her promise to facili- tate approval of their applications for telephone installation.1 Investigated and heard, she was
found guilty as charged and accordingly separated from the service. She went to the Ministry of Labor and
Employment claiming she had been illegally removed. After consideration of the evidence and arguments of the
parties, the company was sustained and the complaint was dismissed for lack of merit.
Both the petitioner and the private respondent appealed to the National Labor Relations Board, which
upheld the said decision in toto and dismissed the appeals.4 The private respondent took no further action, thereby
impliedly accepting the validity of her dismissal. The petitioner, however, is now before us to question the
affirmance of the above-quoted award as having been made with grave abuse of discretion.
The position of the petitioner is simply stated: It is conceded that an employee illegally dismissed is entitled
to reinstatement and backwages as required by the labor laws. However, an employee dismissed for cause is entitled
to neither reinstatement nor backwages and is not allowed any relief at all because his dismissal is in accordance
with law. In the case of the private respondent, she has been awarded financial assistance equivalent to ten months
pay corresponding to her 10-year service in the company despite her removal for cause. She is, therefore, in effect
rewarded rather than punished for her dishonesty, and without any legal authorization or justification. The award is
made on the ground of equity and compassion, which cannot be a substitute for law. Moreover, such award puts a
premium on dishonesty and encourages instead of deterring corruption.
The public respondent claims that the employee is sufficiently punished with her dismissal. The grant of financial
assistance is not intended as a reward for her offense but merely to help her for the loss of her employment after
working faithfully with the company for ten years. In support of this position, the Solicitor General cites the cases of
Firestone Tire and Rubber Company of the Philippines v. Lariosa and Soco v. Mercantile Corporation of Davao,
where the employees were dismissed for cause but were nevertheless allowed separation pay on grounds of social
and compassionate justice. As the Court put it in the Firestone case:

In view of the foregoing, We rule that Firestone had valid grounds to dispense with the services of Lariosa and that
the NLRC acted with grave abuse of discretion in ordering his reinstatement. However, considering that Lariosa had
worked with the company for eleven years with no known previous bad record, the ends of social and
compassionate justice would be served if he is paid full separation pay but not reinstatement without backwages by
the NLRC.
ISSUE
WON the award of separation pay in the form of financial assistance to an employee who had been
dismissed for cause as found by the public respondent is proper?
HELD
NO. The court hold that the grant of separation pay in the case at bar is unjustified. The private respondent
has been dismissed for dishonesty, as found by the labor arbiter and affirmed by the NLRC and as she herself has
impliedly admitted. The fact that she has worked with the PLDT for more than a decade, if it is to be considered at
all, should be taken against her as it reflects a regrettable lack of loyalty that she should have strengthened instead of
betraying during all of her 10 years of service with the company. If regarded as a justification for moderating the
penalty of dismissal, it will actually become a prize for disloyalty, perverting the meaning of social justice and
undermining the efforts of labor to cleanse its ranks of all undesirables.
The Court also rules that the separation pay, if found due under the circumstances of each case, should be computed
at the rate of one month salary for every year of service, assuming the length of such service is deemed material.
This is without prejudice to the application of special agreements between the employer and the employee
stipulating a higher rate of computation and providing for more benefits to the discharged employee.
RULING
The petition is GRANTED. The challenged resolution of September 22, 1987, is AFFIRMED in toto
except for the grant of separation pay in the form of financial assistance, which is hereby DISALLOWED. The
temporary restraining order dated March 23, 1988, is LIFTED. It is so ordered.

23.) Agabon vs. National Labor Relations Commission, 442 SCRA 573/ G.R. No. 158693 November 17, 2004

ABANDONMENT OF WORK

Labor Law; Administrative Law; If the factual findings of the NLRC and the Labor Arbiter are conflicting, the
reviewing court may delve into the records and examine for itself the questioned findings.It is well-settled that
findings of fact of quasi-judicial agencies like the NLRC are accorded not only respect but even finality if the
findings are supported by substantial evidence. This is especially so when such findings were affirmed by the Court
of Appeals. However, if the factual findings of the NLRC and the Labor Arbiter are conflicting, as in this case, the
reviewing court may delve into the records and examine for itself the questioned findings. Accordingly, the Court of
Appeals, after a careful review of the facts, ruled that petitioners dismissal was for a just cause. They had
abandoned their employment and were already working for another employer.
Dismissal of Employees; To dismiss an employee, the law requires not only the existence of a just and valid cause
but also enjoins the employer to give the employee the opportunity to be heard and to defend himself.To dismiss
an employee, the law requires not only the existence of a just and valid cause but also enjoins the employer to give
the employee the opportunity to be heard and to defend himself. Article 282 of the Labor Code enumerates the just
causes for termination by the employer: (a) serious misconduct or willful disobedience by the employee of the lawful
orders of his employer or the latters representative in connection with the employees work; (b) gross and habitual
neglect by the employee of his duties; (c) fraud or willful breach by the employee of the trust reposed in him by his
employer or his duly authorized representative; (d) commission of a crime or offense by the employee against the
person of his employer or any immediate member of his family or his duly authorized representative; and (e) other
causes analogous to the foregoing.

Moonlighting; Subcontracting for another company clearly shows the intention to sever the employer-employee
relationship; The record of an employee is a relevant consideration in determining the penalty that should be
meted out to him.In February 1999, petitioners were frequently absent having subcontracted for an installation
work for another company. Subcontracting for another company clearly showed the intention to sever the employeremployee relationship with private respondent. This was not the first time they did this. In January 1996, they did
not report for work because they were working for another company. Private respondent at that time warned
petitioners that they would be dismissed if this happened again. Petitioners disregarded the warning and exhibited a
clear intention to sever their employer-employee relationship. The record of an employee is a relevant consideration
in determining the penalty that should be meted out to him.
The employer may not be compelled to continue to employ such persons whose continuance in the service will
patently be inimical to his interests.The law imposes many obligations on the employer such as providing just
compensation to workers, observance of the procedural requirements of notice and hearing in the termination of
employment. On the other hand, the law also recognizes the right of the employer to expect from its workers not
only good performance, adequate work and diligence, but also good conduct and loyalty. The employer may not be
compelled to continue to employ such persons whose continuance in the service will patently be inimical to his
interests.
Dismissals based on just causes contemplate acts or omissions attributable to the employee while dismissals based
on authorized causes involve grounds under the Labor Code which allow the employer to terminate employees.
Dismissals based on just causes contemplate acts or omissions attributable to the employee while dismissals based
on authorized causes involve grounds under the Labor Code which allow the employer to terminate employees. A
termination for an authorized cause requires payment of separation pay. When the termination of employment is
declared illegal, reinstatement and full backwages are mandated under Article 279. If reinstatement is no longer
possible where the dismissal was unjust, separation pay may be granted.
Same; Same; Due Process; Notice Requirement; Procedurally, (1) if the dismissal is based on a just cause under
Article 282 of the Labor Code, the employer must give the employee two written notices and a hearing or
opportunity to be heard if requested by the employee
before terminating the employment, and (2) if the dismissal is based on authorized causes under Articles 283 and
284, the employer must give the employee and the Department of Labor and Employment written notices 30 days
prior to the effectivity of his separation; Failure to observe due process in a dismissal for just or authorized cause
does not invalidate the dismissal but makes the employer liable for non-compliance with the procedural
requirements of due process.Procedurally, (1) if the dismissal is based on a just cause under Article 282, the
employer must give the employee two written notices and a hearing or opportunity to be heard if requested by the
employee before terminating the employment: a notice specifying the grounds for which dismissal is sought a
hearing or an opportunity to be heard and after hearing or opportunity to be heard, a notice of the decision to
dismiss; and (2) if the dismissal is based on authorized causes under Articles 283 and 284, the employer must give
the employee and the Department of Labor and Employment written notices 30 days prior to the effectivity of his
separation. From the foregoing rules four possible situations may be derived: (1) the dismissal is for a just cause
under Article 282 of the Labor Code, for an authorized cause under Article 283, or for health reasons under Article
284, and due process was observed; (2) the dismissal is without just or authorized cause but due process was
observed; (3) the dismissal is without just or authorized cause and there was no due process; and (4) the dismissal is
for just or authorized cause but due process was not observed. In the first situation, the dismissal is undoubtedly
valid and the employer will not suffer any liability. In the second and third situations where the dismissals are
illegal, Article 279 mandates that the employee is entitled to reinstatement without loss of seniority rights and other
privileges and full backwages, inclusive of allowances, and other benefits or their monetary equivalent computed
from the time the compensation was not paid up to the time of actual reinstatement. In the fourth situation, the
dismissal should be upheld. While the procedural infirmity cannot be cured, it should not invalidate the dismissal.
However, the employer should be held liable for non-compliance with the procedural requirements of due process.
FACTS
Private respondent Riviera Home Improvements, Inc. is engaged in the business of selling and installing
ornamental and construction materials. It employed petitioners Virgilio Agabon and Jenny Agabon as gypsum board
and cornice installers on January 2, 19922 until February 23, 1999 when they were dismissed for abandonment of
work.

Petitioners then filed a complaint for illegal dismissal and payment of money claims3 and on December 28, 1999,
the Labor Arbiter rendered a decision declaring the dismissals illegal and ordered private respondent to pay the
monetary claims.
On appeal, the NLRC reversed the Labor Arbiter because it found that the petitioners had abandoned their work, and
were not entitled to backwages and separation pay. The other money claims awarded by the Labor Arbiter were also
denied for lack of evidence.5
Upon denial of their motion for reconsideration, petitioners filed a petition for certiorari with the Court of Appeals.
The Court of Appeals in turn ruled that the dismissal of the petitioners was not illegal because they had abandoned
their employment but ordered the payment of money claims.
Petitioners assert that they were dismissed because the private respondent refused to give them assignments
unless they agreed to work on a pakyaw basis when they reported for duty on February 23, 1999. They did not
agree on this arrangement because it would mean losing benefits as Social Security System (SSS) members.
Petitioners also claim that private respondent did not comply with the twin requirements of notice and hearing.8
Private respondent, on the other hand, maintained that petitioners were not dismissed but had abandoned their
work.9 In fact, private respondent sent two letters to the last known addresses of the petitioners advising them to
report for work. Private respondents manager even talked to petitioner Virgilio Agabon by telephone sometime in
June 1999 to tell him about the new assignment at Pacific Plaza Towers involving 40,000 square meters of cornice
installation work. However, petitioners did not report for work because they had subcontracted to perform
installation work for another company. Petitioners also demanded for an increase in their wage to P280.00 per day.
When this was not granted, petitioners stopped reporting for work and filed the illegal dismissal case.
ISSUE
WON the petitioners were legally dismissed for abandonment of work?
HELD
YES. Abandonment is the deliberate and unjustified refusal of an employee to resume his employment. It is
a form of neglect of duty, hence, a just cause for termination of employment by the employer. For a valid finding of
abandonment, these two factors should be present: (1) the failure to report for work or absence without valid or
justifiable reason; and (2) a clear intention to sever employer-employee relationship, with the second as the more
determinative factor which is manifested by overt acts from which it may be deduced that the employees has no
more intention to work. The intent to discontinue the employment must be shown by clear proof that it was
deliberate and unjustified.
RULING
In view of the foregoing, the petition is DENIED. The decision of the Court of Appeals dated January 23,
2003, in CA-G.R. SP No. 63017, finding that petitioners Jenny and Virgilio Agabon abandoned their work, and
ordering private respondent to pay each of the petitioners holiday pay for four regular holidays from 1996 to 1998,
in the amount of P6,520.00, service incentive leave pay for the same period in the amount of P3,255.00 and the
balance of Virgilio Agabons thirteenth month pay for 1998 in the amount of P2,150.00 is AFFIRMED with the
MODIFICATION that private respondent Riviera Home Improvements, Inc. is further ORDERED to pay each of
the petitioners the amount of P30,000.00 as nominal damages for non-compliance with statutory due process.

24.) Jaka Food Processing vs. Pacot, G.R. No. 151378, March 28, 2005
FACTS:
Respondents Darwin Pacot, Robert Parohinog, David Bisnar, Marlon Domingo, Rhoel Lescano and Jonathan
Cagabcab were earlier hired by petitioner JAKA Foods Processing Corporation (JAKA, for short) until the latter
terminated their employment on August 29, 1997 because the corporation was in dire financial straits. It is not
disputed, however, that the termination was effected without JAKA complying with the requirement under Article
283 of the Labor Code regarding the service of a written notice upon the employees and the Department of Labor
and Employment at least one (1) month before the intended date of termination. In time, respondents separately filed

with the regional Arbitration Branch of the National Labor Relations Commission (NLRC) complaints for illegal
dismissal, underpayment of wages and nonpayment of service incentive leave and 13 th month pay against JAKA and
its HRD Manager, Rosana Castelo. After due proceedings, the Labor Arbiter rendered a decision declaring the
termination illegal and ordering JAKA and its HRD Manager to reinstate respondents with full backwages, and
separation pay if reinstatement is not possible. More specifically the decision dispositively reads: In time,
respondents separately filed with the regional Arbitration Branch of the National Labor Relations Commission
(NLRC) complaints for illegal dismissal, underpayment of wages and nonpayment of service incentive leave and
13th month pay against JAKA and its HRD Manager, Rosana Castelo. After due proceedings, the Labor Arbiter
rendered a decision declaring the termination illegal and ordering JAKA and its HRD Manager to reinstate
respondents with full backwages, and separation pay if reinstatement is not possible.
ISSUES:
Does the absence of the notice of hearing in dismissal due to authorize cause amounts to illegal dismissal?
Are the dismissed employees, because of companys serious losses, entitled to separation pay?
RULING:
A dismissal for just cause under Article 282 implies that the employee concerned has committed, or is guilty of,
some violation against the employer, i.e. the employee has committed some serious misconduct, is guilty of some
fraud against the employer, or, as in Agabon, he has neglected his duties. Thus, it can be said that the employee
himself initiated the dismissal process. On another breath, a dismissal for an authorized cause under Article 283 does
not necessarily imply delinquency or culpability on the part of the employee. Instead, the dismissal process is
initiated by the employers exercise of his management prerogative, i.e. when the employer opts to install labor
saving devices, when he decides to cease business operations or when, as in this case, he undertakes to implement a
retrenchment program. The clear-cut distinction between a dismissal for just cause under Article 282 and a dismissal
for authorized cause under Article 283 is further reinforced by the fact that in the first, payment of separation pay, as
a rule, is not required, while in the second, the law requires payment of separation pay. For these reasons, there
ought to be a difference in treatment when the ground for dismissal is one of the just causes under Article 282, and
when based on one of the authorized causes under Article 283. Accordingly, it is wise to hold that: (1) if the
dismissal is based on a just cause under Article 282 but the employer failed to comply with the notice requirement,
the sanction to be imposed upon him should be tempered because the dismissal process was, in effect, initiated by an
act imputable to the employee; and (2) if the dismissal is based on an authorized cause under Article 283 but the
employer failed to comply with the notice requirement, the sanction should be stiffer because the dismissal process
was initiated by the employers exercise of his management prerogative.
It is, therefore, established that there was ground for respondents dismissal, i.e., retrenchment, which is one of the
authorized causes enumerated under Article 283 of the Labor Code. Likewise, it is established that JAKA failed to
comply with the notice requirement under the same Article. Considering the factual circumstances in the instant
case and the above ratiocination, we, therefore, deem it proper to fix the indemnity at P50,000.00. We likewise find
the Court of Appeals to have been in error when it ordered JAKA to pay respondents separation pay equivalent to
one (1) month salary for every year of service. This is because in Reahs Corporation vs. NLRC we made the
following declaration: The rule, therefore, is that in all cases of business closure or cessation of operation or
undertaking of the employer, the affected employee is entitled to separation pay. This is consistent with the state
policy of treating labor as a primary social economic force, affording full protection to its rights as well as its
welfare. The exception is when the closure of business or cessation of operations is due to serious business losses or
financial reverses; duly proved, in which case, the right of affected employees to separation pay is lost for obvious
reasons. xxx.

25.) Reyes vs CA G.R. No. 154448. August 15, 2003

The court held that the resignation must be accepted by the employer to be effective.

(BUT ACCORDING TO ATTY. PLAGATA- The rule is tantamount to involuntary servitude.)

26.) Chiang Kai Shek College vs. Court of Appeals, 437 SCRA 171/ G.R. No. 152988 August 24, 2004
Labor Law; Security of Tenure; Requisites for a Private School Teacher to Acquire a Permanent Status of
Employment and Therefore Entitled to a Security of Tenure; The fundamental guarantees of security of tenure and
due process dictate that no worker shall be dismissed except for just and authorized cause provided by law and after
due notice and hearing.Under the Manual of Regulations for Private Schools, for a private
school teacher to acquire a permanent status of employment and, therefore, be entitled to a security of tenure, the
following requisites must concur: (a) the teacher is a full-time teacher; (b) the teacher must have rendered three
consecutive years of service; and (c) such service must have been satisfactory. Since Ms. Belo has measured up to
these standards, she therefore enjoys security of tenure. The fundamental guarantees of security of tenure and due
process dictate that no worker shall be dismissed except for just and authorized cause provided by law and after due
notice and hearing.
Dismissal; Definition of Constructive Dismissal.Case law defines constructive dismissal as a cessation from
work because continued employment is rendered impossible, unreasonable, or unlikely; when there is a demotion in
rank or a diminution in pay or both; or when a clear discrimination, insensibility, or disdain by an employer
becomes unbearable to the employee.
FACTS
The controversy began on 8 June 1992, when Ms. Belo, a teacher of CKSC since 1977, applied for a leave
of absence for the school year 1992-1993 because her children of tender age had no yaya to take care of them. The
then principal, Mrs. Joan Sy Cotio, approved her application. However, on 15 June 1992, Ms. Belo received a letter
dated 9 June 1992 of Mr. Chien Yin Shao, President of CKSC, informing her of the schools existing policy; thus:
Regarding your letter of request for leave of absence dated June 8, 1992, we would like to inform you of the existing
policy of our school:
(1) We could not assure you of any teaching load should you decide to return in the future.
(2) Only teachers in service may enjoy the privilege and benefits provided by our school. Hence, your children are
no longer entitled to free tuition starting school year 1992-1993.
Ms. Belo, nonetheless, took her leave of absence. On 8 July 1992, she learned that Laurence, one of her three
children studying at the CKSC, was sent out of the examination room because his tuition fees were not paid. This
embarrassing incident impelled Ms. Belo to pay, allegedly under protest, all the school fees of her children.
In May 1993, after her one-year leave of absence, Ms. Belo presented herself to Ms. Cotio and signified her
readiness to teach for the incoming school year 1993-1994. She was, however, denied and not accepted by Ms.
Cotio. She then relayed the denial to Mr. Chien on 17 May 1993. On 21 July 1993, she received the reply of Mr.
Chien dated 1 July 1993 informing her that her confirmation to teach was filed late and that there was no available
teaching load for her because as early as April 21 of that year, the school had already hired non-permanent teachers.
Adversely affected by the development, Ms. Belo filed with the Labor Arbitration Office a complaint for illegal
dismissal; non-payment of salaries, 13th month pay, living allowance, teachers day pay; loss of income; and moral
damages.
The Labor Arbiter thus offered a Solomonic solution by directing the petitioners to give her a teaching load in the
ensuing year 1996-1997 and the succeeding years without loss of seniority rights.
On appeal by the private respondent, the NLRC reversed the decision of the Labor Arbiter. It considered as
misplaced the Labor Arbiters utter reliance on Mr. Chiens letter to Ms. Belo enunciating the questioned school
policies. It reasoned that if the school policy was to extend free tuition fees to children of teachers in school, then the
petitioners must have considered her already not in school or summarily dismissed or separated the very moment
[she] applied for leave, for, otherwise, her children would have been granted that privilege. Thus, it directed the
petitioners to immediately reinstate Ms. Belo to her former position with full back wages from the time of her

dismissal up to her actual reinstatement. It, however, dismissed Ms. Belos prayer for moral and exemplary damages
and attorneys fees for lack of evidence that the petitioners acted in bad faith and malice
ISSUE
WON Diana P. Belo, private respondent, was legally dismissed as a teacher of petitioner Chiang Kai Shek
College (CKSC)?
HELD
NO. The court agreed with the Court of Appeals that the NLRC did not commit any grave abuse of
discretion in finding that Ms. Belo was constructively dismissed when the petitioners, in implementing their
policies, effectively barred her from teaching for the school year 1993-1994. The three policies are (1) the nonassurance of a teaching load to a teacher who took a leave of absence; (2) the hiring of non-permanent teachers in
April to whom teaching loads were already assigned when Ms. Belo signified in May 1993 her intention to teach;
and (3) the non-applicability to children of teachers on leave of the free tuition fee benefits extended to children of
teachers in service.
Case law defines constructive dismissal as a cessation from work because continued employment is rendered
impossible, unreasonable, or unlikely; when there is a demotion in rank or a diminution in pay or both; or when a
clear discrimination, insensibility, or disdain by an employer becomes unbearable to the employee.
When in the school year 1992-1993, the petitioners already applied to Ms. Belos children the policy of extending
free tuition fee benefits only to children of teachers in service, Ms. Belo was clearly discriminated by them. True,
the policy was made known to Ms. Belo in a letter dated 9 June 1992, but, this only additionally and succinctly
reinforced the clear case of discrimination. Notably, petitioners statements of policies dated 13 March 1992 for the
school year 1992-1993.
RULING
The petition is DENIED. The decision of 12 October 2001 and resolution of 11 April 2002 of the Court of Appeals
in CA-GR. SP No. 59996 are hereby AFFIRMED. Costs against the petitioners.

27.) Philippine Industrial Security Agency Corporation (PISAC) vs. Aguinaldo, 460 SCRA 229/ G.R. No.
149974 June 15, 2005
Labor Law; National Labor Relations Commission (NLRC); Factual Findings; Appeals; Settled is the rule that
findings of fact of the Court of Appeals are accorded respect, even finality, and will not be disturbed especially
where such findings are supported by substantial evidence.Settled is the rule that findings of facts of the Court
of Appeals are accorded respect, even finality, and will not be disturbed especially where such findings are
supported by substantial evidence. One of the exceptions, however, is when there is a variance between the findings
of the NLRC and the Court of Appeals, as in this case.
Transfers; Constructive Dismissals; In constructive dismissal, the employer has the burden of proving that the
transfer and demotion of an employee are for just and valid grounds, such as genuine business necessity.A transfer
amounts to constructive dismissal when the transfer is unreasonable, unlikely, inconvenient, impossible, or
prejudicial to the employee, as in this case. It is defined as an involuntary resignation resorted when a clear
discrimination, insensibility or disdain by an employer becomes unbearable to the employee. In constructive
dismissal, the employer has the burden of proving that the transfer and demotion of an employee are for just and
valid grounds, such as genuine business necessity. The employer must be able to show that the transfer is not
unreasonable, inconvenient, or prejudicial to the employee; nor does it involve a demotion in rank or a diminution of
salary and other benefits. Should the employer fail to overcome this burden of proof, the employees transfer shall
be tantamount to unlawful constructive dismissal.
FACTS
On April 11, 1988, Philippine Industrial Security Agency Corporation (PISAC), petitioner, hired Percival
Aguinaldo, respondent, as a security guard. He was assigned to secure the premises of Far East Bank & Trust
Company (FEBTC) Branch in Santiago City. In 1993, he was promoted as Branch Head Guard.2

On November 13, 1998, Ms. Remy Tumamao, petitioners roving personnel, caught respondent without headgear
and smoking while on duty.
On November 23, 1998, petitioner security agency issued a memorandum to respondent directing him to report to
the FEBTC main office in Malabon City for investigation.4 The following day, or on November 24, petitioner issued
a Relief Order5 ordering him to report to its head office for further clarification of his status.
On the morning of November 13, 1998 our armoured car was on its way to deliver cash to Central Bank in
Tuguegarao. At around 10:00 A.M., our armoured car personnel called up Mr. Aguinaldo and informed him that they
incurred a mechanical trouble. Upon receiving the message, Mr. Aguinaldo went out to fetch or call a mechanic.
Since it was raining on that morning, he did not wear his perching cap because his hair was still wet. It was during
that moment when Ms. Tumamao saw him in the branch.
In view of the degree of offense committed by our Security Guard, he should be given a written reprimand and not
relieved from his post since this was his first offense.
Mr. Aguinaldo has been with the branch for ten years, he is a person of good moral character and has performed his
job above our expectations.
In view of this, I would like to seek your approval for the retention of Mr. Aguinaldo.
A constructive dismissal is a quitting because continued employment is rendered impossible, unreasonable or
unlikely, as an offer involving a demotion in rank and a diminution in pay (Philippine Japan Active Carbon Corp. vs. NLRC, G.R. No. 83239, March 8, 1989). As further explained in Jarcia vs.
NLRC (266 SCRA 97 [1997]):
In case of constructive dismissal, the employer has the burden of proving that the transfer and demotion of an
employee are for valid and legitimate grounds such as genuine business necessity. Particularly, for a transfer not to
be considered a constructive dismissal, the employer must be able to show that such transfer is not unreasonable,
inconvenient, or prejudicial to the employee; nor does it involve a demotion in rank or a diminution of his salaries,
privileges and other benefits. Failure of the employer to overcome this burden of proof, the employees demotion
shall no doubt be tantamount to unlawful constructive dismissal.
ISSUE
WON the PISAC, the employer, was able prove that the transfer and demotion of an employee are for just
and valid grounds?
HELD
NO. By transferring respondent to the Malabon City FEBTC Branch, petitioner resorted to constructive
dismissal. A transfer amounts to constructive dismissal when the transfer is unreasonable, unlikely, inconvenient,
impossible, or prejudicial to the employee, as in this case. It is defined as an involuntary resignation resorted when a
clear discrimination, insensibility or disdain by an employer becomes unbearable to the employee.
In constructive dismissal, the employer has the burden of proving that the transfer and demotion of an employee
are for just and valid grounds, such as genuine business necessity. The employer must be able to show that the
transfer is not unreasonable, inconvenient, or prejudicial to the employee; nor does it involve a demotion in rank or a
diminution of salary and other benefits. Should the employer fail to overcome this burden of proof, the employees
transfer shall be tantamount to unlawful constructive dismissal.
RULING
The petition is hereby DENIED. The assailed Decision of the Court of Appeals is AFFIRMED. Costs against
petitioner.
28.) Superstar Security Agency, Inc. vs. NLRC, 184 SCRA 74/ G.R. No. 81493. April 3, 1990
Labor Law; Illegal Dismissal; Temporary off-detail is not equivalent to dismissal.We resolve the issue in the
negative. The charge of illegal dismissal was prematurely filed. The records show that a month after Hermosa was
placed on a temporary off-detail, she readily filed a complaint against the petitioners on the presumption that her
services were already terminated. Temporary off-detail is not equivalent to dismissal. In security parlance, it
means waiting to be posted. (TSN, January 14, 1980, p. 35) It is a recognized fact that security guards employed in a
security agency may be temporarily sidelined as their assignments primarily depend on the contracts entered into by
the agency with third parties (Agro Commercial Security Agencies, Inc. v. NLRC, et al., G.R. Nos. 82823-24, July

31, 1989). However, it must be emphasized that such temporary inactivity should continue only for six months.
Otherwise the security agency concerned could be liable for constructive dismissal under Article 287 (now Article
286) of the Labor Code (see Agro case, supra). We note that Hermosas off-detail from SMY was due not to
petitioners machination but to a previous request of SMY which was reiterated by the management on January 29,
1985 (Exhibit 22, Records, p. 69). Moreover, the defenses raised by the petitioners, namely, their clients cost
reduction program and their refusal to accept the complainants services do not appear to Us as a scheme to
camouflage (Hermosas) illegal dismissal x x x (NLRC decision, Records, p. 201). We simply cannot ignore the
reality of the situation obtaining in this case. In the business world, companies which offer contracts for services
cater to the whims and wishes of clients whether the same are reasonable or not. Clients are not expected to explain
the reasons for their demands while these companies are not only expected but also are bound to comply with their
clients directives. In the case at bar, We do not find it unusual for clients to resort to a cost-cutting program in view
of the prevailing economic condition and then to manifest their preferences of people they want to work with in their
establishments. Same; Same; Evidence; In the absence of contrary evidence, memoranda are credible.Hermosa
denies that she committed the foregoing acts of misconduct. She claims that the evidence were planned and
fabricated to lend a semblance of legality to the cause of (her) dismissal. (Memorandum of Petitioners, Rollo, p.
87). Hermosas supposition is untenable. A study of the records reveals that other than her statement of denial,
Hermosa did not present any corroborative evidence. Upon the other hand, the subject memoranda contained
detailed reports on the incidents which would be difficult for petitioners to concoct. In the absence of a contrary
evidence, the said memoranda are credible.
FACTS
On June 24, 1981, Filomena Hermosa (Hermosa, for short) was hired by petitioner Superstar Security
Agency (Agency, for short) as a Security Guard with a daily salary of P37.00 and an emergency cost of living
allowance of P510.00 per month. She was assigned to different detachments in premises owned by the Agencys
clients such as the Supergarment Malugay Yakal (SMY) or Rustan Commercial Corporation Warehouse, Rustan
Group of Companies consisting of Rustan Commercial Corporation (Cubao and Makati Detachments), Tourist Duty
Free Shop (FTI Detachment, Hyatt, Hilton and Sheraton Detachments), and Rustan Supermarket Warehouse.
On February 1, 1985, the Agency placed Hermosa on a temporary off-detail. On March 5, 1985, Hermosa filed a
complaint for illegal dismissal. She claimed that she was unceremoniously dismissed on suspicion that she was the
author of an anonymous report about the irregularities committed by her fellow lady security guards; that it was this
precise reason why she was called to the headquarters by the Agencys Personnel Supervisor, Rafael Fermo; that,
thereafter, Fermo threatened and directed her to keep any information regarding the matter to herself; that further,
she was instructed not to report for duty at SMY effective February 1, 1985 as she would be given a new
assignment; that she did as she was told but no new assignment came despite repeated follow-ups; and that instead,
the Agency informed her that the cause of her temporary off-detail was the cost-cutting program of the Rustan
Group of Companies and the refusal of Agencys clients to accept her allegedly due to poor performance, and lack of
elementary courtesy and tact. Finally, Hermosa averred that she was denied due process in that she was neither
informed of the alleged complaints against her nor afforded the opportunity to explain her side.
Petitioners, on the other hand, claimed that Hermosa was relieved of her SMY post due to the cost-cutting program
of its clients; that while she was on temporary off-detail since February 1, 1985, the Agency continued to look for
an available assignment for her with the other detachments; that, however, the respective Security Directors of the
said detachments signified their unwillingness to accept her because of her poor performance and undesirable
conduct and behavior (Exhs. 6 to 13); that the Agency did not dismiss her at all; that Mr. Fermo did not receive any
anonymous report of any irregularity committed by some security guards, hence, there was no basis for the supposed
threat and instruction to complainant to be silent; that the Agency usually welcomes any report, if it exists, regarding
the behavior of its personnel by conducting an inquiry thereon; that the Agency is committed to maintain the trust
placed upon it by its clients as well as heed the latters demands for good service; and that the complainant has been
previously warned and reprimanded for breach or violation of the Agencys rules on discipline (Exh. 16 to 22). On
April 7, 1986, the Labor Arbiter rendered a decision, to wit:
WHEREFORE, pursuant to the above premises, the respondent Superstar Security Agency, Inc. is hereby ordered
to pay the complainant the amount of P3,848.00 by way of separation pay.
ISSUE
Whether or not the petitioners are guilty of illegal dismissal of private respondent?

HELD
NO. The court resolve the issue in the negative. The charge of illegal dismissal was prematurely filed. The
records show that a month after Hermosa was placed on a temporary off-detail, she readily filed a complaint
against the petitioners on the presumption that her services were already terminated. Temporary off-detail is not
equivalent to dismissal. In security parlance, it means waiting to be posted. (TSN, January 14, 1980, p. 35) It is a
recognized fact that security guards employed in a security agency may be temporarily sidelined as their
assignments primarily depend on the contracts entered into by the agency with third parties (Agro Commercial
Security Agencies, Inc. v. NLRC, et al., G.R. Nos. 82823-24, July 31, 1989). However, it must be emphasized that
such temporary inactivity should continue only for six months. Otherwise the security agency concerned could be
liable for constructive dismissal under Article 287 (now Article 286) of the Labor Code (see Agro case, supra)
RULING
The decision of the NLRC dated October 30, 1987 is SET ASIDE and the decision of the Labor Arbiter
dated April 7, 1986 is hereby REINSTATED. No costs.

29.) Soliman Security Services, Inc. vs. Court of Appeals, 384 SCRA 514/ G.R. No. 143215. July 11, 2002
Labor Law; Dismissals; Temporary off-detail of respondent Valenzuela not a constructive dismissal.
Constructive dismissal exists when an act of clear discrimination, insensibility or disdain, on the part of an employer
has become so unbearable as to leave an employee with no choice but to forego continued employment. The
temporary off-detail of respondent Valenzuela is not such a case.

FACTS
Respondent Eduardo Valenzuela, a security guard, was a regular employee of petitioner Soliman Security
Services assigned at the BPI-Family Bank, Pasay City. On 09 March 1995, he received a memorandum from
petitioners relieving him from his post at the bank, said to be upon the latter's request, and requiring him to report to
the security agency for reassignment. The following month, or on 07 April 1995, respondent filed a complaint for
illegal dismissal on the ground that his services were terminated without a valid cause and that, during his tenure at
the bank, he was not paid his overtime pay, 13th month pay, and premium pay for services rendered during holidays
and rest days. He averred that, after receiving the memorandum of 09 March 1995, he kept on reporting to the office
of petitioners for reassignment but, except for a brief stint in another post lasting for no more than a week, he was
put on a floating status.
Petitioners contended that the relief of respondent from his post, made upon request of the client, was
merely temporary and that respondent had been offered a new post but the latter refused to accept it.
Petitioners argued that respondents floating status for barely 29 days did not constitute constructive
dismissal.
On 31 July 1995, the Labor Arbiter, Ariel Cadiente Santos, arrived at a decision holding petitioners guilty of
constructive dismissal and ordering the reinstatement of the complainant to his former position with full backwages
from the date of his dismissal until his actual reinstatement; directing the Research and Information Unit to
compute the various monetary benefits awarded to the complainant; and adjudging the payment, by way of
attorneys fees, of ten percent (10%) of all sums owing to the complainant.
On 16 October 1998, petitioners filed an appeal to the National Labor Relations Commission (NLRC).
On 11 November 1998, the NLRC issued an order directing petitioners to submit an affidavit to the effect that their
appeal bond was genuine and that it would be in force and effect until the final disposition of the case. In his reply
memorandum, dated 28 November 1998, respondent, asseverating that petitioners failed to deposit the required bond
for the appeal, sought the appeal to be declared as not having been validly perfected.

The NLRC, on 30 April 1999, gave due course to the appeal and rendered the presently assailed decision, reversing
that of the Labor Arbiter, to wit:
WHEREFORE, the decision appealed from is hereby SET ASIDE. However, respondent [before the NLRC] is
hereby ordered to pay complainant separation pay computed at one-half (1/2) month for every year of service,
reckoned from date of employment on October 9, 1990 up to September 9, 1995, the date the complainant should
have been redeployed.
A motion for reconsideration, filed by herein private respondent Valenzuela, was denied by the NLRC.
Valenzuela forthwith brought the matter up to the Court of Appeals.
ISSUE
Whether or not private respondent should be deemed constructively dismissed by petitioner for having been
placed on floating status, i.e., with no reassignment, for a period of 29 days?
HELD
NO. Constructive dismissal exists when an act of clear discrimination, insensibility or disdain, on the part
of an employer has become so unbearable as to leave an employee with no choice but to forego continued
employment. The temporary off-detail of respondent Valenzuela is not such a case.
RULING
The instant petition is GRANTED. The assailed decision and resolution of the Court of Appeals are SET
ASIDE and the decision of the National Labor Relations Commission in NCR CN. 04-02620-95 is REINSTATED.
No costs. [Soliman Security Services, Inc. vs. Court of Appeals, 384 SCRA 514(2002)]