Magallanes vs. Sun Yat Sen G.R. No.

160876 January 18, 2008 Facts: Azucena Magallanes, Evelyn Bacolod, Judith Cotecson (representedby her he irs), petitioners, Grace Gonzales, and Bella Gonzales were allemployed as teache rs in the Sun Yat Sen Elementary School in SurigaoCity. Paz Go and Elena Cubilla n are principals of the said school. Willy AngGan Teng and Benito Ang are its di rectors, while Teotimo Tan is the schooltreasurer. They are all respondents here in. On May 22, 1994, respondents terminated the services of petitioners. Thus, on August 3, 1994, they filed with the Sub-Regional ArbitrationBranch No. X, National Labor Relations Commission (NLRC), Butuan City, complaints against respondents for illegal dismissal, underpayment of wages, payment of backwages, 13th month pay, ECOLA, separation pay, moral damages, and attorney s fees. Likewise, on August 22, 1994, petitioner Cotecson filed a separate complaint praying for the same reliefs. Issue: (1) whether the Court of Appeals (Seventh Division) erred in holdingthat affixing a wrong docket number on a motion renders it "non-existent;" and (2) whether the issuance by the NLRC of the Order dated March 30,2001, amend ing the amounts of separation pay and backwages, awardedby the Court of Appeals (Sixteenth Division) to petitioners and computedby the Labor Arbiter, is tantamo unt to grave abuse of discretion amountingto lack or excess of jurisdiction. Held: WHEREFORE, we GRANT the petition. The challenged Resolutions dated October 29, 2001, May 8, 2003, and October 10, 2003 in CA-G.R. SPNo. 67068 are REVERSED. The Order of the NLRC dated March 30, 2001 in NLRC Case No. M-006176-2001 is SET ASIDE. The Order of the Labor Arbiter dated January 8, 2001 is REINSTATED. Ratio Decidendi: 1. Court of Appeals (Seventh Division) is correct when itruled that petitioners motion for reconsideration of its Resolution dated October 29, 2001 in CA-G.R. SP No. 67068 is "non-existent." Petitioners counsel placed a wrong case number in their motion. Where a pleadingbears an err oneous docket number and thus "could not be attached to the correct case," the said pleading is, for all intents and purposes, "nonexistent. " It has neither the duty nor the obligation to correct the error orto transfer th e case to the Seventh Division. However, we opt for liberalityin the application of the rules to the instant case in light of the followingconsiderations. First , the rule that negligence of counsel binds the client may be relaxed where adherence thereto would result in outrightdeprivation of th e client s liberty or property or where the interests ofjustice so require. Second , this Court is not a slave of technical rules, shornof judicial discretion in r endering justice; it is guided by the norm that onthe balance, technicalities ta ke a backseat against substantive rights. Thus, if the application of the rules would tend to frustrate rather than promote justice, it is always within this Court s power to suspend the rulesor exc ept a particular case from its application. 2. We sustain petitioners contention that the NLRC, in modifying theaward of the Court of Appeals, committed grave abuse of discretionamounting to lack or excess of jurisdiction. Quasi-judicial agencies haveneither business nor power to modi fy or amend the final and executoryDecisions of the appellate courts. Under the principle of immutability ofjudgments, any alteration or amendment which substan tially affects a finaland executory judgment is void for lack of jurisdiction.8 We thus rule that the Order dated March 30, 2001 of the NLRC directing that the monetaryaward shou

ld be computed from June 1994, the date petitioners weredismissed from the servi ce, up to June 20, 1995 only, is void. Arco Metal Products vs. SAMARM-NAFLU G.R. No. 170734 May 14, 2008 Facts: Petitioner is a company engaged in the manufacture of metalproducts, wher eas respondent is the labor union of petitioner s rank andfile employees. Sometime in December 2003, petitioner paid the13th month pay, bonus, and leave encashmen t of three union members inamounts proportional to the service they actually ren dered in a year, whichis less than a full twelve (12) months. The employees were RanteLamadrid, Alberto Gamban, and Rodelio Collantes. Respondent protestedthe p rorated scheme, claiming that on several occasions petitioner did notprorate the payment of the same benefits to seven (7) employees who hadnot served for the f ull 12 months. The payments were made in 1992, 1993,1994, 1996, 1999, 2003, and 2004. According to respondent, the proratedpayment violates the rule against dim inution of benefits under Article 100of the Labor Code. Thus, they filed a compl aint before the NationalConciliation and Mediation Board (NCMB). The parties sub mitted the casefor voluntary arbitration. The voluntary arbitrator, Apron M. Man gabat, ruled in favor of the petitioner. Issue/s: Whether or not the Court of Appeals erred when it ruled that thegrant o f 13th month pay, bonus, and leave encashment in full regardless ofactual servic e rendered constitutes voluntary employer practice and, consequently, the prorated payment of the said benefits does notconstitute dimin ution of benefits under Article 100 of the Labor Code. Whether the intent of the CBA provisions is to grant full benefits regardlessof service actually rendered by an employee to the company. Held: IN VIEW HEREOF, the petition is DENIED. The Decision of the Court of Appeals in CA-G.R. SP No. 85089 dated 29 September 2005 is and itsResolution dated 9 December 2005 are hereby AFFIRMED. Ratio Decidendi: The Petition fails.

In cases involving money claims of employees, the employer has theburden of prov ing that the employees did receive the wages and benefitsand that the same were paid in accordance with law. Indeed, if petitionerwants to prove that it merely erred in giving full benefits, it could haveeasily presented other proofs, such as the names of other employees whodid not fully serve for one year and thus wer e given prorated benefits. Experientially, a perfect attendance in the workplace is always the goal butit i s seldom achieved. There must have been other employees who hadreported for work less than a full year and who, as a consequence receivedonly prorated benefits. This could have easily bolstered petitioner s theoryof mistake/error, but sadly, no evidence to that effect was presented. PLDT v NLRC and Marilyn Abucay, G.R. No. L-80609 http://www.lawphil.net/judjuris/juri1988/aug1988/gr_80609_1988.html 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 facilitate approval of their applications for telephone installation. 1 Investigated and heard, she was found guilty as charged and accordingly separated from the service. 2 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 anemployee illegally dismissed is entitled to reinstatement and backwages asrequired by the labor laws. However, an employee dismissed for cause isentitled to neither rein statement nor backwages and is not allowed anyrelief at all because his dismissa l is in accordance with law. In the case of the private respondent, she has been awarded financial assistanceequivalent to t en months pay corresponding to her 10 year service in thecompany despite her rem oval for cause. She is, therefore, in effectrewarded rather than punished for he r dishonesty, and without any legalauthorization or justification. The award is made on the ground of equityand compassion, which cannot be a substitute for law . Moreover, suchaward puts a premium on dishonesty and encourages instead of det erringcorruption. For its part, the public respondent claims that the employee is sufficientlypuni shed with her dismissal. The grant of financial assistance is notintended as a r eward for her offense but merely to help her for the loss ofher employment after working faithfully with the company for ten years. ISSUE: The legality of the award of financial assistance to an employeewho had b een dismissed for cause as found by the public respondent. HELD: The Court notes, however, that where the exception has been applied, thedecision s have not been consistent as to the justification for the grant ofseparation pa y and the amount or rate of such award. Thus, the employeesdismissed for theft i

n the Firestone case and for animosities with fellow workers in the Engineering Equipment case were both awarded separationpay not wi thstanding that the first cause was certainly more serious thanthe second. No le ss curiously, the employee in the Soco case was allowedonly one-half month pay f or every year of his 18 years of service, but inFilipro the award was two months separation pay for 2 years service. InFirestone, the employee was allowed full separation pay corresponding tohis 11 years of service, but in Metro, the employ ee was granted only onehalf month separation pay for every year of her 15year service. It wouldseem the n that length of service is not necessarily a criterion for the grantof separati on pay and neither apparently is the reason for the dismissal. The Court feels that distinctions are in order. We note that heretofore the separation pay, when it was considered warranted, was requiredregardless of the nature or degree of the ground proved, be it mereinefficiency or something grave r like immorality or dishonesty. Thebenediction of compassion was made to cover a multitude of sins, as itwere, and to justify the helping hand to the validly d ismissed employeewhatever the reason for his dismissal. This policy should be re -examined. Itis time we rationalized the exception, to make it fair to both labo r andmanagement, especially to labor. There should be no question that where it comes to such valid but notiniquitous causes as failure to comply with work standards, the grant ofseparation pay to t he dismissed employee may be both just andcompassionate, particularly if he has worked for some time with thecompany. For example, a subordinate who has irrecon cilable policy orpersonal differences with his employer may be validly dismissed fordemonstrated loss of confidence, which is an allowable ground. A workingmoth er who has to be frequently absent because she has also to take careof her child may also be removed because of her poor attendance, thisbeing another authorize d ground. It is not the employee's fault if he doesnot have the necessary aptitu de for his work but on the other hand thecompany cannot be required to maintain him just the same at the expenseof the efficiency of its operations. He too may be validly replaced. Underthese and similar circumstances, however, the award to the employee of

separation pay would be sustainable under the social justice policy even ifthe s eparation is for cause. But where the cause of the separation is more serious than mereinefficiency, the generosity of the law must be more discerning. There is nodoubt it is compassio nate to give separation pay to a salesman if he isdismissed for his inability to fill his quota but surely he does not deservesuch generosity if his offense is misappropriation of the receipts of hissales. This is no longer mere incompetenc e but clear dishonesty. A securityguard found sleeping on the job is doubtless s ubject to dismissal but maybe allowed separation pay since his conduct, while in ept, is not depraved. But if he was in fact not really sleeping but sleeping with a prostituteduring h is tour of duty and in the company premises, the situation ischanged completely. This is not only inefficiency but immorality and thegrant of separation pay wou ld be entirely unjustified. We hold that henceforth separation pay shall be allowed as a measure ofsocial ju stice only in those instances where the employee is validlydismissed for causes other than serious misconduct or those reflecting onhis moral character. Where t he reason for the valid dismissal is, for example, habitual intoxication or an offense involving moral turpitude, likethef t or illicit sexual relations with a fellow worker, the employer may notbe requi red to give the dismissed employee separation pay, or financialassistance, or wh atever other name it is called, on the ground of socialjustice. 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 thelabor a rbiter and affirmed by the NLRC and as she herself has impliedlyadmitted. The fa ct 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 itrefle cts a regrettable lack of loyalty that she should have strengthenedinstead of be traying during all of her 10 years of service with the company. If regarded as a justification for moderating the penalty of dismissal, it willa ctually become a prize for disloyalty, perverting the meaning of socialjustice a nd undermining the efforts of labor to cleanse its ranks of allundesirables. The Court also rules that the separation pay, if found due under thecircumstance s of each case, should be computed at the rate of one monthsalary for every year of service, assuming the length of such service isdeemed material. This is with out prejudice to the application of specialagreements between the employer and t he employee stipulating a higherrate of computation and providing for more benef its to the dischargedemployee. The petition is GRANTED. Toyota Motors Phils. Corp. workers Association v. NLRC, J. Velasco Jr. http://sc.judiciary.gov.ph/jurisprudence/2007/october2007/158786_158789.htm FACTS: The Union is a legitimate labor organization duly registered withthe Department of Labor and Employment (DOLE) and is the sole andexclusive bargaining agent of all Toyota rank and file employees.[5] Toyota, on the other hand, is a domestic corporation engaged inthe assembly and sale of vehicles and parts. On February 14, 1999, the Union filed a petition for certification

election among the Toyota rank and file employees with the National Conciliation and Mediation Board (NCMB), which was docketed as Case No. NCR-OD-M-9902-001. Med-Arbiter Ma. Zosima C. Lameyra denied the petition, but, on appeal, the DOLE Secretary granted the Union s prayer, and, through the June 25, 1999 Order, directed the immediate holding ofthe certi fication election.[7] After Toyota s plea for reconsideration was denied, the certificationelection was conducted. Med-Arbiter Lameyra s May 12, 2000 Ordercertified the Union as the sole and exclusive bargaining agent of allthe Toyota rank and file employees. Toyota challenged said Order via anappeal to the DOLE Secretary. In the meantime, the Union submitted its Collective BargainingAgreement (CBA) pr oposals to Toyota, but the latter refused to negotiate inview of its pending app eal. In connection with Toyota s appeal, Toyota and the Union were required to attend a hearing on February 21, 2001 before the Bureau ofLabor Rela tions (BLR) in relation to the exclusion of the votes of allegedsupervisory empl oyees from the votes cast during the certification election. The February 21, 2001 hearing was cancelled and reset to February 22, 2001. On February 21, 2001, 135 Union officers and members failed to render the required overtime work, and instead marched to and staged a picket in front of the BLR office in Intramuros, Manila.[9] The Union, in a letter of the same date, also requested that its members be allowed to be absent on February 22,2001 to attend the hearing and instead work on their next scheduled restday. This request howe ver was denied by Toyota. Despite denial of the Union s request, more than 200 employeesstaged mass actions on February 22 and 23, 2001 in front of the BLR andthe DOLE offices, to protest the partisan and anti-union stance of Toyota. Due to the deliberate absence of a considerable number of employees

on February 22 to 23, 2001, Toyotaexperienced acute lack of manpower inits manuf acturing and production lines, and was unable to meet its production goals resulting in huge losses of PhP 53,849,991. February 27, 2001, Toyota sent individual letters to some 360 employees requiring them to explain within 24 hours why they should notbe dismis sed for their obstinate defiance of the company s directive torender overtime work on February 21, 2001, for their failure to report forwork on February 22 and 23 , 2001, and for their participation in the concerted actions which severely disrupted and paralyzed the plant s operations. On the next day, the Union filed with the NCMB another notice ofstrike docketed as NCMB-NCR-NS-02-061-01 for union busting amountingto unfair labor practice. March 1, 2001, the Union nonetheless submitted an explanation incompliance with the February 27, 2001 notices sent by Toyota to the erringemployees. The Union m embers explained that their refusal to work ontheir scheduled work time for two consecutive days was simply an exerciseof their constitutional right to peaceabl y assemble and to petition thegovernment for redress of grievances. It further a rgued that thedemonstrations staged by the employees on February 22 and 23, 2001 could not be classified as an illegal strike or picket, and that Toyota hadalrea dy condoned the alleged acts when it accepted back the subjectemployees. March 2 and 5, 2001, Toyota issued two (2) memoranda to theconcerned employees t o clarify whether or not they are adopting the March 1, 2001 Union s explanation as their own. The employees were also required to attend an investigative interview,[14] but they refused to do so. On March 16, 2001, Toyota terminated the employment of 227 employees[15] for participation in concerted actions in violation of its Codeof Conduct and for misconduct under Article 282 of the Labor Code. In reaction to the dismissal of its union members and officers, the Union went on strike on March 17, 2001. Subsequently, from March28, 2001 to April 12, 2001, the Union intensified its strike by barricadingthe gates of Toyo ta s Bicutan and Sta. Rosa plants. The strikers preventedworkers who reported for work from entering the plants. Toyota filed a petition to declare the strike illegal with the NLRCarbitration b ranch, which was docketed as NLRC NCR (South) Case No. 300401775-01, and prayed that the erring Union officers, directors, andmembers be di smissed. On April 10, 2001, the DOLE Secretary assumed jurisdiction over thelabor dispute and issued an Order[20] certifying the labor dispute to theNLRC. In said Order, the DOLE Secretary directed all striking workers toreturn to work at their regu lar shifts by April 16, 2001. On the other hand, it ordered Toyota to accept the returning employees under the same termsand cond itions obtaining prior to the strike or at its option, put them underpayroll rei nstatement. The parties were also enjoined from committing acts that may worsen the situation. The Union ended the strike on April 12, 2001. The union members and officers tried to return to work on April 16, 2001 but were told that Toyota opted for payroll-reinstatement authorized by the Order of theDOLE S ecretary.

The Union filed a motion for reconsideration of the DOLE Secretary s April10, 2001 certification Order, which, however, was denied by the DOLESecretary in her May 25, 2001 Resolution. Consequently, a petition forcertiorari was filed before th e CA. Despite the issuance of the DOLE Secretary s certification Order, several payroll-reinstated members of the Union staged a protest rally infront o f Toyota s Bicutan Plant bearing placards and streamers in defianceof the April 10 , 2001 Order. May 28, 2001, around forty-four (44) Union members staged another protest action in front of the Bicutan Plant. At the same time, some twenty-nine (29) payroll-reinstated employees picketed in front ofthe Santa Rosa Plant s main entrance, and were later joined by other Unionmembers. June 5, 2001, notwithstanding the certification Order, the Union filed another notice of strike. Notwithstanding repeated orders to file its position paper, the Union stillfaile d to submit its position paper on July 19, 2001. Consequently, theNLRC issued an Order directing the Union to submit its position paper onthe scheduled August 3 , 2001 hearing; otherwise, the case shall be deemed submitted for resolution based on the evidence on record. During the August 3, 2001 hearing, the Union, despite several accommodations, still failed to submit its position paper. Later that day, the Union claimed it filed its position paper by registered mail. Subsequently, the NLRC, in its August 9, 2001 Decision, declaredthe strikes stag ed by the Union on February 21 to 23, 2001 and May 23and 28, 2001 as illegal. The NLRC considered the mass actions staged on February 21 to 23, 2001 illegal as the Union failed to comply with the procedural requirementsof a valid strike under Art. 263 of the Labor Code. After the DOLE Secretary assumed jurisdiction over the Toyota dispute on April 10, 2001, the Union again staged strikes on May 23 and 28, 2001. The NLRC found the strikes illegal as they violated Art. 264 of the Labor Code which proscribes any strike or lockout after

jurisdiction is assumed over the dispute by the President or the DOLESecretary. The NLRC held that both parties must have maintained the statusquo after the DOL E Secretary issued the assumption/certification Order, and ruled that theUnion did not respect the DOLE Secretary s directive. Accordingly, both Toyota and the Union filed Motions for Reconsideration, which the NLRC denied in its September 14, 2001 Resolution.[23] Consequently, both parties questioned the August 9, 2001 Decision[24] and September 14, 2001 Resolution of the NLRC in separate petitions for certiorari filed with the CA. CA considered the participation in illegal strikes as seriousmisconduct. It defi ned serious misconduct as a transgression of someestablished and definite rule o f action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error injud gment. However, in its June 20, 2003 Resolution,[28] the CA modified its February 27, 2003 Decision by reinstating severance compensation tothe dismi ssed employees based on social justice. ISSUE: (1) Whether the mass actions committed by the Union on different occasions are illegal strikes; (2) Whether separationpay should be awa rded to the Union members who participated inthe illegal strikes. HELD: The Union contends that the NLRC violated its right to due process when it disregarded its position paper in deciding Toyota s petition to declare the strike illegal. We rule otherwise. It is entirely the Union s fault that its position paper was not considered by the NLRC. Records readily reveal that the NLRC was eventoo generou s in affording due process to the Union. It issued no less than three (3) orders for the parties to submit its position papers, which the Union ignored until the last minute. No sufficient justification was offered why the Union belatedly filed its position paper. The proper ruling in this situation is to consider the petition as compliantwith the formal requirements with respect to the parties who signed it and, therefore, can be given due course only with regard to them. The other petitioners who did not sign the verification and certificate against forumshopp ing cannot be recognized as petitioners have no legal standing before the Court. The petition should be dismissed outright with respect tothe n on-conforming petitioners. The alleged protest rallies in front of the offices of BLR and DOLESecretary and at the Toyota plants constituted illegal strikes When is a strike illegal? Noted authority on labor law, Ludwig Teller, lists six (6) categoriesof an illeg al strike, viz:

(1) [when it] is contrary to a specific prohibition of law, such as strike by employees performing governmental functions; or (2) [when it] violates a specific requirement of law[, such as Article 263 of the Labor Code on the requisites of a valid strike]; or (3) [when it] is declared for an unlawful purpose, such as inducing the employer to commit an unfair labor practice against non-union employees; or (4) [when it] employs unlawful means in the pursuit of its objective, such as a widespread terrorism ofnon-strikers [for exa mple, prohibited acts under Art. 264(e) of the Labor Code]; or

(5) [when it] is declared in violation of an existing injunction[, such as injunction, prohibition, or orderissued by the DOL E Secretary and the NLRC under Art. 263of the Labor Code]; or (6) [when it] is contrary to an existing agreement, such as a no-strike clause or conclusive arbitration clause.[33] Petitioner Union contends that the protests or rallies conducted onFebruary 21 a nd 23, 2001 are not within the ambit of strikes as defined inthe Labor Code, sin ce they were legitimate exercises of their right topeaceably assemble and petiti on the government for redress ofgrievances. A strike means any temporary stoppage of work by the concerted action ofemployee s as a result of an industrial or labor dispute. A labor dispute, inturn, includ es any controversy or matter concerning terms or conditions ofemployment or the association or representation of persons in negotiating, fixing, maintaining, changing, or arranging the terms and conditions ofemploymen t, regardless of whether the disputants stand in the proximaterelation of the em ployer and the employee. Applying pertinent legal provisions and jurisprudence, we rule that the protest actions undertaken by the Union officials and members on February 21 to 23, 2001are not valid and proper exercises of their rightto as semble and ask government for redress of their complaints, but areillegal strike s in breach of the Labor Code. TheUnion s position is weakenedby the lack of permi t from the City of Manila to hold rallies. Shrouded asdemonstrations, they were in reality temporary stoppages of work perpetrated through the concerted action of the employees who deliberately failed to report for work on the convenient excuse that theywill ho ld a rally at the BLR and DOLE offices in Intramuros, Manila, onFebruary 21 to 2 3, 2001. The purported reason for these protest actionswas to safeguard their ri ghts against any abuse which the med-arbiter maycommit against their cause. Howe ver, the Union failed to advance convincing proof that the med-arbiter was biased against them. The acts ofthe me d-arbiter in the performance of his duties are presumed regular. Sans ample evidence to the contrary, the Union was unable tojustify the February 2001 mass actions. What comes to the fore is that the decision not to work for two days was designed and calculated to cripplethe manu facturing arm of Toyota. It becomes obvious that the real and ultimate goal of the Union is to coerce Toyota to finally acknowledge the Union as the sole bargaining agent of the company. This is not a legaland va lid exercise of the right of assembly and to demand redress ofgrievance. We sustain the CA s affirmance of the NLRC s finding that the protest rallies staged on February 21 to 23, 2001 were actually illegal strikes. The Union officials were in clear breach of Art. 264(a) when theyknowingly parti cipated in the illegal strikes held from February 21 to 23,2001, from March 17 t o April 12, 2001, and on May 23 and 28, 2001. We uphold the findings of fact of the NLRC on the involvement of said unionofficial s in the unlawful concerted actions as affirmed by the CA. Member s liability depends on participation in illegal acts Did they commit illegal acts during the illegal strikes on February21 to 23, 200 1, from March 17 to April 12, 2001, and on May 23 and 28,2001? The answer is in the affirmative.

As we have ruled that the strikes by the Union on the three different occasions were illegal, we now proceed to determine the individual liabilities of the affected union members for acts committed during these forbidden concerted actions. There can be no good faith in intentionally incurring absences in acollective fa shion from work on February 22 and 23, 2001 just to attendthe DOLE hearings. The Union s strategy was plainly to cripple the operations and bring Toyota to its knees by inflicting substantial financialdama ge to the latter to compel union recognition. The Union officials and members are supposed to know through common sense that huge losseswould befall t he company by the abandonment of their regular work. It was not disputed thatToyota lost more than PhP 50 million because of thewillful desertion of company operations in February 2001 by the dismissedunion members. In addition, further damage was experiencedby Toyota when the Union again resort ed to illegal strikes from March 28to April 12, 2001, when the gates of Toyota w ere blocked and barricaded, and the company officials, employees, and customers were intimidatedand harassed . Moreover, they were fully aware of the company rule on prohibition against concerted action inimical to the interests of the company and hence, their resort to mass actions on several occasions inclear vio lation of the company regulation cannot be excused nor justified. Lastly, they blatantly violated the assumption/certification Orderof the DOLE Secretary, exhibiting their lack of obeisance to the rule oflaw. These acts indeed constituted serious misconduct.

A painstaking review of case law renders obtuse the Union s claimfor separation pa y. In a slew of cases, this Court refrained from awardingseparation pay or finan cial assistance to union officers and members whowere separated from service due to their participation in or commission ofillegal acts during strikes. The petitions in G.R. Nos. 158786 and 158789 are DENIED while those in G.R. Nos. 158798-99 are GRANTED. The June 20, 2003 CA Resolution in CA-G.R. SP Nos. 67100 and 67561 restoring the grant of severance compensation is ANNULLED and SET ASIDE. The February 27, 2003 CA Decision in CA-G.R. SP Nos. 67100 and 67561, which affirmed the August 9, 2001 Decision of the NLRC but deleted the grant of severance compensation, is REINSTATED and AFFIRMED.No costs. Reno Foods Inc v. Nagkakakisang Lakas ng Manggagawa (NLM), J. del Castillo FACTS: Petitioner Reno Foods, Inc. (Reno Foods) is a manufacturer of canned meat products of which Vicente Khu is the president and is being sued in that capacity. Respondent Nenita Capor (Capor) was an employee of Reno Foods until her dismissal on October 27, 1998. It is a standard operating procedure of petitioner-company to subject all its employees to reasonable search of their belongings upon leaving the company premises. On October 19, 1998, the guard on duty found six Reno canned goods wrapped in nylon leggings inside Capor s fabric clutch bag. The only other contents of the bag were money bills and a small plastic medicine container. Petitioners accorded Capor several opportunities to explain her side, often with the assistance of the union officers of Nagkakaisang Lakas ng Manggagawa(NLM) Katipunan. In fact, after petitioners sent a Notice of Termination to Capor, she was given yet another opportunity for reconsideration through a labor-management grievance conference held on November 17, 1999. Unfortunately, petitioners did not find reason to change its earlier decision to terminate Capor semployment with the company. On December 8, 1998, petitioners filed a complaint-affidavit against Capor for qualified theft in the Office of the City Prosecutor, Malabon-NavotasSubstation. On April 5, 1999, a Resolution was issued finding probable cause for the crime charged. Consequently, an Information was filed against Capordocketed as Criminal Case No. 207-58-MN. Meanwhile, the Nagkakaisang Lakas ng Manggagawa (NLM) Katipunan filed on behalf of Capor a complaint[4] for illegal dismissal and money claims against petitioners with the Head Arbitration Office of the National Labor Relations Commission (NLRC) for the National Capital Region. The complaint prayed thatCapor be paid her full backwages as well as moral and exemplary damages. The complaint was docketed as NLRC NCR Case No. 00-010018399.

The Labor Arbiter ruled that consistent with prevailing jurisprudence, an employee who commits theft of company property may be validly terminated and consequently, the said employee is not entitled to separation pay. The NLRC affirmed the factual findings and monetary awards of the Labor Arbiter but added an award of financial assistance. The appellate court affirmed the NLRC s award of financial assistance to Capor. It stressed that the laborer s welfare should be the primordial and paramount consideration when carrying out and interpreting provisions of the Labor Code. It explained that the mandate laid down in Philippine Long Distance Telephone Company v. National Labor Relations Commission was not absolute, but merely directory.

ISSUE: The issue before us is whether the NLRC committed grave abuse of discretion amounting to lack or excess of jurisdiction in granting financial assistance to an employee who was validly dismissed for theft of company property. HELD: Conviction in a criminal case is not necessary to find just cause for termination of employment -Criminal cases require proof beyond reasonable doubt while labor disputes require only substantial evidence, which means such releva nt evidence as a reasonable mind might accept as adequate to justify a conclusion.[20] The evidence in this case was reviewed by the appellate court and two labor tribunals endowed with expertise on the matter the Labor Arbiter and the NLRC. They all found substantial evidence to conclude that Capor had been validly dismissed for dishonesty or serious misconduct. It is settled that factual findings of quasi-judicial agencies are generally accorded respect and finality so long as these are supported by substantial evidence. In the instant case, we find no compelling reason to doubt the common findings of the three reviewing bodies. The award of separation pay is not warranted under the law and jurisprudence.-We find no justification for the award of separation pay to Capor. This award is a deviation from established law and jurisprudence. The law is clear. Separation pay is only warranted when the cause for termination is not attributable to the employee s fault, such as those provided in Articles 283 and 284 of the Labor Code, as well as in cases of illegal dismissal in which reinstatement is no longer feasible. It is not allowed when an employee is dismissed for just cause, such as serious misconduct. Jurisprudence has classified theft of company property as a serious misconduct and denied the award of separation pay to the erring employee. We see no reason why the same should not be similarly applied in the case of Capor. She attempted to steal the property of her long-time employer. For committing such misconduct, she is definitely not entitled to an award of separation pay. It is true that there have been instances when the Court awarded financial assistance to employees who were terminated for just causes, on grounds of equity and social justice. The same, however, has been curbed and rationalized in Philippine Long Distance Telephone Company v. National Labor Relations Commission. In that case, we recognized the harsh realities faced by employees that forced them, despite their good intentions, to violate company policies, for which the employer can rightfully terminate their employment. For these instances, the award of financial assistance was allowed. But, in clear and unmistakable language, we also held that the award of financial assistance shall not be given to validly terminated employees, whose offenses are iniquitous or reflective of some depravity in their moral character. When the employee commits an act of dishonesty, depravity, or iniquity, the grant of financial assistance is misplaced compassion. It is tantamount not only to condoning a patently illegal or dishonest act, but an endorsement thereof. It will be an insult to all the laborers who, despite their economic difficulties, strive to maintain good values and moral conduct. While we sympathize with Capor s plight, being of retirement age and having served petitioners for 39 years, we cannot award any financial assistance in her favor because it is not only against the law but also a

retrogressive public policy. Petition is granted. SAN MIGUEL CORPORATION v. NLRC, 551 SCRA 410 Facts: Ernesto M. Ibias (respondent) was employed by petitioner SMC on 24 December 1978 initially as a CRO operator in its Metal Closure and Lithography Plant. According to SMC s Policy on Employee Conduct,[4] absences without permission or AWOPs, which are absences not covered either by a certification of the plant doctor that the employee was absent due to sickness or by a duly approved application for leave of absence filed atleast si x (6) days prior to the intended leave, are subject to disciplinaryaction. The same Policy on Employee Conduct also punishes falsification of company records or documents with discharge or termination for the first

offense if the offender himself or somebody else benefits from falsificationor w ould have benefited if falsification is not found on time.[6] It appears that per company records, respondent was AWOP on a number of dates. For his absences on 2, 4 and 11 January and 28 and 29 April, he was given a written warning[7] dated 9 May 1997 that he had alreadyincurred five (5) AWOPs and that further absences would be subject todisciplinary action. For his absences on 28 and 29 April and 7 and 8 May, respondent was alleged to have falsified his medical consultation card bystating therein that he was granted sick leave by the plant clinic on saiddates when in truth he was not. Respondent was required to explain his AWOPs. Respondent did not comply with these notices. He was again issued two Notices to Explain[10] both dated 3 June 1997, one for his AWOPs from 26 May to 2June 1997 and another for falsification of medical consultation card entries for 28 April and 8 May 1997. On 5 June 1997, respondent submitted a handwritten explanation to thecharges den ying the falsification charge. Not satisfied with the explanation, SMC conducted an administrative investigation on 17 and 23 June 1997. After the completion of the investigation, SMC concluded that respondent committed the offenses ofexcessive AWOPs and falsification of company records or documents because of the testimony of the staff assistant and the plant doctor. SMCaccordi ngly dismissed him. On 30 March 1998, respondent filed a complaint for illegal dismissal against SMC. The LA rendered his Decision, for the respondent. The labor arbiter believed that respondent had committed the absences pointed out by SMCbut found the imposition of termination of employment based on his AWOPs to be disproportionate since SMC failed to show by clear and convincing evidence that it had strictly implemented its company policy onabsenc es. It also noted that termination based on the alleged falsificationof company records was unwarranted in view of SMC s failure to establishrespondent s guilt. The NLRC affirmed the decision of the LA. On 28 June 2000, the Court of Appeals rendered its Decision affirming thefinding s of the LA and NLRC. Issue: W/N the respondent was illegally dismissed? NO Held: Petition partly granted. The settled rule in administrative and quasi-judicial proceedings is thatproof b eyond reasonable doubt is not required in determining the legalityof an employer s dismissal of an employee and not even a preponderanceof evidence is necessary a s substantial evidence is considered sufficient. Substantial evidence is more than a mere scintilla of evidence or relevant evidence as a reasonable mind might accept as adequate to support aconclusion, e ven if other minds, equally reasonable, might conceivablyopine otherwise. Thus, substantial evidence is the least demanding in thehierarchy of evidence.[24]

The Court agrees with the tribunals below that SMC was unable to provethe falsif ication charge against respondent. Respondent cannot be legallydismissed on the basis of the uncorroborated and self-serving testimoniesof SMC s employees. SMC me rely relied on the testimonies of Marabe andSiwa, who both stated that responden t admitted to them that he falsifiedhis medical consultation card to cover up hi s excessive AWOPs. For his part, respondent denied having had any knowledge of said falsification, both in his testimony during the company-level investigation and in hishandwritt en explanation. He did not even claim that he had requested for, nor had been granted any sick leave for the days that the falsified entrieswere made. Siwa, being responsible for the medical cards, should take theblame for th e loss and alleged tampering thereof, and not respondent whohad no control over the same. The issue of the unauthorized absences, however, is another matter. However, while respondent has admitted these absences, before the Court, he also seeks to belittle the plain by countering that SMC has not been toorigid in its application of company rules pertaining to leave availments. In the proceedings below he claimed that during the days that he was absent, he had attended to some family matters. Respondent cannot feign surprise nor ignorance of the earlier AWOPs hehad incurr ed. He was even given a warning. Thus, even if he was not punished for his subsequent AWOPs, the sameremained on record. He was aware of the number of AWOPs he incurred and should have known that these were punishable under company rules. The fact that he was spared from suspension cannot be used as a reasonto incur f urther AWOPs and be absolved from the penalty therefor. Respondent s dismissal was well within the purview of SMC s managementprerogative. Management also has its own rights, which, as such, are entitledto respect and e nforcement in the interest of simple fair play. Outof its concern for those with [fewer] privileges in life, the SupremeCourt has inclined more often than not t oward the worker and upheld his cause in his conflicts with the employer. Such favoritism, however, has not blinded the Court to rule that justice

is in every case for the deserving, to be dispensed in the light ofthe establish ed facts and applicable law and doctrine.[38] What the lower tribunals perceived as laxity, we consider as leniency. It is axiomatic that appropriate disciplinary sanction is within the purviewof m anagement imposition.[37] Thus, in the implementation of its rules andpolicies, the employer has the choice to do so strictly or not, since this isinherent in i ts right to control and manage its business effectively. Consequently, management has the prerogative to impose sanctions lighter than those specifically prescribed by its rules, or to condone completely the violations of its erring employees. Of course, thisprerog ative must be exercised free of grave abuse of discretion, bearing inmind the re quirements of justice and fair play. Television and Production Exponents(TAPE) Inc. v. Servana, J. Tinga FACTS: TAPE is a domestic corporation engaged in the production of television programs, such as the long-running variety program, Eat Bulaga!. Its president is Antonio P. Tuviera (Tuviera). Respondent Roberto C. Servana had served as a security guard for TAPE from March 1987 until he was terminated on 3 March 2000. Respondent filed a complaint for illegal dismissal and nonpayment of benefits against TAPE. He alleged that he was first connected with AgroCommercial Security Agency but was later on absorbed by TAPE as a regular company guard. He was detailed at Broadway Centrum in Quezon City where Eat Bulaga! regularly staged its productions. On 2 March 2000, respondent received a memorandum informing him of his impending dismissal on account of TAPE s decision to contract the services of a professional security agency. At the time of his termination, respondent was receiving a monthly salary of P6,000.00. He claimed that the holiday pay, unpaid vacation and sick leave benefits and other monetary considerations were withheld from him. He further contended that his dismissal was undertaken without due process and violative of existing labor laws, aggravated by nonpayment of separation pay. TAPE countered that the labor arbiter had no jurisdiction over the case in the absence of an employer-employee relationship between the parties. TAPE made the following assertions: (1) that respondent was initially employed as a security guard for Radio Philippines Network (RPN-9); (2) that he was tasked to assist TAPE during its live productions, specifically, to control the crowd; (3) that when RPN-9 severed its relationship with the security agency, TAPE engaged respondent s services, as part of the support group and thus a talent, to provide security service to production staff, stars and guests of Eat Bulaga! as well as to control the audience during the one-and-a-half hour noontime program; (4) that it was agreed that complainant would render his services until such time that respondent company shall have engaged the services of a professional security agency; (5) that in 1995, when his contract with RPN-9 expired, respondent was retained as a talent and a member of the support group, until such time that TAPE shall have engaged the services of a professional security agency; (6) that respondent was not prevented from seeking other employment, whether or not related to security services, before or after attending to his Eat Bulaga! functions; (7) that sometime in late 1999, TAPE started negotiations for the engagement of a professional security

agency, the Sun Shield Security Agency; and (8) that on 2 March 2000, TAPE issued memoranda to all talents, whose functions would be rendered redundant by the engagement of the security agency, informing them of the management s decision to terminate their services. TAPE averred that respondent was an independent contractor falling under the talent group category and was working under a special arrangement which is recognized in the industry. Respondent for his part insisted that he was a regular employee having been engaged to perform an activity that is necessary and desirable to TAPE s business for thirteen (13) years. Labor Arbiter Daisy G. Cauton-Barcelona declared respondent to be a regular employee of TAPE. the National Labor Relations Commission (NLRC) in a Decision dated 22 April 2002 reversed the Labor Arbiter and considered respondent a mere program employee, thus: We have scoured the records of this case and we find nothing to support the Labor Arbiter s conclusion that complainant was a regular employee.

xxxx The primary standard to determine regularity of employment is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. Reversing the decision of the NLRC, the Court of Appeals found respondent to be a regular employee. ISSUE: WON there was an employer-employee relationship between the petitioner and respondent. HELD: In concluding that respondent was an employee of TAPE, the Court of Appeals applied the four-fold test in this wise: First. The selection and hiring of petitioner was done by private respondents. In fact, private respondents themselves admitted having engaged the services of petitioner only in 1995 after TAPE severed its relations with RPN Channel 9. By informing petitioner through the Memorandum dated 2 March 2000, that his services will be terminated as soon as the services of the newly hired security agency begins, private respondents in effect acknowledged petitioner to be their employee. For the right to hire and fire is another important element of the employer-employee relationship. Second. Payment of wages is one of the four factors to be considered in determining the existence of employer-employee relation. . . Payment as admitted by private respondents was given by them on a monthly basis at a rate of P5,444.44. Third. Of the four elements of the employer-employee relationship, the control test is the most important. x x x The bundy cards representing the time petitioner had reported for work are evident proofs of private respondents control over petitioner more particularly with the time he is required to report for work during the noontime program of Eat Bulaga! If it were not so, petitioner would be free to report for work anytime even not during the noontime program of Eat Bulaga! from 11:30 a.m. to 1:00 p.m. and still gets his compensation for being a talent. Precisely, he is being paid for being the security of Eat Bulaga! during the above-mentioned period. The daily time cards of petitioner are not just for mere record purposes as claimed by private respondents. It is a form of control by the management of private respondent TAPE. Policy Instruction No. 40 defines program employees as x x x those whose skills, talents or services are engaged by the station for a particular or specific program or undertaking and who are not required to observe normal working hours such that on some days they work for less than eight (8) hours and on other days beyond the normal work hours observed by station employees and are allowed to enter into employment contracts with other persons, stations, advertising agencies or sponsoring companies. The engagement of program employees, including those hired by advertising or sponsoring companies, shall be under a written contract

specifying, among other things, the nature of the work to be performed, rates of pay and the programs in which they will work. The contract shall be duly registered by the station with the Broadcast Media Council within three (3) days from its consummation. TAPE failed to adduce any evidence to prove that it complied with the requirements laid down in the policy instruction. It did not even present its contract with respondent. Neither did it comply with the contractregistration requirement. In sum, we find no reversible error committed by the Court of Appeals in its assailed decision. However, with respect to the liability of petitioner Tuviera, president of TAPE, absent any showing that he acted with malice or bad faith in terminating respondent, he cannot be held solidarily liable with TAPE. Thus, the Court of Appeals ruling on this point has to be modified. WHEREFORE, the assailed Decision and Resolution of the Court of Appeals are AFFIRMED with MODIFICATION in that only petitioner Television and Production Exponents, Inc. is liable to pay respondent the amount of P10,000.00 as nominal damages for non-compliance with the statutory due process and petitioner Antonio P. Tuviera is accordingly absolved from

liability. People s Broadcasting v. Sec. of DOLE G.R. no. 179652. May 8, 2009 Facts: Jandeleon Juezan (respondent) filed a complaint against People sBroadcasting Servi ce, Inc. (Bombo Radyo Phils., Inc) (petitioner) for illegaldeduction, non-paymen t of service incentive leave, 13th month pay, premium pay for holiday and rest day and illegal diminution of benefits, delayed payment of wages and non-coverage of SSS, PAG-IBIG andPhilhealth before the Department of Labor and Employment (DOLE) Regional Office No. VII,Cebu City. On the basis of the complaint, the DOLE conducted a plant levelinspection on 23 September 2003. In the Inspection Report Form, the Labor Inspector wrote under the heading Findings/Recommendations nondiminution of benefits and Note: Respondent deny employer-employeerelationship with the compl ainant-see Notice of Inspection results. Petitioner was required to rectify/restitute the violations within five (5) days from receipt. No rectification was effected by petitioner; thus, summary investigations were conducted, with the parties eventuallyordered to sub mit their respective position papers. In his Order dated 27 February 2004, DOLE Regional Director Atty. Rodolfo M. Sabulao (Regional Director) ruled that respondent is anemployee of pe titioner, and that the former is entitled to his money claimsamounting to P203, 726.30. Petitioner sought reconsideration of the Order, claiming that the Regional Director gave credence to the documentsoffered by res pondent without examining the originals, but at the sametime he missed or failed to consider petitioner s evidence. Petitioner s motion for reconsideration was denied.[ On appeal to the DOLE Secretary, petitioner denied once more the existence of employer-employeerelationship. In i ts Order dated 27 January 2005, the Acting DOLE Secretary dismissed the appeal on the ground that petitioner did not post a cash orsurety bond and instead submitted a Deed of Assignment of Bank Deposit. Petitioner maintained that there is no employer-employee relationship hadever ex isted between it and respondent because it was the dramadirectors and producers who paid, supervised and disciplined respondent. It also added that the case was beyond the jurisdiction of the DOLE andshould ha ve been considered by the labor arbiter because respondent s claim exceeded P5,000.00. Issue: Does the Secretary of Labor have the power to determine theexistence of an emplo yer-employee relationship? Held: No. Clearly the law accords a prerogative to the NLRC over the claimwhen the employe r-employee relationship has terminated or suchrelationship has not arisen at all . The reason is obvious. In the second situation especially, the existence of an employer-employee relationship isa mat

ter which is not easily determinable from an ordinary inspection, necessarily so, because the elements of such a relationship are notverifiable fr om a mere ocular examination. The intricacies and implicationsof an employer-emp loyee relationship demand that the level of scrutinyshould be far above the curs ory and themechanical. While documents, particularly documents found in the empl oyer s office are the primary source materials, what may prove decisive are factors related to the history of the employer sbusiness operat ions, its current state as well as accepted contemporarypractices in the industr y. More often than not, the question of employeremployee relationship becomes a battle of evidence, the determination ofwhich sh ould be comprehensive and intensive and therefore best left to the specialized quasi-judicial body that is the NLRC. It can be assumed that the DOLE in the exercise of its visitorial and enforcement power somehow has to make adetermination of the exist ence of an employer-employeerelationship. Such prerogatival determination, howev er, cannotbe coextensive with the visitorial and enforcement poweritself. Indeed , such determination is merely preliminary, incidentaland collateral to the DOLE s primary function of enforcing laborstandards provisions. The determination of t he existence of employer-employee relationship is still primarily lodged with the

NLRC. This is the meaning of the clause in cases where therelationship of employe r-employee still exists in Art. 128 (b). Thus, before the DOLE may exercise its powers under Article 128, two important questions must be resolved: (1) Does the employeremployee relationship still exist, or alternatively, was there ever anemployer-e mployee relationship to speak of; and (2) Are there violations ofthe Labor Code or of any labor law? The existence of an employer-employee relationship is astatutory prerequisite to and a limitation on the power of theSecretary of Labor, one which the legislati ve branch is entitled toimpose. The rationale underlying this limitation is to e liminate theprospect of competing conclusions of the Secretary of Labor and theN LRC, on a matter fraught with questions of fact and law, which is bestresolved b y the quasi-judicial body, which is the NRLC, rather than anadministrative offic ial of the executive branch of the government. If the Secretary of Labor proceeds to exercise his visitorial and enforcementpowers abs ent the first requisite, as the dissent proposes, his office confers jurisdiction on itself which it cannot otherwise acquire. Reading of Art. 128 of the Labor Code reveals that the Secretary ofLabor or his authorized representatives was granted visitorial andenforcement powers for the purpose of determining violations of, and enforcing, the Labor Code and any labor law, wage order, or rules andregulations issued pursuant thereto. Necessarily, the actual existence of anemployer-employ ee relationship affects the complexion of the putativefindings that the Secretar y of Labor may determine, since employees areentitled to a different set of righ ts under the Labor Code from the employeras opposed to non-employees. Among thes e differentiated rights arethose accorded by the labor standards provisions of the Labor Code, which the Secretary of Labor is mandated to enforce. If there is no employer-employee relationship in the first place, the duty of the employerto ad here to those labor standards with respect to the non-employees isquestionable. At least a prima facie showing of such absence of relationship, asin this case, is needed to preclude the DOLE from the exercise of its power. The Secretary of Labor would not have been precluded fromexercising the p owers under Article 128 (b) over petitioner if anotherperson with better-grounde d claim of employment than that whichrespondent had. Respondent, especially if h e were an employee, could have very well enjoined other employees to complain with the DOLE, and, at the same time, petitioner could ill-afford to disclaim an employmentrelations hip with all of the people under its aegis. The most important consideration for the allowance of theinstant petition is the opportunity for the Court not only to set thedemarcation between the NLRC s juris diction and the DOLE sprerogative but also the procedure when the case involves th efundamental challenge on the DOLE s prerogative based on lackof employer-employee relationship. As exhaustively discussedhere, the DOLE s prerogative hinges on the existence of employeremployee relationship, the issue is which is at the very heart ofthis case. And the evidence clearly indicates private respondenthas never been petitioner s emplo yee. But the DOLE did not address, while the Court of Appeals glossed over, the issue. Theperemptory dismi ssal of the instant petition on a technicalitywould deprive the Court of the opp ortunity to resolve the novel controversy.

WHEREFORE, the petition is GRANTED. Tongko vs. The Manufacturer s Life Insurance Co., Inc. November 7, 2008 G.R. No. 167622, November 07, 2008 Manufacturers Life Insurance Co. (Phils.), Inc. (Manulife) is a domestic corporation engaged in life insurance business. Renato A. Vergel De Dios was, during the period material, its President and Chief Executive Officer. Gregorio V. Tongko started his professional relationship with Manulife on July 1, 1977 by virtue of a Career Agent's Agreement (Agreement) he executed with Manulife. In the Agreement, it is provided that: It is understood and agreed that the Agent is an independent contractor and nothing contained herein shall be construed or interpreted as creating an employer-employee relationship between the Company and the Agent. The Company may terminate this Agreement for any breach or violation of any of the provisions hereof by the Agent by giving written notice to the Agent within fifteen (15) days from the time of the discovery of the breach. No waiver, extinguishment, abandonment, withdrawal or cancellation of the right to terminate this Agreement by the Company shall be construed

for any previous failure to exercise its right under any provision of this 1. Ye s Agreement. Either of the parties hereto may likewise terminate his Agreement at any time without cause, by giving to the other party fifteen (15) days notice in writing. In 1983, Tongko was named as a Unit Manager in Manulife's Sales Agency Organization. In 1990, he became a Branch Manager. As the CA found, Tongko's gross earnings from his work at Manulife, consisting of commissions, persistency income, and management overrides. The problem started sometime in 2001, when Manulife instituted manpower development programs in the regional sales management level. Relative thereto, De Dios addressed a letter dated November 6, 2001 to Tongko regarding an October 18, 2001 Metro North Sales Managers Meeting. Stating that Tongko s Region was the lowest performer (on a per Manager basis) in terms of recruiting in 2000 and, as of today, continues to remain one of the laggards in this area. Other issues were:"Some Managers are unhappy with their earnings and would want to revert to the position of agents." And "Sales Managers are doing what the company asks them to do but, in the process, they earn less." Tongko was then terminated. Therefrom, Tongko filed a Complaint dated November 25, 2002 with the NLRC against Manulife for illegal dismissalIn the Complaint. In a Decision dated April 15, 2004, Labor Arbiter dismissed the complaint for lack of an employer-employee relationship. The NLRC's First Division, while finding an employer-employee relationship between Manulife and Tongko applying the four-fold test, held Manulife liable for illegal dismissal. Thus, Manulife filed an appeal with the CA. Thereafter, the CA issued the assailed Decision dated March 29, 2005, finding the absence of an employer-employee relationship between the parties and deeming the NLRC with no jurisdiction over the case. Hence, Tongko filed this petition. Issue: 1. WON Tongko was an employee of Manulife 2. WON Tongko was illegally dismissed. Held: In the instant case, Manulife had the power of control over Tongko that would make him its employee. Several factors contribute to this conclusion. In the Agreement dated July 1, 1977 executed between Tongko and Manulife, it is provided that: The Agent hereby agrees to comply with all regulations and requirements of the Company as herein provided as well as maintain a standard of knowledge and competency in the sale of the Company's products which satisfies those set by the Company and sufficiently meets the volume of new business required of Production Club membership.Under this provision, an agent of Manulife must comply with three (3) requirements: (1) compliance with the regulations and requirements of the company; (2) maintenance of a level of knowledge of the company's products that is

satisfactory to the company; and (3) compliance with a quota of new businesses. Among the company regulations of Manulife are the different codes of conduct such as the Agent Code of Conduct, Manulife Financial Code of Conduct, and Manulife Financial Code of Conduct Agreement, which demonstrate the power of control exercised by the company over Tongko. The fact that Tongko was obliged to obey and comply with the codes of conduct was not disowned by respondents. Thus, with Tongko was Certainly, Tongko was the company regulations and requirements alone, the fact that an employee of Manulife may already be established. these requirements controlled the means and methods by which to achieve the company's goals.

More importantly, Manulife's evidence establishes the fact that Tongko was tasked to perform administrative duties that establishes his employment with Manulife. Additionally, it must be pointed out that the fact that Tongko was tasked with recruiting a certain number of agents, in addition to his other administrative functions, leads to no other conclusion that he was an employee of Manulife. 2. Yes In its Petition for Certiorari dated January 7, 2005[26] filed before the CA,

Manulife argued that even if Tongko is considered as its employee, his employment was validly terminated on the ground of gross and habitual neglect of duties, inefficiency, as well as willful disobedience of the lawful orders of Manulife. Manulife stated: In the instant case, private respondent, despite the written reminder from Mr. De Dios refused to shape up and altogether disregarded the latter's advice resulting in his laggard performance clearly indicative of his willful disobedience of the lawful orders of his superior. As private respondent has patently failed to perform a very fundamental duty, and that is to yield obedience to all reasonable rules, orders and instructions of the Company, as well as gross failure to reach at least minimum quota, the termination of his engagement from Manulife is highly warranted and therefore, there is no illegal dismissal to speak of. It is readily evident from the above-quoted portions of Manulife's petition that it failed to cite a single iota of evidence to support its claims. Manulife did not even point out which order or rule that Tongko disobeyed. More importantly, Manulife did not point out the specific acts that Tongko was guilty of that would constitute gross and habitual neglect of duty or disobedience. Manulife merely cited Tongko's alleged "laggard performance," without substantiating such claim, and equated the same to disobedience and neglect of duty. Apropos thereto, Art. 277, par. (b), of the Labor Code mandates in explicit terms that the burden of proving the validity of the termination of employment rests on the employer. Failure to discharge this evidential burden would necessarily mean that the dismissal was not justified, and, therefore, illegal. The Labor Code provides that an employer may terminate the services of an employee for just cause and this must be supported by substantial evidence. The settled rule in administrative and quasi-judicial proceedings is that proof beyond reasonable doubt is not required in determining the legality of an employer's dismissal of an employee, and not even a preponderance of evidence is necessary as substantial evidence is considered sufficient. Substantial evidence is more than a mere scintilla of evidence or relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other minds, equally reasonable, might conceivably opine otherwise. Here, Manulife failed to overcome such burden of proof. It must be reiterated that Manulife even failed to identify the specific acts by which Tongko's employment was terminated much less support the same with substantial evidence. To repeat, mere conjectures cannot work to deprive employees of their means of livelihood. Thus, it must be concluded that Tongko was illegally dismissed. Moreover, as to Manulife's failure to comply with the twin notice rule, it reasons that Tongko not being its employee is not entitled to such notices. Since we have ruled that Tongko is its employee, however, Manulife clearly failed to afford Tongko said notices. Thus, on this ground too, Manulife is guilty of illegal dismissal. FRANCISCO vs. NLRC ANGELINA FRANCISCO vs. NLRC, KASEI CORPORATION, et al.

G.R. No. 170087 August 31, 2006 FACTS: In 1995, petitioner Angelina Francisco was hired by Kasei Corporation(Kasei) dur ing its incorporation stage. She was designated as Accountant, Corporate Secretary and Liaison Officer of the company. In 1996, Franciscowas de signated Acting Manager to handle recruitment of all employeesand perform manage ment administration functions, represent thecompany in all dealings with governm ent agencies, and to administer allother matters pertaining to the operation of Kasei Restaurant which isowned and operated by Kasei. For five years, petitioner performed the duties of Acting Manager. As ofDecember 31, 2000 her salary was P27,500.00 plus P3,000.00 housingallowance and a 10% sh are in the profit of Kasei Corporation. In January 2001, Francisco was replaced as Manager. She alleged that shewas requ ired to sign a prepared resolution for her replacement but she wasassured that s he would still be connected with Kasei. The Treasurer convened a meeting of all employees and announced that Francisco wasstill connec ted with Kasei Corporation as Technical Assistant to SeijiKamura and in charge o f all BIR matters. Thereafter, Kasei reduced her salary by P2,500.00 a month beginningJanuary up to September 2001 for a total reduction of P22,500.00 as ofSeptember 2001. She was not paid her mid-year bonus allegedly becausethe company was not earning well. In October 2001, she did not receiveher salary from the company, made repeated f ollow-ups with the cashier

but was advised that the company was not earning well. On October 15,2001, she a sked for her salary, but she was informed that she is no longerconnected with th e company. Since she was no longer paid her salary, petitioner did not report for workand f iled an action for constructive dismissal before the labor arbiter. Kasei Corporation claimed that Francisco was not their employee, havingbeen desi gnated as technical consultant who performed work at her owndiscretion without t he control and supervision of the Corporation, and thather consultancy may be te rminated any time considering that her serviceswere only temporary in nature and dependent on the needs of thecorporation. To prove that petitioner was not an employee of the corporation, privateresponde nts submitted a list of employees for the years 1999 and 2000duly received by th e BIR showing that petitioner was not among theemployees reported to the BIR, as well as a list of payees subject toexpanded withholding tax which included peti tioner. SSS records were alsosubmitted showing that petitioner s latest employer w as Seiji Corporation. ISSUES: Whether or not there was an employer-employee relationship betweenFrancisco and Kasei Corporation; and whether Francisco was illegallydismissed. HELD: Generally, courts have relied on the so-called right of control test wherethe pe rson for whom the services are performed reserves a right to controlnot only the end to be achieved but also the means to be used in reachingsuch end. In additi on to the standard of right-of-control, the existingeconomic conditions prevaili ng between the parties, like the inclusion ofthe employee in the payrolls, can h elp in determining the existence of anemployer-employee relationship. However, in certain cases the control test is not sufficient to give acomplete p icture of the relationship between the parties, owing to thecomplexity of such a relationship where several positions have been heldby the worker. There are ins tances when, aside from the employer s powerto control the employee with respect t o the means and methods by whichthe work is to be accomplished, economic realiti es of the employmentrelations help provide a comprehensive analysis of the true classification ofthe individual, whether as employee, independent contractor, co rporateofficer or some other capacity. The better approach would therefore be to adopt a two-tiered testinvolving: (1) the putative employer s power to control the employee withrespect to the means and methods by which the work is to beaccomplished; and (2) the underlying economic realities of the activity or relationship. This two-tiered test would provide us with a framework of analysis, whichwould t ake into consideration the totality of circumstances surrounding thetrue nature of the relationship between the parties. This is especiallyappropriate in this c ase where there is no written agreement or terms ofreference to base the relatio nship on; and due to the complexity of therelationship based on the various posi tions and responsibilities given to theworker over the period of the latter s empl oyment. Thus, the determination of the relationship between employer andemployee depends upon the circumstances of the whole economic activity,

such as: (1) the extent to which the services performed are an integral partof t he employer s business; (2) the extent of the worker s investment inequipment and fa cilities; (3) the nature and degree of control exercised bythe employer; (4) the worker s opportunity for profit and loss; (5) theamount of initiative, skill, jud gment or foresight required for the success ofthe claimed independent enterprise ; (6) the permanency and duration ofthe relationship between the worker and the employer; and (7) the degreeof dependency of the worker upon the employer for hi s continuedemployment in that line of business. By applying the control test, there is no doubt that petitioner is anemployee of Kasei Corporation because she was under the direct controland supervision of Se iji Kamura, the corporation s Technical Consultant. She reported for work regularly and served in various capacities asAccountant, L iaison Officer, Technical Consultant, Acting Manager andCorporate Secretary, wit h substantially the same job functions, that is, rendering accounting and tax services to the company and performingfunctions nec essary and desirable for the proper operation of thecorporation such as securing business permits and other licenses over anindefinite period of engagement. Under the broader economic reality test, the petitioner can likewise be saidto b e an employee of respondent corporation because she had served thecompany for si x years before her dismissal, receiving check vouchersindicating her salaries/wa ges, benefits, 13th month pay, bonuses andallowances, as well as deductions and Social Security contributions fromAugust 1, 1999 to December 18, 2000. When peti tioner was designatedGeneral Manager, respondent corporation made a report to th e SSS signedby Irene Ballesteros. Petitioner s membership in the SSS as manifested bya copy of the SSS specimen signature card which was signed by thePresident of Kasei Corporation and the inclusion of her name in the on-lineinquiry system of the SSS evinces the existence of an employer-employeerelationship between petit ioner and respondent corporation. It is therefore apparent that petitioner is economically dependent onrespondent corporation for her continued employment in the latter s line ofbusiness. The corporation constructively dismissed petitioner when it reduced hersalary by P2,500 a month from January to September 2001. This amountsto an illegal termin ation of employment, where the petitioner is entitled tofull backwages. Since th e position of petitioner as accountant is one of

trust and confidence, and under the principle of strained relations, petitioner is further entitled to separation pay, in lieu of reinstatement. A diminution of pay is prejudicial to the employee and amounts toconstructive di smissal. Constructive dismissal is an involuntary resignationresulting in cessat ion of work resorted to when continued employmentbecomes impossible, unreasonabl e or unlikely; when there is a demotion inrank or a diminution in pay; or when a clear discrimination, insensibility ordisdain by an employer becomes unbearable to an employee. In affording full protection to labor, this Court must ensure equal workopportun ities regardless of sex, race or creed. Even as we, in every case, attempt to carefully balance the fragile relationship between employeesand emplo yers, we are mindful of the fact that the policy of the law is toapply the Labor Code to a greater number of employees. This would enableemployees to avail of t he benefits accorded to them by law, in line with theconstitutional mandate givi ng maximum aid and protection to labor, promoting their welfare and reaffirming it as a primary social economicforce in furtherance of social justice and national development. People s Broadcasting v. Sec. of DOLE | G.R. no. 179652. May 8,2009 Facts: Jandeleon Juezan (respondent) filed a complaint against People sBroadcasting Servi ce, Inc. (Bombo Radyo Phils., Inc) (petitioner) for illegaldeduction, non-paymen t of service incentive leave, 13th month pay, premium pay for holiday and rest day and illegal diminution of benefits, delayed payment of wages and non-coverage of SSS, PAG-IBIG andPhilhealth before the Department of Labor and Employment (DOLE) Regional Office No. VII,Cebu City. On the basis of the complaint, the DOLE conducted a plant levelinspection on 23 September 2003. In the Inspection Report Form, the Labor Inspector wrote under the heading Findings/Recommendations nondiminution of benefits and Note: Respondent deny employer-employeerelationship with the compl ainant-see Notice of Inspection results. Petitioner was required to rectify/restitute the violations within five (5) days from receipt. No rectification was effected by petitioner; thus, summary investigations were conducted, with the parties eventuallyordered to sub mit their respective position papers. In his Order dated 27 February 2004, DOLE Regional Director Atty. Rodolfo M. Sabulao (Regional Director) ruled that respondent is anemployee of pe titioner, and that the former is entitled to his money claimsamounting to P203, 726.30. Petitioner sought reconsideration of the Order, claiming that the Regional Director gave credence to the documentsoffered by res pondent without examining the originals, but at the sametime he missed or failed to consider petitioner s evidence. Petitioner s motion for reconsideration was denied.[ On appeal to the DOLE Secretary, petitioner denied once more the existence of employer-employee relationship. In its Order dated 27 January 2005, the Acting DOLE Secretarydismi ssed the appeal on the ground that petitioner did not post a cash orsurety bond and instead submitted a Deed of Assignment of Bank Deposit. Petitioner maintained that there is no employer-employee relationship hadever ex isted between it and respondent because it was the dramadirectors and producers who paid, supervised and disciplined respondent.

It also added that the case was beyond the jurisdiction of the DOLE andshould ha ve been considered by the labor arbiter because respondent s claim exceeded P5,000.00. Issue: Does the Secretary of Labor have the power to determine theexistence of an emplo yer-employee relationship? Held: No. Clearly the law accords a prerogative to the NLRC over the claimwhen the employe r-employee relationship has terminated or suchrelationship has not arisen at all . The reason is obvious. In the second situation especially, the existence of an employer-employee relationship isa mat ter which is not easily determinable from an ordinary inspection, necessarily so, because the elements of such a relationship are notverifiable fr om a mere ocular examination. The intricacies and implicationsof an employer-emp loyee relationship demand that the level of scrutinyshould be far above the curs ory and themechanical. While documents, particularly documents found in the empl oyer s office are the primary source materials, what may prove decisive are factors related to the history of the employer sbusiness operat ions, its current state as well as accepted contemporarypractices in the industr y. More often than not, the question of employeremployee relationship becomes a battle of evidence, the determination ofwhich sh ould be comprehensive and intensive and therefore best left to the specialized quasi-judicial body that is the NLRC. It can be assumed that the DOLE in the exercise of its visitorial and enforcement power somehow has to make adetermination of the exist ence of an employer-employeerelationship. Such prerogatival determination, howev er, cannotbe coextensive with the visitorial and enforcement poweritself. Indeed , such determination is merely preliminary, incidentaland collateral to the DOLE s primary function of enforcing laborstandards provisions. The determination of t he existence of employer-employee relationship is still primarily lodged with theNLRC. This is t he meaning of the clause in cases where therelationship of employer-employee stil l exists in Art. 128 (b). Thus, before the DOLE may exercise its powers under Article 128, two important questions must be resolved: (1) Does the employeremployee relationship still exist, or alternatively, was there ever anemployer-e mployee relationship to speak of; and (2) Are there violations ofthe Labor Code or of any labor law?

The existence of an employer-employee relationship is astatutory prerequisite to and a limitation on the power of theSecretary of Labor, one which the legislati ve branch is entitled toimpose. The rationale underlying this limitation is to e liminate theprospect of competing conclusions of the Secretary of Labor and theN LRC, on a matter fraught with questions of fact and law, which is bestresolved b y the quasi-judicial body, which is the NRLC, rather than anadministrative offic ial of the executive branch of the government. If the Secretary of Labor proceeds to exercise his visitorial and enforcementpowers abs ent the first requisite, as the dissent proposes, his office confers jurisdiction on itself which it cannot otherwise acquire. Reading of Art. 128 of the Labor Code reveals that the Secretary ofLabor or his authorized representatives was granted visitorial andenforcement powers for the purpose of determining violations of, and enforcing, the Labor Code and any labor law, wage order, or rules andregulations issued pursuant thereto. Necessarily, the actual existence of anemployer-employ ee relationship affects the complexion of the putativefindings that the Secretar y of Labor may determine, since employees areentitled to a different set of righ ts under the Labor Code from the employeras opposed to non-employees. Among thes e differentiated rights arethose accorded by the labor standards provisions of the Labor Code, which the Secretary of Labor is mandated to enforce. If there is no employer-employee relationship in the first place, the duty of the employerto ad here to those labor standards with respect to the non-employees isquestionable. At least a prima facie showing of such absence of relationship, asin this case, is needed to preclude the DOLE from the exercise of its power. The Secretary of Labor would not have been precluded fromexercising the p owers under Article 128 (b) over petitioner if anotherperson with better-grounde d claim of employment than that whichrespondent had. Respondent, especially if h e were an employee, could have very well enjoined other employees to complain with the DOLE, and, at the same time, petitioner could ill-afford to disclaim an employmentrelations hip with all of the people under its aegis. The most important consideration for the allowance of theinstant petition is the opportunity for the Court not only to set thedemarcation between the NLRC s juris diction and the DOLE sprerogative but also the procedure when the case involves th efundamental challenge on the DOLE s prerogative based on lackof employer-employee relationship. As exhaustively discussedhere, the DOLE s prerogative hinges on the existence of employeremployee relationship, the issue is which is at the very heart ofthis case. And the evidence clearly indicates private respondenthas never been petitioner s emplo yee. But the DOLE did not address, while the Court of Appeals glossed over, the issue. Theperemptory dismi ssal of the instant petition on a technicality would deprive the Court of the opportunity to resolve the novel controversy. WHEREFORE, the petition is GRANTED. Tongko vs. The Manufacturer s Life Insurance Co., Inc. November7, 2008 | G.R. No. 167622, November 07, 2008 Manufacturers Life Insurance Co. (Phils.), Inc. (Manulife) is a domestic corporation engaged in life insurance business. Renato A. Vergel De Dios was, during the period material, its President and Chief Executive Officer. Gregorio V. Tongko started his professional relationship with Manulife on

July 1, 1977 by virtue of a Career Agent's Agreement (Agreement) he executed with Manulife. In the Agreement, it is provided that: It is understood and agreed that the Agent is an independent contractor and nothing contained herein shall be construed or interpreted as creating an employer-employee relationship between the Company and the Agent. The Company may terminate this Agreement for any breach or violation of any of the provisions hereof by the Agent by giving written notice to the Agent within fifteen (15) days from the time of the discovery of the breach. No waiver, extinguishment, abandonment, withdrawal or cancellation of the right to terminate this Agreement by the Company shall be construed for any previous failure to exercise its right under any provision of this Agreement. Either of the parties hereto may likewise terminate his Agreement at any time without cause, by giving to the other party fifteen (15) days notice in writing. In 1983, Tongko was named as a Unit Manager in Manulife's Sales Agency Organization. In 1990, he became a Branch Manager. As the CA found, Tongko's gross earnings from his work at Manulife, consisting of commissions, persistency income, and management overrides. The problem started sometime in 2001, when Manulife instituted manpower development programs in the regional sales management level. Relative thereto, De Dios addressed a letter dated November 6, 2001 to Tongko regarding an October 18, 2001 Metro North Sales Managers Meeting. Stating that Tongko s Region was the lowest performer (on a per Manager basis) in terms of recruiting in 2000 and, as of today, continues to remain one of the laggards in this area. Other issues were:"Some Managers are unhappy with their earnings and would want to revert to the position of

agents." And "Sales Managers are doing what the company asks them to do but, in the process, they earn less." Tongko was then terminated. Therefrom, Tongko filed a Complaint dated November 25, 2002 with the NLRC against Manulife for illegal dismissalIn the Complaint. In a Decision dated April 15, 2004, Labor Arbiter dismissed the complaint for lack of an employer-employee relationship. The NLRC's First Division, while finding an employer-employee relationship between Manulife and Tongko applying the four-fold test, held Manulife liable for illegal dismissal. Thus, Manulife filed an appeal with the CA. Thereafter, the CA issued the assailed Decision dated March 29, 2005, finding the absence of an employer-employee relationship between the parties and deeming the NLRC with no jurisdiction over the case. Hence, Tongko filed this petition. Issue: 1. WON Tongko was an employee of Manulife 2. WON Tongko was illegally dismissed. Held: 1. Yes In the instant case, Manulife had the power of control over Tongko that would make him its employee. Several factors contribute to this conclusion. In the Agreement dated July 1, 1977 executed between Tongko and Manulife, it is provided that: The Agent hereby agrees to comply with all regulations and requirements of the Company as herein provided as well as maintain a standard of knowledge and competency in the sale of the Company's products which satisfies those set by the Company and sufficiently meets the volume of new business required of Production Club membership.Under this provision, an agent of Manulife must comply with three (3) requirements: (1) compliance with the regulations and requirements of the company; (2) maintenance of a level of knowledge of the company's products that is satisfactory to the company; and (3) compliance with a quota of new businesses. Among the company regulations of Manulife are the different codes of conduct such as the Agent Code of Conduct, Manulife Financial Code of Conduct, and Manulife Financial Code of Conduct Agreement, which demonstrate the power of control exercised by the company over Tongko. The fact that Tongko was obliged to obey and comply with the codes of conduct was not disowned by respondents. Thus, with Tongko was Certainly, Tongko was the company regulations and requirements alone, the fact that an employee of Manulife may already be established. these requirements controlled the means and methods by which to achieve the company's goals.

More importantly, Manulife's evidence establishes the fact that Tongko was tasked to perform administrative duties that establishes his employment with Manulife. Additionally, it must be pointed out that the fact that Tongko was tasked with recruiting a certain number of agents, in addition to his other administrative functions, leads to no other conclusion that he was an

employee of Manulife. 2. Yes In its Petition for Certiorari dated January 7, 2005[26] filed before the CA, Manulife argued that even if Tongko is considered as its employee, his employment was validly terminated on the ground of gross and habitual neglect of duties, inefficiency, as well as willful disobedience of the lawful orders of Manulife. Manulife stated: In the instant case, private respondent, despite the written reminder from Mr. De Dios refused to shape up and altogether disregarded the latter's advice resulting in his laggard performance clearly indicative of his willful disobedience of the lawful orders of his superior. As private respondent has patently failed to perform a very fundamental duty, and that is to yield obedience to all reasonable rules, orders and instructions of the Company, as well as gross failure to reach at least minimum quota, the termination of his engagement from Manulife is highly warranted and therefore, there is no illegal dismissal to speak of. It is readily evident from the above-quoted portions of Manulife's petition that it failed to cite a single iota of evidence to support its claims. Manulife did not even point out which order or rule that Tongko disobeyed. More importantly, Manulife did not point out the specific acts that Tongko was guilty of that would constitute gross and habitual neglect of duty or disobedience. Manulife merely cited Tongko's alleged "laggard performance," without substantiating such claim, and equated the same to disobedience and neglect of duty. Apropos thereto, Art. 277, par. (b), of the Labor Code mandates in explicit terms that the burden of proving the validity of the termination of employment rests on the employer. Failure to discharge this evidential burden would necessarily mean that the dismissal was not justified, and, therefore, illegal.

The Labor Code provides that an employer may terminate the services of an employee for just cause and this must be supported by substantial evidence. The settled rule in administrative and quasi-judicial proceedings is that proof beyond reasonable doubt is not required in determining the legality of an employer's dismissal of an employee, and not even a preponderance of evidence is necessary as substantial evidence is considered sufficient. Substantial evidence is more than a mere scintilla of evidence or relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other minds, equally reasonable, might conceivably opine otherwise. Here, Manulife failed to overcome such burden of proof. It must be reiterated that Manulife even failed to identify the specific acts by which Tongko's employment was terminated much less support the same with substantial evidence. To repeat, mere conjectures cannot work to deprive employees of their means of livelihood. Thus, it must be concluded that Tongko was illegally dismissed. Moreover, as to Manulife's failure to comply with the twin notice rule, it reasons that Tongko not being its employee is not entitled to such notices. Since we have ruled that Tongko is its employee, however, Manulife clearly failed to afford Tongko said notices. Thus, on this ground too, Manulife is guilty of illegal dismissal. FRANCISCO vs. NLRC August 31, 2006 ANGELINA FRANCISCO vs. NLRC, KASEI CORPORATION, et al.

G.R. No. 170087 FACTS: In 1995, petitioner Angelina Francisco was hired by Kasei Corporation(Kasei) dur ing its incorporation stage. She was designated as Accountant, Corporate Secretary and Liaison Officer of the company. In 1996, Franciscowas de signated Acting Manager to handle recruitment of all employeesand perform manage ment administration functions, represent thecompany in all dealings with governm ent agencies, and to administer allother matters pertaining to the operation of Kasei Restaurant which isowned and operated by Kasei. For five years, petitioner performed the duties of Acting Manager. As ofDecember 31, 2000 her salary was P27,500.00 plus P3,000.00 housingallowance and a 10% sh are in the profit of Kasei Corporation. In January 2001, Francisco was replaced as Manager. She alleged that she was required to sign a prepared resolution for her replacement but she wasassure d that she would still be connected with Kasei. The Treasurer convened a meeting of all employees and announced that Francisco wasstill connec ted with Kasei Corporation as Technical Assistant to SeijiKamura and in charge o f all BIR matters. Thereafter, Kasei reduced her salary by P2,500.00 a month beginningJanuary up to September 2001 for a total reduction of P22,500.00 as ofSeptember 2001. She was not paid her mid-year bonus allegedly becausethe company was not earning well. In October 2001, she did not receiveher salary from the company, made repeated f ollow-ups with the cashierbut was advised that the company was not earning well. On October 15,2001, she asked for her salary, but she was informed that she is

no longerconnected with the company. Since she was no longer paid her salary, petitioner did not report for workand f iled an action for constructive dismissal before the labor arbiter. Kasei Corporation claimed that Francisco was not their employee, havingbeen desi gnated as technical consultant who performed work at her owndiscretion without t he control and supervision of the Corporation, and thather consultancy may be te rminated any time considering that her serviceswere only temporary in nature and dependent on the needs of thecorporation. To prove that petitioner was not an employee of the corporation, privateresponde nts submitted a list of employees for the years 1999 and 2000duly received by th e BIR showing that petitioner was not among theemployees reported to the BIR, as well as a list of payees subject toexpanded withholding tax which included peti tioner. SSS records were alsosubmitted showing that petitioner s latest employer w as Seiji Corporation. ISSUES: Whether or not there was an employer-employee relationship betweenFrancisco and Kasei Corporation; and whether Francisco was illegallydismissed. HELD: Generally, courts have relied on the so-called right of control test wherethe pe rson for whom the services are performed reserves a right to controlnot only the end to be achieved but also the means to be used in reachingsuch end. In additi on to the standard of right-of-control, the existingeconomic conditions prevaili ng between the parties, like the inclusion ofthe employee in the payrolls, can h elp in determining the existence of anemployer-employee relationship. However, in certain cases the control test is not sufficient to give acomplete p icture of the relationship between the parties, owing to thecomplexity of such a relationship where several positions have been held

by the worker. There are instances when, aside from the employer s powerto control the employee with respect to the means and methods by whichthe work is to be ac complished, economic realities of the employmentrelations help provide a compreh ensive analysis of the true classification ofthe individual, whether as employee , independent contractor, corporateofficer or some other capacity. The better approach would therefore be to adopt a two-tiered testinvolving: (1) the putative employer s power to control the employee withrespect to the means and methods by which the work is to beaccomplished; and (2) the underlying economic realities of the activity orrelationship. This two-tiered test would provide us with a framework of analysis, whichwould t ake into consideration the totality of circumstances surrounding thetrue nature of the relationship between the parties. This is especiallyappropriate in this c ase where there is no written agreement or terms ofreference to base the relatio nship on; and due to the complexity of therelationship based on the various posi tions and responsibilities given to theworker over the period of the latter s empl oyment. Thus, the determination of the relationship between employer andemployee depends upon the circumstances of the whole economic activity, such as: (1) the extent to which the services performed are an integral partof t he employer s business; (2) the extent of the worker s investment inequipment and fa cilities; (3) the nature and degree of control exercised bythe employer; (4) the worker s opportunity for profit and loss; (5) theamount of initiative, skill, jud gment or foresight required for the success ofthe claimed independent enterprise ; (6) the permanency and duration ofthe relationship between the worker and the employer; and (7) the degreeof dependency of the worker upon the employer for hi s continuedemployment in that line of business. By applying the control test, there is no doubt that petitioner is anemployee of Kasei Corporation because she was under the direct controland supervision of Se iji Kamura, the corporation s Technical Consultant. She reported for work regularly and served in various capacities asAccountant, L iaison Officer, Technical Consultant, Acting Manager andCorporate Secretary, wit h substantially the same job functions, that is, rendering accounting and tax services to the company and performingfunctions nec essary and desirable for the proper operation of thecorporation such as securing business permits and other licenses over anindefinite period of engagement. Under the broader economic reality test, the petitioner can likewise be saidto b e an employee of respondent corporation because she had served thecompany for si x years before her dismissal, receiving check vouchersindicating her salaries/wa ges, benefits, 13th month pay, bonuses andallowances, as well as deductions and Social Security contributions fromAugust 1, 1999 to December 18, 2000. When peti tioner was designatedGeneral Manager, respondent corporation made a report to th e SSS signedby Irene Ballesteros. Petitioner s membership in the SSS as manifested bya copy of the SSS specimen signature card which was signed by the President of Kasei Corporation and the inclusion of her name in the on-lineinqui ry system of the SSS evinces the existence of an employer-employeerelationship b etween petitioner and respondent corporation. It is therefore apparent that petitioner is economically dependent onrespondent corporation for her continued employment in the latter s line ofbusiness. The corporation constructively dismissed petitioner when it reduced hersalary by P2,500 a month from January to September 2001. This amountsto an illegal termin ation of employment, where the petitioner is entitled tofull backwages. Since th e position of petitioner as accountant is one oftrust and confidence, and under the principle of strained relations, petitioner is further entitled to separation pay, in lieu of reinstatement.

A diminution of pay is prejudicial to the employee and amounts toconstructive di smissal. Constructive dismissal is an involuntary resignationresulting in cessat ion of work resorted to when continued employmentbecomes impossible, unreasonabl e or unlikely; when there is a demotion inrank or a diminution in pay; or when a clear discrimination, insensibility ordisdain by an employer becomes unbearable to an employee. In affording full protection to labor, this Court must ensure equal workopportun ities regardless of sex, race or creed. Even as we, in every case, attempt to carefully balance the fragile relationship between employeesand emplo yers, we are mindful of the fact that the policy of the law is toapply the Labor Code to a greater number of employees. This would enableemployees to avail of t he benefits accorded to them by law, in line with theconstitutional mandate givi ng maximum aid and protection to labor, promoting their welfare and reaffirming it as a primary social economicforce in furtherance of social justice and national development. Pharmacia and Upjohn v. Albayda, Jr. Facts: Respondent Ricardo P. Albayda, Jr. was an employee of Upjohn until the merger between Pharmacia and Upjohn wherein petitioner designated respondent as District Sales Manager to District XI in the Western Visayas area. Respondent settled in Bacolod City with his family. Respondent received a memorandum announcing the new sales force structure reassigning him to District XII in the Northern Mindanao area, Cagayan de Oro City. Respondent replied that he was unwilling to transfer because of concerns about his family and additional expenses and that it is an unfamiliar territory which would make it difficult for him to improve sales, requesting to remain in the Western Visayan area. Respondents request was denied with the reason that the relocation was to maximize business opportunities and growth development of personnel. Respondent was on sick leave and made other letter requests to the company stating his reasons that were denied until he received a memorandum informing him that he has consumed all his sick leave and would be considered on indefinite sick leave without pay as per company policy. Respondent

replied that his doctor has declared him fit to work and that he is ready to work with his old position or anywhere in Western Visayas. The case was referred to the Human Resource Department as it appears that respondent was not willing to work anywhere outside western Visayas. A Mr. Montilla met with respondent to discuss the situation and respondent received a memorandum after the meeting which states that the company needed him in Cagayan de Oro for his abilities but he also has the option of being transferred to manila as there were no more vacancies in the western visayas. Respondent wrote that he will be airing his grievance before the National Labor Relations Commission to which Montilla replied that he will be entitled to Relocation Benefits and Allowance pursuant to the company s Benefits Manual. Montilla did not hear from respondent and wrote another memorandum as a final notice for respondent to report for work in Manila within 5 working days from receipt of the memo otherwise will be terminated due to AWOL. A few weeks after Montilla sent a memorandum of the company s decision to terminate his services for his refusal to report for work and that it is indicated in his contract that he is willing to be assigned anywhere in the Philippines as the company sees fit and the termination is pursuant to Art 282 of the Labor Code due to AWOL and insubordination. Respondent filed a complaint with the NLRC in Bacolod which was dismissed by the labor arbiter for lack of merit. Respondent appealed and the NLRC dismissed for lack of merit and affirmed the decision of the labor arbiter. Respondent filed for motion for reconsideration and was again denied, respondent filed a petition for certiorari before the CA. CA favored respondent, the NLRC decision reversed and set aside, remanded to NLRC Bacolod for the proper determination of petitioner s claims. Petitioners filed motion for reconsideration denied by CA hence petition with petitioner raising a lone assignment of error to wit: Issue: whether or not the CA (Cebu) can reverse or set aside the factual and legal findings of the NLRC which was based on substantial evidence when there is no showing of palpable error or that the findings of fact of the labor arbiter is contrary to that of the NLRC Ruling: petition is meritorious. The reassignment of respondent was a valid exercise of petitioners management prerogative, provided there is no demotion in rank or diminution of salary, benefits, and other privileges, and the action is not motivated by discrimination, made in bad faith, or affected as a form of punishment or demotion without sufficient cause. CA overstepped its legal mandate as it appears that the NLRC and labor arbiter s decisions were based on substantial evidence and should not be disturbed. There is no proof of arbitrariness or abuse of discretion. Petition is partially granted, petitioners are ordered to pay respondent separation pay as a measure of social justice where the employee is validly dismissed for causes other than serious misconduct or those reflecting moral character. http://www.lawphil.net/judjuris/juri2010/aug2010/gr_172724_2010.html Rolando C. Rivera v Solidbank Corporation Facts: Petitioner has been working with Solidbank for 18 years when he was offered a retirement program which he took wherein he would receive P1,045,258.95 by way of benefits. Deciding to devote his time to the poultry business, petitioner applied for retirement which was approved. Petitioner received net amt of P963,619.28 minus total accountabilities amounting to P106,973.00 and confirmed his separation from Solidbank.

Bank required Rivera to sign an undated Release, Waiver and Quitclaim and promised that he would not at any time in any manner whatsoever directly or indirectly engage in any unlawful activity prejudicial to the interest of Solidbank and willnot disclose any information concerning the business the bank may also bring any action to seek an award for damages resulting from his breach of the release, waiver and quitclaim to include whatever sums paid to him by virtue of his retirement and was required to sign an undated Undertaking wherein he promised that he will not seek employment with a competitor bank or financial institution within 1 year and that any breach would entitle to a cause of action against him before the appropriate courts of law. Three months after Rivera worked for Equitable Banking Corporation and he received information from the human resources division of Solidbank that he had violated the undertaking with a demand for the return of all the monetary benefits he received. Rivera refused, solidbank filed complaint for sum of money with prayer for preliminary attachment before RTC manila. The trial court issued a writ of preliminary attachment to attach all of Rivera s properties not exempt from execution. The sheriff levied on a parcel of land owned by rivera. Rivera, in his answer with affirmative defenses and counterclaim alleging that the undertaking was void for being contrary to the constitution, law and public policy. Solidbank filed verified motion for summary judgment alleging that Rivera raised no genuine issue as to any material fact in his answer except as to the amount of damages and that he was obliged to return the money as he had signed the undertaking and that whether it was unreasonable, arbitrary, or oppressive is a question of law. Rivera opposed the motion contending that as gleaned from the pleadings, there are genuine issues as to material facts which call for the presentation of evidence. He averred that there was a need for the parties to adduce evidence to prove that he did not sign the Undertaking voluntarily. He claimed that he would not have been allowed to avail of the benefits if he had not signed it. He also asserted that he could not cause injury or prejudice to Solidbank s interest since he never acquired any

sensitive or delicate information which could prejudice the bank s interest if disclosed. Rivera appended to his Opposition his counter-affidavit in which he reiterated that he had to sign the undertaking containing the employment ban provision other wise his availment would not push through and there was no truth to the bank s allegations that he agreed not to seek employment in a competitor bank or financial institution within one year in exchange for what he receive instead of the other retirement option for a smaller amount. His superior did not inform him that he would have to sign the undertaking when he applied for the retirement benefit and it was the bank who offered it to streamline their organization and he would have continued working for the bank for at least 15 more years earning more than what he received for retirement. He intended to go full time into the poultry business but found out in 2 months that it was not sufficient to support his family. He was then forced to look for a job and with his current training and experience, the job at Equitable bank was all he could find. In his supplemental opposition, Rivera insisted that the ban was not necessary to protect the interst of Solidbank as in the first place he did not have any secret information which if revealed would be prejudicial to the bank. In Solidbank s reply they averred that the wisdom of requiring the undertaking for the retirement benefit is purely a management prerogative. It was not for rivera to question and decry the bank s policy to protect itself from unfair competition and disclosure of its trade secrets. The substantial monetary windfall given the retiring officers was meant to tide them over the one year period of hiatus and did not prevent them from engaging in any kind of business or bar them form being employed except with competitor banks/financial institutions. Trial court issued summary judgment in favor of plaintiff and against defendant to pay bank the retirement benefit plus 12% interest per annum until fully paid. The trial court declared that there was no genuine issue as to a matter of fact since rivera voluntarilyexecuted the release waiver quitclaim and undertaking, and had a choice not to retire. The undertaking was not unreasonable and for rivera to be excused would be enrichment at the expense of the bank. Rivera appealed to CA, partially granted, decision affirmed with modification that the attachment and levy upon the family home set aside and discharged. CA declared that there were no earmarks of coercion, undue influence, or fraud in the deed s execution, he is deemed to have waived the right to assail the same hence stopped from insisting or retaining the money. Hence recourse to the court: Issue: CA erred in the summary judgment with regard to existence of genuine issues as to material facts which call for presentation of evidence; 1 year ban violates public policy as enunciated in our constitution and laws; CA erred in affirming decision ordering respondent to give benefits to Solidbank plus 12% per annum until fully paid Ruling: Petition is meritorious. For a summary judgment to be proper, the movant must establish 2 requisites:1. There must be no genuine issue as to any material fact except for the amount of damages;2. The party presenting the motion for summary judgment must be entitled to a judgment as a matter of law. If opposing party fails to produce a genuine issue, the moving party is entitled to a summary judgment.(genuine issue is an issue of fact which requires the presentation of evidence, where the facts pleaded by the parties are disputed or contested, proceedings for a summary judgment cannot take the place of a trial). Court agrees that issue on the ban as against public policy is a genuine issue of fact, requiring parties to present evidence to support their respective claims. Petitioner also declared in the undertaking that any breach on his part of said undertaking or the terms and conditions of the release, waiver,

quitclaim will entitle respondent to a cause of action for protection before the appropriate courts of law. Art 1306 of the new CC provides tat te contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they arenot contrary to law, morals, good customs, public order or public policy. Retirement plans, in light of the constitutional mandate of affording full protection to labor, must be liberally construed in favor of the employee, it being the general rule that pension or retirement plans formulated by the employer are to be construed against it. Estoppels cannot give validity to an act that is prohibited by law or one that is against public policy. Respondent, as employer is burdened to establish that a restrictive covenant barring an employee from accepting a competitive employment after retirement or resignation is not unreasonable or oppressive. It is settled that actual damages or compensatory damages may be awarded fro breach of contracts. Actual damages are primarily intended to simply make good or replace the loss covered by said breach and cannot be presumed. Even if petitioner had admitted to having breached the undertaking, respondent must still prove that it suffered damages and the amount thereof. On the assumption that the ban is valid, restitution of the money will not follow as a matter of course as any breach of petitioner of his promise entitles respondent a cause of action for protection IN THE COURTS OF LAW. Respondent is still burdened to prove its entitlement by producing the best evidence. http://www.lawphil.net/judjuris/juri2006/apr2006/gr_163269_2006.html

G.R. No. 162957 March 6, 2006 UNITED KIMBERLY-CLARK EMPLOYEES UNION PHILIPPINE TRANSPORT GENERAL WORKERS ORGANIZATION (UKCEU-PTGWO), Petitioner, vs. KIMBERLY CLARK PHILIPPINES, INC., Respondent. Facts:KCPI and UKCEU executed a collective Bargaining agreement (CBA) Art XX section1 for recommendations of retired, resigned, deceased or disabled employees of their legitimate children and in default a relative within the 3rd civil degree, if qualified shall be hired on probationary status. There were no qualifying standards, high school graduates were hired as an act of liberality. On nov 95, KCPI issued guidelines for the implementation of artXX sec1 wich require among others, that:1 recomendees must at least be 18 notmore than 30 at the time of hiring;2. Completed high school and at least 2 years of technical/vocational course or 3rd yr level of college educ; if both husband and wife are employees, theyshall be treated as one family, hence, only one of the spouses would be allowed to avail of the benefit. UKCEU requested for a grievance meeting requesting for the deferment until January 97 after the next CBA negotiations where it will be taken up. KCPI agreed but only with respect to th educational qualification. During negotiations, UKCEU proposed the amendment of art XX sec1 of the existing CBA. KCPI and UKCEU executed a CBA to cover the period form julu 97 to june 99. The educational qualifications were not incorporated neither were the proposed amendment, art XX sec1 was reteained without any modification. In the second half of 98, KCPI started to suspend the implementation of the CBA due to depressed economic conditions then in the philippines and in compliance with the freeze hiring policy of its Asia-Pacific headquarters. On april 23, the parties filed before the natl conciliation and mediation board NCMB, a submission agreement referring to arbitration the issue of whether KCPI violated art XX sec1. The parties agreed not to appeal resolution of the VA. In aug 99 KCPI and UKCEU executed a new CBA incorporating artXX sec1, governing the relation of te parties up to june 2002. UKCEU averred in its pleadings that admitting high school graduates had been an established practice since 1980 and that the educational req does not apply to recommendees as per art XX sec 1 and that denying husband and wife employees of individual rights is a clear violation of the CBA and discrimination since both are paying union dues and individually vote for any policy determination. KCPI in its pleadings maintained that its management prerogative, it had the right to determine hiring standards underartxx sec1 without consent or approval of UKCEU. It averred that after its implementation was deferred the union did not take any action hence stopped from questioning its implementation. It was justified to temporarily suspend the implementation because of existing conditions. KCPI also avers that it never anticipated the undue burden of having to hire recomendees from both husband and wife which do not usually possess the same qualifications and skills of his/her predecessor and was not in a position to sustain the practice considering the low volume in sales and a reduction in the number of working days in some areas of its operations. The voluntary arbitrator visited the premises of KCPI on may 1999, with prior notice to the parties and discovered that KCPI employed casuals who performed the work of certain regular employees. On march 2001 the va issued resolution that the company cannot suspend the implementation of Art XX sec1 of the existing CBA unilaterally by upgrading the educational

qualifications and that husband and wife are each entitled to recommend a replacement. According to the va management prerogative does not give license to a company to set aside or ignore what had been agreed upon through negotiation, KCPI could not just unilaterally change or suspend the implementation of the existing employment requirements. Since KCPI failed to explain why it continued to hire casual workers doing the job of regular employees, it failed to substantiate its contention that the economic crisis did not warrant the hiring of regular employees. Va referred to art1 of the CBA providing that the agreement covers all regular rank and file employees, had it the intention to grant husband and wife only one applicant-replacement, it should have been stated in unequivocal terms. KCPI assailed decision via petition before the CA: partially granted. CA ruled that KCPI may validly exercise management prerogative and that the right to recommend employees as per artXX sec1 is not absolute. CA ruled that the company must prove financial distress by sufficient convincing evidence , that it made it extremely difficult for company to comply with art xx sec1, and that the change in the circumstance must be one which could not be foreseen at the time the contract was executed. UKCEU moved for partial reconsideration, denied. UKCEU, now petitioner seeks relief from this court in the instant petition: Issue: CA erred in agreeing with management prerogative, that to allow respondent to set higher educational standards is to render nugatory the right granted to them under CBA. Ruling: we rule against petitioner. The court has recognized in numerous instances the undoubted right of the employer to regulate, according to his own discretion and best judgment, all aspects of employment. The exercise of thios right is not absolute, management prerogative must always be exercised in good faith for the advancement of employer s

interest and not for the purpose of defeating or circumventing the rights of the employess under special laws, valid agreements scuh as the individual contract of employment and the collective bargaining agreement and general principles of justice and fair play. In this case the court finds that respondent acted in accord with the CBA and the November 1995 guidelines wihcih by agreement of the parties may be implemented by respondent after January 1997. http://www.lawphil.net/judjuris/juri2006/mar2006/gr_162957_2006.html [G.R. No. 165968, April 14, 2008] PEPSI COLA PRODUCTS PHILIPPINES, INC. AND ERNESTO F. GOCHUICO, PETITIONERS, VS. EMMANUEL V. SANTOS, RESPONDENT. Facts: respondent was employed by pepsi cola products and was promoted to acting regional sales manager at the libis sales office in 1996. In 1997 respondent received from petitioner memorandum charging him of fraud and acts of dishonesty out of alleged artificial sales by the sales personnel of the libis sales office in march 1996 allegedly upon instruction of respondent resulting to damages amounting to P795, 454.54. also apprised respondent of preventive suspension and hearings of the administrative investigation. Respondent found guilty and was dismissed. Respondent filed for illegal dismissal which the labor arbiter dismissed. On appeal the NLRC remanded the case to the labor arbiter. The decision is that petitioners failed to satisfactorily prove the serious charges against respondent and ordered petitioners separation pay of 165,000 for 11 yrs of service, 180,000 1yr backwage, 345,000 and atty fees equivalent to 10% of the monetary award. In addition for the illegal dismissal apparently tainted with malice and bad faith, an award of 1000,000 as moral damages and 50,000 as exemplary damages. Petitioners appealed to NLRC which affirmed LA s decision but deleted the award of moral and exemplary damages in the absence of evidence of malice and bad faith. Petitioners elevated matter to CA which affirmed the NLRC decision. petitioners submit the ff issues for reconsideration: Issue: whether respondent was validly dismissed; whether trial on merits was necessary; whether award of atty s fees was proper. Ruling: first issue involves question of fact not an error of law, however the records were still reviewed carefully and petitioner failed to present evidence to justify respondents dismissal. Second issue, it is not legally objectionable, for being violative of due process, for the LA to resolve a case based solely on the position papers, affidavits or documentary evidence submitted by the parties. third issue, we have ruled that atty s fees may be awarded only in case of an illegal dismissal. In this case there is an absence of evidence that respondents suspension and eventual dismissal were tainted with malice and bad faith hence, the NLRC deleted the award for moral and exemplary damages. Although the labor arbiter awarded atty s fees, the basis for the same was not discussed in the decision. there must always be a factual basis for the award of atty s fees, consistent with the policy that no premium should be placed on the right to litigate. Atty s fees award should be deleted. http://elibrary.judiciary.gov.ph/decisions.php?doctype=Decisions %20/%20Signed%20Resolutions&docid=1212366437969076709 G.R. No. 150861 | January 22, 2008 | AL ARELLANO, SOLOMON BRITANICO, VALERIANO MENDOZA, JOSE PERPETUA, REY PAMINIANO, FREDDIE JIMENA, JOEL UBANA, ALEX MABANTA,

ALEXANDER ANTONIO, JERRY NACAYTUNA, ELIZER DELFIN, FRANCISCO CORPUZ, ALEX GARIDO, DANTE DIMAANO, NARCISO ALBAY, MAXIMO GAGARIN, APOLLO CAYABYAB, RONALD GESTIADA, SERGIO ESPERANZA, ROMEO CARPIO and RODRIGO ORDINIZA,petitioners, vs. POWERTECH CORPORATION, WILLIE CABOBOS and COURT OF APPEALS (Former Special NinthDivision), respondents. Facts: 20 petitioners from the Nagkakaisang Manggagawa ng PowertechCorp (petitio ners) were granted by labor arbiter dela cruz monetary claimsfor illegal termina tion totaling to P2,538,728.84. Powertech appealed tothe NLRC, during its penden cy, Calros Gestiada for himself and on behalf ofother petitioners executed a qui tclaim, release and waiver in favor ofPowertech in consideration of the amount o f P150,000. Earlier, Gestiada was appointed by his co-petitioners as their atty in fact evidenced by aspecial power of atty. The compromise amt was paid to gestiada by check. Relying on the quitclaim and release, Powertech filed a motion for thewithdrawal of the appeal and cash bond. NLRC granted the motion. TheP150,000 check bounced due to a stop payment order of powertech. Aggrieved, petitioners moved to nullify the release and quitclaim for lack ofcon sideration. NLRC declared the quitclaim, release and waiver void forlack of cons ideration, reinstated the appeal and ordered Powertech to posta cash or surewty bond for the monetary judgment less the amount it hadpreviously posted. After 2 wks gestiada terminated the services of theircounsel, atty evangelista and inste ad retained atty Manuel Felipe of thePAO. A day later, Powertech paid P150,000 t o Gestiada purportedly ascompromise amount for all of petitioners. That same day , Gestiada throughatty Felipe and Powertech filed a joint motion to dismiss with the NLRCbased on the compromise agreement. Atty Evangelista opposed themotion a lleging that the compromise agreement is unconscionable that hewas illegally ter minated as counsel for the other petitioners without theirconsent and that the P 150,000 was received by Gestiada as paymentsolely for his backwages and other mo netary claims. NLRC denied for lackof merit. NLRC held that P150,000 received by Gestiada did not cover themonetary claim of petitioners. Admitted in a letter t o atty evangelista that

it is solely for his backwages and monetary claims. Granting Gestiada hadthe aut hority to enter into a compromise agreement in behalf of the othercomplainants, the quitclaim and release cannot be recognized as a validand binding undertaking as the consideration therefore (P150,000) asopposed to the total monetary award in the amount equivalent toP2,538,728.84 is clearly unconscionable and thus voi d for being contrary topublic policy. The NLRC ruled that the labor arbiter deci sion had attainedfinality for failure of Powertech to post the required cash or surety bond. Undaunted, Powertech elevated the matter to the CA via petition forcertiorari un der rule 65 of the 1997 rules of civil procedure. CA rendered adecision in favor of powertech. The dispositive portion of the decisionreads: WHEREFORE, premises considered, the petition is GIVEN DUE COURSE andis hereby GR ANTED. The Resolution of the National Labor RelationsCommission dated July 31, 2 000 declaring the Quitclaim and Release voidab initio and denying the Joint Moti on to Dismiss and dismissing the appealof the petitioners is ANNULLED and SET AS IDE. No pronouncement as to costs. SO ORDERED.16 The CA held the validity of the compromise agreement between petitionersand Powe rtech in the following tenor: The public respondent s act of dismissing the appeal and declaring thecompromise a greement void is a grave abuse of discretion. Apparently theNLRC has already los t the jurisdiction over the case because the appealwas already considered withdr awn and th cash bond released. It is notedthat said resolution withdrawing the a ppeal has become final and executorsince the same had not been subject of a moti on for reconsideration. Thepublic respondent (NLRC) in taking cognizance therefo r of the motion forreconsideration by the complainants seeking to declare the co mpromiseagreement void on the ground of non payment and consequently declaringth e same as being contrary to law acted in excess of jusrisdiction since theproced ure for acquiring jurisdiction over the case was not properlyobserved. The prope r remedy of the aggrieved party is not to file a motionfor reconsideration on th e ground ofnon-payment but to have thecompromise agreement enforced by means of a writ of execution. Petitioners moved to reconsider the CA decision but their motion was denied. Hence the present recourse: Issue: petitioners impute to the CA grave abuse of discretion in ruling thatthe NLRC committed grave abuse of discretion in declaring void thecompromise agreeme nt; that NLRC lost jurisdiction; and assumingjurisdiction over the present petit ion considering that private respondentsfailed to perfect their appeal with the NLRC. Ruling: we find that the CA erred in upholding the compromise agreementbetween p owertech and gestiada as there is collusion. Powertech knewthat Gestiada had ple nary authority to act for petitioners in the labor case. It had prior dealings with him. It also knew that gestiada was authorized tonego tiate for any amount he may deem just and reasonable and to signwivers and quitcla ims on behalf of petitioners. Powertech obviously usedthat knowledge, capitalize d on the vulnerable position of Gestiada inentering into the agreement and took advantage of the situation todisadvantage petitioners. Collusion is a species of fraud. Art. 227 of theLabor Code empowers the NLRC to void a compromise agreeme nt forfraud. Considering that Powertech failed to post the required bond, itsapplea was not d eemed perfected and te labor arbiter;s decision is nowfinal and executory.

In the recent case of Mary Abigail s Food Service, Inc. v. Court of Appeals,31 this Court again reiterated: A mere notice of appeal without complying with the otherrequisites aforestated s hall not stop the running of the period forperfecting an appeal. Clear it is from the above that an appeal to the NLRC from anydecision, award or order of the Labor Arbiter must have to be made within ten (10) calendar days from receipt of such decision, awardor order with proof of payment of the required appeal bondaccompanied by a memorandum of appea l. And where, as here, the decision of the Labor Arbiter involves a monetary award, theappeal is deemed perfected only upon the posting of a cash orsurety bond also within ten (10) ca lendar days from receipt of suchdecision in an amount equivalent to the monetary award. The posting of a cash or surety bond is a requirement sine qua nonfor the perfec tion of an appeal from the labor arbiter s monetaryaward. Notably, the perfection of an appeal within the period andin the manner prescribed by law is jurisdictio nal and noncompliance with the requirements therefore is fatal and has theeffect of rendering the judg ment sought to be appealed final andexecutory. Such requirement cannot be trifle d with. Given the foregoing ruling we find it unnecessary to tackle petitioners contention that the NLRC had lost jurisdiction over the case when itdismissed Powertech s ap peal. It had become inconsequential, the crucialissue having been resolved in th eir favor.

Final Note As a final note, We rebuke Powertech s unscrupulous and despicable act ofusing an apparently valid compromise agreement to evade payment of itslegal obligation to petitioners. We will not allow employers to make amockery of our legal system b y using legal means to perpetrate fraud. Thisshould serve as a warning to partie s in labor cases to endeavor to achievea just and equitable resolution of their disputes and to enter intocompromise agreements in good faith. http://www.lawphil.net/judjuris/juri2008/jan2008/gr_150861_2008.html G.R. No. 145587 October 26, 2007 EDI-STAFFBUILDERS INTERNATIONAL, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and ELEAZAR S. GRAN, respondents. This Petition for Review on Certiorari[1] seeks to set aside the October 18, 2000 Decision[2] of the Court of Appeals (CA) in CA-G.R. SP No. 56120 whichaffir med the January 15, 1999 Decision[3] and September 30, 1999 Resolution[4] rendered by the National Labor Relations Commission (NLRC) (Third Division) in POEA ADJ (L) 94-06-2194, ordering Expertise SearchInternatio nal (ESI), EDI-Staffbuilders International, Inc. (EDI), and OmarAhmed Ali Bin Be chr Est. (OAB) jointly and severally to pay Eleazar S. Gran(Gran) the amount of USD 16,150.00 as unpaid salaries. Facts: Private respondent Gran was an OFW recruited by EDI, and deployed by ESI to work for OAB, in Riyadh, Kingdom of Saudi Arabia. EDI sent OAB a list upon the latter s request for qualified applicants of computer specialist. Gran was chosen for the list, and signed an employment contract that granted him a monthly salary of USD 850 for a period of 2 yrs. Upon arrival in Riyadh, Gran questioned the discrepancy in his monthly salary his employment contract stated USD 850.00; while his Philippine Overseas Employment Agency (POEA) Information Sheet indicated USD 600.00 only. However, through the assistance of the EDI office in Riyadh, OAB agreed to pay Gran USD 850.00 a month. After 5 months Gran was terminated for on compliance and insubordination. Gran received from OAB the total amount of SR 2,948.00 representing his final pay, and on the same day, he executed a Declaration releasing OAB from any financial obligation or otherwise, towards him. Gran constituted complaint in the Philippines against EDI, ESI, OAB for underpayment and illegal dismissal. Labor arbiter ruled that there was neither. NLRC reversed LA s decision, declared that charges was not substantiated and there was no investigation, with payment of USD16,150.00 to gran. Gran filed motion for execution of judgment. Petitioner filed opposition and motion for reconsideration, denied. Edi filed for review with CA for NLRC s grave abuse of discretion despite gran s failure to perfect appeal for failure to furnish copy of appeal memorandum to EDI. CA denied petition and declared lack of evidence and denial of due process, and quitclaim is contrary to public policy where the monetary consideration given in the Declaration is much less than what he was

legally entitled to. Hence the petition before this court: Issues: will failure to furnish copy of memorandum justify dismissal of gran s appeal?; if there is substabtial evidence of gran s termination and is justified; if there was due process; if entitled to backwages Ruling: The J.D. Magpayo ruling was reiterated in Carnation Philippines Employees Labor Union-FFW v. National Labor Relations Commission,[27] Pagdonsalan v. NLRC,[28] and in Sunrise Manning Agency, Inc. v. NLRC.[29] Thus, the doctrine that evolved from these cases is that failure to furnish the adverse party with a copy of the appeal is treated only as aformal l apse, an excusable neglect, and hence, not a jurisdictional defect. Accordingly, in such a situation, the appeal should not bedismissed; how ever, it should not be given due course either. As enunciated in J.D. Magpayo, the duty that is imposed on the NLRC, insuch a case, is to require the appellant to comply with the rulethat the opposing party shou ld be provided with a copy of theappeal memorandum. An allegation of incompetence should have a factual foundation. Incompetence may be shown by weighing it against a standard, benchmark, or criterion. However, EDI failed to establish any such bases toshow how petitioner found Gran incompetent. EDI failed to discharge the burden of proving Gran s insubordinationor willful dis obedience. As indicated by the second requirement provided for in Micro Sales Operation Network, in order to justify willfuldisobedience, w e must determine whether the order violated by theemployee is reasonable, lawful , made known to the employee, andpertains to the duties which he had been engage d to discharge. In the case at bar, petitioner failed to show that the order of the company whichwas vi olated the submission of Daily Activity Reports was part ofGran s duties as a Computer S pecialist. Before the Labor Arbiter, EDI should have provided a copy of the company policy, Gran s job description, or any other document that would show that the Daily Activity Reports were required for submission by the employees, more particularly by aComputer Sp ecialist.

Under the twin notice requirement, the employees must be giventwo (2) notices be fore their employment could be terminated: (1) a firstnotice to apprise the empl oyees of their fault, and (2) a second notice tocommunicate to the employees tha t their employment is beingterminated. In between the first and second notice, t he employees shouldbe given a hearing or opportunity to defend themselves person ally or bycounsel of their choice.[55] A careful examination of the records revealed that, indeed, OAB s manner of dismissing Gran fell short of the two notice requirement. In the present case, the employment contract provides that theemployment contrac t shall be valid for a period of two (2) years from thedate the employee starts to work with the employer.[61] Gran arrived in Riyadh, Saudi Arabia and started to work on February 7, 1994;[62] hence, his employment contract is untilFebruary 7, 1996. Since he was illegallydismisse d on July 9, 1994, before the effectivity of R.A. No. 8042, he istherefore entit led to backwages corresponding to the unexpired portion ofhis contract, which wa s equivalent to USD 16,150. Petitioner EDI questions the legality of the award of backwages andmainly relies on the Declaration which is claimed to have been freely andvoluntarily executed by Gran. The foregoing events readily reveal that Gran was forced to signthe Declaration an d constrained to receive the amount of SR 2,948.00 even if it was against his will since he was told on July 10, 1994 toleave Riyadh on July 12, 1994. He had no other choice but to sign theDeclaration as he needed the amount of SR 2,948.00 for the payment ofhis ticket. He could have entertain ed some apprehensions as to the statusof his stay or safety in Saudi Arabia if h e would not sign the quitclaim. Petition is denied. http://sc.judiciary.gov.ph/jurisprudence/2007/october2007/145587.htm LABOR CASES (Part II ng Syllabus) G.R. No. 86773 February 14, 1992 | SOUTHEAST ASIAN FISHERIES DEVELOPMENT CENTER-AQUACULTURE DEPARTMENT (SEAFDECAQD), DR. FLOR LACANILAO (CHIEF), RUFIL CUEVAS (HEAD, ADMINISTRATIVE DIV.), BEN DELOS REYES (FINANCEOFFICER), petitioners, vs. NATIONA L LABOR RELATIONS COMMISSION and JUVENAL LAZAGA, respondents. | J. NOCON NATURE Petition for certiorari to review the decision of the NLRC FACTS 1.) SEAFDEC-AQD is a department of an international organization, the Southeast Asian Fisheries Development Center. Private Respondent Lazaga was hired as a Research Associate and eventually became the Head of External Affairs Office of SEAFDEC-AQD. However, he was terminated allegedly due to financial constraints being experienced by SEAFEC-AQD. He was supposed to receive separation benefits but SEAFDEC-AQD failed to pay private respondent his separation pay so Lazaga filed a complaint for non-payment of separation benefits, plus moral damages and attorney s fees with the NLRC. 2.) In their ANSWER WITH COUNTERCLAIM, SEAFDEC alleged that NLRC has no jurisdiction over the case because: (1) It is an international

organization; (2) Lazaga must first secure clearances from the proper departments for property or money accountability before any claim for separation pay will be paid (and clearances has not been paid) COUNTERCLAIM: Lazaga had property accountability and outstanding obligation to SEAFDEC-AQD amounting to P27, 532.11 and that Lazaga was not entitled to the accrued sick leave benefits due to his failure to avail of the same during his employment 3.) LA: for Lazaga 4.) NLRC: affirmed LA, deleted attorney s fees and actual damages 5.) SEAFDEC-AQD filed MFR, denied ISSUES 1. WON SEAFEC-AQD is immune from suit owing to its international character 2. WON SEAFDEC-AQD is estopped from claiming that the court had no jurisdiction HELD 1. YES Ratio. Being an intergovernmental organization, SEAFDEC including its departments enjoys functional independence and freedom from control of the state in whose territory its office is located. Reasoning. One of the basic immunities of an international organization is immunity from local jurisdiction (immune from legal writs and processes issued by the tribunals of the country where it is found) that the subjection of such an organization to the authority of the local courts would afford a convenient medium thru which the host government may interfere in their operations or even influence or control its policies and decisions of the organization. Such subjection to local jurisdiction would impair the capacity of such body to discharge its responsibilities impartially on behalf of its member-states. 2. NO

Ratio. Estoppel does not apply to confer jurisdiction to a tribunal that has none over a cause of action. Jurisdiction is conferred by law. Where there is none, no agreement of the parties can provide one. Settled is the rule that the decision of a tribunal not vested with appropriate jurisdiction is null and void. -The lack of jurisdiction of a court may be raised at any stage of the proceedings, even on appeal. -The issue of jurisdiction is not lost by waiver or by estoppel G.R. No. L-58494 July 5, 1989 | PHILIPPINE NATIONAL OIL COMPANY-ENERGY DEVELOPMENT CORPORATION, petitioner, vs. VICENTE D. ELLELINA, | MELENCIO-respondents. HON. VICENTE T. LEOGARDO, DEPUTY MINISTER OF LABOR AND HERRERA, J. FACTS On 20 January 1978, petitioner PNOC-EDC is a subsidiary of the PhilippineNationa l Oil Company (PNOC), filed with the Ministry of Labor andEmployment, Regional O ffice No. VII, Cebu City (MOLE), a clearanceapplication to dismiss/ terminate th e services of private respondent, Vicente D. Ellelina, a contractual employee. The application for clearance was premised on Ellelina's allegedcommission of a crime (Alarm or Public Scandal) during a Christmas part atpetitioner's camp in U ling, Cebu, when, because of the refusal of the rafflecommittee to give him the prize corresponding to his lost winning ticket, he tried to grab the armalite rifle of the PC Officer outside the buildingdespit e the warning shots fired by the latter. Clearance to dismiss was initially granted by MOLE but was subsequentlyrevoked a nd petitioner was ordered to reinstate Ellelina to his formerposition, without l oss of seniority rights, and with backwages from IFebruary 1978 up to his actual reinstatement. Petitioner appealed to the Minister of Labor who affirmed the appealedOrder. Petitioner: 1. Under Article 277 of the Labor Code, the Ministry of Labor andEmployment has no jurisdiction over petitioner because it is a governmentowned or controlled corporation; 2. Ellelina's dismissal is valid and just because it is based upon thecommission of a crime. Respondent: (a) While the petitioner is a subsidiary of the PNOC, it is still covered by the Labor Code and, therefore, within the jurisdiction of the Ministry of Laborinasm uch as petitioner was organized as a private corporation under theCorporation La w and registered with the Securities and ExchangeCommission; (b) Petitioner is estopped from assailing the Labor Department'sjurisdiction, ha ving subjected itself to the latter when it filed theapplication for clearance t o terminate Ellelina's services; and (c) Dismissal is too harsh a penalty. ISSUES/RULING 1. Whether or not public respondent committed grave abuse of discretionin holdin g that petitioner is governed by the Labor Code

-Article 277 of the Labor Code (PD 442) provides that terms and conditionsof emp loyment of all government employees, including employees ofgovernment-owned and controlled corporations shall be governed by theCivil Service Law. -The The Civil Service embraces every branch, agency, subdivision andinstrumenta lity of the government, including government-owned orcontrolled corporations. 2. Whether or not Ellelina's dismissal was justified. -The reinstatement ordered by public respondent, without loss of seniorityrights , is proper. However, consistent with the rulings of the Court, backwages should be limited to three years from 1 February 1978. Thedismissal or dered by petitioner was a bit too harsh considering the natureof the act which h e had committed and that it was his first offense. WHEREFORE, the Petition is DISMISSED, and the judgment of respondentpublic offic ial is hereby AFFIRMED. No costs. G.R. No. 148415, July 14, 2008 | RICARDO G. PALOMA, PETITIONER, VS. PHILIPPINE AIRLINES, INC. AND THE NATIONAL LABOR RELATIONS COMMISSION, RESPONDENTS. | VELASCO JR., J.: FACTS Paloma worked with PAL from September 1957, rising from the ranks toretire, afte r 35 years of continuous service, as senior vice president forfinance. In March 1992, or some nine (9) months before Paloma retired onNovember 30, 1992, PAL was privatized. By way of post-employment benefits, PAL paid Paloma the total amount of

PhP 5,163,325.64 which represented his separation/retirement gratuityand accrued vacation leave pay. For the benefits thus received, Palomasigned a document den ominated Release and Quitclaim but inscribed the following reservation therein: "Without prejudice to my claim for furtherleave b enefits embodied in my aide memoire transmitted to Mr. RobertoAnonas covered by my 27 Nov. 1992 letter x x x." The leave benefits Paloma claimed being entitled to refer to his 450-dayaccrued sick leave credits which PAL allegedly only paid the equivalent of18 days. He an chored his entitlement on Executive Order No. (EO) 1077dated January 9, 1986, an d his having accumulated a certain number ofdays of sick leave credits, as ackno wledged in a letter of Alvia R. Leano, then an administrative assistant in PAL. Answering Paloma's written demands for conversion to cash of his accruedsick lea ve credits, PAL asserted having paid all of Paloma's commutablesick leave credit s due him pursuant to company policy made applicable toPAL officers starting 199 0. Subsequently, Paloma filed before the Arbitration Branch of the NationalLabor Re lations Commission (NLRC) a Complaint for Commutation of Accrued Sick Leaves Totaling 392 days. In the complaint, docketed asNLRC-NCR-Cas e No. 00-08-05792-94, Paloma alleged having accrued sickleave credits of 450 day s commutable upon his retirement pursuant to EO1077 which allows retiring govern ment employees to commute, withoutlimit, all his accrued vacation and sick leave credits. And of the 450-daycredit, Paloma added, he had commuted only 58 days, leaving him abalance of 392 days of accrued sick leave credits for commutation. RULING OF LABOR ARBITER The labor arbiter held that PAL is not covered by the civil service systemand, a ccordingly, its employees, like Paloma, cannot avail themselves ofthe beneficent provision of EO 1077. This executive issuance, per the laborarbiter's decision, applies only to government officers and employeescovered by the civil service, exclusive of the members of the judiciarywhose leave and retirement system is co vered by a special law. However, the labor arbiter ruled that Paloma is entitled to a commutation of his alternative claim for 202 accrued sick leave credits less 40 days for1990 and 1991. Thus, the grant of commutation for 162 accrued leavecredits. CA RULING Justifying its amendatory action, the CA stated that EO 1077 applies to PALand n ecessarily to Paloma on the following rationale: Section 2(1) of ArticleIX(B) of the 1987 Constitution applies prospectively and, thus, theexpressed limitation therein on the applicability of the civil service law only to government-owned and controlled corporations (GOCCs) with originalcharters do es not preclude the applicability of EO 1077 to PAL and its thenemployees. ISSUES WHETHER OR NOT THE [CA], IN HOLDING THAT E.O. NO. 1077 ISAPPLICABLE TO PETITIONE R AND YET APPLYING COMPANY POLICY BY AWARDING THE CASH EQUIVALENT OF ONLY 162 DAYS SICK LEAVE CREDITS INSTEAD OF THE 450 DAYS SICK LEAVE CREDITS PETITIONER IS ENTITLED TO UNDER E.O. NO. 1077, DECIDED A QUESTION OF SUBSTANCE

IN A MANNER CONTRARY TO LAW AND APPLICABLE JURISPRUDENCE HELD Paloma maintains that he comes within the coverage of EO 1077, the samehaving be en issued in 1986, before he severed official relations with PAL, and at a time when the applicable constitutional provision on the coverageof the civil service made no distinction between GOCCs with originalcharters and those without, like PAL which was incorporated under theCorporation Code. Implicit in Paloma's contention is the submission that heearned the bulk of his sick leave credits under the aegis of the 1973Constitution when PAL, being then a governmen t-controlled corporation, was under civil service coverage. The contention is without merit. G.R. No. 154472. June 30, 2005 | Lopez et. al. v. MWSS | J. Tinga FACTS: In 1997, MWSS entered into a Concession Agreement with Manila WaterService, Inc. and Benpress-Lyonnaise, wherein the collection of bills wastransferred to said private concessionaires, effectively terminating the contracts of service between petitioners and MWSS. Regular employees ofthe MWSS, except those who had retired or opted to remain with the latter, were absorbed by the concessionaires. Regular employees of the MWSSwere paid the ir retirement benefits, but not petitioners. Instead, they wererefused said bene fits, MWSS relying on a resolution of the Civil ServiceCommission (CSC) that con tract-collectors of the MWSS are not its employees and therefore not entitled to the benefits due regular government employees. Petitioners filed a complaint with the CSC. In its Resolution dated 1 July1999,t he CSC denied their claims, stating that petitioners were engaged byMWSS through a contract of service, which explicitly provides that a billcollector-contracto r is not an MWSS employee. Moreover, it found that petitioners were unable to show that they have contractual appointmentsduly atte sted by the CSC. In addition, the CSC stated that petitioners, notbeing permanen t employees of MWSS and not included in the list submitted to the concessionaire, are not entitled to severance pay. Petitioners claims for retirement benefits and terminal leave pay were

likewise denied. Thereafter the petitioner filed for a Motion for Reconsideration which was later on Denied. Petitioners filed a petition for with the Court of Appeals. Affirming andgeneral ly reiterating the ruling of the CSC, the Court of Appeals held thatthe Agreemen t entered into by petitioners and MWSS was clear and unambiguous, and should be read and interpreted according to its literal sense. Hence, as per the terms of the agreement, petitioners were notMWSS employ ees. The Court of Appeals held that no other evidence wasadduced by petitioners to substantiate their claim that their papers wereforwarded to the CSC for attes tation and approval. It added that in anyevent, as early as 26 June 1996, the CS C specifically stated that contractcollectors are not MWSS employees and therefor e not entitled to severance pay. Thereafter, an appeal was made to the Supreme Court. ISSUE: Whether or not 1) the petitioner are employees of the MWSS 2) the latterhas powe r to dismiss the latter 3) if they are entitled to the benefitsprovided for unde r the Labor Code of the Philippines HELD: The Court has invariably affirmed that it will not hesitate to tilt the scalesof justice to the labor class for no less than the Constitution dictates that the St ate . . . shall protect the rights of workers and promote theirwelfare. It is com mitted to this policy and has always been quick to rise todefense in the rights of labor, as in this case. Protection to labor, it has been said, extends to all of laborlocal and overseas, organized and unorganized, in the public and private sectors. Besides, there is no reason not to apply this principle in favor of workers inth e government. The government, including government-owned and controlled corporations, as employers, should set the example in upholdingthe ri ghts and interests of the working class. For purposes of determining the existence of employer-employee relationship, the Court has consistently adhered to the four-fold test, namely: (1) whether the alleged employer has the power of selection andengagemen t of an employee; (2) whether he has control of the employeewith respect to the means and methods by which work is to be accomplished; (3) whether he has the power to dismiss; and (4) whetherthe employ ee was paid wages.Of the four, the control test is the mostimportant element. A review of the circumstances surrounding the case reveals that petitioners are employees of MWSS. Despite the obvious attempt of MWSSto categor ize petitioners as mere service providers, not employees, byentering into contra cts for services, its actuations show that they are itsemployees, pure and simpl e. MWSS wielded its power of selection when itcontracted with the individual pet itioners, undertaking separate contracts or agreements. The same goes true for the power to dismiss. Although termed as causes for termination of the Agreement, a review of the sameshows tha t the grounds indicated therein can similarly be grounds fortermination of emplo yment. On the other hand, relevant and appropriate is the definition of wages inthe Lab or Code, namely, that it is the remuneration, however designated, for work done or to be done, or for services rendered or to be rendered.

The commissions due petitioners were based on the bills collected as perthe schedu le indicated in the Agreement. Significantly, MWSS granted petitioners benefits usually given to employees, to wit: COLA, meal, emergency, and traveling allowances, hazard pay, cash gift, and otherbonuses. In an unabashed bid to claim credit for itself, MWSS professesthat these additiona l benefits were its acts of benevolence and generosity. We are not impressed. Other manifestations of control are evident from the records. The power totransf er or reassign employees is a management prerogative exclusivelyenjoyed by emplo yers. In this case, MWSS had free reign over the transferof bill collectors from one branch to another. MWSS also monitored the performance of the petitioners and determined their efficiency. Even the four-fold test will show that petitioner is the employer of privaterespon dents. The elements to determine the existence of an employmentrelationship are: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer spower to c ontrol the employee s conduct. The most important element isthe employer s control o f the employee s conduct, not only as to the resultof the work to be done, but als o as to the means and methods to accomplish it. Petitioners are indeed regular employees of the MWSS. The primarystandard of det ermining regular employment is the reasonable connectionbetween the particular a ctivity performed by the employee in relation tothe usual business or trade of t he 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. Likewise, the repeated and continuing need for the performance of the jobhas bee n deemed sufficient evidence of the necessity, if not indispensability of the activity to the business. Some of the petitioners hadren dered more than two decades of service to the MWSS. The continuous and repeated rehiring of these bill collectors indicates the necessity anddesira bility of their services, as well as the importance of the role of billcollector s in the MWSS. MWSS committed itself to pay severance and terminal leave pay to itsregular empl oyees. The guidelines thereof states that regular employeeswho have rendered at least a year of service and not eligible for retirementare entitled to severance pay equivalent to one (1) month basic pay forevery full year of service. In vie w of the Court s finding that petitioners were employees of MWSS, the corresponding severance pay, in accordance with the guidelines, should be given to them. Terminal leave

pay are likewise due petitioners, provided they meet the requirementstherefore. G.R. No. 147745. April 9, 2003 | MARIA BUENA OBRA, petitioner, vs. SOCIAL SECURITY SYSTEM (Jollar IndustrialSales and Service s Inc.), .| J. Puno respondents FACTS Juanito Buena Obra, husband of petitioner, worked as a driver fortwenty-four (24 ) years and five (5) months. His first and second employerswere logging companie s. Thereafter, he was employed at Jollar IndustrialSales and Services Inc. as a dump truck driver from January 1980 to June1988. He was assigned to the followin g projects:[4] 1. January 1980 to December 1981 F.F. Cruz Project, Nabua, CamarinesSur hauling/ delivery of filling materials from quarry to job site 2. January 1982 to December 1983 F.F. Cruz, 300 MW Coal Fire ThermalPlant, Calac a, Bacungan and Makban Geothermal Plant, Los Baos, Laguna hauling/delivery of filling materials from quarry to job site 3. January 1984 to December 1985 Dizon Copper Silver Mines, Pili, SanMarcelino, Zambales hauling/delivery filling materials from quarry to jobsite 4. January 1986 to June 1988 Metro Manila Hauling Project On 27 June 1988, Juanito suffered a heart attack while driving a dumptruck insid e the work compound, and died shortly thereafter. In the Report of Death[5] submitted by his employer to the Social Security System (SSS), Juanito expired at the Worker's Quarters at 10:30 a.m., of Myocardial Infarction. Petitioner Maria M. Buenaobra immediately filed her claim for deathbenefits unde r the SSS law. She started receiving her pension in November 1988. Petitioner was, however, unaware of the other compensation benefits due her under Presidential Decree No. 626, as amended, or the Law on Employees Compensation. In September 1998, or more than ten (10) years after the death of her husband, that shelearned of t he benefits under P.D. No. 626 through the television programof then broadcaster Ted Failon who informed that one may claim for Employees Compensation Commission (ECC) benefits if the spouse diedwhile working for the company. Petitioner prepared the documents to support her claim for ECC benefits. On 23 April 1999, she filed with theSSS her claim for funeral benefits under P.D. No. 626, as amended, which was docketed as SSS # 04-0089326-0.[6] On 28 July 1999, the SSS denied the claim of petitioner for funeralbenefits ruli ng that the cause of death of Juanito was not work-connected, absent a causal relationship between the illness and the job. Caridad R. Borja, Assistant Vice-President National Capital Region (AVP NCR) Centralof the SSS Member Assistance Center in Quezon City wrote: Please be informed that funeral claim under the Employees Compensationis hereby d enied. Per medical evaluation, cause of death of subject member s (sic) cannot be considered work connected since there is no causal relationship between the illness and the job. On 8 October 1999, petitioner wrote to Atty. Teofilo E. Hebron, Executive Director of the ECC, appealing the denial of her claim. On 11 November 1999, Atty. Hebron ordered Dr. Simeon Z. Gonzales, AssistantVice-Presid ent (AVP) of the Medical Services Group of the SSS to review theclaim of petitio ner. On 23 November 1999, the Medical Services Group through Dr. Perla

A. Taday, AVP for Medical Operations, concluded its re-evaluation and affirmed the denial of petitioner s claim. It reiterated that there is no causal relationship between the cause of death/illness and member s job as dump truck driver. [7] Pursuant to Section 5, Rule XVIII of the Implementing Rules of PD 626, the records of the deceased Juanito wereelevated t o the Commission. On 13 April 2000, the Commission rendered a decision, dismissing theappeal.[8] I t ruled that petitioner failed to show by substantial evidence thather husband s c ause of death was due to, or the risk of contracting hisailment was increased by his occupation and working conditions, as perSection 1(b), Rule III of P.D. No. 626, as amended. In addition, the Commission declared that petitioner s claim has prescribed, citing ECC Resolution No. 93-08-0068. Petitioner appealed to the Court of Appeals. She alleged that hercause of action had not prescribed because the filing of her claim for SSSbenefits shortly afte r Juanito s death suspended the running of the prescriptive period for filing EC claims, as per Item No. III of ECC ResolutionN o. 90-03-0022 dated 23 March 1990. The appellate court dismissed the petition. It ruled that petitioner's filing of her claim for SSS benefits shortl yafter Juanito s death did not suspend the running of the prescriptive periodfor f iling EC claims. It interpreted the aforementioned ECC Resolutions tomean that a claimant must indicate the kind of claim filed before the running of the prescriptive period for filing EC claims may be interrupted. In the case at bar, petitioner indeed filed a claim with SSS. In fact, she has been receiving her pension since November 1988. However, she failed to specify whether the basis of her claim was any contingencywhich ma y be held compensable under the EC Program.[9] In addition, the Court of Appeals cited P.D. No. 626 which states that acontinge ncy may be held compensable if listed in Annex "A" of the RulesImplementing Empl oyees' Compensation as an occupational disease, andsatisfying all conditions set forth therein; or if not listed as an occupational

disease, or listed but has not satisfied the conditions set forth therein, it must be proven by substantial evidence that the risk of contracting thedisease w hich caused the death of the member, was increased by themember's working condit ions.[10] The appellate court likewise held that the three-year prescriptive period does not apply in the instant case. Instead, it applied Art. 1142(2) of the Civil Code which reads: Art. 1144. The following actions must be brought within ten (10) yearsfrom the ti me the right of action accrues: (1) Upon a written contract; (2) Upon an obligation created by law; (3) Upon a judgment. [Emphasis supplied.] The appellate court then held that the petitioner's cause of action hasprescribe d. Petitioner's husband died on 27 June 1988. She filed her claim for funeral benefits under P.D. No. 626 or the Law on Employees'Compensation onl y on 23 April 1999, or more than ten (10) years from hisdeath. Lastly, the appellate court ruled that even assuming petitioner's cause of action has not prescribed, her claim for Employees' Compensationbenefits cann ot prosper because of her failure to prove by substantialevidence that her husba nd's working conditions increased the risk of contracting the myocardial infarction that caused his death. Petitioner s Motion for Reconsideration dated 27 September 2000 wasdenied by the a ppellate court in a Resolution promulgated on 6 March2001. ISSUES 1. WHETHER, INDEED, THE CLAIM OF PETITIONER, HAD PRESCRIBED. 2. WHETHER OR NOT THE ILLNESS OF PETITIONER S HUSBAND, MYOCARDIAL INFARCTION, IS WORK-RELATED. HELD 1. The claim of petitioner for funeral benefits under P.D. No. 626, asamended, has not yet prescribed. The issue of prescription in the case at bar is governed by P.D. No. 626, or the Law on Employees' Compensation. Art. 201 of P.D. No. 626 and Sec. 6, Rule VII of the 1987 Amended Rules on Employees'Compensation bot h read as follows: No claim for compensation shall be given due course unless saidclaim is filed wit h the System within three years from the time thecause of action accrued. We agree with the petitioner that her claim for death benefits under the SSS law should be considered as the Employees Compensation claim itself. This is but logical and reasonable because the claim for death benefits which petitioner filed with theSSS is of th e same nature as her claim before the ECC. Furthermore, the SSS is the same agency with which Employees Compensation claims are filed. As correctly contendedby the petitioner, when she filed her claim for death benefits withthe SSS under the SSS law, she had already notified the SSS of heremployees compensation claim, because the SSS is the very same

agency where claims for payment of sickness/disability/death benefits under P.D. No. 626 are filed. Section 4(b)(2), Rule 3 of the ECC Rules of Procedure for the Filingand Disposit ion of the Employees Compensation Claims, quoted above, also provides for the conditions when EC claims filed beyond the three-year prescriptive period may still be given due course. Section 4(b)(2) states the condition for private sector employees, requiring that a claim for Medicare, sickness, burial, disability or death should be filed within three (3) years from theoccurrence of the contingency. In the instant case, the petitioner was able to file her claim for death benefits under the SSS law within the three-year prescriptive period. In fact, she has been receiving her pension under the SSS law since November1988. 2. Myocardial infarction is also known as heart attack. It results in permanent heart damage or death. A heart attack is called myocardial infarction because part of the heart muscle (myocardium) may literally die (infarction). This occurs when a blood clot blocks one of the coronary arteries (the blood vesselsthat bring bloo d and oxygen to the heart muscle). When the heart muscle does not obtain the oxygen-rich blood that it needs, it willbegin to die. The severity of a heart attack usually depends onhow much of the heart muscle i s injured or dies during the heartattack. Heart attack accounts for 1 out of eve ry 5 deaths. It is a major cause of sudden death in adults. Heavy exertion or emotional stresscan trigger a heart attack.[16] In the case at bar, the petitioner s husband s heart disease fallsunder the second c ondition of ECC Resolution No. 432 dated July20, 1977 which states that the stra in of work that brought aboutthe acute attack must be of sufficient severity and must be followed within 24 hours by the clinical signs of a cardiac insult toconstitute causal relationship. Petitioner s husband was driving adump truck within the compa ny premises where they were stacking gravel and sand when he suffered the heart attack. He had to be taken down from the truck and brought to the workers

quarters where he expired at 10:30 a.m., just a few minutes afterthe heart attac k, which is much less than the 24 hours required byECC Resolution No. 432. This is a clear indication that severe strain of work brought about the acute attack that caused his death. Professional drivers, especially truck drivers like the decedent inthe instant c ase, carry the burden of being more exposed andsubjected to the stress and strai n of everyday traffic, and the greater physical exertion brought about by driving a large andheavy vehicle. In addition, according to the petitioner, her husband was under a lot of stress in the workplace. He was a model worker and his employer highly depended on him. He became the object of envy of his co-workers which caused himmuch emotional stres s. Add to this the fact that he has been a truck driver for more than twenty-four (24) years. Due to the combination of emotional stress and vigorous physical exertion, itwas easy for h im to succumb to the heart ailment. We hold that the illness of the decedent which caused his death is workconnected, and thus compensable by virtue of ECC Resolution No. 432 dated 20 July 1977. As a final note, we find it necessary to reiterate that P.D. No. 626, as amended, is a social legislation whose primordial purpose is toprovide meanin gful protection to the working class against thehazards of disability, illness a nd other contingencies resulting inthe loss of income. PETITION GRANTED. G.R. No. 121777 January 24, 2001 | THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. CAROL M. DELA PIEDRA, accusedappellant. Facts: Criminal Investigation Service conducted entrapment of illegalrecruitment by Mrs. Carol Figueroa, alias Carol Llena, and Carol delaPiedra. Both Nancy Ara neta and Lourdes Modesto testified that dela Piedrapromised them employment for a fee. Their testimonies corroborate eachother on material points: the briefing conducted by appellant, the time andplace thereof, the fees involved. Appellant has not shown that thesewitnesses were incited by any motive to testify falsely against her. Theabsence of evidence as to an improper motive actuating the princ ipalwitnesses of the prosecution strongly tends to sustain that no impropermotiv e existed and that their testimony is worthy of full faith andcredence. Accused defense of denial, claiming that she went to Singapore to visitrelatives and met Laleen Malicay who had been working there for six yearshad instructed h er to bring money back to her relatives in the Philippines. This is how accused went from Cebu to Zamboanga to meet Malicay scousin Jasmine Al ejandro who inquired about going to Singapore. Accussedalso says Malicay was the one who instructed Jasmine to give her the application forms the CIS found with accused on their raid in Jasmine s house in Zamboanga and thought it was for Malicay s substitute as she planned to go back to the Philippines. RTC found accused guilty, hence appeal. Issue: Overbreadth and void for vagueness; equal protection clause; legality of arrest; Held: Here, the provision in question reads:

ART. 13. Definitions. (a) x x x. (b) "Recruitment and placement" refers to any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers, andincludes r eferrals, contract services, promising or advertising foremployment, locally or abroad, whether for profit or not: Provided, Thatany person or entity which, in any manner, offers or promises for a feeemployment to two or more persons shall be deemed engaged inrecruitment and placement. x x x. Vagueness: The number of persons dealt with is not an essential ingredient of the actof rec ruitment and placement of workers. Any of the acts mentioned in thebasic rule in Article 13(b) will constitute recruitment and placement even ifonly one prospec tive worker is involved. The proviso merely lays down arule of evidence that whe re a fee is collected in consideration of a promiseor offer of employment to two or more prospective workers, the individualor entity dealing with them shall be deemed to be engaged in the act ofrecruitment and placement. The words "shall b e deemed" create thatpresumption. An act will be declared void and inoperative on the ground of vaguenessand uncer tainty, only upon a showing that the defect is such that thecourts are unable to determine, with any reasonable degree of certainty, what the legislature intended. An Act will not be declared inoperative andineffe ctual on the ground that it furnishes no adequate means to securethe purpose for which it is passed, if men of common sense and reason candevise and provide the means, and all the instrumentalities necessary forits execution are within the reach of those intrusted therewith." Overbreadth: That Section 13 (b) encompasses what appellant apparently considers ascustomary and harmless acts such as " labor or employment referral" ("referring" an applicant, according to appellant, for employment to aprospectiv e employer) does not render the law overbroad. Evidently, appellant misapprehends concept of overbreadth. A statute may be said to be overbroad where it operates to inhibit theexercise o f individual freedoms affirmatively guaranteed by theConstitution, such as the f reedom of speech or religion. A generally wordedstatute, when construed to punis h conduct which cannot beconstitutionally punished is unconstitutionally vague t o the extent that itfails to give adequate warning of the boundary between theco nstitutionally permissible and the constitutionally impermissibleapplications of the statute.26

Appellant also invokes the equal protection clause in her defense. Shepoints out that although the evidence purportedly shows that JasmineAlejandro handed out a pplication forms and even received LourdesModesto's payment, appellant was the o nly one criminally charged. Alejandro, on the other hand, remained scot-free. From this, appellantconcludes that the prosecution discriminated against her on grounds ofregional origins. Ap pellant is a Cebuana while Alejandro is aZamboanguea, and the alleged crime took place in Zamboanga City.Theunlawful administration by officers of a statute fair on its face, resulting inits unequal application to those who are entitled to b e treated alike, is nota denial of equal protection unless there is shown to be present in it anelement of intentional or purposeful discrimination. This may ap pear onthe face of the action taken with respect to a particular class or person , orit may only be shown by extrinsic evidence showing adiscriminatory design ov er another not to be inferred from the actionitself.But a discriminatory purpose is not presumed, there must be ashowing of "clear and intentional discriminatio n."33 Appellant has failed toshow that, in charging appellant in court, that the re was a "clear andintentional discrimination" on the part of the prosecuting of ficials. While all persons accused of crime are to be treated on a basis of equalitybefor e the law, it does not follow that they are to be protected in thecommission of crime. It would be unconscionable, for instance, to excuse a defendant guilty of murder because others have murdered with impunity. The remedy for unequal enforcement of the law in such instances does notlie in t he exoneration of the guilty at the expense of society x x x. Protection of the law will be extended to all persons equally in the pursuitof t heir lawful occupations, but no person has the right to demandprotection of the law in the commission of a crime. Illegal recruitment is committed when two elements concur. First, theoffender ha s no valid license or authority required by law to enable one tolawfully engage in recruitment and placement of workers. Second, he orshe undertakes either any activity within the meaning of "recruitment andplacement" defined under Article 13 (b), or any prohibited practicesenumerated under Article 34 of the Labor Code .38 In case of illegalrecruitment in large scale, a third element is added: that the accusedcommits said acts against three or more persons, individually or as agroup. In this case, the first element is present. The certification of POEAOff icer-in-Charge Macarulay states that appellant is not licensed orauthorized to e ngage in recruitment and placement. The second element is also present. Appellant is presumed engaged inrecruitment and placement under Article 13 (b) of the Labor Code. BothNancy Araneta and Lour des Modesto testified that appellant promisedthem employment for a fee. Their te stimonies corroborate each other onmaterial points: the briefing conducted by ap pellant, the time and placethereof, the fees involved. Appellant has not shown t hat these witnesseswere incited by any motive to testify falsely against her. Th e absence ofevidence as to an improper motive actuating the principal witnesses of the prosecution strongly tends to sustain that no improper motive existed andthat th eir testimony is worthy of full faith and credence. Appellant's denialscannot pr evail over the positive declaration of the prosecution witnesses. Affirmative testimony of persons who are eyewitnesses of the fact assertedeasily overrides negative testimony. That appellant did not receive anypayment for the promised or offered employment is of no moment. Fromthe language of the statute , the act of recruitment may be "for profit ornot;" it suffices that the accused "promises or offers for a fee employment" to warrant conviction for illegal recruitment. The testimonies of Araneta and Modesto, coming as they do from crediblewitnesses , meet the standard of proof beyond reasonable doubt thatappellant committed rec ruitment and placement. We therefore do notdeem it necessary to delve into the l

egality of appellant's arrest and theseizure of the application forms. A warrant less arrest, when unlawful, hasthe effect of invalidating the search incidental thereto and the articles soseized are rendered inadmissible in evidence. Here, e ven if the documents seized were deemed inadmissible, her conviction would stand in view of Araneta and Modesto's testimonies. Appellant attempts to cast doubt on the prosecution's case by claiming inthat Er lie Ramos of the POEA supposedly "planted" the application forms. She also assails his character, alleging that he passed himself off as alawyer, although this was denied by Ramos. The claim of "frame-up," like alibi, is a defense that has been invariablyviewed by the Court with disfavor for it can easily be concocted but difficultto prove . Apart from her self-serving testimony, appellant has not offeredany evidence t hat she was indeed framed by Ramos. She has not evenhinted at any motive for Ram os to frame her. Law enforcers are presumedto have performed their duties regula rly in the absence of evidence to the contrary. A conviction for large scale illegal recruitment must be based on afinding in ea ch case of illegal recruitment of three or more personswhether individually or a s a group. In this case, only two persons, Aranetaand Modesto, were proven to ha ve been recruited by appellant. The thirdperson named in the complaint as having been promised employment for afee, Jennelyn Baez, was not presented in court to testify. It is true that law does not require that at least three victims testify at thet rial; nevertheless, it is necessary that there is sufficient evidence provingtha t the offense was committed against three or more persons. In thiscase, evidence that appellant likewise promised her employment for a feeis sketchy. The only e vidence that tends to prove this fact is the testimonyof Nancy Araneta, who said that she and her friends, Baez and SandraAquino, came to the briefing and that they (she and her "friends") filled upapplication forms. The affidavit Baez executed jointly with Araneta cannot support Araneta'stestimo ny. The affidavit was neither identified, nor its contents affirmed, byBaez. Ins ofar as it purports to prove that appellant recruited Baez, therefore, the affidavit is hearsay and inadmissible.48 In any case, hearsayevid ence, such as the said affidavit, has little probative value. Neither canappella nt be convicted for recruiting CIS agent Eileen Fermindoza or eventhe other pers ons present in the briefing of January 30, 1994. Appellant is

accused of recruiting only the three persons named in the information Araneta, Modesto and Baez. The information does not include Fermindoza or the other persons present in the briefing as among those promised oroffered e mployment for a fee. To convict appellant for the recruitment andplacement of pe rsons other than those alleged to have been offered orpromised employment for a fee would violate her right to be informed ofthe nature and cause of the accusat ion against her. Courts may consider a piece of evidence only for the purpose for which itwas off ered, and the purpose of the offer of their testimonies did notinclude the provi ng of the purported recruitment of other supposedapplicants by appellant. Appellant claims in her seventh assigned error that the information isfatally de fective since it charges her with committing illegal recruitment inlarge scale o n January 30, 1994 while the prosecution evidence supposedlyindicates that she c ommitted the crime on February 2, 1994. We find that the evidence for the prosecution regarding the date of thecommissio n of the crime does not vary from that charged in theinformation. Both Nancy Ara neta and Lourdes Modesto testified that onJanuary 30, 1994, while in the Alejand ro residence, appellant offered thememployment for a fee. Thus, while the arrest was effected only on February2, 1994, the crime had already been committed thre e (3) days earlier onJanuary 30, 1994. The eighth and tenth assigned errors, respectively, pertain to the penaltyof lif e imprisonment imposed by the trial court as well as theconstitutionality of the law prescribing the same, appellant arguing that itis unconstitutional for bein g unduly harsh.55 Section 19 (1), Article III ofthe Constitution states: "Excess ive fines shall not be imposed, nor cruel, degrading or inhuman punishment inflicted." The penalty of life imprisonment imposed upon appellant must be reduced. Because the prosecution was able to prove that appellant committedrecruitment an d placement against two persons only, she cannot beconvicted of illegal recruitm ent in large scale, which requires thatrecruitment be committed against three or more persons. Appellant canonly be convicted of two counts of "simple" illegal recruitment, one for thatcommitted against Nancy Araneta, and another count for that committedagainst Lourdes Modesto. Appellant is sentenced, for each count, t o sufferthe penalty of four (4) to six (6) years of imprisonment and to pay a fi ne ofP30,000.00. This renders immaterial the assigned error assumed of properimp osable penalty of life imprisonment. G.R. No. 81510 March 14, 1990 HORTENCIA SALAZAR, petitioner, vs. HON. TOMAS D. ACHACOSO, in his capacity as Administrator ofthe Philippine Ov erseas Employment Administration, and FERDIEMARQUEZ, respondents. Facts: On November 3, 1987, having ascertained that the petitioner hadno license to operate a recruitment agency, the POEA Administrator issuedClosure and Seizu re Order No. 1205 ordering the closure of the allegedrecruitment agency operated at No. 615 R.O. Santos st. MandaluyongMetro Manila, and the seizure of document s and paraphernalia being used or intended to be used in committing illegal recruitment. Pursuant to saidOrder, a team of POEA people swooped down at the residence of petitionerand at the Han alie Dance Studio inside said residence. The team confiscated assorted costumes which according to petitioner were worthP10,000 an d which already due for shipment to japan. Petitioner wrotePOEA attesting the le gality of the seizure of her personal property, allegingthat the seizure was con trary to the constitutional guarantees of dueprocess and the right of the people to be secured in their persons, houses, papers and effects against unreasonable searches and seizure. On February 2, 1988 the petitioner filed this suit for prohibition. Althoughthe acts sought to be barred are already fait accompli, thereby makingprohibition to o late, the SC considered the petition as one for certiorari inview of the grave public interest involved.

Issue: may the POEA or the Sec. of Labor validly issue warrants of searchand sei zure or arrest under art. 38 of the Labor Code? Held: the petition is granted. Art 38 par. C of the Labor Code is declareduncons titutional and void. The respondents are ordered to return allmaterials seized a s a result of the implementation of search and seizureorder no. 1205. Under the constitution only a judge may issue warrants of search andarrest. Art. 38 par. C of the Labor Code as now written was entered as anamendment by PD No. 1920 and 2018 of the late pres. Marcos to PD 1693in the exercise of his legisla tive powers under amendment no. 6 of the1973 constitution. Under the latter, the then Minister of Labor merelyexercised recommendatory powers,i.e. to recommend the arrest anddetention of any person engaged in illegal recruitrment. On may 1, 1984 Mr. Marcos promulgated PD No.1920 with the avowedpurpose of givin g more teeth to the campaign against illegal recruitment. The decree gave the minister of labor arrest and closure powers: On January 26, 1986 Pres. Marcos promulgated PD No. 2018 giving theLabor Ministe r search and seizure powers as well. The above has now been etched as art 38 par. C of the Labor Code. The decrees in question it is well to note, stand as the dying vestiges ofauthor itarian rule in its twilight moments. We reiterate the Sec. of Labor, not being a judge may no longer issuesearch or a rrest warrants. Hence, the authorities must go through thejudicial process. To t hat extent we declare art 38 par. C of the Labor Codeunconstitutional and of no force and effect. For the guidance of the bench and the bar, we reaffirm the followingprinciples: 1. Under Article III, Section 2, of the l987 Constitution, it is only judges, and no other, who may issue warrants ofarrest and search:

2. The exception is in cases of deportation of illegal andundesirable aliens, wh om the President or the Commissioner of Immigration may order arrested, followinga final order of deport ation, for the purpose of deportation. G.R. No. 129486, July 04, 2008 | PEOPLE OF THE PHILIPPINES, PLAINTIFF-APPELLEE, VS. GLORIA BARTOLOME, ACCUSEDAPPELLANT. Facts: from july to September 1988 in the municipality of indang Caviteaccused b y 4 private complainants Fe Rollon, Raymundo Dimatulac, Esperanza Buhay, and Reynaldo Rollon of estafa and illegal recruitmentreceiving sum of money for processing and placement fees for employment abroad in Bahrain. Accused denied but was found guilty byRTC of illeg al recruitment affirmed by CA with modification of penalties inaccordance to lar ge scale illegal recruitment. MR denied. Hence petition forreview: Issue: court erred in affirming lower court Held: Illegal recruitment is committed when two (2) elements concur: First, the offender does not have the required license or authority to engage inthe rec ruitment and placement of workers. Second, the offender undertook (1) recruitment and placement activity defined under Article 13(b) of theLabor C ode or (2) any prohibited practice under Art. 34 of the same code. Illegal recruitment is qualified into large scale, when three or morepersons, in dividually or as group, are victimized.[11] Art. 13(b) of the Labor Code defines recruitment and placement, as follows: x x x [A]ny act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers, and includes referrals, contract services, promising or advertising for employment, locally or abroad, whether forprofit or not: Provided, That any person or entity which, in any manner, offers or promises for a fee employment to two or more persons shall bedeemed en gaged in recruitment and placement. After a circumspect review of the records, the Court is fully convinced as toacc used-appellant's guilt of the crime of illegal recruitment in large scale. The first element is present. Accused-appellant had not shown any licenseto recr uit or engage in placement activities. As found by the trial court, thePOEA no l ess initiated the filing of the complaints against accusedappellant, a reality which argues against the existence of such license orauthor ity. The second element also obtains. On separate occasions, accusedappellant approached and recruited at least four (4) persons at the sameplace an d at about the same time, giving them the impression that sheand Capawan had the capability to send them to Bahrain for employment. All four testified that accused-appellant promised them employment for afee. The ir testimonies corroborate each other on material points, such asthe amount exac ted as placement fee, the country of destination, and the photocopied plane tickets. The private complainants were positive and categorical in their testimoniesthat they personally met accused-appellant and that she asked for, amongothers, place ment fee in consideration for the promised employment inBahrain. They had no mot ive to testify falsely against accused-appellant. Infact, accused-appellant admi tted personally knowing them since childhood, describing them to be "not misbehaving or perjurious people."[12] The absence of evidence as to improper motive actuating the principalwitnesses of th e prosecution augurs well for their credibility. To be sure,

the RTC and the CA found their testimonies to be worthy of full faith andcredenc e. The testimonies of credible witness meet the standard of proofbeyond reasonab le doubt.[13] Accused-appellant cannot plausibly escape liability for her criminal acts byconv eniently pointing to and passing the blame on Capawan as the illegalrecruiter. L ike the trial court, we entertain serious doubts on this selfserving and gratuitous version of accused-appellant. What is more, herdenials ca nnot prevail over the positive declaration of the prosecutionwitnesses. It is ba sic that affirmative testimony of persons who areeyewitnesses of the events or f acts asserted easily overrides negativetestimony.[14] The crime of illegal recruitment in large scale is punishable under Art. 39(a) of the Labor Code, as amended, with life imprisonment and a fine ofPhP 100 ,000. The CA, accordingly, imposed the right penalty. PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, vs. DELIA SADIOSA y CABENTA, Accused-Appellant. FACTS: Arsenia Conse went to Bayombong, Nueva Ecija in early 1992 where she met the four complainants, Cely Navarro, Marcela Manzano, Erly Tuliao and Benilda Domingo. She enticed the four to apply for overseas employment informing them that she had a cousin who could send them to Kuwait as domestic helpers. Apparently convinced by Arsenia Conse, the four went with her on February 5, 1992 to Manila. Upon arrival, they proceeded to Room 210, Diamond Building, Libertad St., Pasay City where Arsenia Conse introduced the group to accused-appellant Delia Sadiosa. The four then applied for work as domestic helpers.3 On that occasion, accused-appellant assured the four that she coulddispatch them to Kuwait4 and forthwith demandedP8,000.00 from each of them for processing fee and P1,000.00 for passport (P1,500.00 from complainant Cely Navarro).5 She assured the group that she wouldfacilitate the p rocessing of all the necessary documents needed by them. She further promised them that upon payment of the required fees, theywould be a ble to leave for Kuwait immediately.

The four did give accused-appellant the money demanded although ondifferent date s. The latter issued the corresponding receipts6 therefor. Again, she assured them that they could leave for Kuwait on differentdates: Cely Navarro and Erly Tuliao on February 17, 1992 which wasrescheduled twice on Febr uary 19, 1992 and on February 25, 1992,7 and Benilda Domingo and Marcela Manzano on March 17, 1992 which wasmoved twice on Fe bruary 24, 1992 and on March 17, 1992.8 However, not one of them was able to leave for Kuwait. When they asked for the returnof their money, accused-appellant refused and ignored their demand. Consequently, the four filed the complaint for illegal recruitment againstaccuse d-appellant. In addition to the complainants testimonies, the prosecution presentedVirginia S antiago, a Senior Officer in the Licensing Branch and InspectionDivision of the Philippine Overseas Employment Administration (POEA). She testified that accused-appellant was neither licensed nor authorized torecru it workers for overseas employment.9 Accused-appellant herself took the witness stand and testified in herdefense. Sh e resolutely denied having a hand in the illegal recruitment, claiming that she merely received the money on behalf of one Mrs. Ganura10 who owned the recruitment agency called Staff Organizers, Inc. She accepted the money in her capacity as an officer of the saidrecruitment agen cy. To bolster this claim, she presented evidence that sheremitted the money to Mrs. Ganura worthP25,000.0011 although she failed to remit the remaining amount of P8,000.00 since she was already in detention.12Accused-appellant further claimed that although she was notlisted in the POEA as an employee of the recruitment agency of Mrs. Ganura, she had a special power of attorney issued by her employer toreceive pay ments from applicants. The trial court found accused-appellant guilty of illegal recruitment. ISSUES: I. THE LOWER COURT ERRED IN NOT STATING CLEARLY AND DISTINCTLY THE FACTS AND THE LAW ON WHICH ITS JUDGMENT CONVICTING THE ACCUSED-APPELLANT WAS BASED; II. THE LOWER COURT ERRED IN NOT DISMISSING MOTU PROPRIO THE INFORMATION FOR NOT CONFORMING SUBSTANTIALLY TO THE PRESCRIBED FORM, PARTICULARLY AS TO THE DESIGNATION OF THE OFFENSE AND CAUSE OF THE ACCUSATION; III. THE LOWER COURT ERRED IN NOT DISMISSING MOTU PROPRIO THE INFORMATION IN VIEW OF ITS INCONSISTENT AND CONTRADICTORY, CONFLICTING AND IRRECONCILABLE CHARGES OF ILLEGAL RECRUITMENT, ESTAFA UNDER ARTICLE 315, PARAGRAPH 1(b) AND ESTAFA UNDER THE SAME ARTICLE BUTUNDER PARAGRAPH 2(a) OF THE REVISED PENAL CODE AND INCONDUCTING TRIAL THEREUNDER; IV. THE LOWER COURT ERRED IN NOT ACQUITTING THE ACCUSEDAPPELLANT AND IN CONVICTING HER OF THE THE CHARGE IN THE INFORMATION; V. THE LOWER COURT ERRED IN NOT FINDING THAT THE LIABILITY OF THE ACCUSED-APPELLANT, IF ANY, IS ONLY CIVIL, NOT CRIMINAL IN NATURE;

VI. THE LOWER COURT ERRED IN ORDERING THE ACCUSEDAPPELLANT TO INDEMNIFY THE PRIVATE COMPLAINANTS THE SUM OF P8,000.00 EACH. HELD: It is well-settled in our jurisprudence that the information issufficient where it clearly states the designation of the offense by thestatute and the act s or omissions complained of as constituting theoffense.14 However, there is no need to specify or refer to the particularsection or subsection of the statute t hat was violated by the accused. Nolaw requires that in order that an accused ma y be convicted, the specificprovision penalizing the act charged should be menti oned in theinformation.15 What identifies the charge is the actual recital of th e factsand not that designated by the fiscal in the preamble thereof. It is not evennecessary for the protection of the substantial rights of the accused, north e effective preparation of his defense, that the accused be informed ofthe techn ical name of the crime of which he stands charged. He must lookto the facts alle ged.16 In the instant case, the information filed against accused-appellant sufficiently shows that it is for the crime of illegal recruitment in large scale, as defined in Art. 38 (b) of the Labor Code and penalized in Art. 39 of the same Code although it is designated as for illegal recruitment only imprisonment and a fine of P100,000. Hence, to avoid misconception and misinterpretation of the information, the prosecutor involved in this case should have indicated in its caption, the offense he had clearly alleged in its body, that the crime charged wasfor il legal recruitment in large scale. However, such omission or lack of skillof the prosecutor who crafted the information should not deprive thepeople of the right to prosecute a crime with so grave a consequenceagainst the economic life of th e aggrieved parties. What is important isthat he did allege in the information t he facts sufficient to constitute theoffense of illegal recruitment in large sca le. As regards accused-appellants contention that the questioned decision isvoid bec ause it failed to state clearly and distinctly the facts and the lawon which it was based, this Court is not inclined to grant credence thereto. The constitutional requirement that every decision must state distinctly and clearly the factual and legal bases therefor should indeed be the primordial concern of courts and judges. Be that as it may, there should not be a mechanical reliance on this constitutional provision. The courts

and judges should be allowed to synthesize and to simplify their decisions considering that at present, courts are harassed by crowded dockets and time constraints. While it may be true that the questioned decision failed to state thespecific pr ovisions of law violated by accused-appellant, it however clearlystated that the crime charged was Illegal Recruitment. It discussed thefacts comprising the ele ments of the offense of illegal recruitment in large scale that was charged in the information, and accordingly rendered averdict and imposed the corresponding penalty. The dispositive portion ofthe decision quote d earlier, clearly states that appellant was found guiltybeyond reasonable doubt of the charge in the information. As earlier stated, the charge in the information referred to by the decision couldmean only that of illegal recruitment in large scale and not to any otheroffense. The situation would have been altogether different and in violation of theconsti tutional mandate if the penalty imposed was for illegal recruitmentbased on esta blished facts constituting simple illegal recruitment only. Asit is, the trial c ourts omission to specify the offense committed, or thespecific provision of law violated, is not in derogation of the constitutionalrequirement that every deci sion must clearly and distinctly state thefactual and legal bases for the conclu sions reached by the trial court. Thetrial courts factual findings based on cred ible prosecution evidencesupporting the allegations in the information and its i mposition of thecorresponding penalty imposed by the law on such given facts are therefore sufficient compliance with the constitutional requirement. This Court agrees with the trial court that the prosecution evidence hasshown be yond reasonable doubt that accused-appellant engaged inunlawful recruitment and placement activities. Accused-appellant promisedthe four complainants employment as domestic helpers in Kuwait. Article13 (b) of the Labor Code defines recruitm ent and placement as referring toany act of canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring workers, and includes referrals, contract services, promisingor adv ertising for employment locally or abroad whether for profit or not; provided that any person or entity which in any manner offers or promisesfor a f ee employment to two or more persons shall be deemed engaged inrecruitment and p lacement.33 All the essential elements of the crime of illegal recruitment in large scale, which we have enumerated above, arepresent i n this case. The prosecution clearly established the fact that accused-appellant had nolicens e to recruit from the POEA. Yet, the latter entertained the four complainants when they applied, promised them jobs as domestic helpersin Kuwait, and collected fees from them for processing travel documentsonly to renege on h er promise and fail to return the money she collectedfrom complainants despite s everal demands. For engaging in recruitment of the four complainants without firstobtaining the necessary license from the POEA, accused-appellant, therefore, is guilty of illegal recruitment in large scale, an offense involving economic sabotage. She should, accordingly, be punished with lifeimprisonment an d a fine of P100,000 under Article 39 (a) of the LaborCode, as amended. ANTONIO M. SERRANO VS. GALLANT MARITIME SERVICES, INC. AND MARLOW NAVIGATION CO., INC. | GR No. 167614 March 24, 2009 FACTS: Petitioner Antonio Serrano was hired by respondents GallantMaritime Servi ces, Inc. and Marlow Navigation Co., Inc., under a POEAapproved contract of employment for 12 months, as Chief Officer, with thebasic m

onthly salary of US$1,400, plus $700/month overtime pay, and 7days paid vacation leave per month. On March 19, 1998, the date of his departure, Serrano was constrained toaccept a downgraded employment contract for the position of SecondOfficer with a monthly salary of US$1,000 upon the assurance andrepresentation of respondents that he would be Chief Officer by the end ofApril 1998. Respondents did not deliver on their promise to make Serrano ChiefOfficer. Hence , Serrano refused to stay on as second Officer and wasrepatriated to the Philipp ines on May 26, 1998, serving only two (2) months and seven (7) days of his contract, leaving an unexpired portion ofnine ( 9) months and twenty-three (23) days. Serrano filed with the Labor Arbiter (LA) a Complaint against respondentsfor con structive dismissal and for payment of his money claims in the totalamount of US $26,442.73 (based on the computation of $2590/month fromJune 1998 to February 19 9, $413.90 for March 1998, and $1640 for March1999) as well as moral and exempla ry damages. The LA declared the petitioner s dismissal illegal and awarded himUS$8,770, repres enting his salaray for three (3) months of the unexpiredportion of the aforesaid contract of employment, plus $45 for salarydifferential and for attorney s fees e quivalent to 10% of the total amount; however, no compensation for damages as prayed was awarded. On appeal, the NLRC modified the LA decision and awarded Serrano$4669.50, repres enting three (3) months salary at $1400/month, plus 445salary differential and 1 0% for attorney s fees. This decision was based onthe provision of RA 8042, which was made into law on July 15, 1995. Serrano filed a Motion for Partial Reconsideration, but this time he questioned the constitutionality of the last clause in the 5th paragraph ofSecti on 10 of RA 8042, which reads:

Sec. 10. Money Claims.

x x x In case of termination of overseas

employment without just, valid or authorized cause as defined by law or contract, the workers shall be entitled to the full reimbursement of his placement fee with interest of twelve percent (12%) per annum, plus his salaries for the unexpired portion of his employment contract or for three (3) months for every year of the unexpired term, whichever is less. The NLRC denied the Motion; hence, Serrano filed a Petition for Certiorari with the Court of Appeals (CA), reiterating the constitutional challengeagainst the subject clause. The CA affirmed the NLRC ruling on thereduction of the appli cable salary rate, but skirted the constitutional issueraised by herein petition er Serrano. ISSUES: 1. Whether or not the subject clause violates Section 10, Article IIIof the Constitution on non-impairment of contracts; 2. Whether or not the subject clause violate Section 1, Article III of theConsti tution, and Section 18, Article II and Section 3, Article XIII on labor as a protected sector. HELD: On the first issue. The answer is in the negative. Petitioner s claim that the subject clauseunduly in terferes with the stipulations in his contract on the term of hisemployment and the fixed salary package he will receive is not tenable. Section 10, Article III of the Constitution provides: No law impairing theobliga tion of contracts shall be passed. The prohibition is aligned with the general principle that laws newlyenacted hav e only a prospective operation, and cannot affect acts orcontracts already perfe cted; however, as to laws already in existence, theirprovisions are read into co ntracts and deemed a part thereof. Thus, thenon-impairment clause under Section 10, Article II is limited in applicationto laws about to be enacted that would i n any way derogate from existingacts or contracts by enlarging, abridging or in any manner changing theintention of the parties thereto. As aptly observed by the OSG, the enactment of R.A. No. 8042 in 1995preceded the execution of the employment contract between petitionerand respondents in 1998. Hence, it cannot be argued that R.A. No. 8042, particularly the subject clause, impaired the employment contract of theparties. Rather, when the parties executed their 1998 employmentcontract, they were deem ed to have incorporated into it all the provisionsof R.A. No. 8042. But even if the Court were to disregard the timeline, the subject clausemay not be declared unconstitutional on the ground that it impinges on the impairment clause, for the law was enacted in the exercise of the policepower of the State to regulate a business, profession or calling, particularlythe recrui tment and deployment of OFWs, with the noble end in view ofensuring respect for the dignity and well-being of OFWs wherever theymay be employed. Police power le gislations adopted by the State topromote the health, morals, peace, education, good order, safety, andgeneral welfare of the people are generally applicable no t only to futurecontracts but even to those already in existence, for all privat e contractsmust yield to the superior and legitimate measures taken by the State topromote public welfare.

On the second issue. The answer is in the affirmative. Section 1, Article III of the Constitution guarantees: No person shall bedeprive d of life, liberty, or property without due process of law nor shallany person b e denied the equal protection of the law. Section 18, Article II and Section 3, Article XIII accord all members of the labor sector, without distinction as to place of deployment, full protectionof t heir rights and welfare. To Filipino workers, the rights guaranteed under the foregoingconstitutional pro visions translate to economic security and parity: allmonetary benefits should b e equally enjoyed by workers of similarcategory, while all monetary obligations should be borne by them in equaldegree; none should be denied the protection of the laws which is enjoyedby, or spared the burden imposed on, others in like cir cumstances. Such rights are not absolute but subject to the inherent power of Congressto inc orporate, when it sees fit, a system of classification into itslegislation; howe ver, to be valid, the classification must comply with theserequirements: 1) it i s based on substantial distinctions; 2) it is germane tothe purposes of the law; 3) it is not limited to existing conditions only; and4) it applies equally to a ll members of the class. There are three levels of scrutiny at which the Court reviews theconstitutionali ty of a classification embodied in a law: a) the deferential orrational basis sc rutiny in which the challenged classification needs only beshown to be rationall y related to serving a legitimate state interest; b) themiddle-tier or intermedi ate scrutiny in which the government must showthat the challenged classification serves an important state interest andthat the classification is at least subst antially related to serving thatinterest; and c) strict judicial scrutiny in whi ch a legislative classificationwhich impermissibly interferes with the exercise of a fundamental right oroperates to the peculiar disadvantage of a suspect clas s is presumedunconstitutional, and the burden is upon the government to prove th at the

classification is necessary to achieve a compelling state interest and that itis the least restrictive means to protect such interest. Upon cursory reading, the subject clause appears facially neutral, for itapplies to all OFWs. However, a closer examination reveals that the subjectclause has a discriminatory intent against, and an invidious impact on, OFWs at two levels: First, OFWs with employment contracts of less than one year vis--visOFWs with emp loyment contracts of one year or more; Second, among OFWs with employment contracts of more than one year; and Third, OFWs vis--vis local workers with fixed-period employment; In sum, prior to R.A. No. 8042, OFWs and local workers with fixed-termemployment who were illegally discharged were treated alike in terms ofthe computation of their money claims: they were uniformly entitled totheir salaries for the entire unexpired portions of their contracts. But withthe enactment of R.A. No. 8042, specifically the adoption of the subjectclause, illegally dismissed OFWs with an unexpired portion of one year ormore in their employment contract have since be en differently treated inthat their money claims are subject to a 3-month cap, w hereas no suchlimitation is imposed on local workers with fixed-term employment. The Court concludes that the subject clause contains a suspectclassification in that, in the computation of the monetary benefits of fixedterm employees who are illegally discharged, it imposes a 3-month cap onthe clai m of OFWs with an unexpired portion of one year or more in theircontracts, but n one on the claims of other OFWs or local workers with fixed-term employment. The subject clause singles out one classification ofOFWs and burdens it with a peculiar disadvantage. There being a suspect classification involving a vulnerable sector protectedby t he Constitution, the Court now subjects the classification to a strictjudicial s crutiny, and determines whether it serves a compelling stateinterest through the least restrictive means. What constitutes compelling state interest is measured by the scale ofrights and powers arrayed in the Constitution and calibrated by history. Itis akin to the paramount interest of the state for which some individualliberties must give way , such as the public interest in safeguarding healthor maintaining medical stand ards, or in maintaining access to informationon matters of public concern. In the present case, the Court dug deep into the records but found nocompelling state interest that the subject clause may possibly serve. In fine, the Government has failed to discharge its burden of proving theexisten ce of a compelling state interest that would justify the perpetuationof the disc rimination against OFWs under the subject clause. Assuming that, as advanced by the OSG, the purpose of the subject clauseis to pr otect the employment of OFWs by mitigating the solidary liability ofplacement ag encies, such callous and cavalier rationale will have to berejected. There can n ever be a justification for any form of governmentaction that alleviates the bur den of one sector, but imposes the sameburden on another sector, especially when the favored sector is composedof private businesses such as placement agencies, while thedisadvantaged sector is composed of OFWs whose protection no less than

the Constitution commands. The idea that private business interest can beelevate d to the level of a compelling state interest is odious. Moreover, even if the purpose of the subject clause is to lessen the solidarylia bility of placement agencies vis-a-vis their foreign principals, there aremechan isms already in place that can be employed to achieve thatpurpose without infrin ging on the constitutional rights of OFWs. The POEA Rules and Regulations Governing the Recruitment andEmployment of Land-B ased Overseas Workers, dated February 4, 2002, imposes administrative disciplinary measures on erring foreign employerswho defa ult on their contractual obligations to migrant workers and/or theirPhilippine a gents. These disciplinary measures range from temporarydisqualification to preve ntive suspension. The POEA Rules and RegulationsGoverning the Recruitment and Em ployment of Seafarers, dated May 23,2003, contains similar administrative discip linary measures against erringforeign employers. Resort to these administrative measures is undoubtedly the less restrictivemeans of aiding local placement agencies in enforcing the solidary liabilityof their foreign principals. Thus, the subject clause in the 5th paragraph of Section 10 of R.A. No. 8042 is violative of the right of petitioner and other OFWs to equalprotection. The subject clause or for three months for every year of the unexpiredterm, which ever is less in the 5th paragraph of Section 10 of Republic ActNo. 8042 is DECLAR ED UNCONSTITUTIONAL. ANTONIO M. SERRANO VS. GALLANT MARITIME SERVICES, INC. FACTS: Petitioner Antonio Serrano was hired by respondents GallantMaritime Servi ces, Inc. and Marlow Navigation Co., Inc., under a POEAapproved contract of employment for 12 months, as Chief Officer, with thebasic m onthly salary of US$1,400, plus $700/month overtime pay, and 7days paid vacation leave per month.

On the date of his departure, Serrano was constrained to accept adowngraded empl oyment contract upon the assurance and representationof respondents that he woul d be Chief Officer by the end of April 1998. Respondents did not deliver on their promise to make Serrano ChiefOfficer. Hence, Serrano refused to stay on as second Officer and was repatriated tothe Ph ilippines, serving only two months and 7 days, leaving an unexpiredportion of ni ne months and twenty-three days. Upon complaint filed by Serrano before the Labor Arbiter (LA), thedismissal was declared illegal. On appeal, the NLRC modified the LA decision based on the provision of RA8042. Serrano filed a Motion for Partial Reconsideration, but this time he questioned the constitutionality of the last clause in the 5th paragraph ofSecti on 10 of RA 8042. ISSUES: 1. Whether or not the subject clause violates Section 10, Article III of theCons titution on non-impairment of contracts; 2. Whether or not the subject clause violate Section 1, Article III of theConsti tution, and Section 18, Article II and Section 3, Article XIII on labor as a protected sector. HELD: On the first issue. The answer is in the negative. Petitioner s claim that the subject clauseunduly in terferes with the stipulations in his contract on the term of hisemployment and the fixed salary package he will receive is not tenable. The subject clause may not be declared unconstitutional on the groundthat it imp inges on the impairment clause, for the law was enacted in theexercise of the po lice power of the State to regulate a business, professionor calling, particular ly the recruitment and deployment of OFWs, with thenoble end in view of ensuring respect for the dignity and well-being ofOFWs wherever they may be employed. On the second issue. The answer is in the affirmative. To Filipino workers, the rights guaranteed under the foregoingconstitutional pro visions translate to economic security and parity. Upon cursory reading, the subject clause appears facially neutral, for itapplies to all OFWs. However, a closer examination reveals that the subjectclause has a discriminatory intent against, and an invidious impact on, OFWs at two levels: First, OFWs with employment contracts of less than one year vis--visOFWs with emp loyment contracts of one year or more; Second, among OFWs with employment contracts of more than one year; and Third, OFWs vis--vis local workers with fixed-period employment; The subject clause singles out one classification of OFWs and burdens itwith a p

eculiar disadvantage. Thus, the subject clause in the 5th paragraph of Section 10 of R.A. No. 8042 is violative of the right of petitioner and other OFWs to equalprotection. The subject clause or for three months for every year of the unexpiredterm, which ever is less in the 5th paragraph of Section 10 of Republic ActNo. 8042 is DECLAR ED UNCONSTITUTIONAL. BECMEN SERVICE EXPORTER AND PROMOTION, INC. vs. SPOUSES SIMPLICIO and MILA CUARESMA, WHITE FALCON SERVICES, INC. and JAIME ORTIZ | GR No. 182978-79 FACTS: On January 6, 1997, Jasmin Cuaresma (Jasmin) was deployed byBecmen Servic e Exporter and Promotion, Inc. (Becmen) to serve asassistant nurse in Al-Birk Ho spital in the Kingdom of Saudi Arabia (KSA), fora contract duration of three yea rs, with a corresponding salary ofUS$247.00 per month. Over a year later, she di ed allegedly of poisoning. Jessie Fajardo, a co-worker of Jasmin, narrated that on June 21, 1998, Jasmin was found dead by a female cleaner lying on the floor inside herdormitory room with her mouth foaming and smelling of poison. Based on the police report and the medical report of the examiningphysician of t he Al-Birk Hospital, who conducted an autopsy of Jasmin sbody, the likely cause of her death was poisoning. Jasmin s body was repatriated to Manila on September 3, 1998. Thefollowing day, th e City Health Officer of Cabanatuan City conducted anautopsy and the resulting m edical report indicated that Jasmin died underviolent circumstances, and not poi soning as originally found by the KSAexamining physician. The toxicology report of the NBI, however, testednegative for non-volatile, metallic poison and insect icides. Simplicio and Mila Cuaresma (the Cuaresmas), Jasmin s parents and her

surviving heirs, received from the Overseas Workers Welfare Administration (OWWA) the following amounts: P50,000.00 for death benefits; P50,000.00 for loss of life; P20,000.00 for funeral expenses; and P10,000.00 for medical reimbursement. On November 22, 1999, the Cuaresmas filed a complaint against Becmen and its principal in the KSA, Rajab & Silsilah Company (Rajab), claiming death and insurance benefits, as well as moral and exemplary damages for Jasmin s death, Jasmin s death was work-related, having occurred at the employer s premises; that under Jasmin s contract with Becmen, she is entitled to iqama insurance coverage; that Jasmin is entitled to compensatory damages in the amount of US$103,740.00, which is the sum total of her monthly salary of US$247.00 per month under her employment contract, multiplied by 35 years (or the remaining years of her productive life had death not supervened at age 25, assuming that she lived and would have retired at age 60). In their position paper, Becmen and Rajab insist that Jasmin committed suicide, citing a prior unsuccessful suicide attempt sometime in March or April 1998 and relying on the medical report of the examining physician of the Al-Birk Hospital. They likewise deny liability because the Cuaresmas already recovered death and other benefits totaling P130,000.00 from the OWWA. They insist that the Cuaresmas are not entitled to iqama insurance because this refers to the issuance not insurance of iqama, or residency/work permit required in the KSA. On the issue of moral and exemplary damages, they claim that the Cuaresmas are not entitled to the same because they have not acted with fraud, nor have they been in bad faith in handling Jasmin s case. While the case was pending, Becmen filed a manifestation substitution alleging that Rajab terminated their agency had appointed White Falcon Services, Inc. (White Falcon) recruitment agent in the Philippines. Thus, White Falcon respondent as well, and it adopted and reiterated Becmen the position paper it subsequently filed. and motion for relationship and as its new was impleaded as s arguments in

ISSUES: (1.) whether the Cuaresmas are entitled to monetary claims, by way of benefits and damages, for the death of their daughter Jasmin. (2) whether or not Jasmin s death be considered as work-connected andthus compensa ble even while she was not on duty; HELD: Article 19 of the Civil Code provides that every person must, in theexerci se of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith. Article 21 ofthe Code states that any person who wilfully causes loss or injury toanother in a manner that is contrary to morals, good customs or publicpolicy shall compensate the l atter for the damage. And, lastly, Article 24requires that in all contractual, p roperty or other relations, when one of theparties is at a disadvantage on accou nt of his moral dependence, ignorance, indigence, mental weakness, tender age or other handicap, the courts must be vigilant for his protection.

Clearly, Rajab, Becmen and White Falcon s acts and omissions are againstpublic pol icy because they undermine and subvert the interest and generalwelfare of our OF Ws abroad, who are entitled to full protection under thelaw. They set an awful e xample of how foreign employers and recruitmentagencies should treat and act wit h respect to their distressed employeesand workers abroad. Their shabby and call ous treatment of Jasmin s case; their uncaring attitude; their unjustified failure and refusal to assist in thed etermination of the true circumstances surrounding her mysterious death, and instead finding satisfaction in the unreasonable insistence that shecommitte d suicide just so they can conveniently avoid pecuniary liability; placing their own corporate interests above of the welfare of theiremployee s all these are contrary to morals, good customs and publicpolicy, and constitute taki ng advantage of the poor employee and herfamily s ignorance, helplessness, indigen ce and lack of power andresources to seek the truth and obtain justice for the d eath of a loved one. Giving in handily to the idea that Jasmin committed suicide, and adamantlyinsist ing on it just to protect Rajab and Becmen s material interest despite evidence to the contrary is against the moral law and runscontrary to th e good custom of not denouncing one s fellowmen for allegedgrave wrongdoings that undermine their good name and honor. Whether employed locally or overseas, all Filipino workers enjoy theprotective m antle of Philippine labor and social legislation, contractstipulations to the co ntrary notwithstanding. This pronouncement is inkeeping with the basic public po licy of the State to afford protection tolabor, promote full employment, ensure equal work opportunitiesregardless of sex, race or creed, and regulate the relat ions betweenworkers and employers. This ruling is likewise rendered imperative b yArticle 17 of the Civil Code which states that laws which have for their object public order, public policy and good customs shall not be renderedineffec tive by laws or judgments promulgated, or by determinations orconventions agreed upon in a foreign country. The relations between capital and labor are so impressed with publicinterest,and neither shall act oppressively against the other, or impair theinterest or conv enience of the public. In case of doubt, all labor legislationand all labor cont racts shall be construed in favor of the safety and decentliving for the laborer . The grant of moral damages to the employee by reason of misconduct onthe part of the employer is sanctioned by Article 2219 (10) of the CivilCode, which allows recovery of such damages in actions referred to inArticle 21. Thus, in view of o moral damages, to pay, together y way of example the foregoing, the Court holds that the Cuaresmas areentitled t which Becmen and White Falcon are jointly andsolidarily liable with exemplary damages for wanton andoppressive behavior, and b for the public good.

On the second issue: While the employer s premises may be defined very broadly not only toinclude premise s owned by it, but also premises it leases, hires, supplies oruses, we are not p repared to rule that the dormitory wherein Jasmin stayedshould constitute employ er s premises as would allow a finding that deathor injury therein is considered t o have been incurred or sustained in thecourse of or arose out of her employment . There are certainly exceptions, but they do not appear to apply here. Moreover, a complete determinationwould ha ve to depend on the unique circumstances obtaining and theoverall factual enviro nment of the case, which are here lacking. WHEREFORE, Rajab & Silsilah Company, White Falcon Services, Inc., Becmen Service Exporter and Promotion, Inc., and their corporate directorsand of ficers are found jointly and solidarily liable and ORDERED toindemnify the heirs of Jasmin Cuaresma, spouses Simplicio and MilaCuaresma, the following amounts: (1) TWO MILLION FIVE HUNDREDTHOUSAND PESOS (P2,500,000.00) as moral damages; (2) TWO MILLIONFIVE HUNDRED THOUSAND PESOS (P2,500,000.00) as exemplary damages; (3)Attorney s fees equivalent to ten percent (10%) of the total monetaryaward. Carmen Ritualo v People of the Philippines This case originated from two Informations, both dated 2 January 2001, which charged Ritualo with the crimes of Illegal Recruitment defined and penalized by Republic Act No. 8042; and Estafa under Art. 315, par. 2(a) of the Revised Penal Code, In 1993, Felix Biacora went to Saudi Arabia for overseas employment thatwas faci litated by one Cynthia Libutan (Libutan) who worked for arecruitment agency.12 S everal years after his return to the country, Biacoraaccidentally met Libutan in Baclaran Church sometime in 2000. After theyexchanged pleasantries, the former signified to the latter his desire to seekanother overseas employment. Libutan t hen gave Biacora the name, address and contact number of her friend, one Carmen Ritualo, the petitioner herein, who was able to help Libutan s sister find work inAustralia. Bi acora thereafter called petitioner Ritualo to set up a meeting. On 1 May 2000, accompanied by his wife, Biacora went to the house ofpetitioner R itualo and inquired from her whether she could help him secureoverseas employmen t in Australia. Petitioner Ritualo answered in theaffirmative, and to be convinc ing, brought out travel documents of severalpeople she was able to "help," who w ere then supposedly scheduled toleave for abroad pretty soon.13 Biacora was then assured that: [He could] leave for Australia [in a month s time] if [he] will give [petitionerRi tualo] a total amount of P160,000.00, and [his] salary would beUS$700.00 per mon th as a farm worker.14 On the above-quoted representation on the same date, Biacora paidpetitioner Ritu alo the amount of P40,000.00 as downpayment, with thebalance to be completed bef ore he left for Australia. Upon receipt of themoney, petitioner Ritualo issued B iacora a Cash Voucher15 as evidence of said payment. To complete their transaction, Biacora left her a copy of hisBio-d ata.16 On 4 May 2000, Biacora again gave petitioner Ritualo P20,000.00 as additional payment, making the total amount received by thelatter P60,000.00. Ag ain, petitioner Ritualo issued a Cash Voucher.17

Subsequently, Biacora was informed by petitioner Ritualo that all heneeded in se curing an employment in Australia was his Passport and anendorsement from the Re presentative of his district. Accompanied bypetitioner Ritualo and one Anita Ser aspe, the assistant18 of the former, Biacora went to the Batasan Pambansa to secure the necessaryendorsement. Thereaf ter, all three went to the Australian Embassy to applyfor Biacora s working visa. On 1 June 2000, Biacora went to see petitioner Ritualo to follow up thedate of h is departure. Petitioner Ritualo asked from Biacoraanother P20,000.00 and told t he latter to be patient. As with the otheramounts given, proof of payment19 was similarly issued to acknowledge receipt thereof. Several dates were set for Biacora s departure, but none pushed through. To top it all, his Australian Visa application was denied by the AustralianEmbas sy. Consequently, on 9 September 2000, Biacora demanded frompetitioner Ritualo t he return of the P80,000.00. The latter promised to payback the money on the 13t h of September 2000. None came. Thereafter, Biacora filed the subject criminal complaints against petitionerRitu alo. In two Certifications dated 23 October 200020 and 5 November 2003,21 respectively, both identified by Belen Blones of the LicensingDivision o f the POEA, it was confirmed that "per available records of [its] Office, CARMEN RITUALO, in her personal capacity is not licensed by thisAdminist ration to recruit workers for overseas employment"22 ; and that "[a]ny recruitment activity undertaken by [her] is deemed illegal."23 To rebut the foregoing evidence presented by the prosecution, the defensepresent ed a diametrically opposed version of the facts of the present casethrough the s ole testimony of Ritualo.

In her testimony, Ritualo narrated that it was Libutan and Biacora whoasked her to introduce them to a certain Anita Seraspe, the personresponsible for sending petitioner Ritualo s own sister to Australia;24 that she had no agreement with Biacora respecting the latter s employment inAustralia; that any talk of money was made among Libutan, Biacora andSeraspe only; that she received a total of P80,000.00 from Biacora, but that the same was merely entrusted to her because Libutan and Biacorahad just me t Seraspe,25 and that she turned over all the payments toSeraspe who acknowledge d receipt of the same by writing on pieces ofpaper said acceptance; that she acc ompanied Biacora to BatasanPambansa at his request; that she did not earn any mo ney out of herreferral and introduction of Libutan and Biacora to Seraspe; that even ifshe did not earn any money out of the subject transaction, shereturned P1 0,000.00 and P31,000.00, or a total of P41,000.00, to Biacora out of fear that the latter would file charges against her; that she tried tofin d Seraspe, but the latter could not be found at her last known address; and that she gave Biacora an additional P6,000.000 to obviate any more scandal befalling her family.26 On 1 December 2004, after trial, the RTC found the evidence presented by the prosecution to be more credible and logical than that presented by the defense and thus, convicted Ritualo for the crimes of Simple Illegal Recruitment and Estafa, defined and penalized under the Migrant Workers and Overseas Filipino Act of 1995 and the Revised Penal Code. ISSUES: I. WHETHER THE HONORABLE COURT OF APPEALS ERRED IN AFFIRMING WITH MODIFICATION THE DECISION OF THE REGIONAL TRIAL COURT DESPITE THE FACT THAT THE EVIDENCE ON RECORD COULD NOT SUPPORT A CONVICTION; and II. ASSUMING ARGUENDO THAT THE PETITIONER IS CULPABLE, THE HONORABLE COURT OF APPEALS ERRED IN MODIFYING THE DECISION OF THE REGIONAL TRIAL COURT AS REGARDS THE TERM OF SENTENCE IN THE ILLEGAL RECRUITMENT CASE. HELD: Essentially, she argues that there "was no proof beyond reasonabledoubt th at x x x [she] gave Biacora a distinct impression that she had thepower or abili ty to send him abroad for work such that the latter wasconvinced to part with hi s money."37 Petitioner Ritualo maintains that Biacora transacted with Seraspe and not with her. Assuming for the sake ofargume nt that she and Biacora had any agreement with each other, petitioner Ritualo insisted that it was merely to facilitate the latter sapplicati on for an Australian Visa. Particularly, she pointed out that theprosecution fai led to present other witnesses who could have corroboratedthe claim of Biacora t hat she (Ritualo) promised him employment abroad. Anent the penalty imposed by the courts, petitioner disputed the appellatecourt s reasoning and claimed that the same was improper in view of the ruling of this Court in People v. Gallardo,38 in which therein respondent wasals o convicted of Simple Illegal Recruitment. The Office of the Solicitor General, for the People of the Philippines, on theot her hand, asserted that the findings of the Court of Appeals weresupported by th e records of the case, i.e., "Biacora was consistent in histestimony that it was petitioner who illegally recruited him for work as afarmhand in Australia." Thu s, "[a]s against the positive and categoricaltestimony of the private complainan t (Biacora), petitioner s denial cannotprevail."

We find no merit in the petition. Having weighed the evidence for the contending parties, there is no cogentreason to reverse the findings and conclusion of the RTC as affirmed by theCourt of Ap peals. The prosecution established, through Belen Blones of the Licensing Branchof the POEA, who identified and confirmed the two Certifications issued bythe POEA Lice nsing Branch, that "per available records of [its] Office, CARMEN RITUALO, in her personal capacity is not licensed by thisAdminist ration to recruit workers for overseas employment."40 As to the second element, it must be shown that the accused gave theprivate comp lainant the distinct impression that he/she had the power orability to send the private complainant abroad for work, such that thelatter was convinced to part w ith his/her money in order to beemployed.41 Thus, to be engaged in illegal recru itment, it is plain that theremust at least be a promise or an offer of employme nt from the personposing as a recruiter whether locally or abroad.42 In the case at bar, the second element is similarly present. As testified to by Biacora, petitionerRitua lo professed to have the ability to send him overseas to be employedas a farm wo rker in Australia with a monthly salary of US$700.00.43 To further wet Biacora s appetite, petitioner Ritualo even showed himpurported travel documents of other people about to depart, whoseoverseas employment she suppose dly facilitated. That petitioner Ritualopersonally assisted Biacora in the compl etion of the alleged requirements, i.e., securing a Letter of Request and Guarantee from the Representativeof his C ongressional District in Batangas to ensure the approval ofBiacora s application f or an Australian Visa, even accompanying Biacora tothe Australian Embassy, all c learly point to her efforts to convince Biacorathat she (petitioner Ritualo) had , indeed, the ability and influence to makeBiacora s dream of overseas employment come true. The claim of petitioner Ritualo that it was Anita Seraspe who was really therecr uiter and the one who profited from the subject illegal transactionholds no wate r. Petitioner Ritualo s act of receiving payment from Biacoraand issuing personal receipts therefor; of personally assisting Biacora tocomplete the "necessary" do cuments; of failing to present evidence to

corroborate her testimony despite several opportunities given her by thetrial co urt; of petitioner Ritualo having been positively identified as theperson who tr ansacted with Biacora and promised the latter an overseasemployment and who pers onally received money from Biacora, allunhesitatingly point to petitioner Ritual o as the culprit. Petitioner Ritualo next tried to impress upon this Court that she receivednary a centavo from the subject illegal transaction; therefore, she shouldnot be held liable. We reject this outright. In the first place, it has been abundantly shownthat sh e really received the monies from Biacora. Secondly, even withoutconsideration f or her services, she still engaged in recruitment activities, since it was satisfactorily shown that she promised overseas employmentto Biacor a. And, more importantly, Sec. 6 of Republic Act No. 8042 doesnot require that t he illegal recruitment be done for profit. Petitioner Ritualo boldly but vainly tried to inject reasonable doubt bycomplain ing that the RTC and the Court of Appeals affirmed her convictiondespite failure of the prosecution to present other vital witness, i.e., Biacora s wife, who accompanied her husband to the house of petitionerRitualo and, hence, witnessed what happened on the first meetingbetween the latter and Biaco ra. Non-presentation of said witness, according to petitioner Ritualo, raises the presumption that her testimony, if presented, would be adverse to the prosecution. The prosecution is entitled to conduct its own case and to decide whatwitnesses to call to support its charges.48The defense posture that the nonpresentation of the wife of Biacora constitutes suppression of evidencefavorable to petitioner Ritualo is fallacious. In fact, the same line ofreasoning can be used against petitioner Ritualo. If the defense felt thatthe testimony of Biacor a s wife would support her defense, what she couldand should have done was to call her (Biacora s wife) to the stand as herown witness. One of the constitutional ri ghts of the accused is "to havecompulsory process to secure the attendance of wi tnesses and theproduction of evidence in his behalf." And, in the same vein, sin cepetitioner Ritualo is setting the cloak of liability on Seraspe s shoulder, she( petitioner Ritualo) could and should have had the former subpoenaed aswell. As held by this Court, the adverse presumption of suppression of evidencedoes no t, moreover, apply where the evidence suppressed is merelycorroborative or cumul ative in nature.49 If presented, Biacora s wife wouldmerely corroborate Biacora s ac count which, by itself, already detailedwhat occurred on the day of the parties f irst meeting at the house ofpetitioner Ritualo. Hence, the prosecution committed no fatal error indispensing with the testimony of Biacora s wife. Finally, Biacora, the private complainant in this case, did not harbor any illmo tive to testify falsely against petitioner Ritualo. The latter failed to showany animosity or ill feeling on the part of Biacora that could havemotivated him to falsely accuse her of the crimes charged. It would beagainst human nature and e xperience for strangers to conspire and accuseanother stranger of a most serious crime just to mollify their hurtfeelings.50 The totality of the evidence in the case at bar, when scrutinized and takentoget her, leads to no other conclusion than that petitioner Ritualo engagedin recruit ing and promising overseas employment to Felix Biacora underthe above-quoted Sec . 6 of Republic Act No. 8042 vis--vis Article 13(b) ofthe Labor Code. Hence, she cannot now feign ignorance of theconsequences of her unlawful acts. (1) In Criminal Case No. 01-0076, petitioner Carmen Ritualo isfound GUILTY beyon

d reasonable doubt of the crime of SimpleIllegal Recruitment, and is sentenced t o suffer an indeterminateprison term of eight (8) years and one (1) day as minim um, totwelve (12) years, as maximum, and to pay a fine of P500,000.00; and (2) In Criminal Case No. 01-0077, petitioner Carmen Ritualo is alsofound GUILTY beyond reasonable doubt of the crime of Estafa andsentenced to suffer an indeter minate prison term of four (4) yearsand two (2) months of prision correccional, as minimum, to eleven (11) years and eight (8) months and twenty-one (21) days ofprision mayor, as max imum. Petitioner Carmen R. Ritualo is similarly ORDERED to indemnify Felix E. Biacora the amount of P21,000.00. Costs de oficio. Letran Calamba Faculty v. NLRC | GR No. 156225 | 29 January 2008 Austria-Martinez, J FACTS: In 1992, the Letran Calamba Faculty and Employees Associationfiled with t he NLRC a complaint against Colegio de San Juan de Letran, Calamba for collection of various monetary claims due to its members. In1994, th e Association held a strike. On January 29, 1993, respondent filed its Position Paper denying all theallegati ons of petitioner. On March 10, 1993, petitioner filed its Reply. Prior to the filing of the above-mentioned complaint, petitioner filed aseparate complaint against the respondent for money claims with RegionalOffice No. IV of the Department of Labor and Employment (DOLE).

On the other hand, pending resolution of NLRC Case No. RAB-IV-10-456092L, respondent filed with Regional Arbitration Branch No. IV of the NLRCa petitio n to declare as illegal a strike staged by petitioner in January 1994. Subsequently, these three cases were consolidated. The case for moneyclaims was originally filed by petitioner with the DOLE. The Labor Arbiter dismissed the Association s money claims, and alsodismissed Letr an s petition to declare the strike illegal. The NLRC affirmedthe Labor Arbiter on appeal. The CA also affirmed the NLRC. ISSUEs: 1. W/N the CA can review the factual findings and legal conclusions ofthe NLRC in a special civil action for certiorari. 2. W/N a teacher s overload pay should be considered in the computation of his or her 13th month pay. HELD: NO. The Court finds no error in the ruling of the CA that sincenowhere in the petition is there any acceptable demonstration that the LAor the NLRC acted either with grave abuse of discretion or without or inexcess of its jurisdiction , the appellate court has no reason to look into thecorrectness of the evaluatio n of evidence which supports the labortribunals findings of fact. NO. Overload pay should be excluded in the computation of the 13th month pay of the Association s members. The peculiarity of an overload lies in thefact t hat it may be performed within the normal eight-hour working day. This is the only reason why the DOLE, in its explanatory bulletin, finds itprope r to include a teacher s overload pay in the determination of his orher 13th month pay. However, the DOLE loses sight of the fact that even ifit is performed with in the normal eight-hour working day, an overload isstill an additional or extra teaching work which is performed after theregular teaching load has been comple ted. Hence, any pay given ascompensation for such additional work should be cons idered as extra andnot deemed as part of the regular or basic salary RATIONALE: The appellate court s jurisdiction to review a decision of theNLRC in a petition for certiorari is confined to issues of jurisdiction or graveabuse of discretion. An extraordinary remedy, a petition for certiorari is available only and restrictively in truly exceptional cases. The sole office oft he writ of certiorari is the correction of errors of jurisdiction including thec ommission of grave abuse of discretion amounting to lack or excess ofjurisdictio n. The writ of certiorari does not include correction of the NLRC s evaluation of the evidence or of its factual findings. Such findings aregenerall y accorded not only respect but also finality. A party assailing suchfindings be ars the burden of showing that the tribunal acted capriciouslyand whimsically or in total disregard of evidence material to thecontroversy, in order that the ex traordinary writ of certiorari will lie. Settled is the rule that the findings of the LA, when affirmed by the NLRCand th e CA, are binding on the Supreme Court, unless patently erroneous. The Supreme Court is not a trier of facts, and this applies with greaterforce in labor cases. Findings of fact of administrative agencies and quasijudicial bodies, which have acquired expertise because their jurisdiction isconf ined to specific matters, are generally accorded not only great respectbut even finality. Basic wage means all remuneration or earnings paid by an employer to aworker for

services rendered on normal working days and hours but doesnot include cost of living allowances, 13th month pay or other monetarybenefits which are not consid ered as part of or integrated into the regularsalary of the workers. Overload vs. Overtime: Overtime work is work rendered in excess of normal working hours of eight in a day. Overload work is additional workafter co mpleting the regular workload, may be performed either within oroutside eight ho urs in a day, and may or may not be considered overtimework. What are deemed not part of the basic salary: a. Cost of living allowances granted pursuant to PD 525 and LOI 174; b. Profit sharing payments; c. All allowances and monetary benefits which are not considered orintegrated as pa rt of the regular basic salary of the employee atthe time of the promulgation of the Decree; Overtime pay, earnings, and other remunerations as provided for by PD851 s IRR. ROMEO LAGATIC, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, CITYLAND DEVELOPMENT CORPORATION, STEPHEN ROXAS, JESUS GO, GRACE LIUSON, and ANDREW LIUSON, respondents | G.R. No. 121004 | January 28, 1998 | J. Romero NATURE Petition by certiorari FACTS -Petitioner Romeo Lagatic was employed by Cityland as a marketingspecialist. He was tasked with soliciting sales for the company, with thecorresponding duties o f accepting call-ins, referrals, and making client callsand cold calls. Cold cal ls refer to the practice of prospecting for clientsthrough the telephone directo ry. -In order to assess cold calls made by the sales staff, as well as todetermine t he results thereof, Cityland requires the submission of dailyprogress reports on the same. -On October 22, 1991, Cityland issued a written reprimand to petitioner forhis f ailure to submit cold call reports for certain days of September & October 1991. This notwithstanding, petitioner again failed to submit cold

call reports for September & October 1992. Petitioner was required toexplain his inaction, with a warning that further non-compliance wouldresult in his termina tion from the company. In a reply, petitioner claimedthat the same was an honest omission brought about by his concentrationon other aspects of his job. Citylan d found said excuse inadequate andsuspended him for three days, with a similar w arning. -Notwithstanding the aforesaid suspension and warning, petitioner againfailed to submit cold call reports for February 1993. He was verballyreminded to submit t he same and was even given up to February 17, 1993to do so. Instead of complying with said directive, petitioner wrote a note, TO HELL WITH COLD CALLS! WHO CARES? and exhibited the same to his co-employees. -Petitioner received a memorandum requiring him to explain why Citylandshould no t make good its previous warning for his failure to submit coldcall reports, as well as for issuing the written statement aforementioned. Petitioner sent a letter-reply alleging that his failure to submit cold callrepo rts should not be deemed as gross insubordination. He denied anyknowledge of the damaging statement, TO HELL WITH COLD CALLS! -Finding petitioner guilty of gross insubordination, Cityland served a noticeof dismissal upon him. Petitioner filed a complaint against Cityland forillegal dis missal, illegal deduction, underpayment, overtime and rest daypay, damages and a ttorney s fees. -The labor arbiter dismissed the petition for lack of merit. On appeal, thesame was affirmed by the NLRC; hence the present recourse. ISSUE 1. WON respondent NLRC gravely abused its discretion in not finding thatpetition er was illegally dismissed 2. WON respondent NLRC gravely abused its discretion in ruling thatpetitioner is not entitled to salary differentials, backwages, separation pay, overtime pay, rest day pay, unpaid commissions, moral and exemplarydamages and a ttorney s fees HELD 1. NO Ratio Except as provided for, or limited by, special laws, an employer isfree to regulate, according to his discretion and judgment, all aspects ofemployment. Em ployers may, thus, make reasonable rules and regulations for the government of their employees, and when employees, with knowledge of an established rule, enter the service, the rule becomesa part of the contract of employment. It is also generally recognized thatcompany poli cies and regulations, unless shown to be grossly oppressiveor contrary to law, a re generally valid and binding on the parties and mustbe complied with. Reasoning -Said company policy of requiring cold calls and the concomitant reports thereon is clearly reasonable and lawful, sufficiently known to petitioner, and in connection with the duties which he had been engaged to discharge. There is, thus, just cause for his dismissal. -Based on the foregoing, we find petitioner guilty of willful disobedience. Willful disobedience requires the concurrence of at least two requisites: the employee s assailed conduct must have been willful or intentional, thewillfulness being characterized by a wrongful and perverse attitude; andthe order violated m ust have been reasonable, lawful, made known to the employee and must pertain to the duties which he had been engaged todischarge. -Well settled is the dictum that the twin requirements of notice and

hearing constitute the elements of due process in the dismissal of employees. Thus, the employer must furnish the employee with two written notices before the termination of employment can be effected. The first apprises the employee of the particular acts or omissions for which hisdis missal is sought; the second informs him of the employer s decision todismiss him. -The chronology of events clearly shows that petitioner was served withthe requi red written notices. -The requirement of a hearing is complied with as long as there was anopportunit y to be heard, and not necessarily that an actual hearing beconducted. Petitione r had an opportunity to be heard as he submitted aletter-reply to the charge. He , however, adduced no other evidence on his behalf. In fact, he admitted his failure to submit cold call reports, prayingtha t the same be not considered as gross insubordination. -Denials are weak forms of defenses, particularly when they are not substantiated by clear and convincing evidence. Given the foregoing, wehold that petitioner s constitutional right to due process has not been violated. 2. NO -There is no law which requires employers to pay commissions, and whenthey do so , there is no law which prescribes a method for computingcommissions. The determ ination of the amount of commissions is the result of collective bargaining negotiations, individual employment contracts or established employer practice. Since the formula for the computation of commissions was presented to and accepted by petitioner, such prescribed formula is in order. -Petitioner failed to show his entitlement to overtime and rest day paydue, to t he lack of sufficient evidence as to the number of days and hourswhen he rendere d overtime and rest day work. Entitlement to overtimepay must first be establish ed by proof that said overtime work was actuallyperformed, before an employee ma y avail of said benefit. -Lastly, with the finding that petitioner s dismissal was for a just and validcaus e, his claims for moral and exemplary damages, as well as attorney sfees, must fai l. Disposition AFFIRMED. G.R. No. 122240. November 18, 1999 | Legahi v. NLRC | KAPUNAN, J.: Facts: In a complaint filed with the Philippine Overseas EmploymentAdministratio n (POEA), Cristonico B. Legahi alleged that he was hired asChief Cook aboard M/V Federal Nord by the Northsouth Ship Management(PTE), Ltd., Singapore and repres ented by its local agent United PhilippineLines, Inc. (UPLI).

The contract of employment stipulated that his term of employment wasfor ten mon ths beginning October 9, 1992 with a basic monthly salary ofUS$450.00 with 44 ho urs weekly as minimum number of hours workedwith a fixed overtime pay (OT) of $1 85.00 and three (3) days leave withpay every month. Sometime in November, 1992 petitioner was asked by the Shipmaster toprepare a vi ctualling cost statement for the month of October, 1992. Afterlearning that such preparation involves mathematical skills, as it wouldrequire estimation of food cost, value of stocks, etc. he intimated that hedid not know how to do such wor k as it was not part of the duties of a chiefcook. He was told that it was not a difficult job and that he only needed tocopy the previous forms. After much rel uctance, petitioner nonethelessprepared the statement in deference to the Shipma ster. In December, petitioner was requested again to prepare the victuallingcost state ment for the month of November. He obeyed since he was afraidhe would earn the i re of his superiors if he refused. Sometime in January, 1993, the Shipmaster asked petitioner to do thevictualling cost statement for December which he complied. On January 6,1993, the Shipmaster requested the petitioner to prepare a correctedvictualling statement for the sa me month of December. Petitioner askedthe Shipmaster if he could defer the corre ction as he was busy doing hischores. The response certainly did not sit well wi th the Shipmaster so hewas called for a meeting which petitioner did not attend. On January 14, 1993, a committee was formed headed by the Shipmasterhimself with the Chief Officer, Chief Engineer and Bosun as members. In this meeting, the Shipmaster read to him the offenses he committed onboard. H e was asked to answer the charges but petitioner opted to remainsilent. Thereaft er, petitioner was informed that he was dismissed. The next day, petitioner was repatriated to the Philippine through theassistance of the Philippine Consulate. Upon arrival or on February 16, 1993, petitioner filed with the POEA acomplaint for illegal dismissal against private respondents. He sought thepayment of his s alary corresponding to the unexpired portion of hiscontract, unpaid overtime pay , leave pay, salary differential and damages. In answer to the complaint, private respondent stated that prior topetitioners d eployment, he was asked if he knew how to prepare thevictualling cost statement which he answered yes. On January 6, 1993, petitioner was asked to prepare the statement. He refused and evenarrogantly rep lied that the Shipmaster should let some other officer do thejob since he only c ame to the ship to cook. On January 13, 1993, petitioner left the vessel without permission and did not perform his job that day. OnJanua ry 14, 1993, a committee was formed to hear the case of petitioner. Petitioner remained silent so the committee decided to send him home. Contrary to petitioners allegation, it was not the Philippine Consulate, butthe shipowners agent, Navios Ship Agencies, which arranged hisrepatriation. The resp ondent noticed petitioner to be very homesick andsurmised that he deliberately c ommitted the offenses just so he could besent home. Upon his return, petitioner did not even report to the localrepresentative UPLI implying that he had no caus e of action against them. Petitioner was terminated for just cause and must, therefore, reimburseprivate r espondent for the cost of repatriation.

On April 6, 1994, the POEA promulgated a decision finding that there wasjust cau se for petitioners dismissal. On appeal to the National Labor Relations Commission (NLRC), theCommission affir med in toto the POEA decision. Issue: The validity of petitioner s dismissal from his employment Held: To constitute a valid dismissal from employment, two (2) requisitesmust co ncur: (a) the dismissal must be for any of the causes provided inArticle 282 of the Labor Code, and (b) the employee must be accorded dueprocess, the elements o f which are notice and the opportunity to be heardand to defend himself. Procedural due process requires that the employee must be apprised ofthe charges against him. He must be given reasonable time to answer thecharges, allowed amp le opportunity to be heard and defend himself, andassisted by a representative i f the employee so desires. Two writtennotices are required before termination of employment can be legallyeffected. They are: (1) notice which apprises the empl oyee of the particularacts or omissions for which his dismissal is sought, and ( 2) the subsequentnotice which informs the employee of the employers decision to dismisshim; not to mention the opportunity to answer and rebut the chargesagains t him, in between such notices. In the case at bar, the evidence on record belies private respondentsclaim that petitioner was afforded due process. It is rather apparent thatas early as Janua ry 6, 1993, the employer had already decided to dismisspetitioner and sent home for his alleged refusal to obey the orders of hissuperiors. On January 14, 1993, the committee read to petitioner hisalleged offenses which were his refusal to take orders from his superior onJanuary 6 and his leaving the vessel without per mission on January 13. When petitioner remained silent, the committee informed him that he wasdismissed . He was sent home that same day. Petitioner was not givenreasonable time to ans wer the charges hurled against him or to defendhimself. The notice apprising him of the charges and the notice ofdismissal were done in one morning all in the J anuary 14 committee

hearing. The submission that the entry in ted that for petitioner s refusal to take l be sent home in first possible port was ce requirement is not well-taken. This is ue process contemplated by law.

the logbook made on January 6which sta orders from the master ofthe ship he wil sufficientcompliance of the first noti not thekind of notice that satisfies d

On the substantive issue, we find no just cause for petitioner s dismissal. According to the POEA, petitioner was found guilty for insubordination forhis re fusal to obey the order of the master to prepare the victual statementon January 6, 1993,[6 which was presumably for the month of January. The NLRC, which simply adopted in toto the findings of the POEA, concluded that complainant refused albeit in a bad manner the request ofthe Ship master to prepare a correct victualling cost statement for themonth of December. Based on the POEA findings, petitioner was dismissedbecause of his refusal to p repare the victualling statement for the month ofJanuary, 1993. The facts as fou nd by the POEA are all muddled up. On the other hand, the NLRCs conclusion that petitioner refused to correctthe vi ctualling statement for the month of December as ordered to, wasalso not suffici ent basis for his dismissal. There is no doubt that petitionerhad complied with his superiors orders to prepare the statement forDecember. It was only the corre ction of the December statement that herequested to defer which the Shipmaster t ook as a downright refusal tomake and considered such act as a serious and gross insubordination. For willful disobedience to be considered as just cause for dismissal, theemploy ees conduct must be willful or intentional, the willfulness beingcharacterized b y a wrongful and perverse attitude and the order violatedmust have been reasonab le, lawful, made known to the employee andmust pertain to the duties which he ha s been engaged to discharge. In the instant case, it was actually not petitioner s duty to prepare thevictualli ng statement. The allegation that this was part of his duty as chiefcook and the fact that he was aware of such duty when he was interviewedfor the post is only self-serving and without basis. The employmentcontract does not mention anythin g that this was part of his duty as chiefcook. Even assuming that petitioner ref used to obey the order of hissuperior to prepare a corrected victualling cost st atement for December, although he maintained that he just asked for time to do it, as he was thenbusy performing his usual duty, which we believe to be the case, hisrefusal cannot be considered as one being characterized by a wrongful andperverse attitude. From the beginning, petitioner already intimated that hedid not know how to accomplis h the victual cost statement since it entailedsome mathematical skills which he admittedly did not have. Petitioners dismissal without a valid cause constitute a breach of contract. Consequently, he should only be paid the unexpired portion of hisemployment cont ract. In the same vein, the claim for the days leave pay for the unexpired portion of the contract is unwarranted since the same isgiven during the actual service of the seamen. The claim for moral and exemplary damages are deleted for lack ofsufficient basi s. Considering that petitioner was forced to litigate, we holdthat the amount of P10,000.00 is a reasonable and fair compensation forthe legal services rendered by counsel. The petition is GRANTED. G.R. No. 169434, March 28, 2008 | Dacut v. CA | QUISUMBING, J.

Facts: Petitioners Lazaro V. Dacut, Cesario G. Cajote, Romerlo F. Tungala, Lowel Z. Zubista, and Orlando P. Taboy were crew members of the LCT"BASILISA", a n inter-island cargo vessel owned by private respondent Sta. Clara International Transport and Equipment Corporation. On November 29, 1998, Dacut discovered a hole in the vessel's engineroom. The co mpany had the hole patched up with a piece of iron andcement. Despite the repair , Dacut and Tungala resigned in July 1999 dueto the vessel's alleged unseaworthi ness. On the other hand, Cajote went on leave from April 12-28, 1999 to undergoeye tre atment. Since then, he has incurred several unauthorized absences. Fearing that he will be charged as Absent Without Leave (AWOL), Cajoteresigned i n June 1999. On September 22, 1999, petitioners filed a complaint for constructivedismissal a mounting to illegal dismissal (except for Zubista and Taboy); underpayment of wages, special and regular holidays; non-payment of restdays, si ck and vacation leaves, night shift differentials, subsistenceallowance, and fix ed overtime pay; actual, moral and exemplary damages; and litigation costs and attorney's fees. Dacut and Tungala claimed that they resigned after Reynalyn G. Orlina, thesecret ary of the Personnel Manager, told them that they will be paid theirseparation p ay if they voluntarily resigned. They also resigned because thevessel has become unseaworthy after the company refused to have itrepaired properly. Meanwhile, C ajote alleged that he resigned because thecompany hired a replacement while he w as still on leave. When hereturned, the Operations Manager told him that he will be paid hisseparation pay if he voluntarily resigned; otherwise, he would be ch argedfor being AWOL. On the other hand, Zubista claimed that his wage wasbelow t he minimum set by the Regional Tripartite Wages and ProductivityBoard. Finally, petitioners alleged that they were not paid their rest days, sick and vacation leaves, night shift differentials, subsistence allowance, and fixed overtime pay. After the Labor Arbiter declared the case submitted for decision, the company filed its reply to petitioners' position paper. It countered thatDacut a nd Tungala voluntarily resigned due to the vessel's allegedunseaworthiness while Cajote resigned to avoid being charged as AWOL. It

also claimed that petitioners' monetary claims had no basis. On August 2, 2000, the Labor Arbiter dismissed petitioners' complaint. TheLabor Arbiter ruled that there was sufficient evidence to prove that thevessel was sea worthy. The Labor Arbiter noted that except for the holidaypay, accrued sick and vacation leaves, and wage differential, petitionersfailed to substantiate their monetary claims. Petitioners appealed to the NLRC alleging that the Labor Arbiter erred: (1) in entertaining the company's reply after the case had been submitted fordecisio n; (2) in not finding that Dacut, Cajote and Tungala wereconstructively dismisse d; (3) in not finding that petitioners were entitled totheir monetary claims; an d (4) in not finding that petitioners were entitledto actual, moral and exemplar y damages as well as litigation costs andattorney's fees. At this point, Dacut a nd Tungala further contended thatthey resigned because they were being harassed by the company due to acomplaint for violation of labor standards they had filed earlier against it. On May 20, 2002, the NLRC affirmed the Labor Arbiter's decision. Issues: WON petitioners voluntarily resigned from employment and WONthey are ent itled to money claims Held: The fact that the Labor Arbiter admitted the company's reply afterthe case had been submitted for decision did not make the proceedingsbefore him irregula r. Petitioners were given adequate opportunity in theNLRC and the Court of Appea ls to rebut the company's evidence againstthem. A petition for review on certiorari shall only raise questions of lawconsidering that the findings of fact of the Court of Appeals are, as ageneral rule, conclu sive upon and binding on this Court. This doctrineapplies with greater force in labor cases where the factual findings of thelabor tribunals are affirmed by the Court of Appeals. The reason is thatlabor officials are deemed to have acquired expertise in matters withintheir jurisdiction and therefore, their factual find ings are generallyaccorded not only respect but also finality. Here, the Labor Arbiter, the NLRC, and the Court of Appeals wereunanimous in fin ding that the primary reason why Dacut and Tungalaresigned was the vessel's alle ged unseaworthiness as borne by theirpleadings before the Labor Arbiter. Dacut a nd Tungala never mentionedthat they resigned because they were being harassed by the company dueto a complaint for violation of labor standards they had filed a gainst it. Thisground was alleged only before the NLRC and not a single act or i ncidentwas cited to prove this point. Even the alleged assurance by Orlina, that they would be given separation pay, served merely as a secondary reasonwhy they resigned. In fact, we doubt that such assurance was even madeconsidering that as secretary of the Personnel Manager, it was not shownunder what authority Orlina acted when she told Dacut and Tungala toresign. Likewise deserving scant consideration is Cajote's claim that theOperations Mana ger told him that he will be paid separation pay if heresigned voluntarily; othe rwise, he would be charged as AWOL. Althoughthe company already hired a replacem ent, Cajote admitted that he wasstill employed at the time he resigned. In fact, the company tried to givehim another assignment but he refused it. Thus, the on ly reason whyCajote resigned was his long unauthorized absences which would have warranted his dismissal in any case. We find no reason to disturb all these factual findings because they areamply su pported by substantial evidence.

Apropos the monetary claims, there is insufficient evidence to provepetitioners' entitlement thereto. As crew members, petitioners wererequired to stay on board the vessel by the very nature of their duties, andit is for this reason that, i n addition to their regular compensation, they aregiven free living quarters and subsistence allowances when required to beon board. It could not have been the purpose of our law to require theiremployers to give them overtime pay or night shift differential, even whenthey are not actually working. Thus, the correct cr iterion in determiningwhether they are entitled to overtime pay or night shift d ifferential is notwhether they were on board and cannot leave ship beyond the re gulareight working hours a day, but whether they actually rendered service inexc ess of said number of hours. In this case, petitioners failed to submitsufficien t proof that overtime and night shift work were actually performedto entitle the m to the corresponding pay. Petition is denied. SAN MIGUEL CORPORATION v. CAROLINE C. DEL ROSARIO | G.R. Nos. 168194 & 168603 | J. Ynares-Santiago Facts: Respondent was hired by the petitioner as an account specialist, allegedly as a probationary employee, but was dismissed because of areconstructi on scheme and over employment in the company. Labor arbiter (her employment exceeded six months and holding that she wasillegally di smissed as there was no authorized cause to terminate heremployment. The Arbiter further ruled that petitioner's failure to rebutrespondent's claim that it hire d additional employees after she wasdismissed belie the company's alleged redund ancy), NLRC (respondent isa regular employee whose termination from employment w as valid butineffectual for petitioner's failure to comply with the 30-day notic e to theemployee and the Department of Labor and Employment (DOLE), ) and CA ruled that she is a regular employee and was illegally dismissed thusentitled to payment for damages and back wages. Issues: (1) Whether or not respondent is a regular employee of petitioner; and (2) whether or not respondent was illegally dismissed; and (3) if so, whether or not respondent is entitled to any monetary benefit. Held:

. In termination cases, like the present controversy, the burden ofproving the cir cumstances that would justify the employee'sdismissal rests with the employer.[1 8] The best proof thatpetitioner should have presented to prove the probationary statusof respondent is her employment contract. . Having ruled that respondent is a regular employee, hertermination from employme nt must be for a just or authorizedcause, otherwise, her dismissal would be ille gal. The Court finds that petitioner was not able to discharge the burden ofproving t hat the dismissal of respondent was valid. ARTICLE 279. 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 toreinstatement w ithout loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to hisother benefits or their monetary equivalent computed fromthe time his compensation was withheld fr om him up to the time ofhis actual reinstatement. (Emphasis, supplied) Considering that respondent was illegally dismissed, she is entitled notonly to reinstatement but also to payment of full back wages, computedfrom the time her compensation was actually withheld from her on March13, 2001, up to her actual r einstatement. Respondent is not, however, entitled to holiday pay because the recordsreveal th at she is a monthly paid regular employee. Under Section 2, RuleIV, Book III of the Omnibus Rules Implementing the Labor Code, employeeswho are uniformly paid b y the month, irrespective of the number ofworking days therein, shall be presume d to be paid for all the days in themonth whether worked or not. Hence, the Cour t of Appeals correctlydeleted said award. G.R. No. 144664 | March 15, 2004 | ASIAN TRANSMISSION CORPORATION, petitioner, vs. The Hon. COURT OF APPEALS | J. Carpio-Morales Facts: The Department of Labor and Employment (DOLE), throughUndersecretary Cres enciano B. Trajano, issued an Explanatory Bulletindated March 11, 1993 wherein i t clarified, inter alia, that employees areentitled to 200% of their basic wage on April 9, 1993, whether unworked, which, apart from being Good Friday [and, therefore, a legal holiday], is also Araw ng Kagitingan [which is also a legal holiday]. Said bulletinwas rep roduced on January 23, 1998, when April 9, 1998 was both MaundyThursday and Araw ng Kagitingan. Petitioner [Asian Transmission Corporation] opted to pay its daily paidemployees only 100% of their basic pay on April 9, 1998. Respondent Bisigng Asian Transmi ssion Labor Union (BATLU) protested, saying: ART. 94. Right to holiday pay. -(a) Every worker shall be paid hisregular daily wage during regular holidays, except in retail and serviceestablishments regular ly employing less than ten (10) workers; (b) The employer may require an employee to work on any holidaybut such employee shall be paid a compensation equivalent totwice his regular rate; and (c) As used in this Article, "holiday" includes: New Year s Day, Maundy Thursday, Good Friday, the ninth of April, the first of May, the twelfth of June, the fourth of July, the thirtieth of November, thetwenty-fi

fth and thirtieth of December and the day designated bylaw for holding a general election, which was amended byExecutive Order No. 203 issued on June 30, 1987 The Court of Appeals upheld the findings of the Voluntary Arbitrator, holding that the Collective Bargaining Agreement (CBA) between petitionerand BAT LU, the law governing the relations between them, clearlyrecognizes their intent to consider Araw ng Kagitingan and MaundyThursday, on whatever date they may fa ll in any calendar year, as paidlegal holidays during the effectivity of the CBA and that "[t]here is nocondition, qualification or exception for any variance f rom the clear intentthat all holidays shall be compensated." Issue: WON the CA committed grave abuse of discretion in its decision Held: Holiday pay is a legislated benefit enacted as part of theConstitutional i mperative that the State shall afford protection to labor.7 Its purpose is not merely "to prevent diminution of the monthly income of theworkers on account of work interruptions. In other words, although theworker is forced to take a rest, he earns what he should earn, that is, his holiday pay." It is also intended to enable the worker to participate in the nationalcelebrati ons held during the days identified as with great historical andcultural signifi cance. As reflected above, Art. 94 of the Labor Code, as amended, affords a worker the enjoyment of ten paid regular holidays. The provision ismandatory, re gardless of whether an employee is paid on a monthly ordaily basis. Unlike a bonus, which is a management prerogative, holiday pay is astatutory ben efit demandable under the law. Since a worker is entitled tothe enjoyment of ten paid regular holidays, the fact that two holidays fallon the same date should n ot operate to reduce to nine the ten holiday paybenefits a worker is entitled to receive. In Wellington, the issue was whether monthly-paid employees are entitledto an ad ditional day s pay if a holiday falls on a Sunday. This Court, inanswering the iss ue in the negative, observed that in fixing the monthly

salary of its employees, Wellington took into account "every working day ofthe y ear including the holidays specified by law and excluding onlySunday." In the in stant case, the issue is whether daily-paid employeesare entitled to be paid for two regular holidays which fall on the same day. Art. 4 of the Labor Code provides that all doubts in the implementationand inter pretation of its provisions, including its implementing rules andregulations, sh all be resolved in favor of labor. G.R. No. L-65482 December 1, 1987 | JOSE RIZAL COLLEGE, petitioner vs. NATIONAL LABOR RELATIONS COMMISSION AND NATIONAL ALLIANCE OF TEACHERS/OFFICE WORKERS, respondents | J. Paras Facts: Petitioner is a non-stock, non-profit educational institution dulyorganiz ed and existing under the laws of the Philippines. It has threegroups of employe es categorized as follows: (a) personnel on monthlybasis, who receive their mont hly salary uniformly throughout the year, irrespective of the actual number of working days in a month withoutdeduction fo r holidays; (b) personnel on daily basis who are paid on actualdays worked and t hey receive unworked holiday pay and (c) collegiatefaculty who are paid on the b asis of student contract hour. Before the startof the semester they sign contrac ts with the college undertaking to meettheir classes as per schedule. Unable to receive their correspondingholiday pay, as claimed, from 1975 to 1977. Issue: The sole issue in this case is whether or not the school faculty who according to their contracts are paid per lecture hour are entitled to unworked holiday pay. Held: Petitioner maintains the position among others, that it is notcovered by B ook V of the Labor Code on Labor Relations considering that itis a non-profit in stitution and that its hourly paid faculty members are paidon a "contract" basis because they are required to hold classes for aparticular number of hours. if a regular week day is declared a holiday, the school calendar is extended to compensate for that day. Thus petitioner argues that the advent of any of the legal holidays within the semester will not affect the faculty's salary because this day is not included in their schedule while the calendar is extended to compensate for special holidays. Regular holidays specified as such by law are known to both school andfaculty me mbers as no class days;" certainly the latter do not expectpayment for said unwo rked days, and this was clearly in their minds whenthey entered into the teachin g contracts. On the other hand, both the law and the Implementing Rules governingholiday pay are silent as to payment on Special Public Holidays. Declared purpose of the holiday pay which is the prevention of diminution of the monthly income of the employees on account of work interruptions is defeated when a regular class day is cancelled on account of a special public holiday and class hours are held on another working day to make up for time lost in the school calendar. PREMISES CONSIDERED, the decision of respondent National LaborRelations Commissi on is hereby set aside, and a new one is herebyRENDERED: (a) exempting petitioner from paying hourly paid faculty members theirpay for re gular holidays, whether the same be during the regularsemesters of the school ye ar or during semestral, Christmas, or Holy Weekvacations;

(b) but ordering petitioner to pay said faculty members their regular hourlyrate on days declared as special holidays or for some reason classes arecalled off o r shortened for the hours they are supposed to have taught, whether extensions of class days be ordered or not; in case of extensionssaid fa culty members shall likewise be paid their hourly rates should theyteach during said extensions. JOSE RIZAL COLLEGE V NLRC | 156 SCRA 27 | PARAS; 1987 NATURE -Petition for certiorari with preliminary injunction to review the decision ofth e National Labor Relations Commission FACTS -Petitioner is a non-stock, non-profit educational institution duly organizedand existing under the laws of the Philippines. It has three groups ofemployees cat egorized as follows: (a) personnel on monthly basis, whoreceive their monthly sa lary uniformly throughout the year, irrespective ofthe actual number of working days in a month without deduction for holidays; (b) personnel on daily basis who are paid on actual days workedand the y receive unworked holiday pay and (c) collegiate faculty who arepaid on the bas is of student contract hour. Before the start of the semesterthey sign contracts with the college undertaking to meet their classes asper schedule. -Unable to receive their corresponding holiday pay, as claimed, from 1975 to 1977, private respondent National Alliance of Teachers and Office Workers (NATOW) in behalf of the faculty and personnel of Jose Rizal College filed with the Ministry of Labor a complaint against the college forsaid alleged non-payment of holiday pay -After the parties had submitted their respective position papers, theLabor Arbi ter rendered a decision on February 5, 1979:

1. The faculty and personnel of the respondent Jose Rizal College who are paid their salary by the month uniformly in a school year, irrespective of the number of working days in a month, without deduction for holidays, are presumed to be already paid the 10 paid legalholiday s and are no longer entitled to separate payment for the saidregular holidays; 2. The personnel of the respondent Jose Rizal College who are paid theirwages da ily are entitled to be paid the 10 unworked regular holidaysaccording to the per tinent provisions of the Rules and Regulations Implementing the Labor Code; 3. Collegiate faculty of the respondent Jose Rizal College who by contractare pa id compensation per student contract hour are not entitled tounworked regular ho liday pay considering that these regular holidayshave been excluded in the progr amming of the student contact hours. -On appeal, respondent National Labor Relations Commission in a decisionpromulga ted on June 2, 1982, modified the decision appealed from, in thesense that teach ing personnel paid by the hour are declared to be entitledto holiday pay ISSUE WON the school faculty who according to their contracts are paid perlecture hour are entitled to unworked holiday pay HELD NO (for regular holidays)/YES(for special holidays) -Labor Arbiter sustains the view that said instructors and professors arenot ent itled to holiday pay, his decision was modified by the National LaborRelations C ommission holding the contrary. Petitioner maintains the position among others, that it is not covered by Book V of the Labor Codeon Labo r Relations considering that it is a non-profit institution and that itshourly p aid faculty members are paid on a "contract" basis because they are required to hold classes for a particular number of hours. In the programming of these student contract hours, legal holidays are excludedand labe lled in the schedule as "no class day." On the other hand, if a regular week day is declared a holiday, the school calendar is extended tocompen sate for that day. Thus petitioner argues that the advent of any ofthe legal hol idays within the semester will not affect the faculty's salarybecause this day i s not included in their schedule while the calendar isextended to compensate for special holidays. Thus the programmed number of lecture hours is not diminished. -The Solicitor General on the other hand, argues that under Article 94 ofthe Lab or Code, holiday pay applies to all employees except those in retailand service establishments. To deprive therefore employees paid at anhourly rate of unworked holiday pay is contrary to the policy considerationsunderlying such presidentia l enactment, apart from the constitutional mandate to grant greater rights to labor. And under Article 94 of the Labor Code, the petitioner, although a nonprofit institution is under obligation togiv e pay even on unworked regular holidays to hourly paid faculty members subject to the terms and conditions provided for therein. -The Court held that the aforementioned implementing rule is not justifiedby the provisions of the law which after all is silent with respect to faculty members paid by the hour who because of their teaching contracts areobliged to w ork and consent to be paid only for work actually done. -On the other hand, both the law and the Implementing Rules governingholiday pay are silent as to payment on Special Public Holidays. -It is readily apparent that the declared purpose of the holiday pay whichis the prevention of diminution of the monthly income of the employees onaccount of wo rk interruptions is defeated when a regular class day iscancelled on account of

a special public holiday and class hours are heldon another working day to make up for time lost in the school calendar. Otherwise stated, the faculty member, although forced to take a rest, doesnot ea rn what he should earn on that day. Be it noted that when a specialpublic holida y is declared, the faculty member paid by the hour is deprivedof expected income , and it does not matter that the school calendar isextended in view of the days or hours lost, for their income that could beearned from other sources is lost during the extended days. Similarly, when classes are called off or shortened on account of typhoons, floods, rallies, and the like, these faculty members must likewise be paid, whetheror no t extensions are ordered. Disposition Decisions set aside. New decision rendered: (a) exempting petitioner from paying hourly paid faculty members their pay for regular holidays, whether the same be during the regularsemesters of the school year or during semestral, Christmas, or Holy Weekvacations; (b) but ordering petitioner to pay said faculty members their regular hourlyrate on days declared as special holidays or for some reason classes arecalled off o r shortened for the hours they are supposed to have taught, whether extensions of class days be ordered or not; in case of extensionssaid fa culty members shall likewise be paid their hourly rates should theyteach during said extensions. SAN MIGUEL V CA | 375 SCRA 311 | KAPUNAN; January 30, 2002 NATURE Petition for a review of the decision of the Court of Appeals FACTS -17 October 1992: the Department of Labor and Employment (DOLE), Iligan District Office, conducted a routine inspection in the premises of SanMig uel Corporation (SMC) in Sta. Filomena, Iligan City. In the course of the inspection, it was discovered that there was underpayment of regular Muslim holiday pay to its employees. -SMC failed to submit proof that it was paying regular Muslim holiday payto its employees. Alan M. Macaraya, Director IV of DOLE Iligan DistrictOffice issued a compliance order directing SMC to consider Muslim holidaysas regular holidays an d to pay both its Muslim and non-Muslim employeesholiday pay within thirty (30) days from the receipt of the order. ISSUES 1. WON CA erred in granting non-Muslim employees Muslim holiday pay 2. WON Macaraya and Espaol have jurisdiction in issuing compliance orders over said labor standard case

HELD 1. NO Ratio Wages and other emoluments granted by law to the working manare determined on the basis of the criteria laid down by laws and certainlynot on the basis of the worker s faith or religion. Reasoning -Muslim holidays are provided under Articles 169 and 170, Title I, Book V, of Presidential Decree No. 1083, otherwise known as the Code of Muslim Personal Laws. The aforementioned provisions should be read in conjunction with Art. 94 of the Labor Code: Art. 94. Right to holiday pay: (a) Every worker shall be paid his regular daily wage during regularholidays, ex cept in retail and service establishments regularly employingless than ten (10) workers; (b) The employer may require an employee to work on any holiday butsuch employee shall be paid a compensation equivalent to twice his regular rate; x x x. -There should be no distinction between Muslims and non-Muslims as regards payment of benefits for Muslim holidays. Petitioner asserts that Article 3(3) of Presidential Decree No. 1083 provides that (t)he provisionsof thi s Code shall be applicable only to Muslims x x x. However, said article also declares that x x x nothing herein shall be construed to operate to the prejudice of a non-Muslim. 1999 Handbook on Workers Statutory Benefits:

Considering that all private corporations, offices, agencies, and entities oresta blishments operating within the designated Muslim provinces and cities are required to observe Muslim holidays, both Muslim and Christiansworkin g within the Muslim areas may not report for work on the daysdesignated by law a s Muslim holidays. -As regards the allegation that the issue on Muslim holiday pay wasalready resol ved in Napoleon E. Fernan vs. San Miguel Corporation Beer Division and Leopoldo Zaldarriaga, the Court notes that the case was primarily for illegal dismissal and the claim for benefits was only incidentalto the main case. 2. YES -Regional Director Macaraya acted as the duly authorized representativeof the Se cretary of Labor and Employment and it was within his power toissue the complian ce order to SMC. Reasoning -Article 128. Visitorial and enforcement power. (b) Notwithstanding the provisions of Article 129 and 217 of this Code tothe con trary, and in cases where the relationship of employer-employeestill exists, the Secretary of Labor and Employment or his duly authorizedrepresentatives shall h ave the power to issue compliance orders to giveeffect to the labor standards pr ovisions of this Code and other laborlegislation based on the findings of labor employment and enforcementofficers or industrial safety engineers made in the co urse of the inspection. -Petitioner merely contends that its non-Muslim employees are not entitled to Muslim holiday pay. The issue could be resolved even without

documentary proofs. In any case, there was no indication that Regional Director Macaraya failed to consider any documentary proof presented by SMC in the course of the inspection. Disposition The petition is dismissed. WELLINGTON INVESTMENT V TRAJANO | 245 SCRA 561 | NARVASA; July 3, 1995 NATURE Special Civil Action for Certiorari FACTS -A labor Enforcement Officer conducted a routine inspection of the Wellington Flour Mills, owned and operated by Wellington Investment andManufactu ring Corporation, and reported the non-payment of regular holidays falling on a Sunday for monthly-paid employees. A copy of thereport was explained to and received by Wellington s personnel manager. -Wellington sought reconsideration and argued that "the monthly salary ofthe com pany's monthly-salaried employees already includes holiday payfor all regular ho lidays and hence there is no legal basis for the finding ofalleged non-payment o f regular holidays falling on a Sunday." In a positionpaper subsequently submitt ed to the Regional Director, it asserted that itpays its monthly-paid employees a fixed monthly compensation "using the314 factor which undeniably covers and al ready includes payment for allthe working days in a month as well as all the 10 unworked regular holidays within a year." -July 28, 1992: the Regional Director ruled that "when a regular holidayfalls on a Sunday, an extra or additional working day is created and theemployer has the obligation to pay the employees for the extra day exceptthe last Sunday of Augu st since the payment for the said holiday is alreadyincluded in the 314 factor," and accordingly directed Wellington to pay itsemployees compensation correspond ing 4 extra working days. -September 22: the Undersecretary affirmed the challenged order, holdingthat "th e divisor being used by Wellington does not reliably reflect theactual working d ays in a year," and consequently commanded Wellington to pay its employees the "six additional working days resulting fromregular holi days falling on Sundays in 1988, 1989 and 1990." He said thatwhenever a regular holiday coincides with a Sunday, an additional workingday is created and left un paid. In other words, while the said divisor maybe utilized as proof evidencing payment of 302 working days, 2 specialdays and the ten regular holidays in a cal endar year, the same does notcover or include payment of additional working days created as a result ofsome regular holidays falling on Sundays. ISSUE WON a monthly-paid employee, receiving a fixed monthly compensation, isentitled to an additional pay aside from his usual holiday pay, whenever aregular holiday falls on a Sunday HELD NO

-Wellington simply deducts 51 Sundays from the 365 days normallycomprising a yea r and used the difference, 314, as basis for determiningthe monthly salary. The monthly salary thus fixed actually covers paymentfor 314 days of the year, inclu ding regular and special holidays, as well as days when no work is done by reason of fortuitous cause, as above specified, or causes not attributable to the employees. -The monthly salary in Wellington for all 365 days of a year. The respondents' theory would make each of the years in question, a year of368 days. Pursuant to this theory, no employer opting to pay his employees by the month would have any definite basis to determine thenumber of d ays in a year for which compensation should be given to hiswork force. -There is no provision of law requiring any employer to make such adjustments in the monthly salary rate set by him to take account of legalholida ys falling on Sundays in a given year, or, contrary to the legalprovisions beari ng on the point, otherwise to reckon a year at more than365 days. What the law r equires of employers opting to pay by the monthis to assure that "the monthly mi nimum wage shall not be less than thestatutory minimum wage multiplied by 365 da ys divided by twelve," and topay that salary "for all days in the month whether worked or not," and "irrespective of the number of working days therein." That salary is dueand paya ble regardless of the declaration of any special holiday in theentire country or a particular place therein, or any fortuitous cause precluding work on any particular day or days (such as transportation strikes, riots, or typhoons or other natural calamities), or cause not imputable to the worker. The legal provisions governing monthlycompensation are evidently intended precisely to avoid re-computationsand alterations in salary o n account of the contingencies just mentioned, which, by the way, are routinely made between employer and employeeswhen the wag es are paid on daily basis. Disposition The orders complained of, namely: that of the respondentUndersecreta ry dated September 22, 1993, and that of the Regional Director dated July 30, 1992, are NULLIFIED AND SET ASIDE, and the proceeding against petitioner DISMISSED. G.R. No. 114698 July 3, 1995, WELLINGTON INVESTMENT ANDMANUFACTURING CORPORATION , petitioner, vs.CRESENCIANO B. TRAJANO, Under-Secretary of Labor and Employment, ELMERABADILLA, and 34 others, respondents, (Holiday and Holiday Pays) Facts:The case arose from a routine inspection conducted by a LaborEnforcement O fficer on August 6, 1991 of the Wellington Flour Mills, anestablishment owned an d operated by petitioner Wellington Investmentand Manufacturing Corporation (her eafter, simply Wellington). The officerthereafter drew up a report, a copy of wh ich was "explained to andreceived by" Wellington's personnel manager, in which h e set forth hisfinding of "non-payment of regular holidays falling on a Sunday f ormonthly-paid employees." Wellington sought reconsideration of the Labor Inspector's report, by letter dated August 10, 1991. It argued that "the monthly salary of thecompany's monthl y-salaried employees already includes holiday pay for allregular holidays . . . (and hence) there is no legal basis for the finding ofalleged non-payment of reg ular holidays falling on a Sunday." It expounded on this thesis in a position paper subsequently submitted tothe Reg ional Director, asserting that it pays its monthly-paid employees afixed monthly compensation "using the 314 factor which undeniably coversand already includes payment for all the working days in a month as wellas all the 10 unworked regula r holidays within a year."

Wellington's arguments failed to persuade the Regional Director who, in anOrder issued on July 28, 1992, ruled that "when a regular holiday falls on aSunday, an extra or additional working day is created and the employerhas the obligation t o pay the employees for the extra day except the lastSunday of August since the payment for the said holiday is alreadyincluded in the 314 factor," and accordin gly directed Wellington to pay itsemployees compensation corresponding to four ( 4) extra working days. Issue: Whether or not a monthly-paid employee, receiving a fixed monthlycompensa tion, is entitled to an additional pay aside from his usual holidaypay, whenever a regular holiday falls on a Sunday. Ruling: Every worker should, according to the Labor Code, "be paid hisregular da ily wage during regular holidays, except in retail and serviceestablishments reg ularly employing less than ten (10) workers;" this, ofcourse, even if the worker does no work on these holidays. The regularholidays include: "New Year's Day, M aundy Thursday, Good Friday, theninth of April, the first of May, the twelfth of June, the fourth of July, thethirtieth of November, the twenty-fifth of Decembe r, and the daydesignated by law for holding a general election (or national refe rendum orplebiscite). Particularly as regards employees "who are uniformly paid by the month, "the monthly minimum wage shall not be less than the statutory minimumwage multi plied by 365 days divided by twelve." 12 This monthly salaryshall serve as compe nsation "for all days in the month whether worked ornot," and "irrespective of t he number of working days therein." 13 In otherwords, whether the month is of th irty (30) or thirty-one (31) days' duration, or twenty-eight (28) or twenty-nine (29) (as in February), the employee isentitl ed to receive the entire monthly salary. So, too, in the event of thedeclaration of any special holiday, or any fortuitous cause precluding workon any particula r day or days (such as transportation strikes, riots, ortyphoons or other natura l calamities), the employee is entitled to thesalary for the entire month and th e employer has no right to deduct theproportionate amount corresponding to the d ays when no work was done. The monthly compensation is evidently intended precisely to avoidcomputations an d adjustments resulting from the contingencies justmentioned which are routinely made in the case of workers paid on dailybasis.

WHEREFORE, the orders complained of, namely: that of the respondentUndersecretar y dated September 22, 1993, and that of the RegionalDirector dated July 30, 1992 , are NULLIFIED AND SET ASIDE, and theproceeding against petitioner DISMISSED MAYON HOTEL & RESTAURANT vs. ROLANDO ADANA, et al. G.R. No. 157634, May 16, 2005 FACTS: Petitioner Mayon Hotel & Restaurant (MHR) hired herein 16respondents as e mployees in its business in Legaspi City. Its operationwas suspended on March 31 , 1997 due to the expiration and non-renewalof the lease contract for the space it rented. While waiting for thecompletion of the construction of its new site, MHR continued its operationin another site with 9 of the 16 employees. When the new site constructed and MHR resumed its business operation, none of the 16 employees wasrecalled to work. MHR alleged business losses as the reason for not reinstating therespondents. On various dates, respondents filed complaints forunderpayment of wages, money cla ims and illegal dismissal. ISSUES:1. Whether or not respondents were illegally dismissed bypetitioner; 2. Whether or not respondents are entitled to their money claims due tounderpaym ent of wages, and nonpayment of holiday pay, rest daypremium, SILP, COLA, overti me pay, and night shift differential pay. HELD: 1. Illegal Dismissal: claim for separation pay Since April 1997 until the time the Labor Arbiter rendered its decision inJuly 2 000, or more than three (3) years after the supposed temporary lay-off, the employment of all the respondents with petitioner had ceased, notwithstanding that the new premises had been completed and the sameresumed its operation. This is clearly dismissal or the permanentseverance or complete sepa ration of the worker from the service on theinitiative of the employer regardles s of the reasons therefor. Article 286 of the Labor Code is clear there is termination of employment when an otherwise bona fide suspension of work exceeds six (6) months. The cessation of employment for more than six months waspatent and t he employer has the burden of proving that the terminationwas for a just or auth orized cause. While we recognize the right of the employer to terminate the services ofan empl oyee for a just or authorized cause, the dismissal of employeesmust be made with in the parameters of law and pursuant to the tenets offair play. And in terminat ion disputes, the burden of proof is always on theemployer to prove that the dis missal was for a just or authorized cause. Where there is no showing of a clear, valid and legal cause for terminationof em ployment, the law considers the case a matter of illegal dismissal. If doubts exist between the evidence presented by the employer and theemployee, the scales of justice must be tilted in favor of the latter theemployer must aff irmatively show rationally adequate evidence that thedismissal was for a justifi able cause. It is a time-honored rule that incontroversies between a laborer and his master, doubts reasonably arisingfrom the evidence, or in the interpretatio n of agreements and writingshould be resolved in the former s favor. The policy is to extend thedoctrine to a greater number of employees who can avail of the ben efitsunder the law, which is in consonance with the avowed policy of the Stateto give maximum aid and protection of labor.

2. Money claims The Supreme Court reinstated the award of monetary claims granted bythe Labor Ar biter. The cost of meals and snacks purportedly provided to respondents cannotbe deduct ed as part of respondents minimum wage. As stated in the LaborArbiter s decision. Even granting that meals and snacks were provided and indeedconstituted faciliti es, such facilities could not be deducted without compliance with certain legal requirements. As stated in Mabeza v. NLRC, the employer simply cannot deduct the value from the employee swages without satisfying the following: (a) proof that such facilities arecustomarily furnish ed by the trade; (b) the provision of deductible facilitiesis voluntarily accept ed in writing by the employee; and (c) the facilities arecharged at fair and rea sonable value. The law is clear that mere availmentis not sufficient to allow de ductions from employees wages. As for petitioners repeated invocation of serious business losses, suffice tosay that this is not a defense to payment of labor standard benefits. Theemployer c annot exempt himself from liability to pay minimum wagesbecause of poor financia l condition of the company. The payment ofminimum wages is not dependent on the employer s ability to pay. Conclusion: There is no denying that the actuations of petitioners in thiscase h ave been reprehensible. They have terminated the respondents employment in an unde rhanded manner, and have used and abused thequasi-judicial and judicial processe s to resist payment of their employees rightful claims, thereby protracting this c ase and causing the unnecessary

clogging of dockets of the Court. They have also forced respondents tounnecessar y hardship and financial expense. Indeed, the circumstances of this case would have called for exemplary damages, as the dismissal waseffected in a wanton, oppressive or malevolent manner,[95] and publicpolicy requires that these acts must be suppressed and discouraged.[96] Nevertheless, we cannot agree with the Labor Arbiter in grantingexemplary damage s of P10,000.00 each to all respondents. While it is truethat other forms of dam ages under the Civil Code may be awarded toillegally dismissed employees,[97] an y award of moral damages by theLabor Arbiter cannot be based on the Labor Code b ut should be groundedon the Civil Code.[98] And the law is clear that exemplary damages can onlybe awarded if plaintiff shows proof that he is entitled to moral , temperateor compensatory damages.[99] As only respondents Loveres, Guades, Macandog, Llarena, Nicerio, Atractivo and Broola specifically claimed damages from petitioners, thenonly they are entitled to exemplary damage. Finally, we rule that attorney s fees in the amount to P10,000.00 should be granted to each respondent. It is settled that in actions for recovery of wages or where an employee was forced to litigate and incurexpenses to protect his rights and interest, he is entitled to an award ofattorney's fees .[100] This case undoubtedly falls within this rule. The petition is hereby DENIED. The Decision of January 17, 2003 ofthe Court of A ppeals in CA-G.R. SP No. 68642 upholding the Joint Decisionof July 14, 2000 of t he Labor Arbiter in RAB V Case Nos. 04-00079-97 and04-00080-97 is AFFIRMED, with the following MODIFICATIONS: (1) Granting separation pay of one-half (1/2) month for every year ofservice to respondents Loveres, Macandog and Llarena; (2) Grantingretirement pay for respon dents Guades, Nicerio, and Alamares; (3) Removing the deductions for food facility from the amounts due to allrespondents ; (4) Awarding moral damages of P20,000.00 each for respondents Loveres, Macandog, Llarena, Guades, Nicerio, Atractivo, andBroola; (5 ) Deleting the award of exemplary damages of P10,000.00 from all respondents except Loveres, Macandog, Llarena, Guades, Nicerio, Atractivo, and Broola; and (6) Granting attorney s fees of P10,000.00 each to all respondents. The case is REMANDED to the Labor Arbiter for the RECOMPUTATION of the total monetary benefits awarded and due to the employeesconcerned in acco rdance with the decision. The Labor Arbiter is ORDERED to submit his compliance thereon within thirty (30) days from notice of thisdeci sion, with copies furnished to the parties. G.R. No. 156367: AUTO BUS TRANSPORT SYSTEMS, INC. vs ANTONIO BAUTISTA, 16 May 2005 (Service Incentive Leave Pay) FACTS: Antonio Bautista was employed by Auto Bus Transport Systems, Inc. in May 1995. He was assigned to the Isabela-Manila route and he waspaid by commission (7% of gross income per travel for twice a month). In January 2000, while he was driving his bus he bumped another busowned by Auto Bus. He claimed that he bumped the he accidentallybumped the bus as he was so t ired and that he has not slept for more than24 hours because Auto Bus required h im to return to Isabela immediatelyafter arriving at Manila. Damages were comput ed and 30% or P75,551.50of it was being charged to Bautista. Bautista refused pa yment. Auto Bus terminated Bautista after due hearing as part of Auto Bus management prer

ogative. Bautista sued Auto Bus for Illegal Dismissal. TheLabor Arbiter Monroe T abingan dismissed Bautista s petition but ruled thatBautista is entitled to P78,11 17.87 13th month pay payments andP13,788.05 for his unpaid service incentive lea ve pay. The case was appealed before the National Labor Relations Commission. NLRC modified the LA s ruling. It deleted the award for 13th Month pay. The court of Appeals affirmed the NLRC. Auto Bus averred that Bautista is a commissioned employee and if that isnot reas on enough that Bautista is also a field personnel hence he is notentitled to a s ervice incentive leave. They invoke: Art. 95. RIGHT TO SERVICE INCENTIVE LEAVE: (a) Every employee whohas rendered at least one year of service shall be entitled to a yearlyservice incentive leave of five days with pay. Book III, Rule V: SERVICE INCENTIVE LEAVE SECTION 1. Coverage. This rule shall apply to all employees except:

(d) Field personnel and other employees whose performance isunsupervised by the employer including those who are engaged on task orcontract basis, purely commis sion basis, or those who are paid in a fixedamount for performing work irrespect ive of the time consumed in theperformance thereof; . . . ISSUE: Whether or not Bautista is entitled to Service Incentive Leave. If he is, Whether or not the three (3)-year prescriptive period provided underArticle 291 of the Labor Code, as amended, is applicable to respondent sclaim of service i ncentive leave pay. HELD: Yes, Bautista is entitled to Service Incentive Leave. The SupremeCourt emp hasized that it does not mean that just because an employee ispaid on commission basis he is already barred to receive service incentiveleave pay.

The question actually boils down to whether or not Bautista is a fieldemployee. According to Article 82 of the Labor Code, field personnel shall refer tonon-agri cultural employees who regularly perform their duties away fromthe principal pla ce of business or branch office of the employer and whoseactual hours of work in the field cannot be determined with reasonable certainty. As a general rule, field personnel are those whose performance of theirjob/servi ce is not supervised by the employer or his representative, theworkplace being a way from the principal office and whose hours and daysof work cannot be determin ed with reasonable certainty; hence, they arepaid specific amount for rendering specific service or performing specificwork. If required to be at specific place s at specific times, employees including drivers cannot be said to be field personnel despite the fact that they are performing work away from the principal office of the employee. Certainly, Bautista is not a field employee. He has a specific route totraverse as a bus driver and that is a specific place that he needs to be atwork. There a re inspectors hired by Auto Bus to constantly check him. There are inspectors in bus stops who inspects the passengers, thepunched ticket s, and the driver. Therefore he is definitely supervisedthough he is away from t he Auto Bus main office. On the other hand, the 3 year prescriptive period ran but Bautista was ableto fi le his suit in time before the prescriptive period expired. It was onlyupon his filing of a complaint for illegal dismissal, one month from the timeof his dismi ssal, that Bautista demanded from his former employercommutation of his accumula ted leave credits. His cause of action to claim the payment of his accumulated service incentive leave thus accrued fromthe time when his employer dismissed him and failed to pay hisaccumulated leave credits. Therefore, the prescriptive period with respect to his claim for serviceincentiv e leave pay only commenced from the time the employer failed tocompensate his ac cumulated service incentive leave pay at the time of hisdismissal. Since Bautist a had filed his money claim after only one monthfrom the time of his dismissal, necessarily, his money claim was filedwithin the prescriptive period provided fo r by Article 291 of the LaborCode. Definition of Service Incentive Leave: Service incentive leave is a rightwhich a ccrues to every employee who has served within 12 months, whether continuous or broken reckoned from the date the employeestarted working, including authorized absences and paid regular holidaysunless the working days in the establishment as a matter of practice orpolicy, or that provided in the e mployment contracts, is less than 12months, in which case said period shall be c onsidered as one year. It isalso commutable to its money equivalent if not used or exhausted at the end of the year. In other words, an employee who has served for one year is entitled to it. He may use it as leave days or he may collect its monetary value. JPL MARKETING PROMOTIONS, Petitioner v. AUSTRIA-MARTINEZ, CALLEJO, SR.,TINGA, and COURT OF APPEALS, NATIONAL CHICONAZARIO, JJ. LABOR RELATIONS COMMISSION, NOEL GONZALES, RAMON ABESA III and FAUSTINO ANINIPOT, Respondents. July 8, 2005. FACTS: JPL Marketing and Promotions (hereinafter referred to as 'JPL') is adomes

tic corporation engaged in the business of recruitment andplacement of workers. On the other hand, private respondents NoelGonzales, Ramon Abesa III and Faustin o Aninipot were employed by JPL asmerchandisers on separate dates and assigned a t different establishmentsin Naga City and Daet, Camarines Norte as attendants t o the display ofCalifornia Marketing Corporation (CMC), one of petitioner's clie nts. On 13 August 1996, JPL notified private respondents that CMC would stopits direc t merchandising activity in the Bicol Region, Isabela, and CagayanValley effecti ve 15 August 1996.[3] They were advised to wait for furthernotice as they would be transferred to other clients. However, on 17October 1996,[4] private responde nts Abesa and Gonzales filed before theNational Labor Relations Commission Regio nal Arbitration Branch (NLRC) Sub V complaints for illegal dismissal, praying for separation pay, 13th month pay, service incentive leave pay and payment for moraldamages.[5] Ani nipot filed a similar case thereafter. After the submission of pertinent pleadings by all of the parties and aftersome clarificatory hearings, the complaints were consolidated andsubmitted for resolu tion. Executive Labor Arbiter Gelacio L. Rivera, Jr. dismissed the complaints for lack of merit.[6] The Labor Arbiter found that Gonzales and Abesa applied with and were employed by the store wherethey were or iginally assigned by JPL even before the lapse of the six (6)month period given by law to JPL to provide private respondents a newassignment. Thus, they may be considered to have unilaterally severedtheir relation with JPL, and cannot charge JPL with illegal dismissal.[7]The Labor Arbiter held that it was incumbent upon private respondents to waituntil t hey were reassigned by JPL, and if after six months they were notreassigned, the y can file an action for separation pay but not for illegaldismissal.[8] The cla ims for 13th month pay and service incentive leave paywas also denied since priv ate respondents were paid way above theapplicable minimum wage during their empl oyment.[9]

Private respondents appealed to the NLRC-agreed. JPL appealed-CA dismissedpetiti on. ISSUE: whether or not private respondents are entitled to separation pay, 13th month pay and service incentive leave pay, and granting that they areso ent itled, what should be the reckoning point for computing said awards. HELD: Under Arts. 283 and 284 of the Labor Code, separation pay isauthorized onl y in cases of dismissals due to any of these reasons: (a) installation of labor saving devices; (b) redundancy; (c) retrenchment; (d) cessation of the employer's business; and (e) when the employee issuffering from a disease and his continued employment is prohibited bylaw or is prejudicial to his health and to the health of his co-employees. However, separation pay shall be allowed as a measure of social justice inthose cases where the employee is validly dismissed for causes other thanserious misco nduct or those reflecting on his moral character, but onlywhen he was illegally dismissed.[32] In addition, Sec. 4(b), Rule I, Book VIof the Implementing Rules to Implement the Labor Code provides for thepayment of separation pay to an empl oyee entitled to reinstatement butthe establishment where he is to be reinstated has closed or has ceased operations or his present position no longer exists at the time ofreinstatement for reasons not attributable to the employer. The common denominator of the instances where payment of separationpay is warran ted is that the employee was dismissed by the employer. [33] In the instant case, there was no dismissal to speak of. Privaterespondents were simply not dismissed at all, whether legally or illegally. What they received from JPL was not a notice of termination ofemployment, but a memo informing them of the termination of CMC'scontract with JPL. More important ly, they were advised that they were tobe reassigned. At that time, there was no severance of employment tospeak of. Furthermore, Art. 286 of the Labor Code allows the bona fide suspension ofthe op eration of a business or undertaking for a period not exceeding six (6) months, wherein an employee/employees are placed on the so-called'floating s tatus. When that floating status' of an employee lasts for morethan six months, he may be considered to have been illegally dismissedfrom the service. Thus, he is entitled to the corresponding benefits for hisseparation, and this would appl y to suspension either of the entirebusiness or of a specific component thereof. [34] As clearly borne out by the records of this case, private respondentssought empl oyment from other establishments even before the expirationof the six (6)-month period provided by law. As they admitted in theircomment, all three of them appl ied for and were employed by anotherestablishment after they received the notice from JPL.[35] JPL did not terminate their employment; they themselves severed their relations withJPL. Thu s, they are not entitled to separation pay. The Court is not inclined in this case to award separation pay even on theground of compassionate justice. The Court of Appeals relied on the cases[36] wherein the Court awarded separation pay to legally dismissedemployees on the grounds of equity and social consideration. Said casesinvolved employees who were actually dismissed by their employers, whether for cause or not. Clearly, the principle applies only when theemployee i s dismissed by the employer, which is not the case in thisinstance. In seeking a nd obtaining employment elsewhere, privaterespondents effectively terminated the ir employment with JPL.

JPL cannot escape the payment of 13th month pay and service incentiveleave pay t o private respondents. Said benefits are mandated by law andshould be given to e mployees as a matter of right. Presidential Decree No. 851, as amended, requires an employer to pay itsrank and file employees a 13thmonth pay not later than 24 December ofevery year. However , employers not paying their employees a 13th month pay or its equivalent are not covered by said law.[39] The term 'its equivalent was defined by the law's implementing guidelines as includingChristma s bonus, mid-year bonus, cash bonuses and other paymentamounting to not less tha n 1/12 of the basic salary but shall not includecash and stock dividends, cost-o f-living-allowances and all otherallowances regularly enjoyed by the employee, a s well as non-monetarybenefits.[40] On the other hand, service incentive leave, as provided in Art. 95 of theLabor C ode, is a yearly leave benefit of five (5) days with pay, enjoyed byan employee who has rendered at least one year of service. Unlessspecifically excepted, all establishments are required to grant serviceincentive leave to their employees. The term 'at least one year of serviceshall mean service within twelve (12) mont hs, whether continuous orbroken reckoned from the date the employee started work ing.[41] The Court has held in several instances that 'service incentive leave is clearlydema ndable after one year of service.[42]

Admittedly, private respondents were not given their 13th month pay andservice i ncentive leave pay while they were under the employ of JPL. Instead, JPL provided salaries which were over and above the minimumwage. The Co urt rules that the difference between the minimum wage andthe actual salary rece ived by private respondents cannot be deemed astheir 13th month pay and service incentive leave pay as such difference isnot equivalent to or of the same import as the said benefits contemplatedby law. Thus, as properly held by the Court of Appeals and by the NLRC, private respondents are entitled to the 13th month pay and service incentive leave pay. However, the Court disagrees with the Court of Appeals' ruling that the13th mont h pay and service incentive leave pay should be computed fromthe start of employ ment up to the finality of the NLRC resolution. Whilecomputation for the 13th mo nth pay should properly begin from the firstday of employment, the service incen tive leave pay should start a yearafter commencement of service, for it is only then that the employee isentitled to said benefit. On the other hand, the comput ation for bothbenefits should only be up to 15 August 1996, or the last day that privaterespondents worked for JPL. To extend the period to the date of finality ofthe NLRC resolution would negate the absence of illegal dismissal, or to bemo re precise, the want of dismissal in this case. Besides, it would be unfairto re quire JPL to pay private respondents the said benefits beyond 15August 1996 when they did not render any service to JPL beyond that date. These benefits are given by law on the basis of the service actuallyrendered by the employee, and in the particular case of the serviceincentive leave, is grant ed as a motivation for the employee to stay longerwith the employer. There is no cause for granting said incentive to one whohas already terminated his relation ship with the employer. The law in protecting the rights of the employees authorizes neitheroppression n or self-destruction of the employer. 'It should be made clearthat when the law t ilts the scale of justice in favor of labor, it is butrecognition of the inheren t economic inequality between labor andmanagement. The intent is to balance the scale of justice; to put the twoparties on relatively equal positions. There may be cases where thecircumstances warrant favoring labor over the interests of ma nagementbut never should the scale be so tilted if the result is an injustice to theemployer. Justitia nemini neganda est (Justice is to be denied to none).[43] WHEREFORE, the petition is GRANTED IN PART. The Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 62631 are hereby MODIFIED. The award of separation pay is deleted. Petitioner is ordered to pay private respondents their 13th month paycommencing from the date of employment up to 15 August 1996, as wellas service incentive le ave pay from the second year of employment up to15 August 1996. No pronouncement as to costs. G.R. No. 117460 January 6, 1997, REPUBLIC PLANTERS BANK nowknown as PNB-REPUBLIC BANK, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and ANTONIO G. SANTOS, respondents. FACTS: ANTONIO G. SANTOS was employed by Republic Planters Bank, nowknown as PNB -Republic Bank (PNB-RB), for thirty-one (31) years and fifteen (15) days occupying various positions. At the time of his retirement on 31May 19 90 he was a Department Manager with a monthly salary ofP8,965.00 and accumulated leave credits of two hundred and seventy-two (272) days. He received a gratuity pay of P434,468.52 out of whichP20,615.62 was

deducted for taxes due. Santos filed the instant suit for underpayment of gratuity pay, nonpayment of accumulated sick and vacation leaves, mid-year and year-endbonuses, financial assistance, at the same time claiming damages andattorney's fees. The Labor Arbiter found for complainant Santos and this finding wasaffirmed by t he National Labor Relations Commission (NLRC) on appeal. PNB-RB alleges in this petition that the resolution of NLRC is contrary tothe ev idence and existing jurisprudence; that NLRC gravely abused itsdiscretion when i t upheld the order of the Labor Arbiter awardingP661,210.63 to Santos; and, that the award to Santos of mid-year andyear-end bonuses, moral and exemplary damage s and attorney's fees hasno legal basis. Petitioner argues that Santos is not en titled to the award ashe signed aRelease, Waiver and Quitclaim therefor when he received his gratuity pay of P434,468.52. ISSUE: WON private respondent is entitled to gratuity pay, accumulatedsick and v acation leaves, award for exemplary damages, etc? HELD: We are not unaware that a quitclaim by an employee in favor of hisemployer amounts to a valid and binding compromise agreement betweenthem. 1 An agreement voluntarily entered into which represents areasonable settlement is binding on the parties and may not later bedisowned simply because of a change of mind. 2 On the other hand, we are not also unmindful of the principle thatquitclaims are ineffective to bar recovery for the full measure of theworker's rights 3 and th at acceptance thereof does not amount to estoppel. 4 Generally, quitclaims by laborers are frowned upon as contraryto pub lic policy. 5 And the fact that the consideration given in exchange

thereof was very much less than the amount claimed renders the quitclaimnull and void. 6 In the instant case, the total amount claimed by Santos isP908,022.65 o f which only P434,468.52 was received by him. Consideringthat the Release, Waive r and Quitclaim was signed by Santos underprotest as found by the Labor Arbiter and the NLRC, and the differencebetween the amount claimed and that paid cannot in any way beconsidered negligible, we deem it proper to recompute and determine theexact amount of the retirement benefits due private respondent. Weperceive t he waiver under the facts of the case to dangerously encroachon the entrenched d omain of public policy. PNB-RB avers that the NLRC gravely abused its discretion when itcomputed the gra tuity pay of Santos at P661,210.63 based on the salaryrate of the next higher ra nk on the theory that he acquired a vested rightover it pursuant to the 1971-197 3 Collective Bargaining Agreement (CBA). Petitioner posits that as the CBA had long expired it could no longer beused as basis in computing the gratuity pay of its retiring officers; instead, the computation should be based on the practice and policy of the bankeffective at the time of the employee's retirement. We cannot agree. Not so long ago we resolved exactly the same issuesin Republic Planters Bank v. National Labor Relations Commissions 8 which, coincidentally, emanated from a similar set of facts. In that case, Macariode Gu zman resigned from PNB-RB on 3 June 1985. The following day hefiled a complaint with the Department of Labor and Employment forunderpayment of gratuity pay, und erpayment of unused leaves and nonpayment of accrued leave credits. De Guzman bewailed the erroneouscomputation of his gra tuity pay and the cash value of his accumulatedleave credits, and maintained tha t it should have been based on the provisions of the 1971-1973 CBA instead of the 1982-1985 CBA enteredinto between PNB-RB and its rank-and-file employees. PNB-RB insists on disowning any practice or policy of granting gratuity payto it s retiring officers based on the salary rate of the next higher rank. Itadmitted however that it granted gratuity pay on the basis of the salaryrate of the next higher rank but only in the case of Simplicio Manalo. As toother instances when it granted gratuity pay based on the salary rate ofthe next higher rank, PNB-RB explains that those were not voluntarily donebut were in lawful compliance with court orders. computing the gratuity pay based on the performance rating of the retiringoffice r is a practice that is very likely susceptible to abuse as he will beplaced at the mercy of the members of the performance appraisalcommittee. Petitioner argues that the claim of Santos for bonuses corresponding to theyears 1985, 1986 and mid-year of 1987 has already prescribed. This iscorrect. Article 291 of the Labor Code states in part All money claimsarising from employer-empl oyee relations accruing during the effectivity of this Code shall be filed within three (3) years from the time the cause ofaction accrued; otherwise they shall be forever barred. Since Santos filed his complaint only on 12 July 1990, his claim for 1985(mid-ye ar and year-end), 1986 (mid-year and year-end), and 1987 (midyear) bonuses already prescribed. As regards bonuses for 1987 (year-end), 1988 (mid-year and year-end), 1989 (mid-year and year-end), and 1990(mid-year), we agree with petitioner that these should be based on theexisting salary rate a t the time of their accrual. The record shows howeverthat in 1988 Santos was fou nd guilty of an administrative charge. Hence, inconsonance with existing company policy, the 1988 (mid-year and yearend)

bonus should be forfeited in favor of the Bank. 17 As regards the award of moral and exemplary damages, as well asattorney's fees, we quote with approval the Comment of privaterespondent thus On the matter of mor al and exemplary damages, thesame is a must considering that petitioner is guilt y of bad faith by itscontinued refusal to pay his claims despite the final rulin gs of the SupremeCourt in similar other cases earlier cited. By refusing to abid e by thedoctrinal pronouncements of the Highest Tribunal, petitioner has shown t obe anti-labor. This stubborn attitude is not only contemptible but alsocontrary to morals, good customs and public policy. Regardless of its ownthinking on the issues presented vis-a-vis the judicial pronouncementsalready made, petitioner is duty-bound to respect the Supreme Courtdecisions which have become part of th e law of the land.Consequently, private respondent had suffered mental anguish and sleepless nights andtherefore , should be entitled to moral damages. And to serve as examplefor the public goo d so that others similarly inclined could be dissuadedfrom adopting the same det estable practice, petitioner should also besanctioned in the form of exemplary d amages. ACCORDINGLY, the 30 June 1993 Decision of the Labor Arbiter and the 30 August 1994 Resolution of the National Labor Relations Commission areAFFIRMED wi th the modification that petitioner PNB-REPUBLIC BANK isordered to pay private r espondent Antonio G. Santos the amount ofP423,661.00, less the applicable taxes ACE NAVIGATION CO., INC. and/or CONNING SHIPPINGLTD., petitioners, vs. COURT OF APPEALS (THIRTEENTHDIVISION), NATIONAL LABOR RELATIONS COMMISSION (FIRSTDIVISION ) and ORLANDO ALONSAGAY, respondents. Ace Navigation Co., Inc. (Ace Nav) recruited private respondentOrlando Alonsagay to work as a bartender on board the vessel M/V"Orient Express" owned by its pri ncipal, Conning Shipping Ltd. (Conning). Under their POEA approved contract of employment, Orlando shall receive a monthly basic salary of four hundred fifty U.S. dollars (U.S. $450.00), flat rate, including overtime pay for 12 hours ofwork da ily plus tips of two U.S. dollars (U.S. $2.00) per passenger per

day. He, was also entitled to 2.5 days of vacation leave with pay eachmonth. The contract was to last for one (1) year. Petitioners alleged that on June 13, 1994, Orlando was deployed andboarded M/V " Orient Express" at the seaport of Hong Kong. After theexpiration of the contract on June 13, 1995, Orlando returned to thePhilippines and demanded from Ace Nav his vacation leave pay. AceNav did not pay him immediately. It told him that he should have beenpaid prior to his disembarkation and repatriation to the Philipp ines. Moreover, Conning did not remit any amount for his vacation leavepay. Ace Nav, h owever, promised to verify the matter and askedOrlando to return after a few day s. Orlando never returned. On November 25, 1995, Orlando filed a complaint[3] before the labor arbiter for vacation leave pay of four hundred fifty U.S. dollars (U.S. $450.00) and unpaid tips amounting to thirty six, thousand U.S. dollars (U.S. $36,000.00).[4] On November 15, 1996, Labor Arbiter Felipe P. Pati ordered Ace Nav and Conning to pay jointly andseverally Orlando h is vacation leave pay of US$450.00. The claim fortips of Orlando was dismissed f or lack of merit.[5] Orlando appealed[6] to the National Labor Relations Commission (NLRC) on February 3, 1997. In a decision[7] promulgated onNovember 26, 1997, th e NLRC ordered Ace Nav and Conning to paythe unpaid tips of Orlando which amount ed to US$36,000.00 inaddition to his vacation leave pay. Ace Nav and Conning fil ed a motionfor reconsideration on February 2, 1998 which was denied on May 20,19 99.[8] On July 2, 1999, Ace Nav and Conning filed a petitionfor certiorari before the C ourt of Appeals to annul the decision of theNLRC. On July 28, 1999, the Court of Appeals promulgated a threepage resolution[9] dismissing the petition. Their motion forreconsideration file d on September 8, 1999 was denied on October 8,1999. Hence this appeal. ISSUE: Whether petitioners are liable to pay the tips to Orlando. HELD: The word [ tip ] has several meanings, with origins more orless obscure, conne cted with "tap" and with "top." In the sense of asum of money given for good ser vice, other languages are morespecific, e.g., Fr. pourboire, for drink. It is su ggested that [the word] isformed from the practice, in early 18th c. London coff eehouses, ofhaving a box in which persons in a hurry would drop a small coin, to gain immediate attention. The box was labelled To Insure Promptness; then just with the initials T.I.P. Tipping is done to get the attention and secure the immediateservices of a waite r, porter or others for their services. Since a tip isconsidered a pure gift out of benevolence or friendship, it can not bedemanded from the customer. Whether or not tips will be given isdependent on the will and generosity of the giver. A lthough acustomer may give a tip as a consideration for services rendered, its value still depends on the giver. They are given in addition to thecompensation by the employer. A gratuity given by an employer inorder to inspire the employee to exert more effort in his work is moreappropriately called a bonus. The NLRC and the Court of Appeals held that petitioners were liable topay tips t o Orlando because of the contract of employment. "It was thus a serious error on the part of the Labor Arbiter to rule that theti ps were already paid, much less to rule that said tips were directly paid tothe

crew of M/V "ORIENT PRINCESS." With Article 4 of the Labor Codereminding us that doubts should be resolved in favor of labor, we all themore find it compelling to rule that the complainant is still entitled to thecontractually covenanted su m of US$36,000.00. xxx." We disagree. The contract of employment betweenpetitioners and Orlando is catego rical that the monthly salary ofOrlando is US$450.00 flat rate. This already inc luded hisovertime pay which is integrated in his 12 hours of work. Thewords "plu s tips of US$2.00 per passenger per day" were writtenat the line for overtime. S ince payment for overtime was includedin the monthly salary of Orlando, the supp osed tips mentioned inthe contract should be deemed included thereat. The actuations of Orlando during his employment also showthat he was aware his m onthly salary is only US$450.00, no moreno less. He did not raise any complaint about the non-payment ofhis tips during the entire duration of his employment. A fter theexpiration of his contract, he demanded payment only of hisvacation leav e pay. He did not immediately seek the payment oftips. He only asked for the pay ment of tips when he filed thiscase before the labor arbiter. This shows that th e alleged nonpayment of tips was a mere afterthought to bloat up his claim. The records of the case do not show that Orlando was deprived ofany monthly sala ry. It will now be unjust to impose a burden onthe employer who performed the co ntract in good faith. Furthermore, it is presumed that the parties were aware ofthe plain, ordinary an d common meaning of the word "tip." As abartender, Orlando can not feign ignoran ce on the practice oftipping and that tips are normally paid by customers and no t bythe employer. It is also absurd that petitioners intended to give Orlando asalary higher than that of the ship captain. As petitioners pointout, the captain of M/V "Orient Pr incess" receives US$3,000.00per month while Orlando will receive US$3,450.00 per month ifthe tip of US$2.00 per passenger per day will be given in additionto hi s US$450.00 monthly salary. It will be against common sensefor an employer to gi ve a lower ranked employee a highercompensation than an employee who holds the h ighest positionin an enterprise.

However, Orlando should be paid his vacation leave pay. Petitioners denied this liability by raising the defense that theusual practice is that vacation leave pay is given beforerepatriation. But as the labor arbiter correctly observed, petitioners did not present any evidence to prove that theyalready paid the amou nt. The burden of proving payment was notdischarged by the petitioners. IN VIEW WHEREOF, the resolutions of the Court of Appealsin CA G.R. SP No. 53508 are reversed and set aside. The decision of the labor arbiter ordering petitioners to pay jointly andseverally the unpaid vacation leave pay of private respondent, Orlando Alonsagay, in the amount of US$450.00 and dismissinghis other claim for lack of merit is reinstated. [G.R. No. 123880. February 23, 1999], MARANAW HOTELS ANDRESORT CORPORATION, (Own er of Century Park SheratonManila), petitioner, vs. NATIONAL LABOR RELATIONS COM MISSION and EDDIE DAMALERIO, respondents. FACTS: Eddie Damalerio (Damalerio), a room attendant of the Century ParkSheraton Hotel, operated by Maranaw Hotel and Resort Corporation, wasseen by hotel guest Jamie Glaser (Glaser) with left hand inside the latter'ssuitcase. Confronted wi th what he was doing, Damalerio explained that hewas trying to tidy up the room. Not satisfied with the explanation ofDamalerio, Glaser lodged a written complai nt before William D. Despuig, shift-in-charge of security of the hotel. Glaser also reported that Damaleriohad previously asked from him souvenirs, cassettes, and othergiveaways. The complai nt was later brought by Despuig to the attention ofMajor Eddie Buluran, chief of Security of the hotel. On April 3, 1992, Damalerio was given a Disciplinary Action Notice (DAN). The next day, an administrative hearing was conducted on the matter. Among those present at the hearing were: 1) Lourdes Ricardo (room attendant), 2) Angelito Torres (floor supervisor), 3) Major Eddie Buluran (chief of security), 4) Susan Dino (Personnel representative), 5) Alfredo San Gabriel (senior floor supervisor)and 6) Ben Hur Amador (union representative). Taking the witness stand on his own behalf, Damaleriodenied the accusation against him, theorizing that when he found the roomof Glaser in disa rray, and was about to make the bed, he noticed somebelongings, such as socks an d T-shirts of the said hotel guest scatteredaround, so much so that he thought o f placing the same in hisluggage. While doing so, Glaser arrived. When asked by the latter ifsomething was wrong, he (Damalerio) said "I'm just cleaning your ro om," and Glaser remarked, "Good work," and then, the two of them chatted about Glaser's concert at the Araneta Coliseum. Damalerio received a memorandum[3] issued by Alfredo San Gabriel, Sr., Floor Supervisor, bearing the approval of Nicolas R. Kirit, ExecutiveHousekeeper , stating that he (Damalerio) was found to have committedqualified theft in viol ation of House Rule No. 1, Section 3 of Hotel Rules andRegulations. The same mem orandum served as a notice of termination of his employment.Damalerio filed with the Labor Arbiter a Complaint for illegal dismissal against the petitioner. After the parties had sent in theirpos ition papers, Labor Arbiter Ceferina J. Diosana decided the case. ISSUE: 1. WHETHER OR NOT RESPONDENT NLRC COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN HOLDING THAT PETITIONER FAILED TO ADDUCE CONCLUSIVE EVIDENCE IN SUPPORT OF ITS VERSION OF THE INCIDENT, CONSIDERING THE FACT THAT THE EVIDENCE ON RECORD

INELUCTABLY SHOWS THAT PRIVATE RESPONDENT WAS CAUGHT IN FLAGRANTE DELICTO. 2. WHETHER OR NOT RESPONDENT NLRC COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN NOT REVERSING THAT PORTION OF THE DECISION OF THE LABOR ARBITER ORDERING HEREIN PETITIONER TO PAY PRIVATE RESPONDENT HIS SHARE IN THE SERVICE CHARGE WHICH WAS COLLECTED DURING THE TIME HE WAS NOT WORKING IN THE HOTEL. HELD: The petition is barren of merit. Petitioner's theory that Damalerio was caught committing qualifiedtheft in flagr ante delicto is anemic of evidentiary support. Records disclose petitioner's failure to substantiate such imputation against him. During theinve stigation presided over by the Labor Arbiter, Damalerio narrated aplausible and satisfactory explanation for his behavior complained of. According to him, he was then cleaning the hotel room of Glaser, andwhile in the process of placing inside the luggage the personal belongingsof Glaser scat tered near the bed, the latter entered the room. Glaser did not bother to testify as all his things were intact. Although it was not completely proper for Damalerio to be touchingthe things of a hotel guest while cleaning the hotel rooms, personal belongings of hotel guests being off-limits to roomboys, under the attendant facts and circumstances, we believe that the dismissal of Damalerio was unwarranted. To be sure, the investigation held by thehotel securi ty people did not unearth enough evidence of culpability. It bears repeating that subject hotel guest lost nothing. Albeit petitioner mayhave reasons to doubt the honesty and trustworthiness of Damalerio, as aresult of wh at happened, absent sufficient proof of guilt, he (Damalerio), who is a rank-and-file employee, cannot be legally dismissed. [4] Unsubstantiated suspicions and baseless conclusions by employers arenot lega l justification for dismissing employees. The burden of proving the existence of a valid and authorized cause of termination is on the employer.[5] Any doubt should be resolved in favor of the employee, inkeeping wi th the principle of social justice enshrined in the Constitution.[6] All things studiedly considered and viewed in proper perspective, thedismissal o f Damalerio, under the premises, cannot be countenanced. As regards the share of Damalerio in the service charges collectedduring the per iod of his preventive suspension, the same form part of hisearnings, and his dis missal having been adjudged to be illegal, he is entitled not only to full backwages but also to other benefits, including a

just share in the service charges, to be computed from the start of hispreventiv e suspension until his reinstatement. However, mindful of the animosity and strained relations between theparties, ema nating from this litigation, we uphold the ruling a quo that in lieu of reinstatement, separation pay may be given to the private respondent, at the rate of one (1) month pay for every year of service. Should petitioner opt in favor of separation pay, the privaterespondent shall no longer be entitled to share in the service chargescollected during his preventive suspension. WHEREFORE, the petition is hereby DISMISSED and the Court affirmsthe questioned Decision of the National Labor Relations Commission, to beimplemented according to law and this disposition. No pronouncement as to costs. House of Sara Lee vs Rey (2006) G.R. 149013 Facts: The House of Sara Lee is engaged in the direct selling of a varietyof pro duct lines for men and women, including cosmetics, intimateapparels, perfumes, r eady to wear clothes and other novelty items, through its various outlets nationwide. In the pursuit of its business, thepetit ioner engages and contracts with dealers to sell the aforementionedmerchandise. These dealers, known either as Independent BusinessManagers (IBMs) or Independent G roup Supervisors (IGSs), dependingon whether they sell individually or through th eir own group, would obtainat discounted rates the merchandise from the petition er on credit or thensell the same products to their own customers at fixed price s alsodetermined by the petitioner. In turn, the dealers are paid Services Fees, or sales commissions, theamount of wh ich depends on the volume and value of their sales. Under existing company policy, the dealers must remit to the petitioner theproceeds of their sales within a designated credit period, which wouldeither be 38 days for IGSs or 52 days for IBMs, counted from the day thesaid dealers acquired the mer chandise from the petitioner. To discouragelate remittances, the petitioner impo ses a Credit Administration Charge, or simply, a penalty charge, on the value of the unremitted payment. The dealers under this system earn income through a profit marginbetween the dis counted purchase price they pay on credit to the petitionerand the fixed selling price their customers will have to pay. On top of thismargin, the dealer is giv en the Service Fee, a sales commission, based onthe volume of sales generated by him or her. Due to the sheer volume of sales generated by all of its outlets, the petitioner has found the need tostric tly monitor the 38-or 52-day rolling due date of each of its IBMs andIGSs through the employment of Credit Administration Supervisors (CAS) for each branch. The primary duty of the CAS is to strictly monitor each ofthese deadlines, to supervise the credit and collection of payments andoutstanding ac counts due to the petitioner from its independent dealersand various customers, and to screen prospective IBMs. To dischargethese responsibilities, the CAS is p rovided with a computer equipped withcontrol systems through which data is readi ly generated. Under this organizational setup, the CAS is under the direct and immediatesupervision of th e Branch Operations Manager (BOM). Cynthia Rey at the time of her dismissal from employment, held theposition of Cr edit Administration Supervisor or CAS at the Cagayan de OroCity branch of the pe titioner. She was first employed by the petitioner asan Accounts Receivable Cler k at its Caloocan City branch. In November1993, respondent was transferred to th

e Cagayan de Oro City branchretaining the same position. In January 1994, respon dent was elevated to the position of CAS. At that time, the Branch Operations Manager or BOMof the Ca gayan de Oro City branch was a certain Mr. Jeremiah Villagracia. In March 1995, respondent was temporarily assigned to the Butuan Citybranch. Sometime in June 1995, while respondent was still working in Butuan City, she allegedly instructed the Accounts Receivable Clerk of the Cagayan deOro outl et to change the credit term of one of the IBMs of the petitionerwho happens to be respondent s sister-in-law, from the 52-day limit to an unauthorized term of 60 da ys. The respondent made the instruction justbefore the computer data for the com putation of the Service Fee accruingto Ms. Rey-Petilla was about to be generated . Ms. Mendoza then reportedthis allegedly unauthorized act of respondent to her Branch OperationsManager, Mr. Villagracia. Acting on the report, as the petition er alleges, BOM Villagracia discreetly verified the records and discovered that it wasnot on ly the 52-day credit term of IBM Rey-Petilla that had been extendedby the respon dent, but there were several other IBMs whose credit termshad been similarly ext ended beyond the periods allowed by companypolicy. BOM Villagracia then summoned the respondent and required herto explain the unauthorized credit extensions. Issue: WON the respondent is entitled to 13th month pay. Held: The award of 13th month pay must be deleted. Respondent is not arank-and-f ile employee and is, therefore, not entitled to thirteenth-monthpay. However, th e NLRC and the CA are correct in refusing to award 14th and 15th month pay as well as the monthly salary increase of 10 percentper year f or two years based on her latest salary rate. The respondentmust show that these benefits are due to her as a matter of right. Mereallegations by the respondent do not suffice in the absence of proofsupporting the same. With respect to salar y increases in particular, therespondent must likewise show that she has a veste d right to the same, such that her salary increases can be made a component in thecomputation of back wages. What is evident is that salary increases are a mere expectancy. They are by nature volatile and dependent onnumerous variables, including the company s fiscal situation, theemployee s future performance on the j ob, or the employee s continuedstay in a position. In short, absent any proof, the re is no vested right to salary increases.

Honda Phils., Inc., vs Samahan ng Malayang Manggagawa saHonda (2005) G.R. 145561 Facts: The case stems from the collective bargaining agreement betweenHonda and the respondent union that it granted the computation of 14th month pay as the same as 13th month pay. Honda continues the practice ofgranting financial assistance covered every December each year of notless than 100% of t he basic salary. In the latter part of 1998, the partiesstarted to re-negotiate for the fourth and fifth years of the CBA. The unionfiled a notice of strike on the ground of unfair labor practice for deadlock. DOLE assumed jurisdiction over the case and certified it to the NLRC forcompulso ry arbitration. The striking employees were ordered to return towork and managem ent to accept them back under the same terms prior tothe strike staged. Honda is sued a memorandum of the new computation ofthe 13th month and 14th month pay to be granted to all its employeeswhereby the 31 long strikes shall be considered u nworked days forpurpose of computing the said benefits. The amount equivalent to of theemployees basic salary shall be deducted from these bonuses, with acommitm ent that in the event that the strike is declared legal, Honda shallpay the amou nt. The respondent union opposed the pro-rated computation of bonuses. Thisissue was submitted to voluntary arbitration where it ruled that thecompany s implementatio n of the pro-rated computation is invalid. Issue: WON the pro-rated computation of the 13th and 14th month pays and other bonuses in question is valid and lawful. Held: The pro-rated computation is invalid. The pro-rated computation of Honda as a company policy has not ripenedinto a com pany practice and it was the first time they implemented suchpractice. The payment of the 13th month pay in full month payment by Honda hasbecome an es tablished practice. The length of time where it should beconsidered in practice is not being laid down by jurisprudence. Thevoluntary act of the employer cannot be unilaterally withdrawn withoutviolating Article 100 of the Labor Code. The court also rules that the withdrawal of the benefit of paying a fullmonth sa lary for 13th month pay shall constitute a violation of Article 100 of the Labor Code. Producer s Bank v. NLRC Facts: . The employee of the producer bank file a petition to the NLRC that the PBP not complied the wage#6 and non payment of holiday pay. . The petitioner contends that the NLRC gravely abused its discretion in ruling as it did for the succeeding reasons: 1. It contravened the SC decision in traders Royal bank vs NLRC

2. Its ruling is not justified by law and Art. 100 of the labor code 3. Its ruling is contrary to the BA 4. The so called company practice invoked by its has no legaland moral bases . Petitioner under conservatorship and distressed is exempted under wage#6. Issues: . Alleged diminution of benefits, -Christmas and 13th bonus . Non compliance with the wage order#6 . Non payment of legal holiday pay Held: . The granting of a bonus is a management prerogative, somethinggiven in addition to what is ordinarily received by or strictly duethe recipient. . Section 28 A Appointment of conservator whenever, on the basisof a report submit ted b appropraiate supervising and examiningdepartment, the MB fins that a bank is in a state of continuing inability or unwillingness to maintain a condition o f solvency andliquidity deemed adequate to protect the depositors and creditors, the MB may appoint a conservator to take charge of the asses, liabilities and the management of that banking institution allmonies and debs du e said bank exercise all powers necessary topreserve the assets of the bank reor ganize the managementthereof and resorted. . He shall have the power to overrule or revoke the actions of theprevious managem ent and board of directors of the bank, anyprovision of law to the notwithstandi ng, and such other powers asthe monetary board shall deemed necessary. Doctrine: An employer cannot be forced to distribute bonuses which it canno long er afford to pay, a bonus is an amount granted and paid toanemployee for his ind ustry and loyalty which contributed to the successof the employers business and made possible the realization of profile. It isan act of generosity and is a man agement prerogative, given in addition towhat is ordinarily received by or stric tly due the recipient. Thus, it is not ademandable and enforceable obligation, e xcept when it is made part of thewage, salary or compensation of the employee. The conservator was justified in reducing the mid-year and Christmasbonuses of p etitioner s employees. Ultimately, it is to the employee sadvantage that the conserv atorship achieve its purposes otherwise, theclosure of the company would result in the employees losing their jobs. PD 851 requires all employees to pay their employees a basic salary of notmore t han P1, 000 at 13th monthly pay. However, employeesalreadypaying their employees a 13th month pay are not covered by the law. Theterm equivalent shall be construc ted to include Christmas bonus, midyear bonus, cash bonuses and other payments a mounting to not less than1 /12 of the basic salary. The intention was to grant r elief to those notactually paid a bonus, by whatevername called. Thus, petitione r is justifiedin crediting the mid year bonus and Christmas bones as part of the

13th

month pay. The divisor used by petitioner in arriving at the employee s daily rateforthe purp ose of computing salary related benefits is 314 days. This findingwas not disput ed by the NLRC. However, the divisor was for the solepurpose of increasing the e mployee s overtime pay and was not meant toreplace the use of 314 as the divisor i n the computation of thedaily rate for salary related benefits. UNITED CMC TEXTILE WORKERS UNION v. VALENZUELA Facts: Sometime in 1979, petitioner filed a complaint against CentralTextile Mil ls, Inc. (CTMI, for brevity) at the Ministry of Labor andEmployment for non-paym ent of Christmas bonus of the rank and fileemployees of said company as provided in Art. XI of the then existingcollective bargaining agreement between petition er and CTMI. Among theprovisions of the said collective agreement is the payment of Christmasbonus based on a schedule. To be paid to all employees on or before thebeginning of the Christmas vacation. Respondent CTMI appealed saiddecision t o the NLRC which affirmed the Labor Arbiter's decision with the modification that the complainant (petitioner herein) was ordered tofurnish a co py of the computation list in order that respondents may verifythe correctness a nd/or validity of the individual claims and for the latter topresent their objec tion, if any, to the Labor Arbiter of origin, prior to theexecution of the decis ion. Petitioner filed with the NLRC a motion for execution of the decision in October, 1984. Due to the appeal of CTMI, respondent Labor Arbiter refused to continue with the execution of thefinal orde r or decision in G.R. No. 58666 contending that it has becomemoot and academic. Issue: WON the case has been moot and academic Held: We find the contentions of petitioner more meritorious than thecontentions of respondents. When We dismissed the petition for review ofprivate respondents in G.R. No. 58666 on January 20,1982, for lack of merit, We did so upon the doctrine laid down in the Marcopper Case whichwas prom ulgated on June 11, 1981. Before the dismissal of said casebecame final and exec utory, We decided the La Carlota case on May 31, 1982 wherein We ruled that employees are no longer entitled to anadditional Chri stmas bonus or other Christmas benefits if they are alreadyentitled to a 13th mo nth pay. Meanwhile in Case No. 58666 the companyfiled their motion for reconside ration of the dismissal of their petition whichWe denied as per Our resolution o n August 18, 1982.Subsequently, saiddismissal became final and executory as per Entry of Judgmentdated September 22, 1982.Thus, it can be seen that despite the La Carlotaruling We denied the company's Motion for reconsideration and Wereiter ated Our previous dismissal of the petition for review for lack ofmerit. This on ly goes to show that We refused to apply or did not choose toapply the La Carlot a doctrine to the case at bar. And We have consistentlyheld in a number of Our d ecisions that judgments which had long become final and executory can no longer be amended or modified by the courts. Such is the doctrine known as "the law of the case." Furthermore, the findings of the NLRC as stated in its decision 4 show that the claim is for Christmas bonus for the year 1978 only. It appears from thereco rds that the employees of the respondent company had been paidtheir bonuses in a ccordance with the collective bargaining agreement, inaddition to the 13th month pay, for the years 1979 and 1980. The Page431 collective bargaining agreement i n question took effect on November1, 1978, 3 years after the promulgation of P.D . No. 851. If the Christmasbonus was included in the 13th month pay, then there would be no needfor having a specific provision on Christmas bonus in the CBA. B ut it didprovide for a bonus in graduated amounts depending on the length ofserv

ice of the employee. The intention is clear therefore that the bonusprovided in the CBA was meant to be in addition to the legal requirement. Moreover, why exclude the payment of the 1978 Christmas bonus and payonly the 19 79-1980 bonus. The classification of the company's workers inthe CBA according t o their years of service supports the allegation that thereason for the payment of bonus was to give bigger reward to the senioremployees a purpose which is not found in P.D. 851. A bonus under theCBA is an obligation created by the contrac t between the management andworkers while the 13th month pay is mandated by the law (P.D. 851). Likewise We find no merit in respondent's allegations that the applicabilityof t he said La Carlota ruling to the case at bar is explicitly recognized byherein p etitioner. A cursory reading of the CBA signed on November 2,1983 5shows that pe titioner Union recognizes only the application of the LaCarlota doctrine in so f ar as it had agreed to the deletion of the provisionon payment of Christmas bonu s in the new CBA of 1983 withoutnecessarily giving up their claim for their 1978 bonus under their formercollective bargaining agreement. Petition granted. ESCARIO v. NLRC Facts: The petitioners were among the regular employees of respondentPinakamasar ap Corporation (PINA), a corporation engaged inmanufacturing and selling food se asoning. They were members ofpetitioner Malayang Samahan ng mga Manggagawa sa Ba lanced Foods(Union). In the morning of March 1993, all the officers and some 200 members ofthe Union walked out of PINA s premises and proceeded to the barangayoffice to show support for Juanito Caete, an officer of the Union chargedwith oral defamation by PINA s pe rsonnel manager Manor s secretary. Itappears that the proceedings in the barangay resulted in a settlement, andthe officers and members of the Union all returned to work thereafter. As a result of the walkout, PINA preventively suspended all officers of the Unionbeca use of the March 13, 1993 incident. PINA terminated the officers of the Union after a month.

PINA filed a complaint for unfair labor practice (ULP) and damages. Thecomplaint was assigned to then Labor Arbiter Raul Aquino, who ruled in hisdecision that t he incident was an illegal walkout constituting ULP; and thatall the Union s offic ers, except Caete, had thereby lost their employment. The Union filed a notice of strike, claiming that PINA was guilty of unionbustin g through the constructive dismissal of its officers. The Union held astrike vot e, at which a majority of 190 members of the Union voted tostrike. PINA retaliated by charging the petitioners with ULP and abandonment ofwork, sta ting that they had violated provisions on strike of the collectivebargaining agr eement (CBA), such as: (a) sabotage by the insertion offoreign matter in the bot tling of company products; (b) decreasedproduction output by slowdown; (c) serio us misconduct, and willfuldisobedience and insubordination to the orders of the Management and itsrepresentatives; (d) disruption of the work place by invading the premisesand perpetrating commotion and disorder, and by causing fear andappr ehension; (e) abandonment of work since June 28, 1993 despitenotices to return t o work individually sent to them; and (f) picketing withinthe company premises o n June 15, 1993 that effectively barred with theuse of threat and intimidation t he ingress and egress of PINA s officials, employees, suppliers, and customers. The Third Division of the National Labor Relations Commission (NLRC) issued a temporary restraining order (TRO), enjoining the Union s officersand memb ers to cease and desist from barricading and obstructing theentrance to and exit from PINA s premises, to refrain from committing anyand all forms of violence, an d to remove all forms of obstructions such as streamers, placards, or human barricade. NLRC granted the writ ofpreliminary inj unction.[10] Labor Arbiter Jose G. de Vera (LA) rendered a decision: The complainant sprayer fo r decertification of the respondent union being outside of thejurisdiction of th is Arbitration Branch may not be given due course. On appeal, the NLRC sustained the finding that the strike was illegal, butrevers ed the LA s ruling that there was abandonment. However, we disagree with the conclusion that respondents unionmembers should be considered to have abandoned their employment. TheCA affirmed the NLRC in denyin g the petitioners claim for full backwages. Issue: WON petitioners are entitled to full backwages from the date ofdismissal until the date of actual reinstatement due to their not beingfound to have aband oned their jobs Ruling: CA s decision affirmed but the decision on the amount of the backwages in order to accord with equity and jurisprudence is modified. The petitioners were terminated for joining a strike that was later declaredto b e illegal. The NLRC ordered their reinstatement or, in lieu of reinstatement, the payment of their separation pay, because they weremere rank-a nd-file workers whom the Union s officers had misled into joining the illegal strike. They were not unjustly dismissed from work. Based on the text and intent of the two aforequoted provisions of theLaborCode, therefore, it is plain that Article 264(a) is the applicable one. Petitioners not entitled to backwages despite their reinstatement. Thepetitioner s participation in the illegal strike was precisely what promptedPINA to file a c omplaint to declare them, as striking employees, to havelost their employment st

atus. However, the NLRC ultimately ordered theirreinstatement after finding that they had not abandoned their work byjoining the illegal strike. They were thus entitled only to reinstatement, regardless of whether or not the strike was the consequence of theemployer s ULP. As a general rule, backwages are granted to indemnify adismissed employee for hi s loss of earnings during the whole period thathe is out of his job. Considering that an illegally dismissed employee is notdeemed to have left his employment, he is entitled to all the rights andprivileges that accrue to him from the emplo yment. The grant ofbackwages to him is in furtherance and effectuation of the pu blicobjectives of theLabor Code, and is in the nature of a command to theemploye r to make a public reparation for his illegal dismissal of theemployee in violat ion of the Labor Code. That backwages are not grantedto employees participating in an illegal strike simply accords with thereality that they do not render work for the employer during the period ofthe illegal strike. Under the principle of a fair day s wage for a fair day slabor, the petitioners were not entitled to the w ages during the period ofthe strike (even if the strike might be legal), because they performed nowork during the strike. Verily, it was neither fair nor just t hat the dismissedemployees should litigate against their employer on the latter s time.[25] Appropriate Amount for Separation Pay is One Month per Year of Service. The petitioners were ordered reinstated because they were unionmembers merely in stigated or induced to participate in the illegal strike. By joining the strike, they did not renounce their employment relation withPINA but remained as its employees. The absence from an order of reinstatement of an alternative relief should the employer or a supervening event not within the control of theemployee preven t reinstatement negates the very purpose of the order. The judgment favorable to the employee is thereby reduced to a merepaper victory , for it is all too easy for the employer to simply refuse tohave the employee b ack. To safeguard the spirit of social justice that theCourt has advocated in fa vor of the working man, therefore, the right toreinstatement is to be considered renounced or waived only when theemployee unjustifiably or unreasonably refuses to return to work uponbeing so ordered or after the employer has offered to rei nstate him. Philippine Duplicators Inc. vs. NLRC GR 110068 February, 15, 1995Ponente: Feliciano

FACTS: Productivity bonuses are generally tied to the productivity or profitgene ration of the employer corporation. Productivity bonuses are notdirectly depende nt on the extent an individual employee exerts himself. Aproductivity bonus is s omething extra for which no specific additionalservices are rendered by any part icular employee and hence not legallydemandable, absent a contractual undertakin g to pay it. Sales commissions are intimately related to or directly proportional to theexten t or energy of an employee's endeavours. Commissions are paidupon the specific r esults achieved by a salesman-employee. It is apercentage of the sales closed by a salesman and operates as an integralpart of such salesman's basic pay. ISSUE: 1. WON The commissions received by the salesmen were part of the wages d for their 13th month pay. -Yes 2. WON Productivity bonus shall be considered as part of wages in 13th month pay -No HELD: to be considere

1. The commissions were an integral part of the pay of the workers, considering that the fixed wage was only 30% of what they werenormally receiving . 2. Productivity bonuses are generally tied to the productivity, orcapacity for reve nue production, of a corporation; such bonusesclosely resemble profit-sharing pa yments and have no cleardirector necessary relation to the amount of work actual ly done byeach individual employee. More generally, a bonus is an amountgranted and paid ex gratia to the employee; its paymentconstitutes an act of enlightened generosity and self-interest onthe part of the employer, rather than as a deman dable orenforceable obligation. Since productivity bonus is notdemandable, then it cannot be considered part of basic salarywhen time comes to compute 13th mont h pay. Additional payments made to employees, to the extent they partake of the nature of profit-sharing payments, are properlyexcluded from the ambit of the term "basic salary" for purposes ofcomputing the 13th month pay due to employees. Such additional payments are not "commissions" within the meaning of the secondparagraph of Sect ion 5 (a) of the Revised Guidelines Implementing13th Month Pay. The Supplementary Rules and Regulations Implementing P.D. No. 851 subsequently issued by former Labor Minister Ople sought toclarify the scope of items excluded in the computation of the 13thmonth pay; viz.: Sec. 4. Overtime pay, earnings and other remunerations which are not part of the basic salary shall not be included in the computation of the 13th month pay. Rosario Bros v. Ople FACTS: Private respondents are tailors, pressers, stitchers and similarworkers h ired by the petitioner in its tailoring department (ModesSuburbia). Some had wor ked there since 1969 until their separation onJanuary 2, 1978. For their service s, they were paid weekly wages on piecework basis, minus the withholding tax per Bureau of Internal Revenue (BIR) rules. Further, they were registered with the Social Security System (SSS)

as employees of petitioner and premiums were deducted from their wages; they were also members of the Avenida-Cubao Manila COD DepartmentStore Labor Uni on which has a Collective Bargaining Agreement with thecompany and; they were re quired to report for work from Monday throughSaturday and to stay in the tailori ng shop for no less than eight (8) hours aday, unless no job order was given the m after waiting for two to threehours, in which case, they may leave and may com e back in the afternoon. Their attendance was recorded through a bundy clock just like the otheremployees of petitioner. A master cutter distributes job orders equally, supervises the work and sees to it that they were finished as soon aspossible. On September 7, 1977, the private respondents filed with the RegionalOffice of t he Department (now Ministry) of Labor a complaint for violationof Presidential D ecree 851 (13th month pay) and Presidential Decree 525, as amended by Presidential Decree 1123 (Emergency Living Allowance) against herein petitioner. After petitioner had filed its answer, the case was certified for compulsoryarbi tration to the Labor Arbiter who, after due hearing, rendered a decisionon Decem ber 29, 1977 dismissing "private respondents" claims for unpaidemergency living allowance and 13th month pay, for lack of merit, uponfinding that the complainan ts (herein private respondents) are notemployees of the respondent (herein petit ioner) within the meaning ofArticle 267(b)of the Labor Code. As a consequence, t he privaterespondents were dismissed on January 2, 1978 and this prompted them t ofile a complaint for illegal dismissal with the Ministry of Labor. Meanwhile, the National Labor Relations Commission (NLRC) affirmed the decision ofthe Labor Arbiter and dismissed private respondents' appeal for lack ofmerit. Labor Arbiter, issued an order directing the Chief of the Research andInformatio n Department of the Commission to designate a Socio-EconomicAnalyst to compute t he balance of private respondents' claims for the 13thmonth pay and emergency li ving allowance in accordance with respondentMinister's decision of March 27, 197 9. Pursuant thereto, a report, datedMarch 4, 1980, was submitted computing the b alance of privaterespondents' claims for emergency living allowance and 13th mon th pay

up to February 29,1980 in the total amount of P71,131.14. A writ ofexecution was issued for the satisfaction of said amount. ISSUE: WON an employer-employee relationship exists between petitionerand privat e respondents HELD: Yes. The existence of ER-EE relationship is determined by: theselection an d engagement of employee, payment of wages, power ofdismissal, power to control employee s conduct. An independent contractor is the one who exercises independentemployment and con tracts to do a piece of work according to his ownmethods without being subjected to control of his employer except as tothe result of his work. In the case at bar, the selection and hiring of respondents was done bypetitione r through the master cutter. Respondents received their weeklywages from petitio ner on piece-work basis within the meaning of the term wage under the Labor Code, w hich defined as the remuneration orearnings. However, designated, whether fixed o n a time, task, piece orcommission basis, payable by an employer to an employee under a writtenor unwritten contact for work done or to be done or for services rendered or to be rendered. Petitioner also had the power to dismiss respondents, thus, the latter sconduct wa s controlled by petitioner. Respondents were allowed to registerwith SSS and wit hholding taxes were also deducted from their wages. Wherefore, petition is dismissed. PETROLEUM SHIPPING LTD. V. NLRC Facts: Esso International Shipping (Bahamas) Co., Ltd., ("Esso") throughTrans-Gl obal Maritime Agency, Inc. ("Trans-Global") hired Florello W. Tanchico ("Tanchico") as First Assistant Engineer. In 1981, Tanchicobecame Chief Engineer. On 13 October 1992, Tanchico returned to thePhilippines for a two-mon th vacation after completing his eight-monthdeployment. Tanchico underwent the required standard medical examination prior toboarding th e vessel. The medical examination revealed that Tanchico wassuffering from "Isch emic Heart Disease, Hypertensive Cardio-MuscularDisease and Diabetes Mellitus." Tanchico took medications for two months and a subsequent stress test showed a negative result. Esso no longerdeployed Ta nchico. Instead, Esso offered to pay him benefits under theCareer Employment Inc entive Plan. Tanchico accepted the offer. Tanchico filed a complaint against Esso, Trans-Global and MalayanInsurance Co., Inc. ("Malayan") before the Philippine Overseas EmploymentAdministration (POEA) for illegal dismissal with claims for backwages, separation pay, disability and medical benefits and 13th month pay. In view of the enactment of Republic Act No. 8042 ("RA 8042")4 transferringto the N ational Labor Relations Commission (NLRC) the jurisdiction overmoney claims of o verseas workers, the case was indorsed to theArbitration Branch of the National Capital Region. In a Decision5 dated 16 October 1996, Labor Arbiter Jose G. De Vera ("Labor Arbiter De Vera") dismissed the complaint for lack of merit. Tanchico appealed to the NLRC. The Ruling of the NLRC : NLRC affirmed the Decision of Labor Arbiter De Vera. Tanchico filed a motion for reconsideration. On the claim of illegaldismis

sal, the same is unavailing as complainant had been declared as onewith partial permanent disability. Thus, he should be entitled to disabilitybenefit of 18 day s for every year of credited service of fourteen (14) yearsless the amount he al ready received under the Company s Disability Plan. On the claim of 13th month pay, the respondent Agency not falling underthe enume rated exempted employers under P.D. 851 and in the absenceof any proof that resp ondent is already paying its employees a 13th monthpay or more in a calendar yea r, perforce, respondent agency should paycomplainant his monthly pay computed at the actual month worked, whichis 8 months. Since complainant was forced to liti gate his case, he is herebyawarded 10% of the total award as attorney s fees. The Ruling of the Court of Appeals: The Court of Appeals ruled thatTanchico was a regular employee of Petroleum Shipping. The Court ofAppeals held that petition ers are not exempt from the coverage ofPresidential Decree No. 851, as amended ( "PD 851") which mandates thepayment of 13th month pay to all employees. The Cour t of Appeals furtherruled that Tanchico is entitled to disability benefits based on his 14 yearsof tenure with petitioners. The Court of Appeals stated that the employeremployee relationship subsisted even during the period of Tanchico svacation. The Court of Appeals noted that petitioners were aware ofTanchico s medical history ye t they still deployed him for 14 years. Finally, the Court of Appeals sustained the award of attorney s fees. Issues: 1. Whether Tanchico is a regular employee of petitioners; and 2. Whether Tanchico is entitled to 13th month pay, disabilitybenefits and attorn ey s fees. Held: The petition is partly meritorious. Seafarers are consideredcontractual em ployees. They can not be considered as regular employeesunder Article 280 of the Labor Code. Their employment is governed by thecontracts they sign everytime th ey are rehired and their employment isterminated when the contract expires. Thei r employment is contractuallyfixed for a certain period of time. They fall under the exception of Article280 whose employment has been fixed for a specific proj ect orundertaking the completion or termination of which has been determinedat t he time of engagement of the employee or where the work or servicesto be perform ed is seasonal in nature and the employment is for theduration of the season. We need not depart from the rulings of the Court in

the two aforementioned cases which indeed constitute stare decisis with respect to the employment status of seafarers. In this jurisdiction andas c learly stated in the Coyoca case, Filipino seamen are governed by theRules and R egulations of the POEA. The Standard Employment Contractgoverning the employment of All Filipino Seamen on Board Ocean-GoingVessels of the POEA, particularly in Part I, Sec. C specifically provides thatthe contract of seamen shall be for a fixed period. Moreover, it is an accepted maritime industry practice that employment ofseafare rs are for a fixed period only. Constrained by the nature of theiremployment whi ch is quite peculiar and unique in itself, it is for the mutualinterest of both the seafarer and the employer why the employment statusmust be contractual only or for a certain period of time. Seafarers spendmost of their time at sea and un derstandably, they can not stay for a longand an indefinite period of time at se a. Limited access to shore societyduring the employment will have an adverse imp act on the seafarer. Thenational, cultural and lingual diversity among the crew during the COE is areality that necessitates the limitation of its period. Court of Appeals erredin ruling that Tanchico was a regular employee of Petroleum Shi pping. On 13th month pay: Tanchico was a contractual, not a regular, employee. Further, PD 851 does not apply to seafarers. Tanchico s employment isgoverned by h is Contract of Enlistment ("Contract"). The Contract has beenapproved by the POE A in accordance with Title I, Book One of the LaborCode and the POEA Rules Gover ning Employment. The coverage of theContract includes Compensation, Overtime, Su ndays and Holidays, Vacations, Living Allowance, Sickness, Injury and Death, Transportationand Trave l Expense, Subsistence and Living Quarters. It does not providefor the payment o f 13th month pay. The Contract of Employment, which isthe standard employment co ntract of the POEA, likewise does not providefor the payment of 13th month pay. International School Alliance of Educators vs. Quisumbing Facts: International School, Inc., pursuant to PD 732, is a domestic educational institution established primarily for dependents of foreigndiplomati c personnel and other temporary residents. To enable the Schoolto continue carry ing out its educational program and improve its standardof instruction, Section 2(c) of the same decree authorizes the School toemploy its own teaching and mana gement personnel selected by it eitherlocally or abroad, from Philippine or othe r nationalities, such personnelbeing exempt from otherwise applicable laws and r egulations attendingtheir employment, except laws that have been or will be enac ted for theprotection of employees. The School hires both foreign and local teachers as members of its faculty, classifying the same into two: (1) foreign-hires and (2) local-hires. The School employs four tests to determine whether a faculty member shouldbe classif ied as a foreign-hire or a local hire: (a) What is one's domicile? (b) Where is one's home economy? (c) To which country does one owe economic allegiance? (d) Was the individual hired abroad specifically to work in the School and was the School responsible for bringing thatindividual to the Philippines? Should the answer to any of these queriespoint to the Philippi nes, the faculty member is classified as a local hire; otherwise, he or she is deemed a foreign-hire. The School grants foreign-hires certain benefits not accorded local-hires. These include housing, transportation, shipping costs, taxes, and homeleave trav el allowance. Foreign-hires are also paid a salary rate twenty-fivepercent (25%) more than local-hires. The School justifies the difference on

two "significant economic disadvantages" foreign-hires have to endure, namely: (a) the "dislocation factor" and (b) limited tenure. The compensation scheme is simply the School's adaptive measure to remaincompetitive on an international level in terms of attracting competent professionals in the field of international education. Issue: WON local hire teachers shall enjoy same salary as foreign hireteachers w here they perform the same work. Held: Employees are entitled to same salary for performance of equal work. Notably, the International Covenant on Economic, Social, and Cultural Rights, supra, in Article 7 thereof, provides: The States Parties to the present Covenant recognize the right of everyone to the enjoyment of justand fav orable conditions of work, which ensure, in particular: ( a) Remuneration which provides all workers, as a minimum, with: (i) Fairwages and e qual remuneration for work of equal value without distinctionof any kind, in par ticular women being guaranteed conditions of work notinferior to those enjoyed b y men, with equal pay for equal work; Theforegoing provisions impregnably instit utionalize in this jurisdiction the long honored legal truism of "equal pay for equal work." Persons who workwith su bstantially equal qualifications, skill, effort and responsibility, undersimilar conditions, should be paid similar salaries. This rule applies to theSchool. The School contends that petitioner has not adduced evidence that localhires perform work equal to that of foreign-hires. The Court finds this argument a little inconsiderate. If an employer accords employees thesame positi on and rank, the presumption is that these employees performequal work. If the e mployer pays one employee less than the rest, it is notfor that employee to expl ain why he receives less or why the othersreceive more. The employer has discrim inated against that employee; it isfor the employer to explain why the employee is treated unfairly. In this case, the employer has failed to discharge this burden. There is noevide nce here that foreign-hires perform 25% more efficiently or effectively than the local-hires. Both groups have similar functions andresponsi bilities, which they perform under similar working conditions. STATES MARINE CORPORATION V. CEBU SEAMAEN'S ASSOCIATION

Facts: Petitioners States Marine Corporation and Royal Line, Inc. wereengaged in the business of marine coastwise transportation, employingtherein several steam ships of Philippine registry. They had a collectivebargaining contract with the respondent Cebu Seamen's Association, Inc. The respondent union filed with the CIR a petition against the StatesMarine Corp oration alleging that the officers and men working on boardthe petitioners' vess els have not been paid their sick leave, vacation leaveand overtime pay; that th e petitioners threatened or coerced them toaccept a reduction of salaries, obser ved by other shipowners; that after theMinimum Wage Law had taken effect, the pe titioners required theiremployees on board their vessels, to pay the sum of P.40 for every meal, while the masters and officers were not required to pay their meals andthat beca use Captain Carlos Asensi had refused to yield to the generalreduction of salari es, the petitioners dismissed said captain who nowclaims for reinstatement and t he payment of back wages from December25, 1952, at the rate of P540.00, monthly. The petitioners' shipping companies, answering, averred that very muchbelow 30 o f the men and officers in their employ were members of therespondent union; that the work on board a vessel is one of comparativeease; that petitioners have suf fered financial losses in the operation oftheir vessels and that there is no law which provides for the payment ofsick leave or vacation leave to employees or w orkers of private firms; thatas regards the claim for overtime pay, the petition ers have alwaysobserved the provisions of Comm. Act No. 444, (Eight-Hour Labor L aw), notwithstanding the fact that it does not apply to those who provide meansof tra nsportation; that the shipowners and operators in Cebu were payingthe salaries o f their officers and men, depending upon the margin of profitsthey could realize and other factors or circumstances of the business; thatin enacting Rep. Act No . 602 (Minimum Wage Law), the Congress had inmind that the amount of P.40 per me al, furnished the employees should bededucted from the daily wages; that Captain Asensi was not dismissed foralleged union activities, but with the expiration o f the terms of the contractbetween said officer and the petitioners, his service s were terminated. A decision was rendered in favor of the respondent union. The companiesfiled the present writ of certiorari, bearing in mind the deep-rootedprinciple that the f actual findings of the Court of Industrial Relations shouldnot be disturbed, if supported by substantial evidence, the different issuesare taken up, in the orde r they are raised in the brief for the petitioners. Issue: WON the cost of said meals may not be legally deducted from thewages or s alaries of the aforesaid crew members by the herein petitioners. Held: It was shown by substantial evidence, that since the beginning ofthe opera tion of the petitioner's business, all the crew of their vessels havebeen signin g "shipping articles" in which are stated opposite their names, the salaries or wages they would receive. All seamen, whether members ofthe crew or deck officers or engineers, have been furnished free meals bythe ship owners or operators. It is, therefore, apparent that, aside from the payment of the respective salaries or wages, set opposite the names of thecrew m embers, the petitioners bound themselves to supply the crew withship's provision s, daily subsistence or daily rations, which include food. We hold that such deductions are not authorized. In the coastwise business of transportation of passengers and freight, the men who compose thecomplement o f a vessel are provided with free meals by the shipowners, operators or agents, because they hold on to their work and duties,

regardless of "the stress and strain concomitant of a bad weather, unmindful of the dangers that lurk ahead in the midst of the high seas." It is argued that the food or meals given to the deck officers, marineengineers and unlicensed crew members in question, were mere "facilities" which should be deducted from wages, and not "supplements" which, according to said section 19, should not be deducted from such wages, because it is provided therein: "Nothing in this Act shall deprive anemployee of the right to such fair wage ... or in reducing supplementsfurnished on the date of enactment." In short, the benefit or privilege given to the employee which constitutesan ext ra remuneration above and over his basic or ordinary earning orwage, is suppleme nt; and when said benefit or privilege is part of thelaborers' basic wages, it i s a facility. The order CIR to the company to continue granting this privilege, wasupheld by t his Court. Millares et al., vs NLRC 305 SCRA 501 Facts: Petitioners numbering one hundred sixteen occupied the positionsof Techni cal Staff, Unit Manager, Section Manager, Department Manager, Division Manager and Vice President in the mill site of respondent PaperIndustri es Corporation of the Philippines (PICOP) in Bislig, Surigao del Sur. In 1992 PICOP suffered a major financial setback allegedly brought aboutby the j oint impact of restrictive government regulations on logging andthe economic cri sis. To avert further losses, it undertook a retrenchment program and terminated the services of petitioners. Accordingly, petitioners received separation pay computed at the rate of one (1) monthbasic p ay for every year of service. Believing however that the allowancesthey allegedl y regularly received on a monthly basis during their employment should have been included in the computation thereof theylodged a com plaint for separation pay differentials. Issue: Whether the allowances are included in the definition of "facilities" in Art. 97, par. (f), of the Labor Code, being necessary and indispensablefor th eir existence and subsistence.

Held: The allowances are not part of the wages of the employees. Wage isdefined in letter (f) as the remuneration or earnings, however designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece, or commission basis, or other method ofcalcu lating the same, which is payable by an employer to an employeeunder a written o r unwritten contract of employment for work done or tobe done, or for services r endered or to be rendered and includes the fair and reasonable value, as determined by the Secretary of Labor, of board, lodging, or other facilities customarily furnished by the employer to theemploye e. When an employer customarily furnishes his employee board, lodging orother facil ities, the fair and reasonable value thereof, as determined by theSecretary of L abor and Employment, is included in "wage." Customary isfounded on long-establis hed and constant practice connoting regularity. The receipt of an allowance on a monthly basis does not ipso facto characterize it as regular and forming part of salary because the nature ofthe g rant is a factor worth considering. The court agrees with the observation of the Office of the Solicitor General that the subject allowances were temporarily, not regularly, received by petitioners. Although it is quite easy to comprehend "board" and "lodging," it is not sowith "facilities." Thus Sec. 5, Rule VII, Book III, of the Rules Implementingthe Labo r Code gives meaning to the term as including articles or servicesfor the benefi t of the employee or his family but excluding tools of thetrade or articles or s ervice primarily for the benefit of the employer ornecessary to the conduct of t he employer's business. In determining whether a privilege is a facility, the criterion is not so muchit s kind but its purpose. Revenue Audit Memo Order No. 1-87 pertinentlyprovides 3.2 transportation, representation or entertainment expensesshall not constitute tax able compensation if: (a) It is for necessarytravelling and representation or en tertainment expenses paid or incurredby the employee in the pursuit of the trade or business of the employer, and (b) The employee is required to, and does, make an accounting/liquidation for such expense in accordance with the specificrequireme nts of substantiation for such category or expense.Board andlodging allowances f urnished to an employee not in excess of the latter'sneeds and given free of cha rge, constitute income to the latter except ifsuch allowances or benefits are fu rnished to the employee for the convenience of the employer and as necessary incident to properperformance of hi s duties in which case such benefits or allowances do notconstitute taxable inco me. The Secretary of Labor and Employment under Sec. 6, Rule VII, Book III, ofthe Ru les Implementing the Labor Code may from time to time fix inappropriate issuance s the "fair and reasonable value of board, lodging andother facilities customari ly furnished by an employer to his employees." Petitioners' allowances do not represent such fair and reasonable value asdeterm ined by the proper authority simply because the Staff/Manager'sallowance and tra nsportation allowance were amounts given by respondent company in lieu of actual provisions for housing and transportation needs whereas the Bislig allowance was given in consideration of being assigned to the hostile environment then prevailingin Bis lig. The inevitable conclusion is that subject allowances did not formpart of pe titioners' wages. SHS PERFORATED MATERIALS, INC vs. MANUEL F. DIAZ

Facts: Petitioner SHS Perforated Materials, Inc. (SHS) is a start-upcorporation organized and existing under the laws of the Republic of thePhilippines and regi stered with the Philippine Economic Zone Authority. Petitioner Winfried Hartmannshenn (Hartmannshenn), a German national, is its president, in which capacity he determines the administration anddirectio n of the day-to-day business affairs of SHS. Petitioner HinrichJohann Schumacher , also a German national, is the treasurer and one of the board directors. As such, he is authorized to pay all bills, payrolls, andot her just debts of SHS of whatever nature upon maturity. Schumacher isalso the Ex ecutive Vice-President of the European Chamber of Commerceof the Philippines (EC CP) which is a separate entity from SHS. Both entitieshave an arrangement where ECCP handles the payroll requirements of SHSto simplify business operations and minimize operational expenses. Thus, the wages of SHS employees are paid out by ECCP, through its AccountingServices Department headed by Juliet Taguiang (Taguiang). Manuel F. Diaz (respondent) was hired by petitioner SHS as Manager forBusiness D evelopment on probationary status from July 18, 2005 toJanuary 18, 2006, with a monthly salary of P100,000.00. Respondent sduties, responsibilities, and work hour s were described in the Contract ofProbationary Employment. Respondent was also instructed byHartmannshenn to report to the SHS office and plant at least two (2 ) daysevery work week to observe technical processes involved in themanufacturin g of perforated materials, and to learn about the products ofthe company, which respondent was hired to market and sell. During respondent s employment, Hartmannshenn was often abroad and, because of business exigencies, his instructions to respondent were eithersent y electronic mail or relayed through telephone or mobile phone. When he would be in the Philippines, he and the respondent heldmeetings. As to espondent s work, there was no close supervision by him. Hartmannshenn expressed his dissatisfaction over respondent s poorperformance. numerous electronic mail messages, respondentacknowledged his poor performance nd offered to resign from the company. b r In a

Respondent, however, denied sending such messages but admitted that hehad report ed to the SHS office and plant only eight (8) times from July 18,2005 to Novembe r 30, 2005. In preparation for his trip to the Philippines, Hartmannshenn tried to call respondent on his mobile phone, but the latterfailed to answer. Respondent claimed that he never received the messages.

Hartmannshenn instructed Taguiang not to release respondent s salary. Later that afternoon, respondent called and inquired about his salary. Taguiang informed him that it was being withheld and that he had toimmediately c ommunicate with Hartmannshenn. Again, respondent deniedhaving received such dire ctive. The next day, respondent served on SHS ademand letter and a resignation l etter and demanded salary for the periodcovering November 16 to 30, 2005, which has yet been unpaid and is stillcurrently being withheld albeit illegally. It is precisely because of illegaland unfair labor practices such as these that I off er my resignation withneither regret nor remorse.6 Diaz met with Hartmannshenn in Alabang. The latter told him that he wasextremely disappointed for the following reasons: his poor workperformance; his unauthori zed leave and malingering from November 16to November 30, 2005; and failure to i mmediately meet Hartmannshennupon his arrival from Germany. Petitioners averred that respondent was unable to give a properexplanation for h is behavior. Hartmannshenn then accepted respondent sresignation and informed him that his salary would be released uponexplanation of his failure to report to wo rk, and proof that he did, in fact, work for the period in question. He demanded that respondent surrenderall compan y property and information in his possession. Respondentagreed to these "exit" c onditions through electronic mail. Instead ofcomplying with the said conditions, however, respondent sent anotherelectronic mail message to Hartmannshenn and Sc humacher on December1, 2005, appealing for the release of his salary. Respondent, on the other hand, claimed that the meeting withHartmannshenn took p lace in the evening of December 1, 2005, at whichmeeting the latter insulted him and rudely demanded that heaccept P25,000.00 instead of his accrued wage and st op working for SHS, which demands he refused. Later that same night, he sent an electronicmail messa ge appealing for the release of his salary. Another demandletter for respondent s accrued salary for November 16 to November 30,2005, 13th month pay, moral and ex emplary damages, and attorney s feeswere sent on December 2, 2005. To settle the issue amicably, petitioners counsel advised respondent scounsel by te lephone that a check had been prepared in the amountof P50,000.00, and was ready for pick-up on December 5, 2005. Respondent countered that his counsel received petitioners formal replyletter onl y on December 20, 2005, stating that his salary would be releasedsubsequent to t he turn-over of all materials owned by the company in hispossession. Respondent filed a Complaint7 against the petitioners for illegaldismissal; non-payment of salaries/wages and 13th month pay with prayerfor reinstatement and full backwage s; exemplary damages, and attorney sfees, costs of suit, and legal interest. THE RULING OF THE LABOR ARBITER: Declared complainant as havingbeen illegally di smissed and further ordering his immediate reinstatementwithout loss of seniorit y rights and benefits. It is also ordered thatcomplainant be deemed as a regular employee. The LA found thatrespondent was constructively dismissed because the withholding of hissalary was contrary to Article 116 of the Labor Code as it was not one ofthe exceptions for allowable wage deduction by the employer under Art icle113 of the Labor Code. He had no other alternative but to resign becausehe c ould not be expected to continue working for an employer whowithheld wages witho ut valid cause. The LA also held that respondent sprobationary employment was deem ed regularized because petitionersfailed to conduct a prior evaluation of his pe rformance and to give noticetwo days prior to his termination as required by the Probationary Contractof Employment and Article 281 of the Labor Code. Petitione rs contentionthat they lost trust and confidence in respondent as a managerialemp loyee was not given credence for lack of notice to explain thesupposed loss of t rust and confidence and absence of an evaluation ofrespondent s performance. The L

A believed that the respondent compliedwith the obligations in his contract as e videnced by his electronic mailmessages to petitioners. THE RULING OF THE NLRC: On appeal, the NLRC reversed the decision of the LA. The Decision dated June 15, 2006 is hereby REVERSED and SET ASIDE anda new one i s hereby entered. The NLRC explained that the withholding ofrespondent s salary wa s a valid exercise of management prerogative. Theact was deemed justified as it was reasonable to demand an explanationfor failure to report to work and to acco unt for his work accomplishments. The NLRC held that the respondent voluntarily resigned as evidenced bythe langua ge used in his resignation letter and demand letters. Given hisprofessional and educational background, the letters showed respondent sresolve to sever the employ er-employee relationship, and hisunderstanding of the import of his words and th eir consequences. Consequently, respondent could not have been regularized havingvoluntarily resig ned prior to the completion of the probationary period. TheNLRC further noted th at respondent s 13th month pay was alreadyintegrated in his salary in accordance w ith his Probationary Contract ofEmployment and, therefore, no additional amount should be due him. THE RULING OF THE COURT OF APPEALS The CA reversed the NLRC resolutions in its December 23, 2008 Decision, the dispositive portion of said decision reads. CA held that withholdingresponde nt s salary was not a valid exercise of management prerogativeas there is no such thing as a management prerogative to withhold wagestemporarily. Petitioners averm ents of respondent s failure to report towork were found to be unsubstantiated all egations not corroborated byany other evidence, insufficient to justify said wit hholding and lacking inprobative value. The malicious withholding of respondent s salary made it

impossible or unacceptable for respondent to continue working, thus, compelling him to resign. The respondent s immediate filing of a complaintfor ille gal dismissal could only mean that his resignation was not voluntary. As a probationary employee entitled to security of tenure, respondent wasillegal ly dismissed. The CA ruled out actual reinstatement, however, reasoning out that antagonism had caused a severe strain in theirrelationship. I t was of the view that separation pay equivalent to at leastone month pay would be a more equitable disposition. Issue: WON respondent was constructively dismissed by petitioners, which determination is, in turn, hinged on finding out (i) whether or not thetem porary withholding of respondent s salary/wages by petitioners was avalid exercise of management prerogative; and (ii) whether or notrespondent voluntarily resign ed. Held: The factual findings of the CA and the LA are contradictory to that ofthe NLRC. Thus, a review of the records is necessary to resolve the factualissues in volved and render substantial justice to the parties. Althoughmanagement preroga tive refers to "the right to regulate all aspects ofemployment," it cannot be un derstood to include the right to temporarilywithhold salary/wages without the co nsent of the employee. To sanctionsuch an interpretation would be contrary to Ar ticle 116 of the Labor Code. Any withholding of an employee s wages by an employer may only beallowed in the fo rm of wage deductions under the circumstances providedin Article 113 of the Labo r Code The Court finds petitioners evidence insufficient to prove that respondentdid not work from November 16 to November 30, 2005. The nature of respondent s job did not allow close supervision and monitoring bypetitioners. Nei ther was there any prescribed daily monitoring procedureestablished by petitione rs to ensure that respondent was doing his job. Therefore, granting that respondent failed to answer Hartmannshenn smobile calls a nd to reply to two electronic mail messages and given thefact that he admittedly failed to report to work at the SHS plant twice eachweek during the subject per iod, such cannot be taken to signify that he didnot work from November 16 to Nov ember 30, 2005. Furthermore, the electronic mail reports sent to Hartmannshenn and thereceipt pr esented by respondent as evidence of his having worked duringthe subject period were not controverted by petitioners. The eightnotarized letters of prospective clients vouching for meetings they hadwith respondent during the subject period may also be given credence. The Court agrees with the LA and the CA that respondent was forced toresign and was, thus, constructively dismissed. It is of no moment that he served his resignation letter on November 30,2005, th e last day of the payroll period and a non-working holiday, sincehis salary was already due him on November 29, 2005, being the last working day of said period. In fact, he was then informed that the wages ofall t he other SHS employees were already released, and only his was beingwithheld. Wh at is significant is that the respondent prepared and servedhis resignation lett er right after he was informed that his salary was beingwithheld. It is worthy t o note that in his resignation letter, respondent citedpetitioners "illegal and u nfair labor practice"26 as his cause for resignation. As correctly noted by the CA, respondent lost no time insubmitting his resignation letter and eventually filing a complaint for illegaldismissal ju st a few days after his salary was withheld. Thesecircumstances are inconsistent

with voluntary resignation and bolster thefinding of constructive dismissal. Respondent was constructively dismissed and, therefore, illegallydismissed.1avvp hi1 Although respondent was a probationary employee, hewas still entitled to sec urity of tenure. This Court has held thatprobationary employees who are unjustly dismissed during theprobationary period are entitled to reinstatement and payme nt of fullbackwages and other benefits and privileges from the time they weredis missed up to their actual reinstatement.29 Respondent is, thus, entitledto reins tatement without loss of seniority rights and other privileges as wellas to full backwages, inclusive of allowances, and other benefits or theirmonetary equival ent computed from the time his compensation waswithheld up to the time of actual reinstatement. Respondent, however, isnot entitled to the additional amount for 13th month pay, as it is clearlyprovided in respondent s Probationary Contract of Employment that such isdeemed included in his salary. Respondent s reinstatement, however, is no longer feasible as antagonismhas caused a severe strain in their working relationship. Under the doctrineof strained re lations, the payment of separation pay is considered anacceptable alternative to reinstatement when the latter option is no longerdesirable or viable. Payment l iberates the employee from what could be ahighly oppressive work environment, an d at the same time releases theemployer from the obligation of keeping in its em ploy a worker it no longertrusts. Therefore, a more equitable disposition would be an award ofseparation pay equivalent to at least one month pay, in addition t o his fullbackwages, allowances and other benefits. With respect to the personal liability of Hartmannshenn and Schumacher, this Court has held that corporate directors and officers are only solidarilylia ble with the corporation for termination of employment of corporateemployees if effected with malice or in bad faith.32 Bad faith does not connote bad judgment or negligence; it imports dishonest purpose or somemoral ob liquity and conscious doing of wrong; it means breach of unknownduty through som e motive or interest or ill will; it partakes of the nature offraud.33 To sustai n such a finding, there should be evidence on record thatan officer or director acted maliciously or in bad faith in terminating theemployee.34

Petitioners withheld respondent s salary in the sincere belief thatrespondent did not work for the period in question and was, therefore, notentitled to it. There was no dishonest purpose or ill will involved as theybelieved there was a justi fiable reason to withhold his salary. Thus, although they unlawfully withheld respondent s salary, it cannot beconcluded that such was made in bad faith. Accordingly, corporate officers, Hartmannshenn and Schumacher, cannot be held personally liable for thecorporate obligations of SHS. Rosario Bros v. Ople FACTS: Private respondents are tailors, pressers, stitchers and similarworkers h ired by the petitioner in its tailoring department (ModesSuburbia). Some had wor ked there since 1969 until their separation onJanuary 2, 1978. For their service s, they were paid weekly wages on piecework basis, minus the withholding tax per Bureau of Internal Revenue (BIR) rules. Further, they were registered with the Social Security System (SSS) as employees of petitioner and premiums were deducted from their wages; they were also members of the Avenida-Cubao Manila COD DepartmentStore Labor Uni on which has a Collective Bargaining Agreement with thecompany and; they were re quired to report for work from Monday throughSaturday and to stay in the tailori ng shop for no less than eight (8) hours aday, unless no job order was given the m after waiting for two to threehours, in which case, they may leave and may com e back in the afternoon. Their attendance was recorded through a bundy clock just like the otheremployees of petitioner. A master cutter distributes job orders equally, supervises the work and sees to it that they were finished as soon aspossible. On September 7, 1977, the private respondents filed with the RegionalOffice of t he Department (now Ministry) of Labor a complaint for violationof Presidential D ecree 851 (13th month pay) and Presidential Decree 525, as amended by Presidential Decree 1123 (Emergency Living Allowance) against herein petitioner. After petitioner had filed its answer, the case was certified for compulsoryarbi tration to the Labor Arbiter who, after due hearing, rendered a decisionon Decem ber 29, 1977 dismissing "private respondents" claims for unpaidemergency living allowance and 13th month pay, for lack of merit, uponfinding that the complainan ts (herein private respondents) are notemployees of the respondent (herein petit ioner) within the meaning ofArticle 267(b)of the Labor Code. As a consequence, t he privaterespondents were dismissed on January 2, 1978 and this prompted them t ofile a complaint for illegal dismissal with the Ministry of Labor. Meanwhile, the National Labor Relations Commission (NLRC) affirmed the decision ofthe Labor Arbiter and dismissed private respondents' appeal for lack ofmerit. Labor Arbiter, issued an order directing the Chief of the Research andInformatio n Department of the Commission to designate a Socio-EconomicAnalyst to compute t he balance of private respondents' claims for the 13th month pay and emergency living allowance in accordance with respondentMinister's decision of March 27, 1979. Pursuant thereto, a report, datedMarch 4, 1980, was submitted computing the balance of privaterespondents' claims for emergency liv ing allowance and 13th month payup to February 29,1980 in the total amount of P7 1,131.14. A writ ofexecution was issued for the satisfaction of said amount. ISSUE: WON an employer-employee relationship exists between petitionerand privat e respondents HELD: Yes. The existence of ER-EE relationship is determined by: theselection an

d engagement of employee, payment of wages, power ofdismissal, power to control employee s conduct. An independent contractor is the one who exercises independentemployment and con tracts to do a piece of work according to his ownmethods without being subjected to control of his employer except as tothe result of his work. In the case at bar, the selection and hiring of respondents was done bypetitione r through the master cutter. Respondents received their weeklywages from petitio ner on piece-work basis within the meaning of the term wage under the Labor Code, w hich defined as the remuneration orearnings. However, designated, whether fixed o n a time, task, piece orcommission basis, payable by an employer to an employee under a writtenor unwritten contact for work done or to be done or for services rendered or to be rendered. Petitioner also had the power to dismiss respondents, thus, the latter sconduct wa s controlled by petitioner. Respondents were allowed to registerwith SSS and wit hholding taxes were also deducted from their wages. Wherefore, petition is dismissed. TRADERS ROYAL BANK, petitioner, vs.NATIONAL LABOR RELATIONSCOMMISSION & TRADERS ROYAL BANK EMPLOYEES UNION, respondents. FACTS: On November 18, 1986, the Union, through its president, filed aletter-com plaint against TRB with the Conciliation Division of the Bureau ofLabor Relation s and on March 24, 1987, the Secretary of Labor certified thecomplaint to the NL RC for resolution of the following issues raised by thecomplainants: l) The Management of TRB per memo dated October 10, 1986 paid theemployees their holiday pay but has withheld from the union the basis oftheir computation.

2) The computation in question has allegedly decreased the daily salaryrate of t he employees. This diminution of existing benefits has decreasedour overtime rat e and has affected the employees' take home pay. 3) The diminution of benefits being enjoyed by the employees since the(sic) imme morial, e.g. mid-year bonus, from two (2) months gross pay totwo (2) months basi c and year-end bonus from three (3) months gross toonly two (2) months. 4) The refusal by management to recall active union members from thebranches whi ch were being transferred without prior notice, solely at theinstance of the bra nch, manager. On September 2, 1988, the NLRC rendered a decision in favor of theemployees, the dispositive portion of whichreads:1. Holiday differential forthe period coverin g l983-1986 as embodied in Resolution No. 4984-1986 ofrespondent's Board of Dire ctors but to start from November 11, 1983 andusing the Divisor 251 days in deter mining the daily rate of the employees; 2. Mid-year bonus differential representing the difference between two (2) months gross pay and two (2) months basic pay and end-year bonusdifferential of one (1) month gross pay for 1986.The claim for holidaydifferential for the perio d earlier than November 11, 1983 is herebydismissed, the same having prescribed. Likewise, the charge of unfair laborpractice against the respondent company is hereby dismissed for lackof merit. ISSUE: Whether or not the bonus is demandable? DECISION: No. From 1979-1985, the bonuses were less because the income of the Bank had decreased. In 1986, the income of the Bank was only 20.2 million pesos, but the Bank still gave out the usual two (2) months basic mid-year and two months gross year-end bonuses. Thepetitioner point ed out, however, that the Bank weakened considerablyafter 1986 on account of pol itical developments in the country. Suspectedto be a Marcos-owned or controlled bank, it was placed undersequestration by the present administration and is now managed by thePCGG. In the light of these submissions of the petitioner, the con tention ofthe Union that the granting of bonuses to the employees had ripened in toa company practice that may not be adjusted to the prevailing financialconditi on of the Bank has no legal and moral bases. Its fiscal conditionhaving declined , the Bank may not be forced to distribute bonuses which itcan no longer afford to pay and, in effect, be penalized for its pastgenerosity to its employees. Pri vate respondent's contention, that thedecrease in the midyear and year-end bonus es constituted a diminution ofthe employees' salaries, is not correct, for bonus es are not part of labor standards in the same class as salaries, cost of living allowances, holidaypay, and leave benefits, which are provided by the Labor Code. NLRCreversed. *not sure which is the real assigned case, here s another case TRADERS ROYAL BANK, petitioner, vs. NATIONAL LABOR RELATIONSCOMMISSION and ROGEL IO ESPAOLA, respondent. FACTS: Agro-Commercial Security Services Agency Inc. (AGRO) assignedRogelio Espao la to work as a janitor at the Iloilo Branch of petitionerTraders Royal Bank (TR B). This assignment was covered by Mission OrderNo. 29 dated 26 June 1974 which was duly issued by the AdministrativeOfficer of AGRO, Alberto G. Espinosa.[1] So metime in 1982 Espaola wasinformed that he would be absorbed by a new agency, Roy al Protectiveand Janitorial Services Inc. (ROYAL), and that he would perform the samefunctions.[2] However, since ROYAL was also managed and owned by thesame pe ople who previously handled AGRO, it did not give him separationpay or any other

benefits. ROYAL also appointed Alberto G. Espinosa, AGRO s former Administrative Officer, as its General Manager. TRB and ROYAL executed a new service agreement whereby ROYAL wouldcontinue suppl ying janitorial services TRB for one year, beginning 23 March1988.[4] The contra ct also stated that if there was no notice to terminate at the end of the one (1) year period it would remain in force on a monthlybasis . When the service agreement expired on 23 March 1989 TRB did not issuea terminati on notice. Instead, it continued to avail of ROYAL s services on a monthly basis as stated in the contract. It was only on 4 February 1994that TR B sent a letter to ROYAL apprising the latter of its desire toterminate the serv ice agreement effective 16 March 1994.[5] In turn, ROYAL sent a notice to private respondent Espaola informing him thatdue to TRB's decision to end their contract his services were no longerneeded.[6] After being dismissed ROYAL declined to give him any furtherassignment since his job was al legedly coterminus with its contract withTRB. Espaola filed a case against ROYAL, TRB and Alberto Espinosa for illegaldismissal , illegal deduction, underpayment of wages, non-payment ofovertime pay, premium pay for rest day, service incentive leave pay, 13thmonth pay and night shift dif ferentials with a prayer for reinstatement andback wages. He also claimed moral and exemplary damages as well as attorney s fees.

Labor Arbiter ruled in favor of TRB holding that Espaola had no cause ofaction ag ainst it as there was no employer-employee relationship betweenthem. National La bor Relations Commission (NLRC) reversed the decisionof the Labor Arbiter and ru led that Espaola was not an employee ofROYAL but of TRB. NLRC then ordered TRB to reinstate him and to pay himthe total amount of P110,829.78 broken down as foll ows: P81,265.90 for back wages, P736.92 for ERA, P15,698.08 for salary differentials, P3,143.45for 1 3th month pay and P10,075.00 for attorney s fees. After its motion for reconsideration was denied TRB filed this special civilacti on for certiorari contending that the NLRC gravely abused its discretionin rever sing the Labor Arbiter s decision and declaring Espaola to be itsemployee. ISSUE and RULING: 1) Who was Espaola s real employer? To prove thatEspaola was not i ts employee TRB cites Mission Order No. 29 signed byAGRO Administrative Officer Alberto G. Espinosa. The order stated that Rogelio Espaola would be assigned as janitor to TRB s Iloilo Branch. Italso provide d that his employment would be from 26 January 1974 untilrevoked.[11] TRB argues that this proves that AGRO was Espaola semployer from 1974 to 1982. And when he ag reed to be absorbed byROYAL he became its employee from 1982 to 1994. Hence, he was never employed by TRB. To bolster its contention TRB refers to the provisions ofits se rvice agreement with ROYAL. TRB asserts that aside from the agreement itself which reveals that it wasROYAL which provided the janitors salary, par. 2 thereof also states thatthe janitors w ere its own employees. Thus, Espaola s dismissal was theresult of a valid terminati on of its service agreement with ROYAL. We are not convinced. This Court has ruled that the existence of employer-employee relationship cannot be proved by merely showing theagreement o f the parties.[12] It is a question of fact which should besupported by substant ial evidence.[13] And in determining the existence ofsuch relationship the eleme nts usually considered are: (a) the selection ofthe employee; (b) the payment of wages; (c) the power of dismissal; and, (d) the power to control the employee s conduct, with the "control test" generally assuming primacy in the overall consideration.[14] 2) Who then had control over Espaola's conduct? Was it ROYAL orTRB? We believe it was TRB. The allegations contained in the positionpaper of Espaola were never re futed. TRB could have easily presentedaffidavits, written explanations or any ot her pleadings to defend itself anddisprove Espaola s claims.[16] However, the only evidence it everpresented was its service agreement with ROYAL. From the time TR B submitted its position paper to the Labor Arbiter up to the time itsubmitted its memorandum to the Supreme Court, not once did it denythat it designated Espaola as its driver. On the other hand, Espaolaconstantly reiterated in his pleadings t hat TRB supervised and controlledhis work as its janitor-driver. The fact that E spaola s allegations werenever controverted at any stage of the proceedings affirms that suchaverments were true.[17] Furthermore, Rule 9, Sec. 11, of the Rules of Court, which supplements the NLRC rules, also provides that an allegationwhich i s not specifically denied is deemed admitted.[18] The NLRC therefore did not abuse its discretion in ruling that Espaola wasnot the employee of ROYAL. On the contrary, it was the Labor Arbiter whocame up with th e erroneous conclusion. He disregarded theuncontroverted allegations of Espaola a nd hastily concluded that sinceROYAL was an independent contractor, it was Espaol

a s directemployer. While it may be that ROYAL could very well be an independentco ntractor -although it did not establish this fact with competent evidenceto qual ify it as such -and that Espaola s name appeared in its payroll, [22] nevertheless, whatever role ROYAL had in this case, it was certainlynot as the employer of Espaola. For the fact remains that it was TRB which had control and supervision over Espaola s work. Consequently, it should be considered as his employer. Since Espaola was illegally dismissed he is entitled to reinstatement withfull ba ck wages.[23] The NLRC erred in ruling that he was only entitled toback wages fr om 16 March 1994 to 30 September 1996. An illegallydismissed employee is entitle d to back wages from the time he wasdismissed to the time of his actual reinstat ement.[24] However, the NLRC s ruling with regard to the salary differentials and 13th month paydifferentials m ust be sustained. WHEREFORE, the petition is DISMISSED. The assailed Decision of publicrespondent National Labor Relations Commission reversing that of theLabor Arbiter and order ing petitioner Traders Royal Bank to reinstateprivate respondent Rogelio Espanol a and to pay him salary differentialsof P15,698.00, 13th month pay differentials of P3,143.45 and attorney'sfees of P10,075.43 is AFFIRMED, but with the modific ation that petitionershould pay private respondent full back wages from 16 March 1994 up tohis actual reinstatement. Costs again G.R. No. 167217, February 4, 2008, P.I. MANUFACTURING, INCORPORATED, petitioner, vs. P.I. MANUFACTURING SUPERVISORS AND FOREMAN ASSOCIATION and the NATIONAL LABOR UNION,respondents. FACTS: RA 6640 was signed into law on 10 December 1987, providing, among others, an increase in the statutory minimum wage and salary ratesof emplo yees and workers in the private sector. It provides that theminimum wage of work ers and employees in the private sector shall be

increased by P10, except those outside Manila who shall receive anincrease of P1 1, provided those that are already receiving above theminimum wage shall receive an increase of P10. PI ManufacturingSupervisors and Foremen Association (PIMASU FA) entered into a new CBAwhereby the supervisors were granted an increase of P6 25 per month andthe foremen, P475 per month. The increases were made to retroact to 12May 1987, or prior to the passage of RA 6640. The application of said CBAr esulted in a wage distortion, which prompted the PIMASUFA together withthe Natio nal Labor Union to file a case against PIMA for violation of RA6640. PIMA asseve rates that the Company and Supervisors and ForemenContract absolves, quitclaims, and releases the company for any monetaryclaim that the supervisors and the for emen may have previous to thesigning of the agreement on 17 December 1987The Lab or Arbiter ruled infavor of PIMASUFA and ordered PIMA to give the PIMASUFA membe rs wageincreases equivalent to 13.5% of their basic pay. The CA affirmed, butrai sed the wage increase to 18.5%. Issues: 1 W/N the PIMASUFA, by signing The Company and Supervisors andForemen Co ntract, has waived any benefit it may have under RA 6640. 2W/N the 13.5% increas e in the supervisors and foremen s basic salaryshould be increased to 18.5% to cor rect the wage distortion brought aboutby the implementation of RA 6640. Ruling: 1 NO. The increase resulting from any wage distortion broughtabout by th e implementation of the new minimum wage law is notwaivable. 2 NO. Although ther e was a wage distortion, the same was curedor remedied when PIMASUFA entered int o the1987 CBA with PIMA after the effectivity of RA 6640. The 1987 CBA increased the monthly salaries of thesuperv isors by P626 and P475, which re-establishes the gap not onlybetween supervisors and foremen but also between them and the rankandfile employees. Such gap as re-established by virtue of the CBA ismore than a su bstantial compliance with RA 6640. Moreover, requiringPIMA to pay 18.5%, over an d above the negotiated wage increasesprovided under the 1987 CBA, is highly unfa ir and oppressive tothe former. A CBA constitutes the law between the parties when freely and voluntarilyentered into. It was not shown that PIMASUFA was coerced or forced byPIMA to sign the 1 987 CBA. All of its 13 officers signed the CBA with theassistance of NLU. They s igned it fully aware of the passage of RA 6640. The duty to bargain requires that the parties deal with each other withopen and fair minds. PIMASUFA cannot invoke the beneficial provisions ofthe1987 CBA but d isregard the concessions it voluntarily extends to PIMA. Doctrine: Quitclaims by laborers are generally frowned upon as contrary topublic policy and are held to be ineffective to bar recovery for the fullmeasure of th e worker s rights. The reason for the rule is that theemployer and the employee do not stand on the same footing. Article 1149of the Civil Code states that: When the law sets, or authorizes the settingof a minimum wage for laborers, and a con tract is agreed upon by which alaborer accepts a lower wage, he shall be entitle d to recover thedeficiency. According to RA 6727, wage distortion is a situation where an increase inprescri bed wage results in the elimination or severe contraction ofintentional quantita tive differences in wage or salary rates between andamong employee groups in an establishment as to effectively obliteratethe distinctions embodied in such wage structure based on skills, length ofservice, or other logical bases of differen tiation. Otherwise stated, wagedistortion means the disappearance or virtual dis appearance of paydifferentials between lower and higher positions in an enterpri se becauseof compliance with a wage order. The goal of collective bargaining is themaking of agreements that will stabilize business conditions and fix fairstan dards of working conditions.

At this juncture, it must be stressed that a CBA constitutes the lawbetween the parties when freely andvoluntarily entered into.13 Here, it has not been shown that respondent PIMASUFA was coerced or forced bypetitioner to si gn the 1987 CBA. All of its thirteen (13) officers signed theCBA with the assist ance of respondent NLU. They signed it fully aware ofthe passage of R.A. No. 664 0. The duty to bargain requires that the partiesdeal with each other with open a nd fair minds. A sincere endeavor toovercome obstacles and difficulties that may arise, so that employeremployee relations may be stabilized and industrial strife eliminated, mustbe ap parent.14Respondents cannot invoke the beneficial provisions of the1987 CBA but disregard the concessions it voluntary extended topetitioner. The goal of collec tive bargaining is the making of agreementsthat will stabilize business conditio ns and fix fair standards of workingconditions.15 Definitely, respondents posture contravenes this goal. In fine, it must be emphasized that in the resolution of labor cases, thisCourt has always been guided by the State policy enshrined in theConstitution that the rights of workers and the promotion of their welfareshall be protected. However , consistent with such policy, the Court cannotfavor one party, be it labor or m anagement, in arriving at a just solution toa controversy if the party concerned has no valid support to its claim, likerespondents here. WHEREFORE, we GRANT pe titioner s motion forreconsideration and REINSTATE the petition we likewise GRANT. G.R. No. 162411, June 30, 2008, NASIPIT INTEGRATED ARRASTRE AND STEVEDORING SERVICES, INC. (NIASSI), represented by RAMON M.

CALO, petitioner, vs.NASIPIT EMPLOYEES LABOR UNION (NELU)-ALU-TUCP, represented by DONELL P. DAGANI, respondent. FACTS: NIASSI is a domestic corporation with office at Talisay, Nasipit, Agusan del Norte. Respondent Nasipit EmployeesLabor Union (Union) wasand may sti ll be the collective bargaining agent of the rank-and-fileemployees of NIASSI an d is a local chapter of the Associated Labor Union. The dispute started when, in October 1999, the Regional Tripartite Wagesand Prod uctivity Board (Wage Board) of Caraga Region in NortheasternMindanao issued Wage Order No. (WO) RXIII-02 which granted anadditional PhP12 per day cost of living allowance to the minimum wageearners in that region. Owing allegedly to NIASSI s failure to implement thewage order, the Union filed a complaint before the DOLE Caraga RegionalOffice for the inspection of NIASSI s records and the enforcement o f WORXIII-02. A DOLE inspection team was accordingly dispatched and reportedthat WO RXIII-02 was not applicable to NIASSI s employees since they werealready recei ving a wage rate higher than the prescribed minimum wage. Upon motion by the Union, the DOLE Regional Director indorsed thecase to the NLR C Regional Arbitration Branch for further hearing, whichin turn referred the cas e to the NCMB for voluntary arbitration. OnFebruary 22, 2002, Voluntary Arbitrat or Jesus G. Chavez rendereda decision granting the Union s prayer for the implemen tation of WO RXIII02 on the rationale that WO RXIII-02 did not specifically prohibit the grantof wage increase to employees earning above the minimum wage. On thecontrary, Chavez sa id, the wage order specifically enumerated those whoare outside its coverage, bu t did not include in the enumeration thoseearning above the minimum wage. He als o held that the CollectiveBargaining Agreement (CBA) between NIASSI and the Unio n provides thatwage increases granted by the company within one year from CBA si gningshall not be creditable to future legally mandated wage increases. Following the denial of its motion for reconsideration, NIASSI filed with theCA a petition for review, which affirmed the decision of the voluntaryarbitrator. ISSUE: WON the wage order may be made to apply and cover Nasipit semployees who, a t the time of the issuance and effectivity of the wageorder, were already receiv ing a wage rate higher than the prevailingminimum wage. DECISION: No. It is abundantly clear from the above quoted provisions ofWO RXIII -02 and its IRR that only minimum wage earners are entitledto the prescribed wag e increase. Expressio unius est exclusio alterius.6The express mention of one pe rson, thing, act, or consequence excludes allothers. The beneficent, operative p rovision of WO RXIII-02 is specificenough to cover only minimum wage earners. Ne cessarily excludedare those receiving rates above the prescribed minimum wage. T he onlysituation when employees receiving a wage rate higher than that prescribed by the WO RXIII-02 may still benefit from the order is, asindicated i n Sec. 1 (c) of the IRRs, through the correction of wagedistortions. Clearly the n, only employees receiving salaries below theprescribed minimum wage are entitl ed to the wage increase set forthunder WO RXIII-02, without prejudice, of course , to the grant of increase tocorrect wage distortions consequent to the implemen tation of such wageorder. Considering that NIASSI s employees areundisputedly al ready . receiving a wage rate higher than that prescribed by the wage order, NIASSI is not legally obliged to grant them wage increase.CA reversed. ** Petitioner s reliance on the above quoted CBA provision and on theflawed arbitr ator s case disposition is really misplaced. Consider that in hisdecision, Chavez, after admitting that NIASSI s employees were receiving awage rate higher than the prescribed minimum wage, proceeded to faultNIASSI for not presenting evidence t

o show that the overage or excessresulted from general wage increases granted by the company itself withinone year from the effectivity of the CBA in 1997. By s implistically utilizingthe adage "doubt is resolved in labor," instead of relyin g on the caserecords and the evidence adduced, the voluntary arbitrator extended thecoverage of WO RXIII-02 to include those who, by the terms of the order, are not supposed to receive the benefit. If only the voluntary arbitrator wascir cumspect enough to consider the facts on hand, he would have seenthat the CBA pr ovision on non-creditability finds no application in thepresent case, because cr editability is not the real issue in this case. Andneither is the interpretation of the CBA provision. The real issue in thiscase, as discussed above, is the co verage and application of WO RXIII-02. While it behooves the Court to accord protection to the working class, tilting the balance of justice in its favor whenever appropriate, it is notpossi ble to resolve every dispute to further the cause of labor. In everycase, justic e is to be granted to the deserving and dispensed in the light ofestablished fac ts and the applicable law and doctrine, DISMISSED for lackof merit. ALLIED INVESTIGATION BUREAU, INC., Petitioner, v. HON. SECRETARY OF LABOR & EMPLOYMENT, acting through Undersecretary CRESENCIANO B. TRAJANO, Respondents. FACTS: Petitioner Allied Investigation Bureau, Inc. is a security agency. OnJanu ary 11, 1994, it entered into a security contract with NoveltyPhilippines, Inc. (NPI, for brevity) whereby it obligated itself to providesecurity services to th e latter. Private respondents Melvin T. Pelayo andSamuel Sucanel, two of the sec urity guards assigned by petitioner to NPI, filed a complaint with the Office of respondent Regional Director Romeo A. Young charging petitioner with non-compliance with Wage Order No. NCR03,[ 2 which increased the minimum daily pay of workers by P17.00, orfrom P118.00 toP 135.00 effective December 16, 1993; and further, by P10.00, or from P135.00 to P145.00 daily beginning April 1, 1994. Private respondents, likewise, sought the recovery of wage differentials.

On February 9 and 14, 1995, the Office of Regional Director Youngconducted inspe ction visits at petitioners establishment. Senior LaborEnforcement Officer Eduvi gis A. Acero issued a Notice of InspectionResults. (the above computed wage diff erentials form part of the legalremunerations of the complainants, respondent AL LIED INVESTIGATIONBUREAU, INC., is hereby ordered to pay to the ninety-two emplo yees thetotal amount of EIGHT HUNDRED SEVEN THOUSAND FIVE HUNDRED SEVENTY PESOS AND THIRTY-SIX CENTAVOS (P807.570.36) to bedistributed to the indi vidual employees in accordance with the schedulementioned above, within ten (10) days from receipt hereof. Otherwise, Writof execution shall issue to enforce th is Order.The issue on the nonremittance of SSS premiums is hereby indorsed to the Social SecuritySystem, the same being within its jurisdiction to properly pass upon.) Petitioner appealed the Order to respondent Secretary of Labor andEmployment, wi thout however, posting a cash or surety bond equivalent tothe monetary award in the said Order appealed from. On September 19, 1995, the Secretary of Labor, thru UndersecretaryCresenciano B. Trajano issued an Order dismissing petitioners appeal forfailure to perfect sai d appeal. ISSUES: a. Whether or not respondent Regional Director acted withoutjurisdiction in adjudicating the private respondents money claims wherethe aggregate money c laim of each of them exceeds P5,000.00. b. Whether or not respondent Secretary of Labor & Employment, actingthrough Unde rsecretary Cresenciano B. Trajano, acted with grave abuse ofdiscretion in dismis sing herein petitioners appeal attacking the jurisdictionof respondent Regional Director in adjudicating subject money claims ofprivate respondents. HELD: Petitioner argues that the power to adjudicate money claimsbelongs to the Labor Arbiter who has exclusive jurisdiction over employeesclaims where the aggr egate amount of the claims of each employeeexceeds P5,000.00.[10 Petitioners cites Articles 129 and 217 of the Labor Code of the Philippineswhich provide, respectively, that the power of the Regional Director toadjudicate emp loyees money claims is subject to the condition that theaggregate money claims o f each employee does notexceed P5,000.00; and, that the Labor Arbiter has jurisd iction over all otherclaims arising from employer-employee relations, including those ofpersons in domestic or household service, involving an amount exceedingf ive thousand pesos (P5,000.00), whether or not accompanied with a claimfor reins tatement. Petitioner further contends that since the Order appealed from is void andwithou t legal effect, said Order never assumed finality and, therefore, itwas improper for the respondent Secretary of Labor to outrightly dismissthe appeal on the gr ound that petitioner failed to post a cash/surety bond. Petitioner alleges that respondent Secretary of Labor acted with graveabuse of d iscretion in evading its duty to entertain the appeal on atechnical ground. Finally, petitioner prays for the issuance of a temporary restraining orderor a writ of preliminary injunction as the enforcement of the alleged voidorders woul d cause them great prejudice if not irreparable damage. Petitioners arguments are untenable.While it is true that under Articles129[14 a nd 217[15 of the Labor Code, the Labor Arbiter has jurisdiction tohear and decid e cases where the aggregate money claims of eachemployee exceeds P5,000.00, said provisions of law do not contemplatenor cover the visitorial and enforcement po wers of the Secretary of Laboror his duly authorized representatives. Rather, sa

id powers are defined andset forth in Article 128 of the Labor Code (as amended by R.A. No. 7730) thus: Art. 128. Visitorial and enforcement power. -(a) The Secretary of Labor orhis du ly authorized representatives, including labor regulation officers, shall have access to employers records and premises at any time of theday or nig ht whenever work is being undertaken therein, and the right tocopy therefrom, to question any employee and investigate any fact, condition or matter which may be necessary to determine violations orwhich may a id in the enforcement of this Code and of any labor law, wageorder or rules and regulations issued pursuant thereto. (b) Notwithstanding the provisions of Articles 129 and 217 of this Code tothe co ntrary, and in cases where the relationship of employer-employeeexists, the Secr etary of Labor and Employment or his duly authorizedrepresentatives shall have t he power to issue compliance orders to giveeffect to the labor standards provisi ons of this Code and other laborlegislation based on the findings of labor emplo yment and enforcementofficers or industrial safety engineers made in the course of inspection. TheSecretary or his duly authorized representatives shall issue w rits ofexecution to the appropriate authority for the enforcement of their order s, except in cases where the employer contests the findings of the laboremployment and enforcement officer and raises issues supported bydocumentary proofs which w ere not considered in the course of inspection. An order issued by the duly authorized representatives of the Secretary ofLabor and Employment under this article may be appealed to the latter. Incase said ord er involves a monetary award, an appeal by the employermay be perfected only upo n the posting of a cash or surety bond issued bya reputable bonding company duly accredited by the Secretary of Laborand Employment in the amount equivalent to the monetary award in theorder appealed from. In the case at bar, the Office of respondent Regional Director conductedinspecti on visits at petitioners establishment on February 9 and 14, 1995in accordance w ith the above-mentioned provision of law. In the course ofsaid inspection, sever al violations of the labor standard provisions of the

Labor Code were discovered and reported by Senior Labor EnforcementOfficer Eduvi gis A. Acero in his Notice of Inspection Results. It was on thebases of the afor esaid findings (which petitioner did not contest), thatrespondent Regional Direc tor issued the assailed Order for petitioner topay private respondents the respe ctive wage differentials due them. Clearly, as the duly authorized representative of respondent Secretary ofLabor, and in the lawful exercise of the Secretarys visitorial andenforcement powers un der Article 128 of the Labor Code, respondentRegional Director had jurisdiction to issue his impugned Order. 2) The issue of whether or not the respondent Secretary of Labor actedwith grave abuse of discretion in dismissing petitioners appeal on theground that petition er failed to post the required cash or surety bond, werule in the negative. Article 128 of the Labor Code likewise explicitly provides that in case anorder issued by the duly authorized representative of the Secretary ofLabor and Employ ment involves a monetary award, an appeal by theemployer may be perfected only u pon posting of a cash or surety bond inan amount equivalent to the monetary awar d in the order appealed from. The Office of the Solicitor General: since the Order appealed from involvesa mon etary award, an appeal by petitioner may be perfected only uponposting of a cash or surety bond issued by a reputable bonding companyduly accredited by responde nt Secretary of Labor in the amount equivalentto the monetary award in the Order appealed from. It is undisputed that petitioner herein did not post a cash or surety bondwhen i t filed its appeal with the Office of respondent Secretary of Labor. Consequently, petitioner failed to perfect its appeal on time and the Orderof re spondent Regional Director became final and executory. The Secretaryof Labor and Employment thru Undersecretary Cresenciano B. Trajanocorrectly dismissed petiti oners appeal. The instant petition is herebyDENIED for lack of merit. CIRINEO BOWLING PLAZA, INC., Petitioner, vs. GERRY SENSING, BELEN FERNANDEZ, et. al., DEPARTMENT OF LABOR AND EMPLOYMENT and COURT of APPEALS, Respondents. FACTS: Eligio Paolo, Jr., an employee of petitioner, filed a letter complaintwit h the Department of Labor and Employment (DOLE for short), DagupanDistrict Offic e, Dagupan City, requesting for the inspection/investigation ofpetitioner for va rious labor law violations like underpayment of wages, 13thmonth pay, non-payment of rest day pay, overtime pay, holiday payand service incentive leave pay.[3]Pursuant to the visitorial and enforcement powers of the Secretary of Labor and Employment, his dulyauthorized representative under Article 128 of the Labor Code, asamended, conducted inspect ions on petitioner's establishment thefollowing day. In his inspection report,[4 ] Labor and Employment Officer III, Crisanto Rey Dingle, found that petitioner has thirteen[5] employees and had committed the following violations: underpayment of minimum wage, 13th month pay, holiday premiums, overtime premiums, and non-paymentof rest day. The findings in the inspection report were explained topetitioner's officer-incharge, Ma. Fe Boquiren, who signed the same. The first hearing of the case was scheduled on December 27, 1995, butpetitioner failed to appear, thus, the hearing was reset to January 10,1996. On the date se t, Boquiren, as petitioner's representative, appearedwith the information that p etitioner's President/General Manager LuisitoCirineo was sick and confined in a

hospital. On the January 19, 1996 hearing, Cirineo appeared and asked for moretime to sett le with his employees. The case was again set on January 26,1996 but Cirineo fai led to appear. On April 22, 1996, an Order[6] was issued by the DOLE Regional Office, thedispos itive portion of which reads: WHEREFORE, premises considered and considering further that the amountcomputed c onstitutes part of the lawful remunerations of thirteen affectedemployees, respo ndent is hereby ordered to pay them the total amount ofTHREE HUNDRED SEVENTY SEV EN THOUSAND FIVE HUNDRED PESOS AND 58/100. (P377,500.58), representing their unpaid/underpaid wages, 13thmonth pay, holiday premiums, rest day pay and overtime premiumsdistributed. petitioner's representative, Carmen Zapata, appeared before the DOLERegional Off ice and submitted the quitclaims, waivers and releases ofemployees-awardees, Lam berto Solano, Jovelyn Quinto, Manuel Benitez, Edgar Dizon, Ronillo Tandoc, Eligio Paolo, Jr., and Dario Benitez. Later, however, Benitez, Tandoc, Quinto and Dizon wrote DOLE a letter denyinghaving rec eived any amount from petitioner. Thus, DOLE's inspector Dinglewent to petitione r's establishment to confirm the authenticity of thequitclaims and releases and talked to the employees concerned who statedthat they signed the document withou t knowing its contents but they arewilling to settle if they will be given the a mount computed by DOLE. On June 19, 1996, Luisito Cirineo and a certain Fe Cirineo Octaviano, owner of Esperanza Seafoods Kitchenette stationed in petitioner's establishment, wrote DOLE a letter requesting that the case be endorsed to the NationalLabor Re lations Commission since the resolution of the case requiredevidentiary matters not disclosed or verified in the normal course ofinspection. They also submitted documents to show that petitioner andEsperanza Seafoods Kitchenette are separat e and distinct business entitiesand that some of the employees-awardees are actu ally employees of theEsperanza Seafoods Kitchenette. Petitioner filed its Memorandum of Appeal to the Secretary of Labor andEmploymen t[14] who dismissed the appeal on the ground that same wasfiled out of time.[15] On motion for reconsideration, the appeal wasgranted and the appeal was given d ue course.

However, on March 30, 1999, DOLE Undersecretary Jose Espaol dismissedthe appeal and affirmed the order. ISSUE: PUBLIC RESPONDENT ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT DISMISSED THE INSTANT PETITION AND OUTRIGHT DISMISSAL OF PETITIONER'S MOTION FOR RECONSIDERATION DUE TO MERE TECHNICALITIES. RULING: We dismiss the petition. We find no grave abuse of discretioncommitted b y the CA in issuing the assailed resolutions. The CA dismissedthe petition for c ertiorari for failure of petitioner to attach certaindocuments and to state the material date. While petitioner filed its motionfor reconsideration, attaching t he required documents, the CA correctlyfound that it still did not state the mat erial date when it received the DOLE's Resolution dated April 18, 2000 denying its motion forreconsideration. Th us, without the date of receipt of the denial of suchmotion, the CA could not de termine whether the petition was filed withinthe reglementary period of sixty da ys for filing the petitionfor certiorari under Rule 65 of the Rules of Court. While there are exceptional cases where we set aside procedural defectsto correc t a patent injustice, there should be an effort on the part of theparty invoking liberality to at least explain its failure to comply with therules.[20] It appe ars that petitioner's new counsel failed to state thematerial date twice, first in its petition filed with the CA and, second, in itsmotion for reconsideration. Petitioner's explanation focused on the factthat its President, Luisito Cirineo , only learned of the DOLE's denial of itsmotion for reconsideration on August 1 , 2000 when he came back from atrip from Europe; that efforts to communicate wit h its former counselremained futile. We find such explanation unsatisfactory sin ce the materialdates can easily be verified from the files of the DOLE office. Even if we disregard technicality, we find the arguments raised bypetitioner wit hout merit. As correctly held by the DOLE Regional Directorand sustained by the DOLE Undersecretary, records show that petitionernever refuted the findings of t he labor inspector as to the identity of thethirteen employees nor raised the is sue of separate juridical personalitiesof petitioner Cirineo and Esperanza Seafo ods Kitchenette during theinvestigation and on the hearings conducted. Likewise, we sustain the jurisdiction of the DOLE Regional Director. Thevisitori al and enforcement powers of the DOLE Regional Director to orderand enforce comp liance with labor standard laws can be exercised evenwhere the individual claim exceeds P5,000.00. DISMISSED. G.R. No. 78909, June 30, 1989, MATERNITY CHILDREN'S HOSPITAL, represented by ANTERA L. DORADO, President, petitioner, vs.THEHONORABLE SECRETAR Y OF LABOR AND THE REGIONAL DlRECTOR OF LABOR, REGION X,respondents. Facts: Petitioner is a semi-government hospital, managed by the Board ofDirector s of the Cagayan de Oro Women's Club and Puericulture Center, headed by Mrs. Antera Dorado, as holdover President. The hospital derivesits fin ances from the club itself as well as from paying patients, averaging130 per mon th. It is also partly subsidized by the Philippine CharitySweepstakes Office and the Cagayan De Oro City government. Petitioner has forty-one (41) employees. Aside from salary and livingallowances, the employees are given food, but the amount spent thereforis deducted from the ir respective salaries (pp. 77-78, Rollo). On May 23, 1986, ten (10) employees of the petitioner employed indifferent capac ities/positions filed a complaint with the Office of theRegional Director of Lab or and Employment, Region X, for underpaymentof their salaries and ECOLAS, which

was docketed as ROX Case No. CW-71 86. The Regional Director issued and order based on the reports of the LaborStandard and Welfare Officers, directing payment of P723, 888.58representing underpaymen t of wages and ECOLAs to all the petitioner semployees. Petitioner appealed to the Minister of Labor and Employmentwhich modified the decision as to the period fo r the payment ECOLAs only. A motion for reconsideration was filed by petitioner and was denied by theSecret ary of Labor. ISSUE and RULING: 1) Whether or not the Regional Director had jurisdictionover t he case and if so, the extent of coverage of any award that should beforthcoming , arising from his visitorial and enforcement powers underArticle 128 of the Lab or Code. Labor standards refer to the minimum requirements prescribed by existinglaws, ru les, and regulations relating to wages, hours of work, cost of livingallowance a nd other monetary and welfare benefits, includingoccupational, safety, and healt h standards (Section 7, Rule I, Rules on theDisposition of Labor Standards Cases in the Regional Office, datedSeptember 16, 1987). 1 Under the present rules, a Regional Directorexercises both visitorial and enforcement power over labor stan dardscases, and is therefore empowered to adjudicate moneyclaims, provided there still exists an employer-employee relationship, andthe findings of the regional office is not contested by the employerconcerned. Prior to the promulgation of E.O. No. 111 on December 24, 1986, theRegional Dire ctor's authority over money claims was unclear. Thecomplaint in the present case was filed on May 23, 1986 when E.O. No. 111was not yet in effect, and the preva iling view was that stated in the caseof Antonio Ong, Sr. vs. Henry M. Parel, et al., G.R. No. 76710, datedDecember 21, 1987, thus: . . . the Regional Director, in the exercise of his visitorial and enforcementpo wers under Article 128 of the Labor Code, has no authority to award

money claims, properly falling within the jurisdiction of the laborarbiter. . . .. . . If the inspection results in a finding that the employer hasviolated cert ain labor standard laws, then the regional director must orderthe necessary rect ifications. However, this does not include adjudication ofmoney claims, clearly within the ambit of the labor arbiter's authorityunder Article 217 of the Code. We believe, however, that even in the absence of E. O. No. 111, RegionalDirector s already had enforcement powers over money claims, effectiveunder P.D. No. 850, issued on December 16, 1975, which transferred labor standards cases from the arbitration system to the enforcement system. EO 111 authorizes a Regional Director to order compliance by an employerwith lab or standards provisions of the Labor Code and other legislation. Itis Our consid ered opinion however, that the inclusion of the phrase, " Theprovisions of Artic le 217 of this Code to the contrary notwithstanding andin cases where the relati onship of employer-employee still exists" ... inArticle 128(b), as amended, abov e-cited, merelyconfirms/reiterates theenforcement adjudication authority of the Regional Directorover uncontested money claimsin cases where an employer-employe erelationship still exists. 6 Viewed in the light of PD 850 and read in coordination with MOLE PolicyInstructi ons Nos. 6, 7 and 37, it is clear that it has always been theintention of our la bor authorities to provide our workers immediate access(when still feasible, as where an employer-employee relationship stillexists) to their rights and benefit s, without being inconvenienced byarbitration/litigation processes that prove to be not only nerve-wracking, but financially burdensome in the long run. E.O. No. 111 was issued on December 24, 1986 or three (3) months afterthe promul gation of the Secretary of Labor's decision upholding privaterespondents' salary differentials and ECOLAs on September 24, 1986. Theamendment of the visitorial and enforcement powers of the RegionalDirector (Article 128-b) by said E.O. 111 reflects the intention enunciatedin Policy Instructions Nos. 6 and 37 to empower the Regional Directors toresolve uncontested money claims in cases where an emp loyer-employeerelationship still exists. This intention must be given weight and entitled to great respect. 2) Whether or not the Regional Director erred in extending the award to allhospi tal employees. We answer in the affirmative. The Regional Director correctly applied the award with respect to thoseemployees who signed the complaint, as well as those who did not sign thecomplaint, but w ere still connected with the hospital at the time thecomplaint was filed (See Or der, p. 33 dated August 4, 1986 of the RegionalDirector, Pedrito de Susi, p. 33, Rollo). The justification for the award to this group of employees who were notsignatori es to the complaint is that the visitorial and enforcement powers given to the Secretary of Labor is relevant to, and exercisable overestablishmen ts, not over the individual members/employees, becausewhat is sought to be achie ved by its exercise is the observance of, and/orcompliance by, such firm/establi shment with the labor standardsregulations. Necessarily, in case of an award res ulting from a violation oflabor legislation by such establishment, the entire me mbers/employeesshould benefit therefrom. ACCORDINGLY, this petition should be dismissed, as it is herebyDISMISSED, as reg ards all persons still employed in the Hospital at the timeof the filing of the complaint, but GRANTED as regards those employees nolonger employed at that time

. G.R. No. 74621 February 7, 1990, BROKENSHIRE MEMORIAL HOSPITAL, INC., petitioner, vs.THE HONORABLE MINISTER OF LABOR & EMPLOYMENTAND BROKENSHIRE MEMORIAL HOSPITAL EMPLOYEES AND WORKER'S UNION-FFW Represented by EDUARDO A. AFUAN, respondents. FACTS: This case originated from a complaint filed by private respondentsagainst petitioner on September 21, 1984 with the Regional Office of theMOLE, Region XI , Davao City for non-compliance with the provisions ofWage Order No. 5. After du e healing the Regional Director rendered adecision dated November 16, 1984 in fa vor of private respondents. Judgment having become final and executory, the Regional Director issueda Writ o f Execution whereby some movable properties of the hospital(petitioner herein) w ere levied upon and its operating expenses kept withthe bank were garnished. The levy and garnishment were lifted whenpetitioner hospital paid the claim of the private respondents (281 hospitalemployees) directly, in the total amount of P16 3,047.50 covering theperiod from June 16 to October 15, 1984. After making said payment, petitioner hospital failed to continue to complywith Wage Order No. 5 and likewise, failed to comply with the new WageOrder No. 6 whi ch took effect on November 1, 1984, prompting privaterespondents to file against petitioner another complaint docketed as ROXILSED14-85, which is now the case at bar. ISSUE: Whether or not the Regional Director has jurisdiction over moneyclaims of workers concurrent with the Labor Arbiter. RULING: It will be observed that what in fact conferred upon RegionalDirectors a nd other hearing officers of the Department of Labor (aside fromthe Labor Arbite rs) adjudicative powers, i.e., the power to try and decide, or hear and determine any claim brought before them for recovery ofwages, simple money claims, and other benefits, is Republic Act 6715, provided that the following requisites concur, to wit: 1) The claim is presented by an employee or person employed in domesticor househ old service, or househelper under the code; 2) The claimant, nolonger being empl oyed, does not seek reinstatement; and 3) The

aggregate money claim of the employee or househelper does not exceedfive thousan d pesos (P5,000.00). In the absence of any of the three (3) requisites, the Labor Arbiters haveexclus ive original jurisdiction over all claims arising from employeremployee relations, other than claims for employee's compensation, socialsecurit y, medicare and maternity benefits. Petitioner's contention that the constitutionality of Wage Order Nos. 5 and6 sho uld be passed upon by the National Labor Relations Commission, lacks merit. The Supreme Court is vested by the Constitution with thepower to ul timately declare a law unconstitutional. Without suchdeclaration, the assailed l egislation remains operative and can be thesource of rights and duties especiall y so in the case at bar when petitionercomplied with Wage Order No. 5 by paying the claimants the total amountof P163,047.50, representing the latter's minimum wage increases up toOctober 16, 1984, instead of questioning immediately at that stage beforepaying the amount due, the validity of the order on grounds ofconst itutionality. The Regional Director is plainly ,without the authority todeclare an order or law unconstitutional and his duty is merely to enforcethe law which stands valid, unless otherwise declared by this Tribunal to beunconstitutional. On our part, We hereby declare the assailed Wage Ordersas constitutional, there being no provision of the 1973 Constitution (oreven of both the Freedom Constitu tion and the 1987 Constitution) violatedby said Wage Orders, which Orders are wi thout doubt for the benefit oflabor. The labor regulations officers may not be deemed uncontested as to bringthe case at bar within the competence of the Regional Director, as dulyauthorized repres entative of the Secretary of Labor, pursuant to Article128 of the Labor Code, as amended. Considering further that theaggregate claims involve an amount in exce ss of P5,000.00, We find itmore appropriate that the issue of petitioner hospita l's liability therefor, including the proposal of petitioner that the obligation of privaterespondents t o the former in the aggregate amount of P507,237.57 beused to offset its obligat ions to them, be ventilated and resolved, not in asummary proceeding before the Regional Director under Article 128 of theLabor Code, as amended, but in accorda nce With the more formal and extensive proceeding before the Labor Arbiter. Nevertheless, it should beemphasi zed that the amount of the employer's liability is not quite a factorin determin ing the jurisdiction of the Regional Director. However, thepower to order compli ance with labor standards provisions may not beexercised where the employer cont ends or questions the findings of thelabor regulation officers and raises issues which cannot be determinedwithout taking into account evidentiary matters not v erifiable in the normalcourse of inspection, as in the case at bar. Viewed in the light of RA 6715 and read in consonance with the case ofBriad Agro Development Corp., as reconsidered, The instant case fallsunder the exclusive o riginal jurisdiction of the Labor Arbiter RA 6715 is inthe nature of a curative statute. Curative statutes have long been considered valid in our jurisdiction, as long as they do not affect vestedrights . In this case, We do not see any vested right that will be impaired bythe appli cation of RA 6715. Inasmuch as petitioner had already paid theclaims of private respondents in the amount of P163,047.50 pursuant tothe decision rendered in the first complaint, the only claim that should bedeliberated upon by the Labor Arb iter should be limited to the secondamount given by the Regional Director in the second complaint togetherwith the proposal to offset the obligations. SET ASIDE . The case isREFERRED, if the respondents are so minded, to the Labor Arbiter fo rproper proceedings.

PT&T v. NLRC FACTS: PT&T (Philippine Telegraph & Telephone Company) initially hiredGrace de G uzman specifically as Supernumerary Project Worker , for afixed period from Novembe r 21, 1990 until April 20, 1991 as reliever for C.F. Tenorio who went on maternity leave. She was again invited foremployment as replacement of Erlina F. Dizon who went on leave on 2periods, from June 10, 199 1 to July 1, 1991 and July 19, 1991 to August 8,1991. On September 2, 1991, de Guzman was again asked to join PT&T as aprobationary em ployee where probationary period will cover 150 days. She indicated in the portion of the job application form under civil statusthat she was single although she had contracted marriage a few monthsearlier. When pe titioner learned later about the marriage, its branchsupervisor, Delia M. Oficia l, sent de Guzman a memorandum requiring herto explain the discrepancy. Included in the memorandum, was a reminder about the company s policy of not accepting married women foremployment. She was d ismissed from the company effective January 29, 1992. Labor Arbiter handed down decision on November 23, 1993 declaring that petitioner illegally dismissed De Guzman, who had alreadygained t he status of a regular employee. Furthermore, it was apparentthat she had been d iscriminated on account of her having contractedmarriage in violation of company policies. ISSUE: Whether the alleged concealment of civil status can be grounds toterminat e the services of an employee. HELD: Article 136 of the Labor Code, one of the protective laws forwomen, explic itly prohibits discrimination merely by reason of marriage ofa female employee. It is recognized that company is free to regulatemanpower and employment from hi ring to firing, according to theirdiscretion and best business judgment, except in those cases of unlawfuldiscrimination or those provided by law. PT&T s policy of not accepting or disqualifying from work any womanworker who cont racts marriage is afoul of the right against discriminationprovided to all women workers by our labor laws and by our Constitution. The record discloses clearly that de Guzman s ties with PT&T weredissolved princip ally because of the company s policy that married women

are not qualified for employment in the company, and not merely becauseof her su pposed acts of dishonesty. The government abhors any stipulation or policy in the nature adopted byPT&T. As stated in the labor code: ART. 136. Stipulation against marriage. It shall be unlawful for anemployer to re quire as a condition of employment or continuation ofemployment that a woman sha ll not get married, or to stipulate expresslyor tacitly that upon getting marrie d, a woman employee shall be deemedresigned or separated, or to actually dismiss , discharge, discriminate orotherwise prejudice a woman employee merely by reaso n of marriage. The policy of PT&T is in derogation of the provisions stated in Art.136 ofthe La bor Code on the right of a woman to be free from any kind ofstipulation against marriage in connection with her employment and itlikewise is contrary to good mo rals and public policy, depriving a woman ofher freedom to choose her status, a privilege that is inherent in anindividual as an intangible and inalienable righ t. The kind of policyfollowed by PT&T strikes at the very essence, ideals and pu rpose ofmarriage as an inviolable social institution and ultimately, family as t hefoundation of the nation. Such policy must be prohibited in all its indirect, disguised or dissembled forms as discriminatory conduct derogatory of thelaws of the land not only for order but also imperatively required. APEX MINING CO V NLRC NATURE: Special civil action for certiorari to annul NLRC decision FACTS -Sinclita Candida was employed by Apex Mining Company, Inc. to performlaundry se rvices at its staff house. At first, she was paid on a piece ratebasis. Later, s he was paid on a monthly basis. -While she was hanging her laundry, she accidentally slipped and hit herback on a stone. She reported the accident to her immediate supervisorand to the personn el officer. As a result of the accident she was not able tocontinue with her wor k. -She was permitted to go on leave for medication and was offered P2kwhich was ev entually increased to P5k to persuade her to quit her job, butshe refused the of fer and preferred to return to work. Petitioner did notallow her to return to wo rk and dismissed her. -Labor arbiter ordered Apex Mining Company to pay the complainantSalary Differen tial, Emergency Living Allowance, 13th Month PayDifferential and separation pay of one month for every year of serviceNLRC affirmed. ISSUE WON the househelper in the staff houses of an industrial company is adomestic he lper HELD NO -Petitioner is a regular employee-Rule XIII, Section l(b), Book 3 of the Labor C ode: The term "househelper" as used herein is synonymous to the term "domestic servant" and shall refer to any person, whether male or female, who renders services in and about the employer's home andwhich services

are usually necessary or desirable for the maintenanceand enjoyment thereof, and ministers exclusively to the personal comfortand enjoyment of the employer's fa mily. -The foregoing definition clearly contemplates such househelper or domestic servant who is employed in the employer's home to ministerexclusively t o the personal comfort and enjoyment of the employer's family. The definition cannot be interpreted to include househelp or laundrywomen working in staffhouses of a company -The criteria is the personal comfort and enjoyment of the family of theemployer in the home of said employer. -While it may be true that the nature of the work of a househelper, domestic servant or laundrywoman in a home or in a company staffhousemay be simi lar in nature, the difference in their circumstances is that inthe former instan ce they are actually serving the family while in the lattercase, whether it is a corporation or a single proprietorship engaged inbusiness or industry or any ot her agricultural or similar pursuit, service isbeing rendered in the staffhouses or within the premises of the business ofthe employer. In such instance, they a re employees of the company oremployer in the business concerned entitled to the privileges of a regularemployee. Disposition Petition dismissed BARCENAS V NLRC (REV SIM DEE) FACTS -In 1978, Chua Se Su (Su, for short) in his capacity as the Head Monk ofthe Budd hist Temple of Manila and Baguio City and as President and Chairman of the Board of Directors of the Poh Toh Buddhist Association of the Phils. Inc. hired the petitioner, Filomena Barcenas, who speaks theChinese l anguage as secretary and interpreter. -Her position required her to receive and assist Chinese visitors to thetemple, act as tourist guide for foreign Chinese visitors, attend to thecallers of the H ead Monk as well as to the food for the temple visitors, runerrands for the Head Monk such as paying the Meralco, PLDT, MWSS billsand act as liaison in some gov ernment offices. Aside from her pay andallowances under the law, she received an amount of P500 per month plusfree board and lodging in the temple. -In December, 1979, Su assumed the responsibility of paying for theeducation of Barcenas nephew. In 1981, Su and Barcenas had amorousrelations. In May, 1982, or five months before giving birth to the allegedson of Su on October 12, 1982, she was sent home to Bicol. Upon the death of Su in July, 1983, she remained and continued in her job.

-. In 1985, Manuel Chua (Chua, for short) was elected President and Chairman of the Board of the Poh Toh Buddhist Association of the Philippines, Inc. and Rev. Sim Dee (Dee, for short) was elected Head Buddhist Priest. Thereafter, Chua and Dee discontinued payment of hermonthly all owance and the additional P500 effective 1983. In addition, Barcenas and her son were evicted forcibly from their quarters in thetemple by s ix police officers. She was brought first to the Police precinct inTondo and the n brought to Aloha Hotel where she was compelled to sign awritten undertaking no t to return to the Buddhist temple in considerationof the sum of P10,000. She re fused and Chua shouted threats against herand her son. Her personal belongings i ncluding assorted jewelries werenever returned. -The Labor Arbiter ruled for Barcenas but the NLRC reversed. ISSUES 1. WON Barcenas was a regular employee of the Manila Buddhist Temple 2. WON Barcenas was illegally dismissed HELD 1. YES Reasoning -We agree with the petitioner's claim that she was a regular employee ofthe Mani la Buddhist Temple as secretary and interpreter of its Head Monk, Su. As Head Monk, President and Chairman of the Board of Directors of the Poh Toh Buddhist Association of the Philippines, Su was empowered to hirethe pet itioner under Article V of the By-laws of the Association which states: "The President or in his absence, the Vice President shall represent theAssociat ion in all its dealings with the public, subject to the Board, shallhave the pow er to enter into any contract or agreement in the name ofthe Association, shall manage the active business operation of the Association, shall deal with the bank or banks." -Chua and Dee, on the other hand, claimed that Barcenas was never an employee of the Poh Toh Temple but a servant who confined herself to thetemple a nd to the personal needs of the late Chua Se Su and thus, herposition is co-term inus with that of her master. However, the work that sheperformed in the temple could not be categorized as mere domestic work. Barcenas, being proficient in the Chinese language, attended to the visitors, mostly Chinese, who came to pray or seek advice before Buddhafor perso nal or business problems; arranged meetings between these visitors and Su and supervised the preparation of the food for the templevisitor s; acted as tourist guide of foreign visitors; acted as liaison withsome governm ent offices; and made the payment for the temple, Meralco, MWSS and PLDT bills. Indeed, these tasks may not be deemed activities of a household helper. They were essential and important to the operationand religi ous functions of the temple. 2. NO Reasoning -Her status as a regular employee ended upon her return to Bicol in May, 1982 to await the birth of her lovechild allegedly by Su. The records do notshow that she filed any leave from work or that a leave was granted her. Neither did she return to work after the birth of her child on October

12,1982, whom she you re alert you name! Hmmm don t was only in July, mple.

named Robert Chua alias Chua Sim Tiong [Whoa, waita minute! If ll realize that Sim is the NEW Head Monk s you think something else s going on here? .]. TheNLRC found that it 1983 after Su died that she went backto the Manila Buddhist Te

-She herself supplied the reason for her return. She stated: "It was the death-bed instruction to her by Chua Se So to stay at thetemple and to take care of the two boys and to see to it that they finishtheir studies to b ecome monks and when they are monks to eventuallytake over the two temples as th eir inheritance from their father." -Thus, her return to the temple was no longer as an employee but ratheras Su's m istress who is bent on protecting the proprietary and hereditaryrights of her so n and nephew. In her pleadings, the petitioner claims thatthey were forcefully e victed from the temple, harassed and threatened byrespondents and that the Poh T oh Buddhist Association is a trustee corporation with the children as cestui que trust. These claims are not proper in this labor case. They should be appropriately threshed out in thecompl aints already filed by the petitioner before the civil courts. Due tothese claim s, we view the respondents' offer of P10,000 as indicative moreof their desire t o evict the petitioner and her son from the temple ratherthan an admission of an employer-employee relation. -The petitioner's claim for unpaid wages since May, 1982 which she filedonly in 1986, has already prescribed. Under Article 292 of the Labor Code, all money claims arising from employer-employee relations must be filedwithin th ree years from the time the cause of action accrued, otherwisethey shall forever be barred. -Finally, while petitioner contends that she continued to work in the temple after Su died, there is, however, no proof that she was re-hired bythe ne w Head Monk. In fact, she herself manifested that respondents madeit clear to he r in no uncertain terms that her services as well as her presence and that of her son were no longer needed. However, she persisted and continued to work in the temple without receiving her salarybecaus e she expected Chua and Dee to relent and permit the studies ofthe two boys. Con sequently, under these circumstances, no employeremployee relationship could have arisen.

Disposition Decision of the NLRC is AFFIRMED. GR No. 146053 (April 30, 2008) This case deals with the sexual harassment of a young girl by herelementary scho ol teacher. The case highlights the vulnerability of female students. Facts: Petitioner is a public school teacher of Pandan Elementary School, Pandan, Mambajao, Camiguin Province. Respondent is the father of AAA, an elementary school student of the petitioner. AAA claimed that on August 16, 1995, petitioner asked her to be at hisoffice to do an errand. Once inside, she saw him get a folder from one ofthe cartons on th e floor near his table, and place it on his table. He thenasked her to come clos er, and when she did, held her hand, then touched and fondled her breast. She stated that he fondled her breast five times, and that she felt afraid. A classmate of hers, claiming to have witnessedthe inc ident, testified that the fondling incident did happen just as AAArelated it. Petitioner was charged with Misconduct in a Formal Charge dated February12, 1996 by Regional Director Vivencio N. Muego, Jr. of the CSC. In his defense, petitioner claimed that the touching incident happened byacciden t, just as he was handing AAA a lesson book. He further stated thatthe incident happened in about two or three seconds, and that the girl lefthis office without any complaint. Held: The act of petitioner of fondling one of his students is against a law, RA 7877, and is doubtless inexcusable. The particular act of petitionercannot in any way be construed as a case of simple misconduct. Sexuallymolesting a child is, by any norm, a revolting act that it cannot but becategorized as a grave off ense. Parents entrust the care and molding oftheir children to teachers, and exp ect them to be their guardians while inschool. Petitioner has violated that trus t. A teacher who perverts his position by sexually harassing a student shouldnot be allowed, under any circumstance, to practice this noble profession. So it must be here. Bacsin vs. Wahiman FACTS -Bacsin, a public elementary school teacher, was charged with Misconductfor fond ling the breast of his student, as was witnessed by anotherstudent. In his defen se, Bacsin claimed that the touching happened byaccident. *CSC: GUILTY of Grave Misconduct (Acts of Sexual Harassment), DISMISSED. Act contained in the Anti-Sexual Harassment Act of 1995. MR Denied. Appealed to CA *CA: Affirm. Even if Bacsin was formally charged with disgraceful andimmoral cond uct and misconduct , CSC found that the allegations andevidence sufficiently prove d petitioner s guilt of grave misconduct, which ispunishable by dismissal from ser vice. ISSUE: WON MISCONDUCT (which was the charge against him) includesGrave Misconduc t, thus, he can be convicted of such even if that was not charged

HELD: YES *Dadubo v. Civil Service Commission: The charge against the respondentin an admi nistrative case need not be drafted with the precision of aninformation in a cri minal prosecution. It is sufficient that he is apprised ofthe substance of the c harge against him; what is controlling is theallegation of the acts complained o f, not the designation of the offense. >>>It is clear that petitioner was sufficiently informed of the basis of thechar ge against him, which was his act of improperly touching one of hisstudents. Thu s informed, he defended himself from such charge. Thefailure to designate the of fense specifically and with precision is of nomoment in this administrative case . >>>Charges against him imputes acts covered and penalized under Antisexual harassment act of 1995 *Domingo v. Rayala: it is not necessary that the demand, request, orrequirement of a sexual favor be articulated in a categorical oral or writtenstatement. It m ay be discerned, with equal certitude, from the acts of theoffender. >>>act of mashing the breast, in an education environment, upon astudent, who fe lt fear at the time Bacsin touched her, are sufficient grounds for grave misconduct*there is grave misconduct! The act of petitioner of fondling one of hisstudents is against a law, RA 7877, and is doubtless inexcus able. Theparticular act of petitioner cannot in any way be construed as a case o fsimple misconduct. Sexually molesting a child is, by any norm, a revoltingact t hat it cannot but be categorized as a grave offense. Parents entrustthe care and molding of their children to teachers, and expect them to betheir guardians whi le in school. Petitioner has violated that trust. Thecharge of grave misconduct proven against petitioner demonstrates hisunfitness to remain as a teacher and c ontinue to discharge the functions ofhis office. *no denial of due process: The essence of due process is simply anopportunity to be heard, or, as applied to administrative proceedings, anopportunity to explai n one's side or an opportunity to seek for areconsideration of the action or rul ing complained of. These elements arepresent in this case, where petitioner was properly informed of the chargeand had a chance to refute it, but failed. A teacher who perverts his position by sexually harassing a studentshould not be allowed, under any circumstance, to practice this nobleprofession. So it must be here. Disposition: DISMISS Petition

G.R. No. 164774 | April 12, 2006 STAR PAPER CORPORATION, JOSEPHINE ONGSITCO & SEBASTIAN CHUA, Petitioners, vs. RONALDO D. SIMBOL, WILFREDA N. COMIA & LORNA E. ESTRELLA, Respondents. PUNO, J.: FACTS: Petitioner Star Paper Corporation (the company) is a corporationengaged i n trading principally of paper products. Josephine Ongsitco is itsManager of the Personnel and Administration Department while SebastianChua is its Managing Dir ector. The evidence for the petitioners show that respondents Ronaldo D. Simbol(Simbol) , Wilfreda N. Comia (Comia) and Lorna E. Estrella (Estrella) were allregular emp loyees of the company.1 Simbol was employed by the company on October 27, 1993. He met AlmaDayrit, also an employee of the company, whom he married on June 27,1998. Prior to the marria ge, Ongsitco advised the couple that should theydecide to get married, one of th em should resign pursuant to a companypolicy promulgated in 1995. Simbol resigne d on June 20, 1998 pursuant tothe company policy.4 Comia was hired by the company on February 5, 1997. She met HowardComia, a co-em ployee, whom she married on June 1, 2000. Ongsitcolikewise reminded them that pu rsuant to company policy, one must resignshould they decide to get married. Comi a resigned on June 30, 2000. Estrella was hired on July 29, 1994. She met Luisito Zuiga (Zuiga), also aco-worke r. Petitioners stated that Zuiga, a married man, got Estrellapregnant. The compan y allegedly could have terminated her services dueto immorality but she opted to resign on December 21, 1999.6 The respondents each signed a Release and Confirmation Agreement. Theystated the rein that they have no money and property accountabilities inthe company and tha t they release the latter of any claim or demand ofwhatever nature.7 Respondents offer a different version of their dismissal. Simbol and Comiaallege that they did not resign voluntarily; they were compelled to resign inview of a n illegal company policy. As to respondent Estrella, she allegesthat she had a r elationship with co-worker Zuiga who misrepresentedhimself as a married but separ ated man. After he got her pregnant, shediscovered that he was not separated. Th us, she severed her relationshipwith him to avoid dismissal due to the company p olicy. On November 30,1999, she met an accident and was advised by the doctor at theOrthopedic Hospital to recuperate for twenty-one (21) days. She returnedto w ork on December 21, 1999 but she found out that her name was onhold at the gate. She was denied entry. She was directed to proceed to theperson nel office where one of the staff handed her a memorandum. Thememorandum stated that she was being dismissed for immoral conduct. She refused to sign the memorandum because she was on leave fortwenty-one (21) d ays and has not been given a chance to explain. Themanagement asked her to write an explanation. However, after submissionof the explanation, she was nonetheles s dismissed by the company. Due toher urgent need for money, she later submitted a letter of resignation inexchange for her thirteenth month pay. Respondents filed a complaint for unfair labor practice, constructivedismissal, separation pay and attorney s fees. They averred that theaforementioned company po licy is illegal and contravenes Article 136 ofthe Labor Code. They also contende d that they were dismissed due to theirunion membership. Labor Arbiter Melquiade s Sol del Rosario dismissed thecomplaint for lack of merit. On appeal to the NLRC, the Commission affirmed the decision of the LaborArbiter

on January 11, 2002. Respondents filed a Motion for Reconsideration but was denied by theNLRC in a Re solution dated August 8, 2002. They appealed to respondent court via Petition for Certiorari. Court of Appeals reversed the NLRC. ISSUE: Whether the policy of the employer banning spouses from workingin the sam e company violates the rights of the employee under theConstitution and the Labo r Code or is a valid exercise of managementprerogative. HELD: The 1987 Constitution states our policy towards the protection of labor. TheCivi l Code likewise protects labor with the following provisions: Art. 1700. The relation between capital and labor are not merelycontractual. The y are so impressed with public interest that labor contractsmust yield to the co mmon good. Therefore, such contracts are subject tothe special laws on labor uni ons, collective bargaining, strikes andlockouts, closed shop, wages, working con ditions, hours of labor andsimilar subjects. Art. 1702. In case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety and decent living for the laborer. The Labor Code is the most comprehensive piece of legislation protectinglabor. T he case at bar involves Article 136 of the Labor Code which provides: Art. 136. It shall be unlawful for an employer to require as a condition ofemplo yment or continuation of employment that a woman employee shallnot get married, or to stipulate expressly or tacitly that upon getting

married a woman employee shall be deemed resigned or separated, or toactually di smiss, discharge, discriminate or otherwise prejudice a womanemployee merely by reason of her marriage. Respondents submit that their dismissal violates the above provision. Petitioners allege that its policy "may appear to be contrary to Article 136of t he Labor Code" but it assumes a new meaning if read together with thefirst parag raph of the rule. The rule does not require the woman employeeto resign. The emp loyee spouses have the right to choose who betweenthem should resign. Further, t hey are free to marry persons other than coemployees. Hence, it is not the marital status of the employee, per se, that is being discriminated. It is only intended to carry out its no-employmentforrelatives-within-the-third-degree-policy which is within the ambit of thepreroga tives of management.16 It is true that the policy of petitioners prohibiting close relatives fromworkin g in the same company takes the nature of an anti-nepotismemployment policy. Com panies adopt these policies to prevent the hiringof unqualified persons based on their status as a relative, rather than upontheir ability.17 These policies foc us upon the potential employmentproblems arising from the perception of favoriti sm exhibited towardsrelatives. With more women entering the workforce, employers are also enactingemployment po licies specifically prohibiting spouses from working for thesame company. We not e that two types of employment policies involvespouses: policies banning only sp ouses from working in the same company (no-spouse employment policies), and those banning allimmediate family m embers, including spouses, from working in the same company (anti-nepotism employment policies).18 Unlike in our jurisdiction where there is no express prohibition on maritaldiscr imination,19 there are twenty state statutes20 in the United States prohibiting marital discrimination. Some state courts21 have been confronted with the issue of whether no-spouse policies violate their lawsprohib iting both marital status and sex discrimination. In challenging the anti-nepotism employment policies in the United States, complainants utilize two theories of employment discrimination: the disparate treatment and the disparate impact. Under the disparate treatment analysis, the plaintiff must prove that anemployment pol icy is discriminatory on its face. No-spouse employmentpolicies requiring an emp loyee of a particular sex to either quit, transfer, or be fired are facially discriminatory. For example, an employment policyprohib iting the employer from hiring wives of male employees, but nothusbands of femal e employees, is discriminatory on its face. On the other hand, to establish disparate impact, the complainants mustprove tha t a facially neutral policy has a disproportionate effect on a particular class. For example, although most employment policies do notexpressly indicate which spouse will be required to transfer or leave thecompany, the pol icy often disproportionately affects one sex. The state courts rulings on the issue depend on their interpretation of thescope of marital status discrimination within the meaning of theirrespective civil rig hts acts. Though they agree that the term "maritalstatus" encompasses discrimina tion based on a person's status as eithermarried, single, divorced, or widowed, they are divided on whether theterm has a broader meaning. Thus, their decisions vary.

The courts narrowly interpreting marital status to refer only to a person'sstatu s as married, single, divorced, or widowed reason that if thelegislature intende d a broader definition it would have either chosendifferent language or specifie d its intent. They hold that the relevantinquiry is if one is married rather tha n to whom one is married. Theyconstrue marital status discrimination to include only whether a person issingle, married, divorced, or widowed and not the "ident ity, occupation, and place of employment of one's spouse." These courts have upheld thequestioned policies and ruled that they did not violate the marital statusdiscrimination p rovision of their respective state statutes. The courts that have broadly26 construed the term "marital status" rule that it encompassed the identity, occupation and employment of one'sspouse. They strike down the no-spouse employment policies based on thebroad legislative int ent of the state statute. They reason that the nospouse employment policy violate the marital status provision because itarbitrar ily discriminates against all spouses of present employees withoutregard to the actual effect on the individual's qualifications or workperformance.27 These cou rts also find the no-spouse employment policyinvalid for failure of the employer to present any evidence of business necessity other than the general perception that spouses in the sameworkplace mi ght adversely affect the business.28 They hold that the absence of such a bona fide occupational qualification29 invalidates a rule denying employment to one spouse due to the current employment ofthe other spouse in the same office.30 Thus, they rule that unless theemployer can prove t hat the reasonable demands of the business require adistinction based on marital status and there is no better available or acceptable policy which would better accomplish the business purpose, anemployer may not discriminate against an employee based on the identityof the employee s s pouse.31 This is known as the bona fide occupational qualification exception. We note that since the finding of a bona fide occupational qualificationjustifie s an employer s no-spouse rule, the exception is interpreted strictlyand narrowly by these state courts. There must be a compelling businessnecessity for which no alternative exists other than the discriminatorypractice.32 To justify a bona f ide occupational qualification, the employermust prove two factors: (1) that the employment qualification isreasonably related to the essential operation of the job involved; and, (2)

that there is a factual basis for believing that all or substantially all person smeeting the qualification would be unable to properly perform the duties ofthe job.33 The concept of a bona fide occupational qualification is not foreign in ourjuris diction. We employ the standard ofreasonableness of the companypolicy which is p arallel to the bona fide occupational qualificationrequirement. In the recent ca se of Duncan Association of DetailmanPTGWO and Pedro Tecson v. Glaxo Wellcome Philippines, Inc.,34 we passed on the validity of the policy of a pharmaceutical companyprohibiting its employees from marrying employees of any competitorcompany. We held that Glaxo h as a right to guard its trade secrets, manufacturing formulas, marketing strategies and other confidentialprograms and information from competitors. We considered the prohibitionagainst personal or m arital relationships with employees of competitorcompanies upon Glaxo s employeesr easonable under the circumstances because relationships of that nature might compromise the interests ofGlaxo. In laying down the assailed company policy, we recognized thatGlaxo only aims to pr otect its interests against the possibility that acompetitor company will gain a ccess to its secrets and procedures.35 The requirement that a company policy must be reasonable under the circumstances to qualify as a valid exercise of management prerogativewas also a t issue in the 1997 case of Philippine Telegraph and Telephone Company v. NLRC.36 In said case, the employee wasdismissed in violatio n of petitioner s policy of disqualifying from work anywoman worker who contracts marriage. We held that the company policyviolates the right against discriminati on afforded all women workers underArticle 136 of the Labor Code, but establishe d a permissible exception, viz.: [A] requirement that a woman employee must remain unmarried could bejustified as a "bona fide occupational qualification," or BFOQ, where the particular requirements of the job would justify the same, but not onthe gro und of a general principle, such as the desirability of spreadingwork in the wor kplace. A requirement of that nature would be validprovided it reflects an inher ent quality reasonably necessary for satisfactory job performance.37 (Emphases supplied.) The cases of Duncan and PT&T instruct us that the requirement of reasonableness must be clearly established to uphold the questionedemployment po licy. The employer has the burden to prove the existence ofa reasonable business necessity. The burden was successfully dischargedin Duncan but not in PT&T. We do not find a reasonable business necessity in the case at bar. Petitioners sole contention that "the company did not just want to havetwo (2) or more of its employees related between the third degree byaffinity and/or consan guinity"38 is lame. That the second paragraph was meant to give teeth to the first paragraph of the questioned rule39 is evidently not the valid reasonable business necessity required by the law. It is significant to note that in the case at bar, respondents were hired aftert hey were found fit for the job, but were asked to resign when they marrieda co-e mployee. Petitioners failed to show how the marriage of Simbol, thena Sheeting M achine Operator, to Alma Dayrit, then an employee of theRepacking Section, could be detrimental to its business operations. Neitherdid petitioners explain how t his detriment will happen in the case ofWilfreda Comia, then a Production Helper in the Selecting Department, who married Howard Comia, then a helper in the cutter-machine. Thepolicy is prem

ised on the mere fear that employees married to each otherwill be less efficient . If we uphold the questioned rule without validjustification, the employer can create policies based on an unprovenpresumption of a perceived danger at the exp ense of an employee s rightto security of tenure. Petitioners contend that their policy will apply only when one employeemarries a co-employee, but they are free to marry persons other than coemployees. The questioned policy may not facially violate Article 136 ofthe Labor Code but it creates a disproportionate effect and under thedisparate impact theory, the o nly way it could pass judicial scrutiny is ashowing that it is reasonable despit e the discriminatory, albeitdisproportionate, effect. The failure of petitioners to prove a legitimatebusiness concern in imposing the questioned policy cannot prejudice theemployee s right to be free from arbitrary discrimination based upons tereotypes of married persons working together in one company.40 Lastly, the absence of a statute expressly prohibiting marital discriminationin our jurisdiction cannot benefit the petitioners. The protection given tolabor in our jurisdiction is vast and extensive that we cannot prudentlydraw inferences from the legislature s silence41 that married persons arenot protected under our C onstitution and declare valid a policy based on aprejudice or stereotype. Thus, for failure of petitioners to presentundisputed proof of a reasonable business n ecessity, we rule that thequestioned policy is an invalid exercise of management prerogative. Corollarily, the issue as to whether respondents Simbol and Comiaresigned volunt arily has become moot and academic. As to respondent Estrella, the Labor Arbiter and the NLRC based theirruling on t he singular fact that her resignation letter was written in her ownhandwriting. Both ruled that her resignation was voluntary and thus valid. The respondent court failed to categorically rule whether Estrellavoluntarily re signed but ordered that she be reinstated along with Simboland Comia. Estrella claims that she was pressured to submit a resignation letterbecause she was in dire need of money. We examined the records of thecase and find Estrella s contention to be more in accord with the evidence.

While findings of fact by administrative tribunals like the NLRC aregenerally gi ven not only respect but, at times, finality, this rule admits ofexceptions,42 a s in the case at bar. Estrella avers that she went back to work on December 21, 1999 but was dismissed due to her alleged immoral conduct. At first, she did not want tosign the termination papers but she was forced to tender her resignationletter in exc hange for her thirteenth month pay. The contention of petitioners that Estrella was pressured to resign becauseshe g ot impregnated by a married man and she could not stand beinglooked upon or talk ed about as immoral43 is incredulous. If she reallywanted to avoid embarrassment and humiliation, she would not have goneback to work at all. Nor would she have filed a suit for illegal dismissal andpleaded for reinstatement. We have held t hat in voluntary resignation, theemployee is compelled by personal reason(s) to dissociate himself fromemployment. It is done with the intention of relinquishin g an office, accompanied by the act of abandonment. 44 Thus, it is illogical for Estrellato r esign and then file a complaint for illegal dismissal. Given the lack ofsufficie nt evidence on the part of petitioners that the resignation wasvoluntary, Estrel la s dismissal is declared illegal. CA decision affirmed. Bay Haven v. Abuan Facts: This is a petition for certiorari on the decision of the CA, who denied theirpet ition to annul the resolution of the DOLE . Upon complaint of Florentino Abuan, one of herein respondents, the DOLE, in the exercise of its visitorial, inspection and enforcement powers, throughits Regional Director for the National Capital Region (NCR), issued an Ordercommand ing petitioners to pay respondents a total of P638,187.15corresponding to the la tter's claims for underpayment as petitioners'workers. The Regional Director bas ed his Order on the results of theinspection conducted on April 23, 1997 by one of its inspectors who foundthat petitioner New Bay Haven Restaurant, committed t he followingviolations under the labor standards law which are Underpayment ofmi nimum wage, Underpayment of thirteenth month pay, Underpayment ofregular holiday pay, Underpayment of special holiday pay, Non-payment ofnight shift differentia l pay and Non-registration of the firm under Rule ofOccupational Safety and Heal th Standards. The petitioners filed with theDOLE-NCR Regional Office a Motion fo r Reconsideration, alleging that theoffice had no jurisdiction over the case and that the order was issued indenial of petitioners' right to due process, and th e jurisdiction rest on theNLRC. they added that their right to due process was a lso denied becausethe order was issued without them being furnished copies of th e complaintand the inspection report and without being notified of the hearings held inthe case. The DOLE-NCR Assistant Regional Director, acting for theRegiona l Director, issued an Order granting petitioners' motion for reconsideration as he found merit in petitioners' allegation of absence ofdue pr ocess in the issuance of the first order. The order, however, statedthat the DOL E had jurisdiction over the case, pursuant to the Labor Code. The next hearing was set wherein the petitioners showed payroll sheetsand waiver s of quitclaims which were signed by the respondents. However, the latter denied of the amount stated in the payroll as they contend theyreceiv e lesser that what is stated there and also they were forced to signthe quitclai ms. The DOLE issues an order holding the petitioners liable tothe respondents. T he case was elevated to the CA. The CA ruled indismissing the petition, ruling t hat the DOLE had jurisdiction over the laborstandards case and that petitioners

did not present enough evidence torefute the claims made by respondents. Issues: 1) whether the DOLE Secretary and her authorized representatives havejurisdictio n to impose the monetary liability against petitioners; and 2) whether the DOLE-NCR, as upheld by the DOLE Secretary and the CAcommitted an error in awarding the claims of respondents. Ruling: 1. The DOLE Secretary and her authorized representatives such asthe DOLE-NCR Region al Director, have jurisdiction to enforcecompliance with labor standards laws un der the broad visitorialand enforcement powers. The Court has held that the visi torial andenforcement powers of the Secretary, exercised through hisrepresentati ves, encompass compliance with all labor standardslaws and other labor legislati on, regardless of the amount of the claims filed by workers. 2. The mere disagreement by the employer with the findings of thelabor officer, or the simple act of presenting controvertingevidence, does not automatically dives t the DOLE Secretary or anyof his authorized representatives such as the regiona l directors, ofjurisdiction to exercise their visitorial and enforcement powersu nder the Labor Code. Thus, the key requirement for the RegionalDirector and the DOLE Secretary to be divested of jurisdiction isthat the evidentiary matters are not verifiable in the course of inspection. Where the evidence presented was verifiable in thenormal course of i nspection, even if presented belatedly by theemployer, the Regional Director, an d later the DOLE Secretary, may still examine them; and these officers are not divested ofjurisdiction to de cide the case. In the present case, petitioners' pieces of evidence of the allegedcontract of l ease, payroll sheets, and quitclaims were all verifiablein the normal course of inspection and, granting that they were notexamined by the labor inspector, they have nevertheless beenthoroughly examined by the Regional Director and the DOLE

Secretary. For these reasons, the exclusion clause of Art. 128(b) does not apply. G.R. No. 186091 | December 15, 2010 | EMMANUEL BABAS v. LORENZO SHIPPING CORPORATION F: Respondent Lorenzo Shipping Corporation (LSC) is a duly organizeddomestic cor poration engaged in the shipping industry; it owns severalequipment necessary fo r its business. On September 29, 1997, LSCentered into a General Equipment Maint enance Repair and ManagementServices Agreement3 (Agreement) with Best Manpower S ervices, Inc. (BMSI). Under the Agreement, BMSI undertook to provide maintenance andrepair ser vices to LSC s container vans, heavy equipment, trailer chassis, and generator sets. BMSI further undertook to provide checkers to inspectall con tainers received for loading to and/or unloading from its vessels. Simultaneous with the execution of the Agreement, LSC leased itsequipment, tools , and tractors to BMSI.4 The period of lease was coterminous with the Agreement. BMSI then hired petitioners on various dates to work at LSC as checkers, welders, utility men, clerks, forklift operators, motor pool and machineshop wor kers, technicians, trailer drivers, and mechanics. Six years later, or on May 1, 2003, LSC entered into another contract with BMSI, this time, a service contract.5 In September 2003, petitioners filed with the Labor Arbiter (LA) a complaintfor regularization against LSC and BMSI. On October 1, 2003, LSCterminated the Agree ment, effective October 31, 2003. Consequently, petitioners lost their employment. BMSI asserted that it is an independent contractor. It averred that it waswillin g to regularize petitioners; however, some of them lacked therequisite qualifica tions for the job. BMSI was willing to reassign petitionerswho were willing to a ccept reassignment. BMSI denied petitioners claimfor underpayment of wages and no n-payment of 13th month pay and otherbenefits. LSC, on the other hand, averred that petitioners were employees of BMSIand were assigned to LSC by virtue of the Agreement. BMSI is anindependent job contractor with substantial capital or investment in theform of tools, equipment, and mach inery necessary in the conduct of itsbusiness. The Agreement between LSC and BMS I constituted legitimate jobcontracting. Thus, petitioners were employees of BMS I and not of LSC. After due proceedings, the LA rendered a decision6 dismissing petitioners complain t. The LA found that petitioners were employees of BMSI. It was BMSI which hired petitioners, paid their wages, and exercised control overthem. Petitioners appealed to the National Labor Relations Commission (NLRC), arguing that BMSI was engaged in labor-only contracting. They insistedthat their employer was LSC. On January 16, 2008, the NLRC promulgatedits decision. NLRC r eversed the LA s decision. NLRC s finding: BMSI is not engaged in legitimate job contracting. BMSI hasno equi pment, no office premises, no capital and no investments as shownin the Agreemen t itself. BMSI has no independent business or activity or job to perform inrespondent LSC free from the control of respondent LSC except as to theresults thereof. In view of the absence of such independent business oractivity or job to be performed b

y respondent BMSI in respondent LSC[petitioners] performed work that was necessa ry and desirable to the mainbusiness of respondent LSC. Respondents were not abl e to refute theallegations of [petitioners] that they performed the same work th at theregular workers of LSC performed and they stood side by side with regulare mployees of respondent LSC performing the same work. Necessarily, thecontrol on the manner and method of doing the work was exercised byrespondent LSC and not b y respondent BMSI since the latter had nobusiness of its own to perform in respo ndent LSC. LSC went to the CA via certiorari. On October 10, 2008, the CA rendered the now challenged Decision, reversing the NLRC. In holding that BMSI wasan inde pendent contractor, the CA relied on the provisions of theAgreement, wherein BMS I warranted that it is an independent contractor, with adequate capital, expertise, knowledge, equipment, and personnelnecessary f or the services rendered to LSC. According to the CA, the factthat BMSI entered into a contract of lease with LSC did not ipso facto makeBMSI a labor-only contr actor; on the contrary, it proved that BMSI hadsubstantial capital. The CA was o f the view that the law only requiredsubstantial capital or investment. Since BM SI had substantial capital, asshown by its ability to pay rents to LSC, then it qualified as an independentcontractor. It added that even under the control test , BMSI would be the real employer of petitioners, since it had assumed the entire charge andcontrol of petitioners services. The CA further held that BMSI s Certificateof Registration as an independent contractor was sufficient proof that itwas an independent con tractor. Hence, the CA absolved LSC from liabilityand instead held BMSI as emplo yer of petitioners. Petitioners filed a motionfor reconsideration, but the CA de nied it on January 21, 2009. Hence, thisappeal by petitioners. I: WON CA ERRED IN IGNORING THE CLEAR EVIDENCE OF RECORD THAT RESPONDENT WAS ENGAGED IN LABOR-ONLY CONTRACTING TO DEFEAT PETITIONERS RIGHT TO SECURITY OF TENURE.

H: We dismiss the petition insofar as petitioners Soriano and Anajao areconcerne d. In declaring BMSI as an independent contractor, the CA, in thechallenged Deci sion, heavily relied on the provisions of the Agreement, wherein BMSI declared that it was an independent contractor, withsubstantial cap ital and investment. De Los Santos v. NLRC instructed us that the character of the business, i.e., whether as labor-only contractor or as job contractor, should bemeasured i n terms of, and determined by, the criteria set by statute. Theparties cannot di ctate by the mere expedience of a unilateral declaration ina contract the charac ter of their business. Despite the fact that the service contracts contain stipulations which areearmar ks of independent contractorship, they do not make it legally so. The language of a contract is neither determinative nor conclusive of therelatio nship between the parties. Petitioner SMC and AMPCO cannotdictate, by a declarat ion in a contract, the character of AMPCO's business, that is, whether as labor-only contractor, or job contractor. AMPCO'scharacter s hould be measured in terms of, and determined by, the criteriaset by statute. Thus, in distinguishing between prohibited labor-only contracting andpermissible job contracting, the totality of the facts and the surroundingcircumstances of the case are to be considered. Labor-only contracting, a prohibited act, is an arrangement where thecontractor or subcontractor merely recruits, supplies, or places workers toperform a job, w ork, or service for a principal. In labor-only contracting, thefollowing element s are present: (a) the contractor or subcontractor doesnot have substantial capi tal or investment to actually perform the job, work, or service under its own account and responsibility; and (b) theemployees recruited, supplied, or placed by such contractor orsubcontractor perform activi ties which are directly related to the mainbusiness of the principal.20 On the other hand, permissible job contracting or subcontracting refers toan arr angement whereby a principal agrees to put out or farm out with thecontractor or subcontractor the performance or completion of a specificjob, work, or service within a definite or predetermined period, regardlessof whether such job, work, or service is to be performed or completedwithin or outside the premises of the principal. A person is considered engaged in legitimate job contracting orsubcontracting if the following conditions concur: (a) The contractor carries on a distinct and independent businessand undertakes the contract work on his account under his own responsibility according to his own manner and method, free fromthe control and direction of his employer or principal in all matters connected with the performance of his work except as to theresults thereof; (b) The contractor has substantial capital or investment; and (c) The agreement between the principal and the contractor orsubcontractor assur es the contractual employees' entitlement toall labor and occupational safety an d health standards, freeexercise of the right to self-organization, security of tenure, andsocial welfare benefits.22 Given the above standards, we sustain the petitioners contention thatBMSI is enga ged in labor-only contracting. First, petitioners worked at LSC s premises, and nowhere else. Other thanthe provi sions of the Agreement, there was no showing that it was BMSIwhich established p etitioners working procedure and methods, whichsupervised petitioners in their wo

rk, or which evaluated the same. Therewas absolute lack of evidence that BMSI ex ercised control over them or their work, except for the fact that petitioners were hired by BMSI. Second, LSC was unable to present proof that BMSI had substantial capital. The record before us is bereft of any proof pertaining to the contractor scapitali zation, nor to its investment in tools, equipment, or implementsactually used in the performance or completion of the job, work, or servicethat it was contracte d to render. What is clear was that the equipmentused by BMSI were owned by, and merely rented from, LSC. The law casts the burden on the contractor to prove that it has substantialcapit al, investment, tools, etc. Employees, on the other hand, need notprove that the contractor does not have substantial capital, investment, and tools to engage in job-contracting. Third, petitioners performed activities which were directly related to themain b usiness of LSC. The work of petitioners as checkers, welders, utilitymen, driver s, and mechanics could only be characterized as part of, or atleast clearly rela ted to, and in the pursuit of, LSC s business. Logically, when petitioners were assigned by BMSI to LSC, BMSI acted merely as alabor-only contractor. Lastly, as found by the NLRC, BMSI had no other client except for LSC, andneithe r BMSI nor LSC refuted this finding, thereby bolstering the NLRCfinding that BMS I is a labor-only contractor. The CA erred in considering BMSI s Certificate of Registration as sufficientproof that it is an independent contractor. In San Miguel Corporation v. Vicente B. Semillano, Nelson Mondejas, Jovito Remada, Alilgilan MultiPurpose Coop (AMPCO), and Merlyn N. Policarpio, we held that a Certificate

of Registration issued by the Department of Labor and Employment is notconclusiv e evidence of such status. The fact of registration simply preventsthe legal pre sumption of being a mere labor-only contractor from arising. Indubitably, BMSI can only be classified as a labor-only contractor. The CA, therefore, erred when it ruled otherwise. Consequently, the workers thatBMSI sup plied to LSC became regular employees of the latter. Havinggained regular status , petitioners were entitled to security of tenure andcould only be dismissed for just or authorized causes and after they hadbeen accorded due process. Accordingly, we hold that the NLRC committed no grave abuse ofdiscretion in its decision. Conversely, the CA committed a reversible errorwhen it set aside the N LRC ruling. Petition granted. HANJIN HEAVY INDUSTRIES vs. IBANEZ| GR 170181 | June 26 2008 FACTS: Felicito Ibanez (tireman), Elmer Gacula (Crane Operator), ElmerDagotdot ( Welder), Aligwas Carolino (Welder), Ruel Calda (Warehouseman) filed a complaint at the NLRC for illegal dismissal with prayer forreinstatement and payment of backwages. The group alleged that thecontract they have is good for three months, subject to automatic renewalif there is no notice of terminati on from Hanjin, and that the contract wouldautomatically terminate upon the comp letion of the project. They furtheraverred that during the time they were dismis sed, the project was stillongoing and Hanjin hired people for the positions that they had vacated. Lastly, they also allege that they are entitled to a completion bonus as partof the industry practice and this was substantiated by past payrollpayments. Hanjin failed to furnish a copy of the contract agreements withthe dismissed group. In stead it showed the quitclaims that had beenexecuted by the group that released Hanjin and its representatives fromany claims with their employment. It containe d clearance certificates thatshow that respondents are free from accountability. ISSUE: WON the members of the dismissed group are project employees? HELD: No, Hanjin was unable to prove they were not regular employeesThe rehiring of construction workers on a project to project basis does notconfer upon them regular employment status, since their re-hiring is only anatural consequence of the fact that experienced construction workers arepreferred. Employees who are hired for carrying out a separate job, distinctfrom the other undertakings of th e company, the scope and duration of which has been determined and made known to the employees at the time of the employment, are properly treated as project employees and theirservices m ay be lawfully terminated upon the completion of a project. Should the terms of their employment fail to comply with this standard, they cannot be considered project employees. Hanjin was unable to showthe writte n contracts it had with the workers. White the absence of the contract does not grant permanent status it is the burden of the employerto prov e that the employees were aware that their contract with the company is for per project only. While Hanjin submitted a terminationreport incl uding the worker s names to prove that the services of theirservices were only con tracted for a per project basis, Hanjin only submittedone report. It was unable to disprove the allegation of the workers thatthey were part of a pool that Hanj in contacts once a project is to becompleted. Employers cannot mislead their emp loyees, whose work isnecessary and desirable in the former's line of business, b y treating themas though they are part of a work pool from which workers could b econtinually drawn and then assigned to various projects and thereafterdenied re gular status at any time by the expedient act of filing aTermination Report. Thi

s would constitute a practice in which an employeeis unjustly precluded from acq uiring security of tenure, contrary to publicpolicy, morals, good customs and pu blic order. Hanjin alleged that per Department Order 19, Series of 1993 of DOLE, thepayment of completion bonus is further proof that the workers were onlyproject employees as Hanjin is mandated by law to pay it to the temporaryworkers whose contracts are about to end upon the completion of theproject. SC views the completion bonu s terminology here reflects the factthat the project has already been completed and that is the premium theywished to pay. Quitclaims are viewed with disfavor, especially when a. There is clear proof that the waiver was wangled from an unsuspectingor gulli ble person b. Where the terms are unconscionable in its face. For quitclaims to bevalid, it must constitute a reasonable settlement commensurate to their legal rights. It does not preclude them from seeking benefits they wereentitled to such as back wages. The respondents were also not granted thetwin requirement s of notice and hearing. COCA-COLA BOTTLERS PHILS., INC. vs. ALAN M. AGITO, et al | GR No. 179546 | February 13, 2009 FACTS: Petitioner (Coke) is a domestic corporation engaged inmanufacturing, bott ling and distributing soft drink beverages and otherallied products. Respondents were salesmen assigned at Coke Lagro SalesOffice for years but were not regular ized. Coke averred that respondentswere employees of Interserve who were tasked to perform contractedservices in accordance with the provisions of the Contract of Servicesexecuted between Coke and Interserve on 23 March 2002. Said Contract constituted legitimate job contracting, given that the latter was a bonafideinde pendent contractor with substantial capital or investment in theform of tools, e quipment, and machinery necessary in the conduct of itsbusiness. To prove the status of Interserve as an independent contractor, petitionerpresen ted the following pieces of evidence: (1) the Articles of Incorporationof Inters erve; (2) the Certificate of Registration of Interserve with theBureau of Intern al Revenue; (3) the Income Tax Return, with AuditedFinancial Statements, of Inte rserve for 2001; and (4) the Certificate ofRegistration of Interserve as an inde pendent job contractor, issued by theDepartment of Labor and Employment (DOLE).

As a result, petitioner asserted that respondents were employees ofInterserve, s ince it was the latter which hired them, paid their wages, andsupervised their w ork, as proven by: (1) respondents Personal Data Filesin the records of Interserv e; (2) respondents Contract of TemporaryEmployment with Interserve; and (3) the p ayroll records of Interserve. ISSUES: 1. Whether or not Inteserve is a labor-only contractor; 2. Whether or not an employer-employee relationship exists betweenpetitioner Coc a-Cola Bottlers Phils. Inc. and respondents. RULING: At the outset, the Court clarifies that although Interserve has anauthor ized capital stock amounting to P2,000,000.00, only P625,000.00thereof was paid up as of 31 December 2001. The Court does not set anabsolute figure for what it considers substantial capital for an independentjob contractor, but it measures the same against the type of work whichthe contractor is obligated to perform fo r the principal. However, this isrendered impossible in this case since the Cont ract between petitioner andInterserve does not even specify the work or the proj ect that needs to beperformed or completed by the latter s employees, and uses the dubiousphrase tasks and activities that are considered contractible under existi nglaws and regulations. Even in its pleadings, petitioner carefully sidestepsiden tifying or describing the exact nature of the services that Interservewas obliga ted to render to petitioner. The importance of identifying withparticularity the work or task which Interserve was supposed to accomplishfor petitioner becomes even more evident, considering that the Articles ofIncorporation of Interserve s tates that its primary purpose is to operate, conduct, and maintain the business of janitorial and allied services. Butrespond ents were hired as salesmen and leadman for petitioner. The Courtcannot, under s uch ambiguous circumstances, make a reasonabledetermination if Interserve had su bstantial capital or investment toundertake the job it was contracting with peti tioner. [In] Vinoya v. NLRC, we clarified that it was not enough to show substantialcapi talization or investment in the form of tools, equipment, machineryand work prem ises, etc., to be considered an independent contractor. Infact, jurisprudential holdings were to the effect that in determining theexistence of an independent c ontractor relationship, several factors maybe considered, such as, but not neces sarily confined to, whether thecontractor was carrying on an independent busines s; the nature andextent of the work; the skill required; the term and duration o f therelationship; the right to assign the performance of specified pieces ofwor k; the control and supervision of the workers; the power of theemployer with res pect to the hiring, firing and payment of the workers ofthe contractor; the cont rol of the premises; the duty to supply premises, tools, appliances, materials and labor; and the mode, manner and terms of payment. In sum, Interserve did not have substantial capital or investment in theform of tools, equipment, machineries, and work premises; andrespondents, its supposed e mployees, performed work which was directly related to the principal business of petitioner. It is, thus, evident thatInters erve falls under the definition of a labor-only contractor, underArticle 106 of th e Labor Code; as well as Section 5(i) of the RulesImplementing Articles 106-109 of the Labor Code, as amended. It is also apparent that Interserve is a labor-only contractor under Section 5(ii) ofthe Ru les Implementing Articles 106-109 of the Labor Code, as amended, since it did not exercise the right to control the performance of the work ofres pondents. The lack of control of Interserve over the respondents can be gleaned fromthe Co

ntract of Services between Interserve (as the CONTRACTOR) andpetitioner (as the CLIENT). The Contract of Services between Interserve and petitioner did not identify the work needed to be performed and thefinal res ult required to be accomplished. Instead, the Contract specified thetype of work ers Interserve must provide petitioner ( Route Helpers, Salesmen, Drivers, Clericals, Encoders & PD ) and their qualifications(technical/v ocational course graduates, physically fit, of good moralcharacter, and have not been convicted of any crime). The Contract alsostates that, to carry out the und ertakings specified in the immediatelypreceding paragraph, the CONTRACTOR shall employ the necessarypersonnel, thus, acknowledging that Interserve did not yet ha ve in itsemploy the personnel needed by petitioner and would still pick out such personnel based on the criteria provided by petitioner. In other words, Interserve did not obligate itself to perform an identifiable job, work, orservi ce for petitioner, but merely bound itself to provide the latter withspecific ty pes of employees. These contractual provisions stronglyindicated that Interserve was merely a recruiting and manpower agencyproviding petitioner with workers pe rforming tasks directly related to thelatter s principal business. The certification issued by the DOLE stating that Interserve is anindependent jo b contractor does not sway this Court to take it at facevalue, since the primary purpose stated in the Articles of Incorporation ofInterserve is misleading. Acc ording to its Articles of Incorporation, theprincipal business of Interserve is to provide janitorial and allied services. The delivery and distribution of Coca-Cola products, the work for whichresponden ts were employed and assigned to petitioner, were in no wayallied to janitorial services. While the DOLE may have found that thecapital and/or investments in to ols and equipment of Interserve weresufficient for an independent contractor for janitorial services, this does notmean that such capital and/or investments wer e likewise sufficient tomaintain an independent contracting business for the del ivery anddistribution of Coca-Cola products. With the finding that Interserve was engaged in prohibited labor-onlycontracting , petitioner shall be deemed the true employer of respondents. As regular employees of petitioner, respondents cannot be dismissedexcept for ju st or authorized causes, none of which were alleged or provento exist in this ca se, the only defense of petitioner against the charge ofillegal dismissal being that respondents were not its employees. Recordsalso failed to show that petitio ner afforded respondents the twin

requirements of procedural due process, i.e., notice and hearing, prior totheir dismissal. Respondents were not served notices informing them ofthe particular a cts for which their dismissal was sought. Nor were theyrequired to give their si de regarding the charges made against them. Certainly, the respondents dismissal was not carried out in accordancewith law an d, therefore, illegal. TAN v. LAGRAMA, 387 SCRA 393 Facts: Petitioner Rolando tan is the president of supreme theatercorporation and the general manager of crown and Empire Theater inButuan city. Private responde nt Leovildo Lagrama is a painter, making adbillboards and murals for the motion pictures shown at the empress, supreme and crown theaters for more than 10 years from September 1,1988 to Octob er 17 1998. On October 17, 1998 Lagrama was summoned and was scolded forurinating on his wor k area and was asked not to draw anymore. Lagrama denied the charged against him. He claimed that he was not theonly one w ho entered the drawing are and that even if the charge wastrue, it was a minor i nfraction to warrant his dismissal. However everytimehe spoke. Tan showed at him to get out, leaving him no choice but to leavethe premises. Lagrama filed LRC in Butuan investigation differential, a complaint with the sub-regional arbitration branch no. x ofthe N city. He alleged that he had been illegally dismissedand sought re and payment of 13th month pay, serviceincentive leave pay, salary and damages.

Tan denied that Lagrama was his employee. He asserted that Lagrama wasan indepen dent contractor. On June 1999, labor arbiter found tan guilty of illegal dismissal and grandpetit ion. Upon appeal to the NLRC fifth division, Cagayan de Oro city whichrendered a deci sion finding Lagrama to b an independent contractor, andfor this reason reversin g the decision of the labor arbiter. NLRC deniedmotion for reconsideration A. Petition for certiorari was filed before the court of appeals which foundthat tan exercises control over Lagrama s it is a method of computingcompensation, not a basis for determining the existence or absence ofemployer-employee relationsh ip. In the case at bar petitioner did notpresent the payroll to support his clai m that Lagrama was not hisemployee B. The primary standard for determining regular employment is thereasonable conn ection between the particular activity performed by theemployee in relation to t he usual trade or business of the employer. In this case there is such a connection between the job of Lagrama paintingbillboards an d murals and the business of the petitioned. C. The fact the Lagrama was not reported as an employee to the SSS is notconclus ive on the question of whether he was an employee of petitioner. Otherwise an employer would be rewarded for his failure or even neglectto perfor m his obligation. D. Neither does the fact that Lagrama painted for other persons affect oralter h is employment relationship with petitioner. That he did 50 onlyduring weekends h as not been denied by petitioner. E. Lagrama had been employed by petitioner since 1988.under the law, therefore, he is deemed a regular employee and is thus entitled to securityof te

nure, as provided in art. 279 of labor code. This court has held that if the employee has been performing the job for atleast one year, even if he not continuously but intermittently, the repeatedand conti nuing need for its performance is sufficient evidence of thenecessity, if not in dispensability, of that activity to the business of hisemployer hence the employ ment is also considered regular although withrespect only to such activity and w hile such activity exists. Issues and Ruling: I. Whether or not Lagrama abandoned his work. There is no evidence toshow this a bandonment. Requires two elements: 1. the failure to report forwork or absence w ithout valid or justifiable reason and 2. A clear intentionto server the employe r-employee relationship, with the second element asthe more determinative factor and being manifested by some overacts. Mere absence is not sufficient, and the burden is on the part of theemployer to show a deliberate and unjustified refusal on the part of theemployee to resume h is employment without any intention of returning thecourt affirmed the court of appeals ruling that, private respondent (hereinpetitioner) has not established c lear proof of the intention of the petitionerto abandon his job or to sever the employment relationship between himand the private respondent. On the contrary, it was the private respondentwho told that he did not want the latter to draw fo r him and thereafter refused to give him work to do or any mural or billboard to paint or drawn on. tobegin, II. Whether or not private respondent Lagrama was illegally dismissed. the employer has the burden of proving the lawfulness of hisemployee s dismissal. Labor code provides that no worker shall bedismissed except for a just or author ized cause provided by law and afterdue process. In this case, by his refusal to give Lagrama work to do and orderingLagrama to g et out of his sight as the latter tried to explain his side, petitioner made it plain that Lagrama was dismissed. Urinating in a workplace ot her than the one designated for the purpose constitutes valid g___

for dismissal. However, there is no evidence that Lagrama did urinate in aplace other than the rest room in the premises of his work. III. The grant of separation pay in LIEU of reinstatement is appropriatebecause the relationship between the employer and employee has been sostrained that rein statement would no longer serve any purpose. IV. The bureau of working conditions classifies workers paid by results intotwo groups, namely 1. Those whose time and performance is supervised bythe employer and 2. those whose time or performance is unsupervised bythe employer. The first involves an element of control and supervision overthe manner the work is to be performed, while the second does not. If apiece worker is supervised, there is an employer-employee relationship. Asin this case, however such an employee is n ot entitled to service incentiveleave pay since he is paid a fixed amount for wo rk done. Regardless of thetime he spent in accomplishing such work. Disposition: Petition is denied. Decision of labor arbiter is affirmed with modification that the back wages and other benefits awarded to privaterespondent should be computed from the time of his dismissal up to thetime of the finality of this decision, without any deduction and qualification. However, the service incentive leave pay awarded to him is deleted. PAL v. LIGAN | GR 146408 | February 29, 2008 FACTS: PAL and Synergy Services Corp entered into an agreement whereby Synergy undertook to provide loading, unloading, delivery ofbaggage and cargo and other related services from PAL s aircraft at theMactan station. 1. It was expressly stipulated in the contract that Synergy was anindependent contr actor and there would be no employer-employeerelationship between the Contractor (Synergy) and/or its employees and PAL. 2. It was also specified that should PAL find the services provided bySynergy to be unsatisfactory, Synergy has 15 days to improve itsservices otherwise PAL has th e right the terminate its agreementimmediately and without notice 3. Respondents filed a complaint for underpayment, nonpayment ofpremium pay for hol idays, service incentive leave pay, 13th month pay and allowances and for regularization of employment statuswith PAL 4. LA found Synergy an independent contractor and dismissed therespondents complaint for regularization against petitioner but granted their money claims 5. NLRC reversed LA decision and declared Synergy to be a labor-onlycontractor and ordered PAL to accept as regular employees, allcomplainants and give each of the salaries and benefits providedfor in the CBA 6. PAL argued that the law does not prohibit an employer from engaging an independent contractor like Synergy, which has substantial capital in carrying on an independent business of contracting, to perform specific jobs. Petitioner also maintained that its contracting out to Synergy services like janitorial, baggagehandling etc, which are directly related to its business, does notmake respodent s its employees 7. PAL also averred that none of the 4 elements of an employeremployee relationship between petitioner and respondents, i.e.,

selection and engagement of an employee, payment of wages, power of dismissal, and the power to control employee s conduct, were present in the case. ISSUE: WON SYNERGY IS A MERE JOB-ONLY CONTRACTOR OR A LEGITIMATE CONTRACTOR HELD: Synergy is a mere labor-only contractor.

There is "labor-only" contracting where the person supplying workers to anemploy er does not have substantial capital or investment in the form of tools, equipment, machineries, work premises, among others, AND theworkers recru ited and placed by such person are performing activities which are directly related to the principal business of such employer. Insuch ca ses, the person or intermediary shall be considered merely as an agent of the employer who shall be responsible to the workers in the samemanner and extent as if the latter were directly employed by him. One who claims to be an independent contractor has to prove that hecontracted to do the work according to his own methods and without beingsubject to the employ er's control except only as to the results. While petitioner claimed that it was Synergy's supervisors who actuallysupervise d respondents, it failed to present evidence thereon. It did noteven identify wh o were the Synergy supervisors assigned at the workplace. Respondents having performed tasks which are usually necessary and desirable in the air transportation business of petitioner, they should bedeemed its regular employees and Synergy as a labor-only contractor. OREGAS v. NLRC, 559 SCRA 153 FACTS: Petitioners Rommel C. Oregas, Darwin R. Hilario and Sherwin A. Arboleda worked as valet parking and door attendants in respondent DusitHotel Ni kko. They have employment contracts with respondent FVA. In 2000, FVA recalled petitioners from Dusit. Petitioners then instituted a complaint for illegal dismissal, regularization, premium pay for holiday andrest day, holiday pay, service incentive leave pay, 13th month pay andattorney's fee s against respondents Dusit, Philippine Hotelier's, Inc. and FVA. Petitioners alleged that despite the length of their service, Dusit never

granted them the status and benefits of a regular employee. Thus, whenthe rank a nd file employees' union of Dusit learned that petitioners wereentitled to regul arization, Dusit immediately terminated their services dueto "end of contract." On 3/6/2001, Labor Arbiter Potenciano S. Canizares, Jr. dismissed the complaint for lack of merit. Petitioners failed to prove that they wereemployees of Dusit. Petitioners admitted that they transferred to FVA aftertheir previous placement agencies terminated their contracts of serviceswith Dusit. Labor Arbi ter Canizares also noted that petitioners signed application and employment contracts with FVA and were under its payrolls and accounts. Thus, FVA was petitioners' employer. Finally, heruled tha t petitioners were merely recalled and not dismissed from theservice by FVA. On appeal, the NLRC issued a Resolution dated August 25, 2003, modifying the decision of Labor Arbiter. The NLRC observed that the four-fold test in determining the existence of an employer-employee relationship is presentin peti tioners' relationship with FVA. On the matter of selection and engagement, records showed that petitioners applied with and were employed by FVA. Although they were required to test drive by Dusit, itwas done only to verify if they had the necessary skills and competencerequired by the jo b. On the matter of control, it was established that petitioners maintained their daily time records with FVA. On the matter ofdismis sal, FVA exercised its power to dismiss when it recalled petitionersfrom Dusit. Finally, on the matter of payment of wages, it is undisputedthat petitioners wer e under the payrolls and accounts of FVA. Nevertheless, the NLRC noted that after petitioners' recall, they were nolonger given new assignments. Since more than six months have alreadylapsed, petitioner s were deemed to have been constructively dismissedand therefore entitled to sep aration pay of one-half month pay for everyyear of service. Petitioners elevated the case to the CA which affirmed the NLRC resolution. Reconsideration having been denied, petitioners raises the instant petition. ISSUES WON Respondent FVA is an independent contractorWON there an EMPLOYER-EMPLOYEE RE LATIONSHIP exists between Petitioners and Respondent Hotel HELD 1. YES. the Labor Arbiter, NLRC and the CA were unanimous in finding that FVA was a legitimate job contractor. Among the circumstances that established the status of FVA as a legitimate job contractor are: (1) FVA is registered with theDOLE and the DTI; ( 2) FVA has a Contract for Services with Dusitfor the supply of valet parking and door attendant services; (3) FVAhas an independent business and provides valet parking and doorattendant services to other clients like Mandarin Oriental, Mani la Hotel, Peninsula Manila Hotel, Westin Philippine Plaza, Golden B Hotel, Pan Pacific Manila Hotel, and Strikezone Bowling Lane; and (4) FVA's total assets from 1997 to 1999 amount to P1,502,597.70to P9,021,335.13 . In addition, it provides the uniforms and lockersof its employees. 2. NO. By applying the four-fold test used in determining anemployer-employee relat ionship, the status of FVA as theemployer of petitioners is indubitably establis hed.

a. Petitioners applied and signed employment contracts withFVA. They were merely as signed to Dusit conformably withthe Contract for Services between FVA and Dusit. b. FVA assigned a supervisor in Dusit to monitor petitioners'attendance, leaves of absence, performance and conduct. Petitioners also maintained their daily time records withFVA. c. Petitioners were duly notified by FVA that they would beassigned to Dusit for fi ve months only. Thereafter, theymay either be recalled for transfer to other cli ents or bereassigned to Dusit depending on the result of FVA's evaluation of their performance. In this case, FVA opted torecall petitioners fr om Dusit. d. While FVA billed Dusit for the services rendered, it was actually FVA which paid petitioners' salaries. Worthy ofnote, FVA registered pet itioners with the Bureau of InternalRevenue and the Social Security System as it s employees. In summary, this Court accepts as established the fact that FVA is a legitimate job contractor and, in contemplation of law, the employer ofpetitione rs. DISPOSITION: The instant petition is DENIED for lack of merit. CA s decision is AFFIRMED. ESCARIO v. NLRC | GR No 124055 | June 8, 2000 FACTS: Petitioners allege that they were employed by CMC asmerchandisers. Among the tasks assigned to them were the withdrawing ofstocks from the warehouse, the fixing of prices, price-tagging, displaying ofmerchandise, and the inventory of stocks. These were done under thecontrol, management and supervision of CMC. Th e materials andequipment necessary in the performance of their job, such as pric emarkers, gun taggers, toys, pentel pen, streamers and posters wereprovided by C MC. Their salaries were being paid by CMC. According topetitioners, the hiring, control and supervision of the workers and thepayment of salaries, were all cour sed by CMC through its agent D.L. Admark in order for CMC to avoid its liability under the law. On 7 February 1992, petitioners filed a case against CMC before the LaborArbiter for the regularization of their employment status. During thependency of the ca se before the Labor Arbiter, D.L. Admark sent topetitioners notice of terminatio n of their employment effective 16 March

1992. Hence, their complaint was amended so as to include illegaldismissal as ca use of action. Thereafter, twenty-seven more persons joinedas complainants. CMC filed a motion to implead as party-defendant D. L. Admark and at the same time the latter filed a motion to intervene. Both motions were granted. CMC, on the other hand, denied the existence of an employer-employeerelationship between petitioner and itself. Rather, CMC contended that it is D.L. Admark who is the employer of the petitioners. While CMC is engagedin the m anufacturing of food products and distribution of such towholesalers and retaile rs, it is not allowed by law to engage in retail ordirect sales to end consumers . It, however, hired independent jobcontractors such as D.L. Admark, to provide the necessary promotionalactivities for its product lines. For its part, D.L. Admark asserted that it is the employer of the petitioners. Its primary purpose is to carry on the business of advertising, promotionand pub licity, the sales and merchandising of goods and services andconduct survey and opinion polls. As an independent contractor it servesseveral clients among which include Purefoods, Corona Supply, Firstbrand, Splash Cosmetics and herein private respondent California Marketing. On 29 July 1994, the Labor Arbiter rendered a decision finding thatpetitioners a re the employees of CMC as they were engaged in activitiesthat are necessary and desirable in the usual business or trade of CMC.1 In justifying its ruling, the Labor Arbiter cited the case of Tabas vs. CMC which, likewise, involved private respondent CMC. On appeal, the NLRC set aside the decision of the Labor Arbiter. It ruledthat no employer-employee relationship existed between the petitionersand CMC. It, like wise, held that D.L. Admark is a legitimate independentcontractor, hence, the em ployer of the petitioners. Finding no validgrounds existed for the dismissal of the petitioners by D.L. Admark, itordered their reinstatement. The dispositive p ortion of the decision reads: WHEREFORE, premises considered, the appealed judgment is modified. Intervenor DL ADMARK is ordered to reinstate the eighty one (81) complainants mentioned in the appealed decision to their former positionswith ba ckwages from March 16, 1992 until they are actually reinstated. The award of attorneys fees equivalent to ten (10%) of the award isdeleted for l ack of basis. Petitioners filed a motion for reconsideration but the same was denied by the NLRC for lack of merit. Hence, this petition. ISSUE: Whether or not the petitioners are employees of the company. HELD: The court ruled that there is no employer-employee relationshipand that pe titioners are employees of the agent. The agent is a legitimateindependent contr actor. Labor-only contractor occurs only when thecontractor merely recruits, sup plies or places workers to perform a job for a principal. The labor-only contractor doesn t have substantial capital orinvestme nt and the workers recruited perform activities directly related tothe principal business of the employer. There is permissible contractingonly when the contrac tor carries an independent business and undertakesthe contract in his won manner and method, free from the control of the principal and the contractor has substantial capital or investment. Theagent, an d not the company, also exercises control over the petitioners. Nodocuments were submitted to prove that the company exercised controlover them. The agent hired the petitioners. The agent also pays thepetitioners, no evidence was submitted showing that it was the companypaying them and not the agent. It was also the ag

ent who terminated theirservices. By petitioning for regularization, the petitio ners concede thatthey are not regular employees. ALIVIADO v. PROCTER and GAMBLE PHILS F: Petitioners worked as merchandisers of P&G from various dates, allegedly starting as early as 1982 or as late as June 1991, to either May 5,199 2 or March 11, 1993. They all individually signed employment contracts with either Promm-Gemor SAPS f or periods of more or less five months at a time. They wereassigned at different outlets, supermarkets and stores where they handledall the products of P&G. The y received their wages from Promm-Gem or SAPS. SAPS and Promm-Gem imposed disciplinary measures on erringmerchandisers for reas ons such as habitual absenteeism, dishonesty orchanging day-off without prior no tice. P&G is principally engaged in the manufacture and production of differentconsume r and health products, which it sells on a wholesale basis tovarious supermarket s and distributors.[8] To enhance consumer awareness and acceptance of the products, P&G entered into contracts with PrommGem and SAPS for the promotion and merchandising of its products. In December 1991, petitioners filed a complaint against P&G forregularization, s ervice incentive leave pay and other benefits withdamages. The complaint was lat er amended to include the matter of theirsubsequent dismissal. Ruling of the Labor Arbiter: Labor Arbiter dismissed the complaint forlack of me rit and ruled that there was no employer-employee relationshipbetween petitioner s and P&G. He found that the selection and engagement of the petitioners, the payment of their wages, the power ofdismissal and control with respect to the means and methods by whichtheir work was accomp lished, were all done and exercised by PrommGem/SAPS. He further found that Promm-Gem and SAPS were legitimateindependent jo b contractors.

Ruling of the NLRC: The appeal of complainants is hereby DISMISSEDand the decisi on appealed from AFFIRMED. Ruling of the Court of Appeals: CA likewise denied the petition. Hence, this petition. Petitioners Arguments: Petitioners insist that they are employees of P&G. They claim that they were recruited by the salesmen of P&G andwere engaged to undertake merchandising chores for P&G long before theexistence of Promm-Gem and/or SAPS. They further claim that when thelatter had its so-called re-alignme nt program, petitioners were instructedto fill up application forms and report t o the agencies which P&G created. Respondents Arguments: On the other hand, P&G points out that theinstant petition raises only questions of fact and should thus be thrown outas the Court is not a trier of facts. It argues that findings of facts of theNLRC, particularly wher e the NLRC and the Labor Arbiter are in agreement, are deemed binding and conclusive on the Supreme Court. Issues: (1) whether P&G is the employer of petitioners; (2) whetherpetitioners w ere illegally dismissed; and (3) whether petitioners areentitled for payment of actual, moral and exemplary damages as well aslitigation costs and attorney s fees . H: The petition has merit. As a rule, the Court refrains from reviewingfactual a ssessments of lower courts and agencies exercising adjudicativefunctions, such a s the NLRC. Occasionally, however, the Court isconstrained to wade into factual matters when there is insufficient or insubstantial evidence on record to support those factual findings; or whentoo m uch is concluded, inferred or deduced from the bare or incompletefacts appearing on record.[23] In the present case, we find the need toreview the records to as certain the facts. In order to resolve the issue of whether P&G is the employer of petitioners, it is necessary to firstdetermine wh ether Promm-Gem and SAPS are labor-only contractors orlegitimate job contractors . In the event that the contractor or subcontractor fails to pay the wages ofhis e mployees in accordance with this Code, the employer shall be jointlyand severall y liable with his contractor or subcontractor to such employeesto the extent of the work performed under the contract, in the samemanner and extent that he is l iable to employees directly employed byhim. There is labor-only contracting where the person supplying workers to anemployer d oes not have substantial capital or investment in the form oftools, equipment, m achineries, work premises, among others, and theworkers recruited and placed by such person are performing activitieswhich are directly related to the principal business of such employer. In such cases, the person or intermediary shall be considered merely as anagent of the employer who shall be responsible to the workers in the samemanner and exten t as if the latter were directly employed by him. Clearly, the law and its implementing rules allow contracting arrangementsfor th e performance of specific jobs, works or services. Indeed, it is management prerogative to farm out any of its activities, regardless ofwhether s uch activity is peripheral or core in nature. However, in order for such outsourcing to be valid, it must be made to an independent contractor because the current labor rules expressly prohibit labor-onlycontract ing.

In the instant case, the financial statements of Promm-Gem show that it has authorized capital stock of P1 million and a paid-in capital, or capital available for operations, of P500,000.00 as of 1990. It also has long term assets worth P432,895.28 and current assets ofP719,042.32. Promm-Gem has also proven that it maintained its own warehouse and office space witha floo r area of 870 square meters. It also had under its name threeregistered vehicles which were used for its promotional/merchandisingbusiness. Promm-Gem also has o ther clients aside from P&G. Under the circumstances, we find that Promm-Gem has substantial investment which relates to the work to be performed. These factors negate the existence ofthe el ement specified in Section 5(i) of DOLE Department Order No. 18-02. The records also show that Promm-Gem supplied its complainant-workerswith the re levant materials, such as markers, tapes, liners and cutters, necessary for them to perform their work. Promm-Gem also issued uniforms to them. It is also relevant to mention that Promm-Gem alreadyconsidere d the complainants working under it as its regular, not merelycontractual or pro ject, employees. This circumstance negates theexistence of element (ii) as state d in Section 5 of DOLE Department OrderNo. 18-02, which speaks of contractual em ployees. This, furthermore, negates on the part of Promm-Gem bad faith and intent to circumventlabor laws wh ich factors have often been tipping points that lead the Courtto strike down the employment practice or agreement concerned ascontrary to public policy, morals, good customs or public order. Under thecircumstances, Promm-Gem cannot be consi dered as a labor-only contractor. We find that it is a legitimate independent contractor. Furthermore, the petitioners have been charged with the merchandisingand promoti on of the products of P&G, an activity that has already beenconsidered by the Co urt as doubtlessly directly related to themanufacturing business, which is the p rincipal business ofP&G. Considering that SAPS has no substantial capital or inv estment andthe workers it recruited are performing activities which are directly relatedto the principal business of P&G, we find that the former is engaged in la bor-only contracting . WHEREFORE, the petition is GRANTED. The case be REMANDED to the Labor Arbiter for the computation. Sonza vs. ABS-CBN Broadcasting Corporation | GR 138051 | June10, 2004

FACTS: ABS-CBN and MJMDC entered into a contract on may 1994. ABSCBN was represented by its officers while MJMDC was represented bySonza, as presiden t and general manager and Mel Tiangco, as EVP andtreasurer referred to in the ag reement as agent , MJDC agreed to provideSonza s services exclusively ABS-CBN as tale nt for radio and television. The agreement listed the services Sonza would render. On April 1996, Sonza wrote a letter to ABS-CBN s president in regard to hisresigna tion in view of the events concerning his programs and career. April 30, 1996, Sonza filed a complaint against the ABS-CBN before theDOLE. Sonz a complained that the ABS-CBN did not pay his salaries, separation pay, and service incentive, leave pay, signing bonus, travelallowance s and amounts due under the employee stock option plan(ESOP). On July 10 1996, ABS-CBN filed a motion to dismiss on the ground thatthere is no employer-employee relationship. Sonza filed an opposition tothe motion on July 19, 1996. Meanwhile, ABS-CBN opened a account to continually remit Sonza fee sunder the agre ement. Labor arbiter denied the motion to dismiss; however in his decision labor arbiter dismissed the complaint for lack of jurisdiction and that there is notem ployer-employee relationship. On appeal, the NLRC affirmed the decision of the labor arbiter. The samewas also denied upon the motion for reconsideration. ISSUES and RULING: I. Whether or not Sonza is an employee or independent contractor > The existence of an employer-employee relationship is a question offact. Appel late courts accord the factual findings of the labor arbiter andthe NLRC not onl y respect but also finality when supported by substantialevidence. Court does no t substitute its own judgment for that of thetribunal in determining where the w eight of evidence lies or what evidenceis credible. II. Essential elements of employer-employee relationship A. Selection and engagement of employer. The specificselection and hiring of Sonza, because of his unique skills, talent and celebrity status not possessed by ordinaryemployees. Is a circumstanc e indicative but not conclusiveof independent contractual relationship. B, Payment of wages whatever benefits Sonza enjoyedarose from contract and not beca use of an employeremployee relationship. The power to bargain the talent fees way above the salary scales of ordinary employees isa circumstance indicati ve, but not conclusive of independent contractual relationship. C. Power of dismissal. Sonza could terminate his service on renchment to prevent losses as D. power of control applying failed to show that ABS-CBN grounds other than breach ofcontract, such as ret providedunder labor laws. the control test the court heldthat Sonza is not an

employee but an independent contractor. Thecontrol test being the most importan t test our courts apply indistinguishing an employee from an independent contact or. ABS-CBN did not exercise control over the means and methods of performance of Sonza s work. Moreover a radio broadcast specialist whoworks under minimal supervision is an independent contractor lastly, inbroadcast industry ex clusively is not necessarily the same as control. I. Nature of Sonza s claim Sonza s claims are all based on the may agreement and stockoption plan and not in the 1994 labor code. Clearly the presentcase does not call for an application of the labor code. In effectSonza s cause of action is for breach of contract which is intrinsically a civil dispute cognizable by the court. Petition isdenied. SONZA V ABS-CBN BROADCASTING CORPORATION FACTS . ABS-CBN signed Agreement with Mel and Jay Management andDevt Corp (MJMDC), which agreed to provide Sonza s services exclusively to the network as talent for radio and TV. . Sonza resigned and filed a complaint against ABS-CBN before theDOLE that the sai d network didn t pay his salaries, separation pay, service incentive leave pay, etc. . ABS filed Motion to Dismiss because there was no employeremployee relationship. . Labor Arbiter dismissed complaint because of lack of jurisdiction. It stands to reason that a "talent" cannot be considered as an employee. NLRC affirmed Arbiter s decision. Sonza filed certiorari action with CA, which dismissed the case. Hence this petition. ISSUE: WON there was an employer-employee relationship between ABSCBN and Sonza? HELD: No employer-employee relationship.

SONZA maintains that all essential elements of an employer-employeerelationship are present in this case. The last element, the so-called controltest, is the mo st important element Power of Control The Agreement required SONZA to attend only rehearsals and tapings ofthe shows, as well as pre-and post-production staff meetings. ABS-CBNcould not dictate the contents of SONZAs script. However, the Agreementprohibited SONZA from criticizi ng in his shows ABS-CBN or its interests. The clear implication is that SONZA had a free hand on what to say ordiscuss in his shows provided he did not attack ABS-CBN or its interests. The Agreement stipulates that SONZA shall abide with the rules and standards of performance covering talents of ABS-CBN. The Agreement does not require SONZA to comply with the rules and standards of performance prescribed for employees of ABS-CBN. In any event, not all rules imposed by the hiring party on the hired partyindica te that the latter is an employee of the former. In this case, SONZAfailed to sh ow that these rules controlled his performance. We find thatthese general rules are merely guidelines towards the achievement of themutually desired result, whi ch are top-rating television and radio programsthat comply with standards of the industry. We have ruled that: Further, not every form of control that a party reserves to himself over thecond uct of the other party in relation to the services being rendered maybe accorded the effect of establishing an employer-employee relationship. The facts of this case fall squarely with the case of Insular Life AssuranceCo., Ltd. vs. NLRC. In said case, we held that: Logically, the line should be drawn between rules that merely serve asguidelines towards the achievement of the mutually desired result withoutdictating the mea ns or methods to be employed in attaining it, and thosethat control or fix the m ethodology and bind or restrict the party hired tothe use of such means. The fir st, which aim only to promote the result, create no employer-employee relationship unlike the second, which address both the result and the means used to achieve it. Lastly, SONZA insists that the exclusivity clause in the Agreement is themost ex treme form of control which ABS-CBN exercised over him. This argument is futile. Being an exclusive talent does not by itself meanthat S ONZA is an employee of ABS-CBN. Even an independent contractor can validly provide his services exclusively to the hiring party. In the broadcast industry, exclusivity is not necessarily the same as control. SONZA seeks the separation pay, and amounts due on the May 1994 recovery of allegedly unpaid talent fees, 13th month pay, service incentive leave, signing bonus, travel allowance, under the Employee Stock Option Plan. These claims areall based Agreement and stock option plan, and not on

the Labor Code. This case call for an interpretation and implementation ofthe Ma y 1994 Agreement. In effect, SONZAs cause of action is for breachof contract whi ch is intrinsically a civil dispute cognizable by the regular courts. DELA CRUZ v. MAERSK FILIPINAS CREWING, INC., 551 SCRA 284

FACTS: Respondent Elite Shipping A.S. hired petitioner Dante D. de la Cruzas thi rd engineer for the vessel M/S Arktis Morning through its local agencyin the Phi lippines, co-respondent Maersk Filipinas Crewing Inc. Dela Cruzwas deployed to J ebel Ali, United Arab Emirates and boarded M/S ArktisMorning. In a logbook entry , chief engineer Normann Per Nielsen expressedhis dissatisfaction over Dela Cruz 's performance: he has been informedthat if he does not improve his Job/Working performance within [a] shorttime he will be signed off according to CBA Article 1 (7)1. Entry wasfollowed by another one which was similar in content And then, Dela Cruz was finally informed of his discharge through a noticecaptio ned "Notice according to CBA Article 1 (7) : Reason for the decisionis The chief en gineer has made 2 entries in the engine logbook, regarding your insufficient job/working, which you are well aware of. DelaCruz w as then made to disembark at the port of Houston, Texas and wasrepatriated to Ma nila Dela Cruz thereafter filed a complaint for illegal dismissal Labor Arbiter: ruled that Dela Cruz was dismissed without just cause anddue proc ess as the logbook entry (which respondents claimed to be thefirst notice to pet itioner) was vague. NLRC: upheld LA decision CA: reversed the decision. CA deemed the logbook entries to be sufficientcomplia nce with the first notice requirement of the law Issues ISSUES: 1. WON Dela Cruz was illegally dismissed 2. WON Dela Cruz was a regular employer fee Held and Ratio HELD: 1. Yes. An employer has the burden of proving that an employee'sdismissal was for a just cause and that it complied with the rudimentaryrequirements of du e process, that is, the opportunity to be heard and todefend oneself Procedural due process requires that a seaman must be given a writtennotice of t he charges against him and afforded a formal investigationwhere he can defend hi mself personally or through a representative beforehe can be dismissed and disem barked from the vessel The employer is bound to furnish him two notices: (1) the written chargeand (2) the written notice of dismissal (in case that is the penalty imposed) in accordance with the POEA Revised Standard Employment Terms and

Conditions Governing the Employment of Filipino Seafarers on BoardOcean-Going Ve ssels (POEA Revised Standard Employment Terms andConditions) The notice must state with particularity the acts or omissions for which hisdism issal is being sought In this case, the logbook entries did not substantially comply with the firstnot ice, or the written notice of charge(s) Respondents should have indicated the grounds for the threatenedtermination, the specific acts or omissions illustrating the same, along withthe date and the ap proximate time of their occurrence The same thing may be said of the written notice of dismissal. It sorelylacked t he necessary details that should accompany it. The records weredevoid of any pro of indicating that petitioner was ever given anopportunity to present his side. Respondents dismally failed to prove thatpetitioner's termination from employmen t was for cause Hence, not onlywas Dela Cruz's dismissal procedurally flawed, it was also without justcause. The first sixty (60) days of service is to be consi dered aprobationary period which entitles a shipowner or his representative tote rminate the contract by giving fourteen (14) days of written notice. 1. No. Seafarers are not covered by the term regular employment, asdefined under Article 280 of the Labor Code Instead, they are considered contractual employees whose rights andobligations a re governed primarily by the POEA Standard EmploymentContract for Filipino Seame n, the Rules and Regulations GoverningOverseas Employment, and, more importantly , by Republic Act No. 8042, otherwise known as The Migrant Workers and Overseas Filipinos Act of1995. It is an accepted maritime industry practice that the employment ofseafarers is for a fixed period only. The Court acknowledges this to be forthe mutual interes t of both the seafarer and the employer. Seafarerscannot stay for a long and ind efinite period of time at sea as limited accessto shore activity during their em ployment has been shown to adverselyaffect them. Furthermore, the diversity in n ationality, culture and languageamong the crew necessitates the limitation of th e period of employment While the court recognizes that petitioner was a member of Seamen'sUnion of the Philippines which had a CBA with respondent Elite Shipping A.S. providing for a probationary period of employment, the CBA cannotoverride t he provisions of the POEA Standard Employment Contract. Thelaw is read into, and forms part of, contracts. And provisions in a contractare valid only if they ar e not contrary to law, morals, good customs, publicorder or public policy. This is the only logical explanation possible as the parties cannot andshould no t violate the POEA's directive that a contract of enlistment must not exceed 12 months. BIENVENIDO D. GOMA v. PAMPLONA PLANTATION INCORPORATED, 557 SCRA 124 F: Petitioner commenced the instant suit by filing a complaint for illegaldismis sal, underpayment of wages, non-payment of premium pay forholiday and rest day, five (5) days incentive leave pay, damages andattorney's fees, against the respo ndent. The case was filed with the SubRegional Arbitration Branch No. VII of Dumaguete City. Petitioner claimedthat he worked as a carpenter at the Hacienda Pamplona since 1995; thathe worked from 7 :30 a.m. to 12:00 noon and from 1:00 p.m. to 5:00 p.m.

daily with a salary rate of P90.00 a day paid weekly; and that he workedcontinuo usly until 1997 when he was not given any work assignment.[4] On a claim that he was a regular employee, petitioner alleged to have beenillegally dismissed when the respondent refused without just cause to givehim work assign ment. Thus, he prayed for backwages, salary differential, service incentive leave pay, damages and attorney's fees. On the other hand, respondent denied having hired the petitioner as itsregular e mployee. It instead argued that petitioner was hired by a certainAntoy Caaveral, t he manager of the hacienda at the time it was ownedby Mr. Bower and leased by Ma nuel Gonzales, a jai-alai pelotari known as"Ybarra."[6] Respondent added that it was not obliged to absorb theemployees of the former owner. In 1995, Pamplona Plantation Leisure Corporation (PPLC) was created forthe opera tion of tourist resorts, hotels and bars. Petitioner, thus, renderedservice in t he construction of the facilities of PPLC. If at all, petitioner was aproject bu t not a regular employee.[7] On June 28, 1999, Labor Arbiter Geoffrey P. Villahermosa dismissed thecase for l ack of merit.[8] The Labor Arbiter concluded that petitioner washired by the for mer owner, hence, was not an employee of the respondent. Consequently, his money claims were denied.[9] On appeal to the National Labor Relations Commission (NLRC), thepetitioner obtai ned favorable judgment when the tribunal reversed and setaside the Labor Arbiter 's decision. The NLRC upheld the existence of an employer-employee relationship, ratiocinating that it was difficult to believe that a simple carpenter from fara way Pamplona would go to Dumaguete City to hire a competent lawyer tohelp him se cure justice if he did not believe that his right as a laborer hadbeen violated. Contrary to the NLRC's finding, the CA concluded that there was noemployer-emplo yee relationship. The CA stressed that petitioner having

raised a positive averment, had the burden of proving the existence of anemploye r-employee relationship. I: 1) Is the petitioner a regular employee of the respondent? 2) If so, washe il legally dismissed from employment? and 3) Is he entitled to hismonetary claims? H: A thorough examination of the records compels this Court to reach aconclusion different from that of the CA. It is true that petitioner admittedhaving been e mployed by the former owner prior to 1993 or before therespondent took over the ownership and management of the plantation, however, he likewise alleged having been hired by the respondent as acarpenter i n 1995 and having worked as such for two years until 1997. He is a project employee as he was hired -1) for a specific project orundertakin g, and 2) the completion or termination of such project orundertaking has been d etermined at the time of engagement of theemployee. In other words, as regards those workers who worked in 1995 specificallyin conne ction with the construction of the facilities of Pamplona PlantationLeisure Corp oration, their employment was definitely "temporary" incharacter and not regular employment. Their employment was deemedterminated by operation of law the momen t they had finished the job oractivity under which they were employed.[22] Thus, departing from its initial stand that it never hired petitioner, therespon dent eventually admitted the existence of employer-employeerelationship before t he CA. It, however, qualified such admission byclaiming that it was PPLC that hi red the petitioner and that the nature ofhis employment therein was that of a "p roject" and not "regular" employee. The employment relationship having been established, the next questionwe must an swer is: Is the petitioner a regular or project employee? We find the petitioner to be a regular employee provided in Article 280 ofthe La bor Code, as amended. Respondent is engaged in the management of the Pamplona Plantation aswell as in the operation of tourist resorts, hotels, inns, restaurants, etc. Petitioner, on the other hand, was engaged to perform carpentry work. Hisservice s were needed for a period of two years until such time that therespondent decid ed not to give him work assignment anymore. Owing tohis length of service, petit ioner became a regular employee, by operationof law. A project employee is assigned to carry out a specific project orundertaking the duration and scope of which are specified at the time theemployee is engaged in the project. A project is a job or undertaking whichis distinct, separate and i dentifiable from the usual or regular undertakingsof the company. A project empl oyee is assigned to a project which begins and ends at determined or determinable times.[30] The principal test used to determine whether employees are projectemployees as d istinguished from regular employees, is whether or not theemployees were assigne d to carry out a specific project or undertaking, the duration or scope of which was specified at the time the employeeswere engag ed for that project.[31] In this case, apart from respondent's bareallegation th at petitioner was a project employee, it had not shown thatpetitioner was inform ed that he would be assigned to a specific project orundertaking. Neither was it established that he was informed of theduration and scope of such project or un dertaking at the time of his engagement.

Most important of all, based on the records, respondent did not report thetermin ation of petitioner's supposed project employment to theDepartment of Labor and Employment (DOLE). Department Order No. 19(as well as the old Policy Instruction s No. 20) requires employers to submita report of an employee's termination to t he nearest publicemployment office every time the employment is terminated due t o acompletion of a project. Respondent's failure to file termination reports, particularly on the cessation of petitioner's employment, was an indicationthat the petitioner was not a project but a regular employee.[32] We stress herein that the law overrides such conditions which are prejudicial to the interest of the worker whose weak bargaining positionnecessit ates the succor of the State. What determines whether a certain employment is regular or otherwise is not the will or word of the employer, to which the worker oftentimes acquiesces. Neither is it the procedure ofhiring the employee nor the manner of paying the salary or the actual timespent at work . It is the character of the activities performed by theemployer in relation to the particular trade or business of the employer, taking into account all the circumstances, including the length of time of itspe rformance and its continued existence. Given the attendantcircumstances in the c ase at bar, it is obvious that one year after he wasemployed by the respondent, petitioner became a regular employee byoperation of law.[33] As to the question of whether petitioner was illegally dismissed, we answerin th e affirmative. Well-established is the rule that regular employees enjoy security of tenureand they can only be dismissed for just cause and with due process, i.e., after notice and hearing. In cases involving an employee's dismissal, theburden is on the employer to prove that the dismissal was legal. Thisburden was not amp ly discharged by the respondent in this case. Obviously, petitioner's dismissal was not based on any of the just orauthorized causes enumerated under Articles 282, 283 and 284 of the Labor Code, as amended. After working for the respondent for a period oftwo year s, petitioner was shocked to find out that he was not given anywork assignment a nymore. Hence, the requirement of substantive due

process was not complied with. Apart from the requirement that the dismissal of an employee be based onany of t he just or authorized causes, the procedure laid down in Book VI, Rule I, Section 2 (d) of the Omnibus Rules Implementing the Labor Code, must be followed. Failure to observe the rules is a violation of the employee's right to procedural due process. Having shown that petitioner is a regular employee and that his dismissalwas ill egal, we now discuss the propriety of the monetary claims of thepetitioner. An i llegally dismissed employee is entitled to: (1) eitherreinstatement, if viable, or separation pay if reinstatement is no longerviable, and (2) backwages. In the instant case, we are prepared to concede the impossibility of thereinstat ement of petitioner considering that his position or any equivalentposition may no longer be available in view of the length of time that thiscase has been pend ing. Moreover, the protracted litigation may haveseriously abraded the relations hip of the parties so as to renderreinstatement impractical. Accordingly, petiti oner may be awardedseparation pay in lieu of reinstatement. Petitioner's separation pay is pegged at the amount equivalent topetitioner's on e (1) month pay, or one-half (1/2) month pay for every yearof service, whichever is higher, reckoned from his first day of employmentup to finality of this deci sion. Full backwages, on the other hand, should becomputed from the date of his illegal dismissal until the finality of thisdecision. On petitioner's entitlement to attorney's fees, we must take into accountthe fac t that petitioner was illegally dismissed from his employment andthat his wages and other benefits were withheld from him without anyvalid and legal basis. As a consequence, he was compelled to file an actionfor the recovery of his lawful w ages and other benefits and, in the process, incurred expenses. On these bases, the Court finds that he is entitled toattorne y's fees equivalent to ten percent (10%) of the monetary award.[42] Lastly, we affirm the NLRC's award of salary differential. In light of ourforego ing disquisition on the illegality of petitioner's dismissal, and ouradoption of the NLRC's findings, suffice it to state that such issue is aquestion of fact, and we find no cogent reason to disturb the findings of thelabor tribunal. Petit ion granted. Wah Yuen Restaurant v. Jayona | GR 159448 | Dec. 16, 2005 | J. Carpio-Morales F: Primo Jayona (respondent) was hired in December 1998 as AssistantManager of W ah Yuen Restaurant (petitioner). By respondent s claim, hisinitial monthly salary was P9,000.00, which was increased to P9,450.00 effective January 15, 2000. By letter-memorandum dated January 5, 2000. Betty Chua, the President ofpetition er, directed respondent to explain within 72 hours why he shouldnot be dismissed from the service for grave dishonesty and loss ofconfidence for billing a custo mer in an amount considerably less than thecost of the actual stuff ordered. And Betty warned respondent that arepetition of the same act would cause his automa tic dismissal from theservice. A handwritten note with an unidentified initial a t the lower portionof the letter-memorandum indicates that respondent refused to acknowledge receipt thereof. Subsequently, petitioner through counsel, by letter of April 5, 2000 whichwas se rved upon respondent on even date, terminated his services effective that same date, upon the ground that he was found for thesecond time on

April 3, 2000 (the first was on January 3, 2000) to havecharged/billed a custom er an amount, which was considerably less thanthe actual order, [which] is certa inly prejudicial to the interests of [his] employer, a practice which can bring about the collapse of the business inthe lo ng run; that is if the practice is not checked immediately. Respondent thus filed a complaint for illegal dismissal, recovery ofovertime pay , service incentive leave pay and 13th month pay. The Labor Arbiter dismissed respondent s complaint on the ground that asan assista nt manager, he works for as long as he enjoys the trust andconfidence of his emp loyer, but once the trust and confidence are lost, hehas no more reason to stay as such. On appeal, the National Labor Relations Commission (NLRC), by Resolutionof Decem ber 14, 2001, affirmed the dismissal. On respondent s Petition forCertiorari, the Court of Appeals reversed and set aside the NLRCResolution. The CA gave the peti tion due course. Hence, the present petition for review. Petitioner harps on the unwarranted stress on respondent s rather self-serving claim thathe was granted a salary increase ba rely two (2) weeks after hecommitted his first infraction. I: WON the respondent was illegally dismissed H: In the case at bar, petitioner, which has the onus of provingthat the dismiss al of respondent on account of loss of confidencearose from particular facts, fa iled to discharge the same. On respondent s claim that his salary was increased effective January 15,2000, pet itioner argues that other than respondent s self-serving claim, noevidence was pre sented to show that indeed the salary increase took effecton January 15, 2000. This Court notes that in its Position Paper before the Labor Arbiter, petitioner stated that respondent was hired in December 1998 at a monthly

salary ofP9,540.00 more or less. If respondent was hired at suchamount, contrary t o respondent s claim that his initial salary was P9,000.00 but that it was increased toP9,450 on January 15, 2000 or twelve days after he was alleged to have committed an infraction on January 3,2000, it would have been easy for petitioner to present documentary proofof its claim. Bu t none was produced. Under Article 277 (b) of the Labor Code, as well as Section 2, Rule XXIII, Book V and Section 2, Rule I, Book VI, of the Implementing Rules andRegulations of the Labor Code, the dismissal of an employee must be for ajust or authorized cause and after due process. Procedural due process requires the employer to give the employee twonotices. Th e first is to apprise him of the particular acts or omissions forwhich his dismi ssal is sought, and the second is to inform him of thedecision to terminate him. Failure to comply with these mandatory procedural requirements taintsthe dismiss al with illegality and any judgment rendered by the employerwithout compliance t herewith can be considered void and inexistent. For petitioner to consider the letter-memorandum of January 5, 2000 asthe first notice, and the letter of April 5, 2000 as the second notice oftermination of em ployment is erroneous. For albeit the two letters dealt with infractions of the same nature, they were separate and distinct. The April 5, 2000 termination letter itself clearly stated that respondentwas be ing terminated for committing a second infraction. As such he should have been given the chance to give his side thereon. But he was not. In any event, not only did petitioner fail to observe the due processrequirement s. It also failed to establish by substantial evidence that thealleged second in fraction was committed. Loss of confidence then, which is the usual ground for the removal of amanageria l employee, not having been established, like any other lawfulcause, the petitio n must fail. Although the loss of confidence on petitioner s part is unfounded, reinstating respondent to his former position would not be advisable giventhe so uring of their relationship. This Court now, therefore, directspetitioner to jus t afford respondent his right to separation pay, backwages, and other benefits under the law. Since the records do not provide a basis for the determination of theamount of s eparation pay plus backwages and other benefits to whichrespondent is entitled, a remand of the case to the Labor Arbiter is thus inorder. The decision is AFFIRMEDwith MODIFICATION. The records of this case are REMANDED to the Labor Arbiter, through the National LaborRelations Comm ission, only for the determination of the amount ofseparation pay plus backwages and other benefits to which respondent isentitled. Austria v. NLRC, 310 SCRA 293 F: PHILIPPINE STEEL COATING CORPORATION (PHILSTEEL), privaterespondent, is engag ed in the manufacture of prefabricated steel, galvanized iron and other metal products. On 19 December 1985 it hired

petitioner Nazario C. Austria as its Credit and Collection Manager. On 11August 1987 petitioner and private respondent PHILSTEEL entered into a"Confidentiality Agreement" whereby he agreed not to disclose to anyoneoutside the company any te chnical, operational and other such informationacquired in the course of his emp loyment, unless otherwise dulyauthorized by private respondent, on pain of immed iate dismissal. A smooth and satisfactory employee-employer relationship ensuedbetween the two ( 2) parties until 17 August 1989 when petitioner wasunceremoniously terminated by private respondent company on theground that he allegedly disclosed confidentia l information to prospectivecompetitors and had undertaken activities far beyond his official dutiesand responsibilities. On 30 August 1989 Austria filed a case for illegal dismissal againstPHILSTEEL. H e alleged that on 5 August 1989 the President of PHILSTEEL, Abeto Uy, demanded his resignation purportedly due to loss of confidencebut refu sed to shed light on the reasons therefor. Austria further allegedthat on 17 Aug ust 1989, without any prior written notice, he wassummoned to a meeting with the Vice-President for Finance, Primo Valerio, and Vice-President for Legal and Personnel, Gregorio Vega. Therein he was questioned about a certain 13 July 1989 telefax message sent by one FelixLukban to PHILSTEEL's Australian supplier of equipment and machinery, Bliss Fox Manufacturing Corporation (BLISS FOX). The telefax showed that, on behalf of an unnamed client, Lukban was asking for the purchase priceof a com plete line of machinery and equipment for a steel galvanizingplant. Austria deni ed any knowledge of the telex. Petitioner was also asked about his close relationship with Lukban, whichthe for mer admitted, Lukban being the godfather of his child. Immediatelyafter the meet ing Austria was given his notice of termination and requiredto surrender the key s to his company car and to his room which were in hispossession. When he return ed to his room it was already padlocked; whenhe passed by his car it was barrica ded. Austria submitted in support of his complaint the affidavit of Felix Lukbanexecu ted on 13 December 1989 disclaiming any participation of petitionerin the sendin g of the telefax message. In addition, Lukban testified to thesame effect and de nied hearing any answer from BLISS FOX on his telefax. PHILSTEEL, on the other hand, contended that any information as to thesources of its supply was highly confidential as the steel industry was very

competitive, and the information was disclosed by Austria to Lukban. The basis for this contention was the incident of 5 August 1989 when arepresentative of BLISS FOX named Charles Villa informed Abeto Uy, in thepresence of Primo Val erio and Gregorio Vega, of the fax message sent byLukban to BLISS FOX. Charles V illa was said to have stated that Lukban represented himself to be acting for PHILSTEEL so he verified therepresentation from Uy who however denied it. Forthwith, Villa dialed a certain number from the telefax message.[9] After a brief exchange with theperso n on the other end of the phone, during which time Villa scribbled aname at the back of the telex, he informed Uy that he just talked withLukban who informed hi m that his contact with PHILSTEEL was RudyAustria whose name he had just written . After Villa left, Austria was immediately investigated on the matter. Petitioner admitted having a close relationship with Lukban. Austria also volunteered to disclose secret meetings at ManilaGarden Hot el with Lukban and the latter's son-in-law regarding plans to putup a rival galv anizing business either here in the Philippines or inSingapore, as well as meeti ngs at company premises with a group ofAustralians on the same subject. A second investigation held on 17 August1989 yielded the same result. Testimonies of Veg a and Valerio, as well asthe latter's 29 November 1989 affidavit, the confidenti ality agreement andthe termination letter were presented to buttress private res pondents'evidence. The Labor Arbiter found the evidence of private respondents credible onthe groun d that no other inference other than Austria's guilt could bedrawn from these es tablished circumstances: the Australian representative of BLISS FOX did not know Austria nor the latter's nickname(Rudy) when he called Lukban and inquired who Lukban's contact personwas at PHILSTEEL; Lukban was not only known to Austria, he was close tohim; and, Austria signifie d his intention to join the rival company whichLukban planned to form. The Labor Arbiter pointed out that petitioner failed to establish any motiveon t he part of private respondents and of Valerio and Vega in terminatinghis employm ent or in testifying against him since his services were stillhighly satisfactor y as of July 1989. Thus, the Labor Arbiter declared the dismissal to be legal but ordered private respondents to paypetitioner P24,000.0 0 separation pay considering that the companysuffered no loss and that there was no proof of a rival company laterestablished by petitioner. On appeal the NLRC agreed with the thesis of the Labor Arbiter thatpetitioner fa iled to prove any other motive by private respondents for histermination conside ring his excellent job performance. The Commission however modified the Labor Arbiter's decision by directing PHILSTEEL topay petit ioner an indemnity of P1,000.00 for non-observance of due process in failing to provide petitioner with a prior written notice of theinves tigation and for not giving him time to answer charges and to seekassistance of counsel. Basic is the rule that judicial review of labor cases does not go so far as toev aluate the sufficiency of evidence on which the labor officials' findingsrest, m ore so when both the Labor Arbiter and the NLRC share the same findings. This, notwithstanding, we cannot affirm the decision of the NLRCespeci ally when its findings of fact on which the conclusion was based arenot supporte d by substantial evidence. By substantial evidence, we meanthe amount of relevan t evidence which a reasonable mind might accept asadequate to justify the conclu sion. The NLRC grounded its findings on the following postulates: (a) thewitnesses of

PHILSTEEL are credible for petitioner failed to show anyground for them to false ly testify, especially in the light of his excellent jobperformance; and, (b) re spondents' witnesses are more credible thanpetitioner's -Lukban who, insofar as the source of the information isconcerned, impressed the NLRC as evasive. The NL RC however entertained a patent misapprehension of the burden of proof rule in labortermina tion cases. Unlike in other cases where the complainant has theburden of proof t o discharge, in labor cases concerning illegal dismissals, the burden of proving that the employee was dismissed with just causerests upon the employer. Such is the mandate of Art. 278 of the LaborCode. In brief, the evidence of PHILSTEEL rests ation of Charles Villa, representative of Austria as his contact in PHILSTEEL; (b) stria; and, (c) the admissions of Austria th the close relationship with Lukban and upon the following bases: (a) thealleg BLISS FOX, that Lukban namedpetitioner the close relationship ofLukban and Au during theinvestigation relative to bo theirplans to set up a rival business.

I: WON NLRC committed grave abuse of discretion for its misappreciationof the ev idence and giving it undue weight H: Like a house of cards, the evidence of private respondents collapseswhen we t ake into account the fact that its foundation is made of hearsayevidence or mere speculations. It must be noted that the testimonies of Valerio and Vega relied mainly on the veracity of the assertions ofVilla. They d id not say that they actually heard or observed Lukban admitto Villa that the fo rmer's client was PHILSTEEL and that his contact with PHILSTEEL was Austria. What they seemingly saw was Villa scribbling aname on the telefax purportedly dictated by Lukban. In short, what theyappear to have obser ved was what Villa wanted them to observe, nomatter whether it was the truth or not. Thus, their testimony was clearly hearsay and must not be given weight. Moreover, the veracity of Villa'sassertion s, even as to his being a representative of BLISS FOX, is suspect. The reliance both by the Labor Arbiter and the NLRC on thehearsay testi monies in assessing the evidence of private respondentsreflects a dangerous prop ensity for baseless conclusions amounting tograve abuse of discretion. Such prop ensity is further shown when publicrespondent gave imprimatur to PHILSTEEL's con clusion that Austria was the one who divulged the so-called confidential information due mainly tohis clo se affinity with Lukban.

Of significance here is the fact that nowhere in all the allegations ofPHILSTEEL was there proof of any concrete action by Austria of divulgingconfidential info rmation and of setting up a rival business. Everything wasaccording to what Vill a said or what Lukban supposedly said. Thus, PHILSTEEL's resort to Austria's "admissions." The admission of close relationship is certainly true as it was affirmed by both Austria andLukban. The "admission" however, of their setting up a rival businessstrikes this Court as somewhat forced like squeezing a stone for water. The reality of such admission is negated by subsequent events. At no time did such an envisioned "rival" company come to being. Indeed, after his dismissal, petitioner had to languish for several months inuncertainty while looking for employment, instead of just joining thealleged company. Until he died on 15 March 1997, petitioner never wentinto partnership with Lukban nor joined any other company. Accusation cannot take the place of proof. A suspicion or belief no matterhow si ncerely felt cannot be a substitute for factual findings carefullyestablished th rough an orderly procedure. Such orderly procedure wasdenied petitioner by PHILS TEEL, as correctly found by the NLRC, thus In the instant case, there was at least a partial denial of the complainant'srig ht to due process because there was no showing: (1) that he was giventhe require d first written notice; (2) that he was given sufficient time toanswer the charg es against him; and, (3) that he had the chance to obtainthe assistance of couns el. As there is a finding of illegal dismissal, an award of back wages, instead ofin demnity, computed from the time of dismissal up to the time of hisdeath, with le gal interest plus attorney's fees, might properly assuage thehurt and damages ca used by such illegal dismissal. The petition isGRANTED. General Bank & Trust Co. v. CA, 135 SCRA 569 F: This case starts with the employment of plantiff-appellee with the CebuBranch of the First National City Bank of New York for 18 years, where herose to the p osition of Chief Clerk, Accounting Department (Exhibit 0); thaton January 11, 19 65, plaintiff-appellee joined the defendant bank in itsCebu branch as accountant with an annual compensation of P6,000.00(Exhibit A); that on April 26, 1965, th e Cebu Branch of defendant bankbegan operating and doing business with the publi c; that on January 1,1966, plaintiff received an increase of P50.00 bringing his monthly salaryto P550.00 (Exhibit D); that on April 11, 1967 defendant bank app ointedthe plaintiff to the position of Acting Manager of its Cebu Branch, with t hecorresponding increase of sale to P700.00 a month (Exhibit E); thateffective S eptember 1, 1967, defendant bank granted plantiff a monthlyhousing allowance of P200.00 in addition to his monthly salary (Exhibit F); that on October 3, 1967 defendant bank appointed plaintiff as the regularManager of its Cebu Branch (Exhibit G) effective May 1, 1968; thatdefendant bank increa sed plaintiff's salary to P1800.00 a month (ExhibitH); that on May 16, 1969 whil e the plaintiff was on vacation leave, he happened to visit the bank and learned that three tellers of defendantbank's bra nch in Cebu City, namely, Miss Crystal Enriquez, Miss YolandaChu, and Miss Sonia Chiu, had been transferred to the head office in Manila by defendant Jose D. Santos; that the plantiff went to Manila on May 18,1969 to make personal representation with the head office for theretention of the said t ellers in Cebu; that on May 26, 1969 the plaintiffreported back for duty with de fendant bank's branch in Cebu andreinstated immediately the three tellers to the ir respective positions in theCebu branch of defendant bank; that on May 28, 196 9 defendant Jose D. Santos submitted a report to defendant Salvador D. Tenorio alleging thatthere wa

s excess personnel in the Cebu Branch; that on the same datedefendant Jose D. Sa ntos submitted a supplementary report to defendantSalvador D. Tenorio charging t he plaintiff of over appraising the real estateoffered by Domingo Chua as collat eral for his credit accommodation(Exhibit 34); that defendant Salvador D. Tenori o immediately dispatched aletter to the plaintiff dated May 30, 1969 requiring h im to explain withintwenty-four hours why no disciplinary action should be taken against himfor alleged repeated violation of defendant bank's policies and dire ctivesregarding credit accommodations and for over-appraisal of the real estatec ollateral for Domingo Chua's account, among others (Exhibit 8); that onJune 6, 1 969, the plaintiff received the said letter of defendant Salvador D. Tenorio but found it impossible to render the required explanation in 24hours; t hat on June 19, 1969 defendant Jose D. Santos went to Cebu Cityand served plaint iff with the letter of defendant Salvador D. Tenorio, datedJune 18, 1969, suspen ding the plaintiff; and that on July 22, 1969 plantiffwas served with the order of his termination signed by defendant Clarencio S. Yujuico, dated July 18, 1969. The Court of First Instance of Cebu rendered a decision, finding thedismissal of plantiff as without just cause or otherwise illegal arbitrary, oppressive and malicious, and ordering defendants to pay to the plaintiff, jointly and severally. The Court of Appeals, affirmed the decision of thelower c ourt. I: WON the dismissal of Manuel E. Batucan was justified on the ground thathe rep eatedly failed to uphold the interests of the bank thus leading to hisemployer's loss of confidence on him. H: After a careful review of the case, we find no error in the finding of theCou rt of Appeals that Mr. Batucan was indeed illegally dismissed. Thepetitioners' c laim that "undisputed documentary evidence show that priorto his dismissal, spec ifically from March 1968 to January 1969, respondentBatucan had been repeatedly cited, warned and finally threatened withdismissal by his superior, petitioner T enorio, for his practice of grantingcredit accommodations without authority duri ng his tenure." They supportsuch claim with six memoranda addressed to Mr. Batuc an, to wit: Exh. "22" dated April 17, 1968 by Tenorio; Exh. "23" dated March 12, 1968 byTenorio; Exh. "24" dated March 14, 1968 by Tenorio; Exh. "29" datedDecember 9, 1968 by Tenorio ; Exh. "30" dated December 27, 1968 byTenorio; Exh. "34" dated January 28, 1969 by Tenorio.

Petitioners' argument is devoid of merit. We agree with the respondentthat these communications are "nothing more than routinary acts and/orprivileged acts of t op management officials which could not in any wayaffect or erode petitioners' c onfidence in respondent Batucan." After the first three aforecited exhibits were dispatched to Cebu on March12, 19 68, March 14, 1968, and April 17, 1968, petitioner San Luis clearedMr. Batucan f rom an exceptions reported by the Central Bank examiners inconnection with their examination conducted in March, 1968. In his reportto the President of the bank in about the first week of March 1968, San Luis commended Mr. Batucan for the good image enjoyed by the bank in thelocality beca use clients, customers, and depositors spoke well and highlyof Mr. Batucan for h is dedication, sincere and upright dealing with people. Because of such commendation, the president of the bank, the lateSenator Quintin Paredes gave Mr. Batucan an increase of P100.00 in hismonthly salary effective May 1, 1968. Mr. Batucan was also asked to speakat the manager's meeting on Octo ber 19, 1968 on his "Techniques inEffective solicitation of Deposits or New Acco unts." Batucan was also givena free hand in the prosecution of a defalcating hea d teller relying on hisgood judgment to protect the interests of the bank. With the foregoing circumstances, we cannot reconcile the management'salleged lo ss of confidence in Mr. Batucan with the latter's commendationsfor efficient per formance, his having been given an increase in salary andhis being asked to spea k to other colleagues on effective bankingtechniques shortly after the supposed loss of confidence. We agree with the Court of Appeals in its finding that preponderance of theevide nce, however, shows that the alleged unauthorized extension oftemporary over-dra ft or credit accommodations referred to creditaccommodations which were granted by and already existing during theterm of the previous management. Not only did the Court of Appeals establish that there were no impropercredit ac commodations granted during Mr. Batucan's term as manager buthis competence at b eing able to regularize these accounts and hiscontributions to the improvement o f the bank were clearly ascertained. There is no question that managerial employees should enjoy theconfidence of top management. This is especially true in banks whereofficials handle big sums of money and engage in confidential or fiduciarytransactions. However, loss of conf idence should not be simulated. It should not be used as a subterfuge for causes which are improper, illegal, or unjustified. Loss of confidence may not be arbitrarily asserted in theface of overwhelming evidence to the contrary. It must be genuine, not amere afterthoug ht to justify earlier action taken in bad faith. We now come to the issue of damages. Petitioners question the proprietyof awardi ng moral and exemplary damages to the respondent. UnderArticle 2217 of the Civil Code: Moral damages include physical suffering, mental anguish, fright, seriousanxiety , besmirched reputation, wounded feelings, moral shock, socialhumiliation, and s imilar injury. Though incapable of pecuniarycomputation, moral damages may be re covered if they are the proximateresult of the defendant's wrongful act or commi ssion. Mr. Batucan left a stable job with a reputable bank to join the petitionerbank. He had been an employee of the First National City Bank of New Yorkfor eighteen (18) years. Undoubtedly, before he accepted petitionerTenorio's invitation, he m ust have thought the matter over several times.

And from the time he joined the petitioner bank, the records show that Mr. Batucan has indeed worked his way up from accountant to permanentbranch manager of the bank. During his term as manager, he was able toincrease the income and r esources of the bank. He raised the image ofpetitioner bank in the business and banking community and placed itsoperations on a good and competitive basis. His peremptory dismissal fromthe bank was certainly a shock to him and damaged his m oral feelings andpersonal pride after all the loyalty and hard work he had dedic ated to thebank. The only reason for his dismissal found in the records is his failure to followt op-management orders with regards to the transfer of the three tellers. Petitioners alleged it to be insubordination. Nevertheless, insubordinationmust be proven to justify dismissal (St. Luke's Hospital v. Ministry of Laborand Empl oyment, 116 SCRA 240). And we do not think that his earnestefforts in making rep resentations to retain the three tellers warrant hisdimissal. A manager or super visor must stand up for his subordinatesunless the latter are guilty of wrongdoi ng or some conduct prejudicial tothe employer. Only after as representations was Mr. Batucan questionedon the several "unauthorized credit accommodations." His failure to explain within 24 hours which, in the light of the circumstances, was tooshort, caused his suspension and later, his dismissal retroactive to the dateof suspens ion. There was no valid reason for his dismissal, much less for allthe charges a nd accusations made against him. The dismissal followed bythe efforts to justify it was tainted by bad faith or malice on the part of thepetitioners who wanted Mr. Batucan removed from his post. The employer's right to ot be confused with the The manner in which the was abusive; hence, it dismiss his employee, however, differs from, andshould n manner in which the right is exercised. company exercised its right to dismiss in the caseat bar is liable for moral damages, as previouslydiscussed.

A review of the records, however, indicates that the moral and exemplarydamages awarded may be somewhat excessive. Hence, in the exercise of

our discretion and after considering all factors, we have decided to reduceto P2 0,000.00 the award for moral and exemplary damages and toP5,000.00 the award for attorney's fees. The award of P1,000.00 a month from the time Mr. Batucan's employmentwas termina ted up to the date this case becomes final and executory islikewise excessive. A t the same time, pursuant to Republic Act 1052 asamended by Republic Act 1787, w hich provides that in case of employmentwithout a definite period, an employer m ay terminate an employee'sservices without just cause by serving to the employee a written notice atleast one month in advance or by granting him pay equivalent to one-halfmonth salary for every year of service, whichever is longer. Considering the facts and equities of this case, however, we have decidedto limi t compensatory damages to only P12,000.00, as explainedabove.chanroblesvirtualaw library chanrobles virtual law library Lastly, petitioners raise the issue that "individual petitioners, having actedin their official capacities as bank officers, did not incur any personalliability in favor of Batucan. We quote with favor the finding of therespondent Court: Th e evidence shows that the individual defendantsacted jointly in causing the ille gal and unjustifiable dimissal of the plaintiffappellee. Hence, the trial court is correct in holding the individualdefendants jointly and severally liable to the plaintiff-appellee. " Clearly, the petitioners acted beyond their authority and against what thelaw pr ovides. WHEREFORE, the decision appealed from is MODIFIED. Sy v. Metrobank, 506 SCRA 580 F: Petitioner Dennis D. Sy, herein substituted by his heirs Soledad Y. Sy, Ronald Allan Y. Sy, and Melinda S. Pompenada, was the branch manager inBajada, D avao City, of respondent Metropolitan Bank and Trust Company. Under the bank s Retirement Plan, an employee must retire upon reachingthe age of 55 years or after rendering 30 years of service, whichevercomes first. Sy would have rendered 30 years of service by August 18,1999. However, on February 5, 199 9, he was reappointed as branchmanager for a term of one year starting August 18 , 1999 until August 18,2000. His monthly compensation was accordingly increased from P50,400 to P54,500, effective August 16, 1999. Meanwhile, on November 10 and 15, 1999, the bank released the results of the audit conducted in its Bajada branch. On November 15, 1999, Sytendered an ir revocable letter of retirement. In his letter, he requested thetimely release of his retirement pay and other benefits. His request wasdenied. The bank alleged that Sy allowed spouses Gorgonio and Elizabeth Ong toconduct "k iting" activities in their account with the bank. Thus, the bankplaced Sy under preventive suspension and gave him 48 hours to submit awritten explanation. In r esponse, Sy wrote a letter explaining that he onlymade a wrong credit judgment. Not satisfied with his answer, the banknotified Sy of other alleged violations o f company policies. In reply, Sy explained in writing that the accommodation granted tospouses Samue l Aquino and Charito Sy-Aquino was only P650,000, not P9.11M as claimed by the bank. He added that the spouses evenoffered a parce l of land as collateral and were willing to sell a vehicle insettlement of their obligation with the bank. Unconvinced, the bankdismissed Sy on December 15, 199 9.

Sy filed against the bank a complaint for illegal suspension, illegaldismissal a nd money claims, docketed as RAB-11-01-00024-0. However, the Labor Arbiter dismissed the case for lack of merit. On appeal, the National Labor Relations Commission (NLRC) deemed Sycompulsorily retired. Thus, the NLRC awarded him retirement benefits, unpaid salary, monetary value of unused leave credits, 13th month pay, Christmas bonus, and refund of provident fund. The parties sought reconsideration, which were both denied for lack ofmerit. Res pondent bank elevated the matter to the Court of Appeals, whichset aside the rul ing of the NLRC and reinstated the Decision of the LaborArbiter. On motion for r econsideration, however, the Court of Appealsmodified its ruling and ordered the bank to reimburse Sy s contribution tothe provident fund. I: (1) Was petitioner illegally terminated? (2) If his dismissal was valid, would he still be entitled to retirement benefits? H: Sy was validly dismissed on the ground of fraud and willful breach oftrust un der Article 282 of the Labor Code. Records show that as bank manager, he authorized "kiting" or drawing of checks against uncollectedfunds in wanton violation of the bank s policies. 19 It was sufficient basis for the bank to lose trust in him. Unlike a rank-and-file worker, where breach of trust as a ground for validdismis sal requires proof of involvement in the alleged anomaly and wheremere uncorrobo rated accusation by the employer will not suffice, the sheerexistence of a basis for believing that the employer s trust has beenbreached is enough for the dismis sal of amanagerial employee. Petitioner s conduct betrays his culpability. Shortly after the auditconducted in the Bajada branch, he tendered an "irrevocable letter ofretirement." In the said letter, he requested that his retirement be made

effective December 1, 1999. Said request arouses suspicion consideringthat he ha d previously agreed to the extension of his employment asbranch manager until Au gust 18, 2000. Petitioner s evident failure to offerany reasonable explanation for such sudden shift in his plans is prejudicialto his cause. As for the requirement of due process, records show that it has been fullysatisf ied in the instant case. The bank had complied with the two-noticerequirement, i .e.: (a) a written notice of the cause for his dismissal toafford him ample oppo rtunity to be heard and to defend himself with theassistance of counsel, if he s o desires; and (b) a written notice of thedecision to terminate him, stating cle arly the reason therefor. Petitioner, however, theorizes that having been compulsorily retired, hecould no longer be dismissed by the bank. His premise is absurd. Indeed, he would have qualified for compulsory retirement under the bank sRetirement Plan. However, he opted to accept the bank s offer ofextending his employment for anoth er year with a corresponding salaryincrease. Thus, in effect, he had never retir ed. Unfortunately for him, whileserving such extended term, the bank discovered his unauthorized grant ofaccommodation to accounts engaged in "kiting" activity. Such act is a clearbreach of the trust reposed in him by the bank. He cannot no w eludedismissal for a just cause by claiming he was already retired compulsoril y. Is petitioner nevertheless entitled to retirement benefits? Under the LaborCode, only unjustly dismissed employees are entitled to retirementbenefits and other privileges including reinstatement and backwages. Since petitioner s dismissal was for a just cause, he is not entitled to anyretire ment benefit. To hold otherwise would be to reward acts of willful breach of trust by the employee. It would also open the floodgate topotential an omalous banking transactions by bank employees whoseemployments have been extend ed. Since a bank s operation is essentiallyimbued with public interest, it owes gr eat fidelity to the public it deals with. In turn, it cannot be compelled to continue in its employ a person in whomit has lost trust and confidence and whose continued employment wouldpatently be inimi cal to the bank s interest.24 While the scale of justice istilted in favor of work ers, the law does not authorize blind submission to the claim of labor regardless of merit. While the Court commiserates with petitioner who has spent with the bankthe best three decades of his employable life, we find no room to accordhim compassionat e justice. Records showed that he violated the bankpolicies prior to his compuls ory retirement. Thus, there can be no earnedretirement benefits to speak of. No such provision is provided for by theLabor Code. In fact, even the Civil Service Law imposes forfeiture ofretirement benefits in valid dismissal cases. Notably, the Court has also disallowed claims for retirement benefits invalid di smissal cases because the retirement plan itself precluded employees dismissed for cause from availing it. Although no suchprohibition in t he retirement plan was alleged or proved in this case, wenevertheless deny petit ioner s claims because his offenses, vis--vis hislong years of service with the ban k, reflect a regrettable lack of loyaltywhich he should have strengthened instea d of betrayed. The petition ishereby DENIED. Jardine Davies v. NLRC, 311 SCRA 289 F: Petitioner is a domestic corporation engaged in general trading, including the exclusive distribution in the country of the world-renowned Union 76 lubricating oil manufactured by Unoco Philippines, Inc. Privaterespondent was a

former sales representative of petitioner. A review of the records of this case reveals that petitioner engaged theservices of a private investigation agency to conduct surveillance andinvestigation pert inent to reports that some of petitioner s products, particularly the Union 76 lubricating oil, were being illegallymanufactured, blend ed, packed and distributed. Consequently, a privateinvestigator of the said inve stigation agency, confirmed that there werereally fake Union 76 lubricating oil in the market and reported furtherthat the same were indeed being illegally manufa ctured, blended, packedand distributed by private respondent Virgilio Reyes. Pet itioner thensecured a search warrant which led to the seizure of some of the all egedfake items found in the apartment complex reportedly occupied by saidprivate respondent. Thereafter, a criminal complaint for violation of Article 189 on unfaircompetiti on of the Revised Penal Code [2] was filed against privaterespondent and others. Subsequently, private respondent was likewisecharged administratively for havin g committed serious misconduct inimicalto the interest of petitioner company. Ac cordingly, he was advised to go onan indefinite leave. This eventually led to hi s termination from employmenton February 23, 1983. Meanwhile, all the materials seized by virtue of the search warrant issuedwere r eleased by order of the same court in view of a petition filed byprivate respond ent s younger brother, Donato Reyes. Apparently, theyounger Reyes convinced the co urt that he was the legal tenant of theapartment complex searched and that all t he materials seized are legallyowned by him. He further proved that he was legal ly engaged in thebusiness of general merchandising, operating under the trade na me ofLubrix Conglomerate, a single proprietorship duly licensed by thegovernment in dealing with oil and lubricant products. Furthermore, hepresented the receip ts covering the purchases of the seized Unocoproducts purposely for packing the same in small containers to be resold tothe public.

Relying on the foregoing facts, private respondent sued petitioner forillegal di smissal. But the Labor Arbiter, Manuel R. Caday, dismissed hiscomplaint. In a Decision dated September 24, 1985, the labor arbiter stated that theapartme nt complex allegedly occupied by private respondent was indeedthe situs of the i llegal manufacture, blending and packaging of Union 76 oil and lubricating products. Convinced that private respondent waspersonally in volved in the aforementioned illegal activity, the labor arbiterruled that the p rivate respondent committed an act of serious misconduct, fraud or willful breach of trust reposed in him by petitioner, a just cause fort erminating employment. Private respondent appealed to the NLRC. In its Decision dated March 17,1986, th e NLRC reversed the labor arbiter s judgment on the ground thatthere is no cogent reason for petitioner to lose its trust and confidence onprivate respondent. I: WON public respondent committed grave abuse of discretion inreversing the lab or arbiter s judgment which found a just and valid causefor dismissal of private r espondent by petitioner. H: Petitioner s attack on the alleged misappreciation of facts and distortedevalua tion of evidence by public respondent stands, in our view, on hollowground. Reso rt to judicial review of the decisions of the National LaborRelations Commission by way of a special civil action for certiorari underRule 65 of the Rules of Co urt is confined only to issues of want or excess ofjurisdiction and grave abuse of discretion on the part of the labor tribunal. It does not include an inquiry as to the correctness of the evaluation ofevidenc e which was the basis of the labor agency in reaching itsconclusion. Neither is it for this Court to re-examine conflicting evidence, re-evaluate the credibility of the witnesses nor substitute findings of factfor those of an administrative body which has gained expertise in itsspecialized fie ld. Arguably, there may even be an error in judgment. This, however, is not within the ambit of the extraordinary remedy of certiorari. It is beyond dispute that loss of trust and confidence constitutes a validground for dismissing an employee. It is settled that loss of confidence as ajust caus e for terminating employment must be premised on the fact thatan employee concer ned holds a position of trust and confidence. Thissituation obtains where a pers on is entrusted with confidence on delicatematters, such as care and protection, handling or custody of theemployer s property as in this case. But, in order to c onstitute a just causefor dismissal, the act complained of must be work-related su ch as wouldshow the employee concerned to be unfit to continue working for theem ployer. Likewise, it must be noted that proof beyond reasonable doubtis not requ ired to dismiss an employee on the ground of loss of confidence. It is sufficient that there is some basis for such loss of confidence, such as when the employer has reasonable ground to believe that the employeeconcerned is responsible for the purported misconduct, and the nature of his participation therein renders him unworthy of the trust and confidencedemand ed of his position. This Court, however, has repeatedly stressed that the right of an employerto dis miss employees on account of loss of trust and confidence must notbe exercised a rbitrarily and without showing just cause, so as not to renderthe employee s const itutional right to security of tenure nugatory. Thus, although the dropping of a criminal charge for an employee s allegedmisconduct doe s not bar his dismissal, and proof beyond reasonable doubtis not necessary to ju stify the same, still the basis thereof must be clearlyand convincingly establis hed. Besides, for loss of confidence to be a validground for dismissal, such los s of confidence must arise from particularproven facts. In other words, this gro und must be founded on factsestablished by the employer who must clearly and con

vincingly prove bysubstantial evidence the facts and incidents upon which loss o f confidencein the employee may be fairly made to rest; otherwise the dismissal will berendered illegal. In the case at bar, private respondent was suspended and eventuallydismissed for allegedly committing fraudulent acts and unfairly competingwith petitioner. To justify its administrative action, petitioner somehowgrave credence to the surve illance report implicating private respondent inthe illegal manufacture, blendin g, packing and distribution of petitioner sproducts. Petitioner likewise relied on the result of the search on theapartment reportedly leased by private responden t from which allegedcounterfeit Union 76 oil products were seized. Unfortunately, these couldnot be deemed sufficient basis for petitioner to lose its trust andco nfidence on private respondent so as to justify the latter s dismissal. For evidently, the surveillance report is unreliable. As found by the NLRC, the conclusions therein were mere deductions not supported by anysubstantial cor roborating evidence. Public respondent also observed thatthe petitioner failed t o show concrete evidence to controvert the proofpresented by private respondent that the packing of genuine Union 76 oil in small containers was in support of the marketing policy of petitioner. Furthermore, as the Solicitor General points out, petitioner s agentssurprisingly did not submit to laboratory test the alleged fake merchandiseseized during the search, to determine its genuineness. This deficiencycould be attributed to the misstep of the private detectives who werespecifically instructed to investigate precisely the reported counterfeitingof petitioner s products. Another virtual confirmation that petitioner lacks factual basis for itsdistrust of private respondent was the subsequent judicial order releasingthe articles s eized during the search. As it appears on record, the courtbelieved the explanat ion of Donato Reyes, brother of private respondent, that he was the lessee of the aforesaid apartment. In sum, we hold that public respondent did not gravely abuse its discretionin ru ling that petitioner failed to duly prove that the dismissal of private

respondent was justified on account of loss of trust and confidence. Hence, private respondent s dismissal was found illegal. With the finding that private respondent was illegally dismissed, an awardof bac kwages is proper. It must be emphasized, though, that jurisprudencedistinguishes between employees illegally dismissed prior to the effectivityof Republic Act N o. 6715 on March 21, 1989, and those whose illegaldismissals were effected after such date. Thus, employees illegallydismissed prior to March 21, 1989, are enti tled to backwages up to three (3) years without deduction or qualification, while those illegally dismissedaft er are granted full backwages inclusive of allowances and other benefitsor their monetary equivalent from the time their actual compensation waswithheld from th em up to the time of their actual reinstatement. Considering that private respondent was terminated from the service onFebruary 2 3, 1983, he is entitled to backwages up to three years only, computed on the basis of his last monthly salary or pay. In addition to backwages, illegally dismissed employees are entitled toeither re instatement, if feasible, or separation pay, if reinstatement is nolonger viable . Petition is DENIED for lack of merit. Central Pangasinan Electric Cooperative c. Macaraeg | GR 145800 | Jan. 22, 2003 F: Petitioner is an electric cooperative duly organized and existing underPhilip pine laws. Respondent Geronima Macaraeg and Maribeth de Vera areemployees of pet itioner at its office in Area V, Bayambang, Pangasinan. Respondent de Vera was employed as teller whose primary duty was toaccept paymen ts from petitioner s consumers in Bayambang and remit hercollections to the cashie r, herein co-respondent GeronimaMacaraeg. Respondent Macaraeg s duty was to deposi t the dailycollections of the office to petitioner s account at the Rural Bank of CentralPangasinan in Bayambang. From January 1998 to January 1999, respondent de Vera accommodatedand encashed t he crossed checks of her sister, Evelyn Joy Estrada. Evelyn issued two hundred eleven (211) crossed checks amounting to P6, 945,128.95 payable to petitioner cooperative despite the absence of anytransacti on or any outstanding obligation with petitioner. In turn, respondent de Vera, with the knowledge and consent of respondentMacaraeg, paid t he full value of these checks from the cash collections ofpetitioner. At the end of the day, respondents credited the checks as partof their collection and depo sited the same together with their cashcollection to the account of petitioner a t the Rural Bank of CentralPangasinan. Sometime in January 1999, petitioner, through its Finance Department, noticed that several checks payable to petitioner from the collections inthe Are a V office were returned due to insufficiency of funds. On January19, 1999, Jose fina Mandapat, Sandra Frias and Marites Radac, petitioner sFinance Manager, Chief Accountant and Legal Assistant, respectively, confronted respondents with their discovery. Respondent de Vera admitted that the checks were issued by her sister and that she encashedthem fro m the money collected from petitioner s customers. On January21, 1999, Mrs. Josefi na Mandapat submitted a memorandum to petitioner sGeneral Manager, Salvador M. de Guzman, detailing their findings aboutthe bounced checks. On February 2, 1999, s he submitted an addendum toher memorandum. On February 4, 1999, petitioner, thro ugh de Guzman, issued a memorandum to respondents placing them under preventivesuspension and r equiring them to explain in writing within forty-eight (48) hours why they misappropriated cooperative funds. In the same

communication, a hearing was set on February 13, 1999 at 9:30 a.m. at the Board Room of petitioner before Atty. Teodoro Fernandez. In their respective Answers/Explanations, respondents denied havingmisappropriat ed the funds of petitioner cooperative. They alleged that: (1) the checks that bounced were redeposited with the Rural Bank of CentralPangasina n; (2) the amount representing the face value of the checks hadbeen used by peti tioner as of December 15, 1998; (3) there was never anyshortage in the cooperati ve money or funds in their possession; and (4) they never violated any policy of the cooperative and on the contrary, theyhave been very religious in remitting the funds and money of petitioner. At the scheduled hearing on February 13, 1999, respondents, withassistance of co unsel, appeared before Atty. TeodoroFernandez. Respondent de Vera testified and admitted that she encashedthe checks of Evelyn Joy Estrada because the latter is her older sister andthat she has a soft spot for her; that Mrs. Estrada owns a sash factory andthat she merely wanted to help her sister meet her business obli gations; that sometime in November 1998, Mrs. Marites Radoc, Chief Accountant of petitioner, called her attention to one check which bounced thrice; that thische ck was eventually replaced by her sister with cash; that despite thebouncing of some other checks, all checks were eventually funded andpaid to petitioner, henc e, petitioner incurred no losses in its collections; that she has worked for petitioner for nineteen (19) years and this is thefirst time she has been charged administratively by petitioner. Respondent Macaraeg admitted that she knew of the accommodationsgiven by respond ent de Vera to her sister; that she allowed hersubordinate to do it because resp ondent de Vera is her kumare, and that she knew that Mrs. Estrada s checks were sufficiently funded. She worked for petitioner for twenty-two (22) years and has never had anadministrative char ge. Mrs. Josefina Mandapat, Finance Manager of petitioner, testified aspetitioner s wi tness. She stated that she prepared a report on the findingsof their accountant regarding the encashment of Evelyn Joy Estrada schecks, and that the encashment of said checks is prohibited under anoffice memorandum. On March 10, 1999, Atty. Fernandez submitted his findings to the GeneralManager of petitioner. On March 19, 1999, on the basis of said findingsand recommendatio n, the General Manager issued to respondentsseparate notices of termination, eff ective April 9, 1999, for serious

misconduct, and breach of trust and confidence reposed on them bymanagement. Respondents, with the help of the President and representative of theUnion, Cent ral Pangasinan Electric Cooperative (CENPELCO) Employees Association-Tupas Local C hapter No. R01-0012, questioned their dismissalbefore the National Conciliation and Mediation Board (NCMB). Theyclaimed that their dismissal was without just ca use and in violation of theCollective Bargaining Agreement (CBA), which requires that the caseshould first be brought before a grievance committee. Eventually, theparties agreed to submit the case to a voluntary arbitrator for arbitration. On August 12, 1999, the voluntary arbitrator rendered a decision in favorof resp ondents. Petitioner appealed to the Court of Appeals via a petition for review. On August 17, 2000, the Court of Appeals rendered a decisiondismissi ng the petition and affirming the decision of the voluntaryarbitrator. Hence, th e present course of action. I: WON the CA gravely abused its discretion in holding that petitionerillegally terminated the services of herein private respondents. H: The petition is impressed with merit. At the outset, we hold that the firstis sue raised in the petition pertaining to the alleged violation of the CBAgrievan ce procedure is moot and academic. The parties activeparticipation in the volunta ry arbitration proceedings, and their failure toinsist that the case be remanded to the grievance machinery, shows aclear intention on their part to have the is sue of respondents illegaldismissal directly resolved by the voluntary arbitrator . We therefore find it unnecessary to rule on the matter in light of their preference to bring theilleg al dismissal dispute to voluntary arbitration without passing throughthe grievan ce machinery. This leads us to the next issue of whether respondents were validlydismissed. To constitute a valid dismissal from employment, tworequisites must be met, namely : (1) it must be for a just or authorizedcause, and (2) the employee must be aff orded due process. We hold that there exists a valid reason to dismiss both employees. Article 282(c) of the Labor Code allows an employer to dismiss employees forwillful brea ch of trust or loss of confidence. Proof beyond reasonable doubtof their miscond uct is not required, it being sufficient that there is somebasis for the same or that the employer has reasonable ground to believethat they are responsible for the misconduct and their participation thereinrendered them unworthy of the tru st and confidence demanded of theirposition. To be sure, the acts of the respondents were clearly inimical to thefinancial in terest of the petitioner. During the investigation, they admittedaccommodating E velyn Joy Estrada by encashing her checks from itsfunds. They did so without pet itioner s knowledge, much less itspermission. These inimical acts lasted for more than a year, and probablywould have continued had it not been discovered in time . All along, they were aware that these acts were prohibited by the Coop Checks Policy. Clearly, there was willful breach of trust on the respondents part, as theytook a dvantage of their highly sensitive positions to violate their duties. Moreover, the acts of the respondents caused damage to thepetitioner. During tho se times the checks were illegally encashed, petitioner was not able to fully utilize the collections, primarily in servicing its debts. In her memorandum dated January 21, 1999, Finance ManagerJosefina Man dapat reported how petitioner is prejudiced. It is not material that they did not misappropriate any amount of money,

nor incur any shortage relative to the funds in their possession. The basicpremis e for dismissal on the ground of loss of confidence is that theemployees concern ed hold positions of trust. The betrayal of this trust isthe essence of the offe nce for which an employee is penalized. In the caseat bar, the respondents held positions of utmost trust and confidence. As teller and cashier, respectively, they are expected to possess a highdegree of f idelity. They are entrusted with a considerable amount ofcash. Respondent de Ver a accepted payments from petitioner sconsumers while respondent Macaraeg received remittances for deposit atpetitioner s bank. They did not live up to their duties and obligations. Nor is there any doubt that petitioner observed procedural due process indismiss ing the respondents. In separate memoranda dated February 4,1999 and signed by t he General Manager ( de Guzman), the respondentswere both appraised of the parti cular acts or omissions constituting thecharges against them. They gave their ow n answer/explanation to the charges. They participated in the investigation conducted at petitioner sboard roo m. We are aware that the respondents Macaraeg and de Verahave been employed with the petitioner for 22 and 19 years of continuousservice, respectively, and this is the first time that either of them has beenadministratively charged. Nonethe less, it is our considered view that their dismissal is justified considering the breach of trust they havecommitted. Well to emphasize, the longer an employee stays in the serviceof the company, the gre ater is his responsibility for knowledge andcompliance with the norms of conduct and the code of discipline in thecompany. Considering that they have mishandled the funds of thecooperative and the danger they have posed to its members, thei rreinstatement is neither sound in reason nor just in principle. It is irreconcilable with trust and confidence that has been irretrievably lost. The petition is GRANTED. Mcleod v. NLRC, 512 SCRA 222 F: John F. McLeod filed a complaint for retirement benefits, vacation andsick le ave benefits, non-payment of unused airline tickets, holiday pay, underpayment of salary and 13th month pay, moral and exemplarydamages, attorney s fees plus interest against Filipinas SyntheticCorporation (Filsyn), Far Eastern Textile Mills, Inc., Sta. Rosa Textiles, Inc., Patricio Lim and Eric Hu. He alleges that at the time of his retirementcomplaina nt was receiving P60, 000.00 monthly with vacation and sickleave benefits; 13th month pay, holiday pay and two round trip business

class tickets on a Manila-London-Manila itinerary every three years which isconv ertible to cash if unused. Respondents accordingly failed to payvacation and lea ve credits and requested complainant to wait as it wasshort of funds but the sam e remain unpaid at present. Respondentslikewise failed to pay complainant s holida y pay up to the present. Therewere more benefits which were not honored. The Labor Arbiter, held all respondents jointly and severally liable for themone y claims of Mcleod. However, the NLRC reversed and made PeggyMills as the sole e ntity liable for the retirement pay of Mcleod. This wasaffirmed by the CA. I: WON an employer-employee relationship exists between the privaterespondents a nd the petitioner for purposes of determining employerliability to the petitione r. H: No employer-employee relationship, McLeod was a managerialemployee of PMI fro m 20 June 1980 to 31 December 1992. McLeod couldhave presented evidence to suppo rt his allegation of employer-employeerelationship between him and any of Filsyn , SRTI, and FETMI, but he didnot. Appointment letters or employment contracts, p ayrolls, organizationcharts, SSS registration, personnel list, as well as testim ony of coemployees, may serve as evidence of employee status. It is a basic rule inevidence that par ties must prove their affirmative allegations. Whiletechnical rules are not stri ctly followed in the NLRC, this does not meanthat the rules on proving allegatio ns are entirely ignored. Bare allegationsare not enough. They must be supported by substantial evidence at thevery least. McLeod s reliance on Annex M can hardly carry the day for him. Annex M, which is McLeod s letter addressed to "Philip Lim, VP Administration," merely contains McLeod s proposals for the grant of some benefits tosupervisory an d confidential employees. Contrary to McLeod s allegation, Patricio did not sign the letter. Hence, the letter does not embody anyagreement between McLeod and the management that would entitleMcLeod to his money claims. Neither can McLeod s assertions find supportin Annex U. Annex U is the Agreement which McLeod and Universal TextileMills, Inc. executed in 1959. The Agreement me rely contains the renewal ofthe service agreement which the parties signed in 19 56. John Hancock Life Insurance Corp. v. Davis | GR 169549 | Sept. 3, F: Respondent Joanna Cantre Davis was agency administration officer ofpetitioner John Hancock Life Insurance Corporation. On October 18, 2000, Patricia Yuseco, petitioner's corporate affairs manager, discovered that herwall et was missing. She immediately reported the loss of her credit cardsto AIG and BPI Express. To her surprise, she was informed that "PatriciaYuseco" had just ma de substantial purchases using her credit cards invarious stores in the City of Manila. She was also told that a proposed transaction in Abenson's-Robinsons Place was disapproved because "she" gave the wrong information upon verification. Because loss of personal property among its employees had becomerampant in its o ffice, petitioner sought the assistance of the NationalBureau of Investigation ( NBI). The NBI, in the course of its investigation, obtained a security video from Abenson's showing the person who usedYuseco's cre dit cards. Yuseco and other witnesses positively identified theperson in the vid eo as respondent. Consequently, the NBI and Yuseco filed a complaint for qualified theftagainst re spondent in the office of the Manila city prosecutor. But becausethe affidavits presented by the NBI (identifying respondent as the culprit) were not properly verified, the city prosecutor dismissed the complaint dueto in sufficiency of evidence.

Meanwhile, petitioner placed respondent under preventive suspension andinstructe d her to cooperate with its ongoing investigation. Instead of doingso, however, respondent filed a complaint for illegal dismissal alleging thatpetitioner termi nated her employment without cause. The labor arbiter, in a decision dated May 21, 2002, found that respondentcommit ted serious misconduct (she was the principal suspect for qualifiedtheft committ ed inside petitioner's office during work hours). There was avalid cause for her dismissal. Thus, the complaint was dismissed for lack ofmerit. Respondent appealed the labor arbiter's decision to the National LaborRelations Commission (NLRC) which affirmed the assailed decision on July31, 2003. Responde nt moved for reconsideration but it was denied in aresolution dated October 30, 2003. Aggrieved, respondent filed a petition for certiorari in the Court of Appeals(CA ) claiming that the NLRC committed grave abuse of discretion inaffirming the dec ision of the labor arbiter. She claimed there was no validcause for her terminat ion because the city prosecutor of Manila "did notfind probable cause for qualif ied theft against her." The dismissal of thecomplaint proved that the charges ag ainst her were based on suspicion. The CA, in its July 4, 2005 decision found that the labor arbiter and NLRCmerely adopted the findings of the NBI regarding respondent's culpability. Because the affidavits of the witnesses were not verified, they did notconstitut e substantial evidence. The labor arbiter and NLRC should have assessed evidence independently as "unsubstantiated suspicions, accusations and conclusions of employers (did) not provide legaljustification fo r dismissing an employee." Thus, the CA granted thepetition. Petitioner moved fo r reconsideration but it was denied. Hence, this petition. I: WON petitioner substantially proved the presence of valid cause forrespondent 's termination.

H: We grant the petition. Misconduct involves "the transgression of someestablis hed and definite rule of action, forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error injudgment. " In this case, petitioner dismissed respondent based on the NBI's findingthat the latter stole and used Yuseco's credit cards. But since the theft was not committed against petitioner itself but against one of its employees, respondent's misconduct was not work-related and therefore, she couldnot be dism issed for serious misconduct. Nonetheless, Article 282(e) of the Labor Code talks of other analogouscauses or those which are susceptible of comparison to another in generalor in specific de tail. For an employee to be validly dismissed for a causeanalogous to those enum erated in Article 282, the cause must involve avoluntary and/or willful act or o mission of the employee. A cause analogous to serious misconduct is a voluntary and/or willful act oromis sion attesting to an employee's moral depravity. Theft committed byan employee a gainst a person other than his employer, if proven bysubstantial evidence, is a cause analogous to serious misconduct. Did petitioner substantially prove the existence of valid cause forrespondent's separation? Yes. The labor arbiter and the NLRC relied notonly on the affidavits of the NBI's witnesses but also on that of respondent. They likewise considered petitioner's own investigative findings. Clearly, they did not merely adopt the findings of the NBI but independentlyassessed evid ence presented by the parties. Their conclusion (that therewas valid cause for r espondent's separation from employment) wastherefore supported by substantial ev idence. All things considered, petitioner validly dismissed respondent for cause analogous to seriousmisconduct . Petition is hereby GRANTED. Security and Credit Investigation v. NLRC, 350 SCRA 357 F: Private respondents Mercado, Somosot and Oliver were employed assecurity guar ds by petitioner and assigned to the CHR which waspetitioner s client. Sometime in February 1990, about eighteen (18) ofpetitioner s security guards detailed at the CHR, including Mercado, Somosot and Oliver, filed a complaint for money claims againstpetitioner. Howeve r, upon petitioner s request that the security guardswithdraw the complaint, each of the complainants, except for Mercado, Somosot and Oliver, signed a Release and Quitclaim in favor of petitioner. Mercado averred that he was being pressured by petitioner to sign aRelease and Q uitclaim, so he went on leave from work on March 22, 1990. When he called petitioner s office on the afternoon of the same dayto inquir e about his work assignment, petitioner s officer-in-charge, RogelioVecido, inform ed him that he was not assigned anywhere because he wassuspended from work. Somosot likewise claimed that on March 22, 1990, Mr. Igmedio Tomenio, petitioner s shift-in-charge at the CHR, tried to pressure him to sign aRelease an d Quitclaim but he refused. That afternoon, Somosot learned that he had been suspended from work. When he attempted to report forwork the ne xt day, he was informed verbally that his employment wasalready terminated. The next day, March 23, 1990, Mercado and Somosot filed a complaint forillegal d ismissal and underpayment of wages, overtime pay, legal holidaypay, premium pay for holiday and rest day, 13th month pay, serviceincentive leave benefits and ni ght differential against petitioner. The case was docketed as NLRC-NCR Case No. 00-03-01791-90.

Like Mercado and Somosot, respondent Oliver asseverated that on March27, 1990 he went to petitioner s office to reiterate his money claims andwas forced by Mr. Re ynaldo Dino, petitioner s operations manager, to signa Release and Quitclaim. Beca use of his refusal to sign the same, he wasnot given any new assignment by petit ioner. He was thus surprised toreceive on March 29, 1990 a telegram from petitio ner requiring him toexplain his absence from work without leave from March 27,19 90. Subsequently, Oliver filed a complaint for illegal dismissal andunderpayment of backwages against petitioner, which case was docketedas NLRC-NCR Case No. 00 -03-01886-90. Upon motion of petitioner, the two cases were consolidated. Petitioner, onthe ot her hand, denied that it dismissed Mercado, Somosot and Oliver and alleged that the latter abandoned their employment. Meanwhile, on February 18, 1991, petitioner filed a third-party complaintagainst the CHR, claiming that its failure to effect the increase in theminimum wage of respondent security guards from July 1, 1989 to March31, 1990, was due to the f ailure of the CHR to promptly pay the increasesin the wage rates of said guards pursuant to Section 6 of Republic Act No. 6727 (R.A. 6727). The CHR approved payment of increased wage ratesonly from Apri l 16, 1990. Petitioner claimed that under R.A. 6727, the CHR was mandated to pay increased wages to the security guards commencingfrom July 1 , 1989. The CHR denied that it was obliged to pay the increase in the wage rates ofthe r espondent guards. It averred that R.A. 6727 is not applicable to it, because it had already been paying the respondent security guards morethan P100. 00 a day even before the effectivity of said law. Its decision to increase the salaries of respondent guards effective August 16, 1990 wasdue only to humanitarian reasons. In his Decision dated November 18, 1991 the Labor Arbiter found that there was neither dismissal by petitioner of the respondent security guardsnor a bandonment of employment by the latter, and that the controversyresulted from mi scommunication and misapprehension of facts by theparties. The Labor Arbiter, ho wever, ruled that there was underpayment ofrespondent guards salaries, holiday pa y, premium pay for holidays andrest days, overtime pay, 13th month pay and servi ce incentive leavebenefits.

All parties filed their respective appeals with the National Labor RelationsComm ission. In their partial appeal, respondents Mercado andSomosot argued that the Labor Arbiter erred in not finding that they wereillegally dismissed and in not awarding backwages in their favor. Petitioner, on the other hand, claimed that the Labor Arbiter erred in not finding that respondent security guards abandoned their employment, andthat it i s the CHR which should be held liable for the monetary award givento respondent security guards. The CHR for its part contended that the Labor Arbiter erred in not findingthat R .A. 6727 does not apply to it, and in failing to appreciate the CHR sLetter dated April 16, 1990 which stated that it was increasing the wagerates of the security guards beginning April 16, 1990. I: WON NLRC committed grave abuse of discretion amounting to lack ofjurisdiction when it ruled that private respondents did not abandon their posts H: The Court finds that the NLRC committed no grave abuse of discretionin affirm ing the finding that petitioner did not dismiss respondent securityguards, and t hat the latter did not abandon their employment. Both the NLRC and the Labor Arbiter found no clear proof that petitionerhad in f act dismissed respondent security guards. Mercado based his claimof illegal dism issal only on the statement of officer-in-charge Mr. Vecidothat he had not been assigned to any post. Similarly, Somosot relied merely on the verbal information relayed to him that he had beenterminated. Oliv er s belief that he had been illegally dismissed wasfounded on the telegram from p etitioner requiring him to explain hisabsence without leave which he received on March 29, 1990. None of them exerted efforts to confirm from petitioner s office whether they hadin fact b een dismissed. Furthermore, petitioner denied the allegation that ity guards employment without just cause and even bandoned their employment. Thus, absent anyshowing roving that petitioner had dismissed Mercado, Somosot and Oliver, their claim sustained. it terminated respondentsecur alleged thatrespondent guards a of an overt or positive act p of illegal dismissalcannot be

There being no finding that respondent security guards were illegallydismissed, there is no basis for an award of backwages in their favor. It is axiomatic that before backwages may be granted, there must be unjust orillegal d ismissal from work. Neither did the NLRC find evidence to support petitioner s allegation thatMercado, Somosot and Oliver abandoned their employment. The records reveal that their failure to report for duty was not caused by a willful anddeli berate intent to abandon their employment. Rather, such failure resulted from their belief, though mistaken, that they had been suspendedor term inated from work. The rule is that for abandonment to exist, two elements must concur: first, the employee must have failed to report forwork or must have been absent without justifiable reason; and second, there must have been a clear intention to sever the employer-employeerelationshi p manifested by some overt acts. The filing by Mercado, Somosot and Oliver of their complaints for illegal dismissal negates theexistenc e of any intention on their part to abandon their employment. On the other hand, there is merit in petitioner s argument that there wasan error

in the computation of the amounts constituting underpayment ofovertime pay, 13th month pay and service incentive leave benefits torespondent security guards by the Labor Arbiter, which in turn wasaffirmed by the NLRC. However, in computing the underpayment for overtime, 13th month andservice incen tive leave benefits, the Labor Arbiter erroneously included theperiod from Septe mber 1, 1988 to June 30, 1989 in spite of his finding thatthere was no underpaym ent in wages during said period. The Court also finds merit in petitioner s argument that the NLRC shouldnot have r eversed the Labor Arbiter s finding that the CHR is liable for thepayment of P28,5 00.00 representing the differentials of respondentsecurity guards wage, overtime, 13th month and service incentive leavebenefits for the period July 1, 1989 to A pril 15, 1990. The record shows that petitioner informed the CHR regarding the increasein the w ages of the security guards effective July 1, 1989, pursuant to R.A. 6727 which mandated a Twenty Five Peso (P25.00) increase in the dailywage rate i n a Letter dated August 7, 1989. In its reply letter dated April16, 1990, the CH R stated that it had approved the increase in the wageseffective April 16, 1990. The CHR, however, maintains that it is not liable to pay increased wages tothe s ecurity guards and claims that there is a proviso in Section 4 of R.A. 6727 which exempts employees already receiving more than P100.00 dailyfrom recei ving the P25.00 increase required under said law. The CHR argues that since the security guards were receiving P103.56 daily for theyear 1 989, it was not required to pay them the P25.00 per day increaseunder R.A. 6727. The CHR further asserts that its approved increase in thesecurity guards wages f rom April 16, 1990 was due only to humanitarianreasons and was not an admission of any obligation to increase the sameunder R.A. 6727. It must be noted that both the Labor Arbiter and the NLRC found that there were discrepancies in the minimum wage prescribed under R.A. 6727 andwhat were a ctually received by respondent security guards from July 1,1989. The rule is tha t the factual findings of the Labor Arbiter, whenaffirmed by the NLRC are accord ed to great weight and respect whensupported by substantial evidence, and devoid of any unfairness andarbitrariness. It is clear that the CHR is the party liable for payment of the wage increasedue to respondent security guards. While petitioner, as the contractor, isheld soli darily liable for the payment of wages, including wage increases,

as prescribed under the Labor Code, the obligation ultimately belongs tothe CHR as principal. The Labor Arbiter was therefore correct in requiringthe CHR to rei mburse petitioner the amount of P28, 500.00 representingthe unpaid wage increase s of respondent security guards for the periodJuly 1, 1989 to April 15, 1990. Th e assailed decision of the affirmed withthe MODIFICATION CALS Poultry Supply v. Roco, 385 SCRA 479 F: CALS Poultry Supply Corporation is engaged in the business of sellingdressed chicken and other related products and managed by Danilo Yap. On March 15, 1984, CALS hired Alfredo Roco as its driver. On the same date, CALS hired Edna Roco, Alfredo s sister, as a helper in the dressingroom of C ALS. On May 16, 1995, it hired Candelaria Roco, another sister, as helper, also at its chicken dressing plant on a probationary basis. On March 5, 1996, Alfredo Roco and Candelaria Roco filed a complaint forillegal dismissal against CALS and Danilo Yap alleging that Alfredo andCandelaria were i llegally dismissed on January 20, 1996 and November 5,1996, respectively. Both a lso claimed that they were underpaid of theirwages. Edna Roco, likewise, filed a complaint for illegal dismissal, allegingthat on June 26, 1996, she was reassig ned to the task of washing dirtysacks and for this reason, in addition to her be ing transferred from nightshift to day time duties, which she considered as mana gement act ofharassment, she did not report for work. According to Alfredo Roco, he was dismissed on January 20, 1996 when herefused t o accept P30,000.00 being offered to him by CALS lawyer, Atty. Myra Cristela A. Yngcong, in exchange for his executing a letter ofvoluntary res ignation. On the part of Candelaria Roco, she averred thatshe was terminated wit hout cause from her job as helper after servingmore than six (6) months as proba tionary employee.red The Labor Arbiter on April 16, 1998, issued a decision dismissing thecomplaints for illegal dismissal for lack of merit. The Labor Arbiter found that Alfredo Roco applied for and was granted a leave of absence for theperiod f rom January 4 to 18, 1996. He did not report back for work afterthe expiration o f his leave of absence, prompting CALS, through its ChiefMaintenance Officer to send him a letter on March 12, 1996 inquiring if hestill had intentions of resum ing his work. Alfredo Roco did not respond tothe letter despite receipt thereof, thus, Alfredo was not dismissed; it washe who unilaterally severed his relation with his employer. In the case of Candelaria Roco, the Labor Arbiter upheld CALS decision notto cont inue with her probationary employment having been found herunsuited for the work for which her services were engaged. She was hiredon May 16, 1995 and her servi ces were terminated on November 15, 1995. Edna Roco, according to the Labor Arbiter, began absenting herself on June25, 19 96. She was sent a memo on July 1, 1996 requiring her to report forwork immediat ely, but she did not respond. In their position papers, the complainants claimed that they were not given their overtime pay, premium pay for holidays, premium pay for rest days, 13th month pay, allowances. They were also not given their separation pay after their dismissal. The Labor Arbiter, however, denied their claims, stating thatthey had not substantiated the same; on the other hand, CALS presentedevidence showing t hat complainants received the correct salaries andrelated benefits. The National Labor Relations Commission (NLRC), in a decisionpromulgated on Janu ary 17, 2000, affirmed the judgment of the LaborArbiter.

On appeal by Alfredo, Candelaria and Edna Roco to the Court of Appeals, the appellate court set aside the NLRC s decision and orderedreinstatement of Alfr edo and Candelaria Roco to their former positionswithout loss of seniority of ri ghts and benefits, with full payment ofbackwages. However, in the case of Edna R oco, the Court of Appealsfound that her appeal cannot be favorably considered as she actuallyabandoned her work without justification. In considering that Alfredo Roco was illegally dismissed, the Court ofAppeals re lied on his allegation that on January 20, 1996 when hereported for work, follow ing his leave of absence from January 10 to 18,1996, he learned from Elvie Acant elado, a secretary of Danilo Yap that hewas already separated from his employmen t. I: WON there was illegal dismissal by CALS H: From the facts established, we are of the view that Alfredo Roco has not established convincingly that he was dismissed. No notice of termination was given to him by CALS. There is no proof at all, except his self-servingasser tion, that he was prevented from working after the end of his leave ofabsence on January 18, 1996. In fact, CALS notified him in a letter dated March 12, 1996 to resume his work. Both the Labor Arbiter and the NLRC found that Alfredo, as well as Candelaria Roco, was not dismissed. Their findings of fact are entitled to great weight. With respect to Candelaria Roco, there is no dispute that she wasemployed on pro bationary basis. She was hired on May 16, 1995 and herservices were terminated o n November 15, 1995 due to poor workperformance. She did not measure up to the w ork standards on thedressing of chicken. The Labor Arbiter sustained CALS in ter minating her employment. The NLRC affirmed the Labor Arbiter s ruling. The Court of Appeals did not disagree with the NLRC s finding thatCandelaria was d ismissed because she did not qualify as a regularemployee in accordance with the reasonable standards made known bythe company to her at the time of her employm ent. CALS argues that the Court of Appeals computation of the 6-monthprobationary peri od is erroneous as the termination of Candelaria s

services on November 15, 1995 was exactly on the last day of the 6-monthperiod. We agree with CALS contention as upheld by both the Labor Arbiter andthe NLRC tha t Candelaria s services was terminated within and not beyondthe 6-month probationa ry period. As there is no mention of the basis of the above order, we may assume itwas the temporary payroll authority submitted by the petitioner showingthat the private respondent was employed on probation on February 16,1978. Even supposing that it is not self-serving, we find nevertheless thatit is self-defeating. The six-mon th period of probation started from the saiddate of appointment and so ended on August 17, 1978, but it is not shownthat the private respondent s employment also ended then; on thecontrary, he continued working as usual. Under Article 282 of the Labor Code, an employee who is allowed to work after a probationary periodshall be cons idered a regular employee.' Hence, Pilones was already onpermanent status when he was dismissed on August 21, 1978, or four daysafter he ceased to be a probation er. WHEREFORE, our Resolution of April 1, 2002 denying the petition is herebySET ASI DE and another one entered REVERSING the decision of the Court of Appeals insofar as it ruled in favor of herein respondents and thedecisions o f the Labor Arbiter and the National Labor Relations Commission REINSTATED. Jardine Davies v. NLRC, 225 SCRA 757 Nature: The instant Petition for Certiorari seeks the reversal of the resolution of respondent National Labor Relations Commission, dated 22July 1992, which declared private respondent Salvador Salutin as nothaving abandoned his w ork by his alleged failure to report for work duringthe pendency of the petition er's appeal before the respondentCommission. F: Respondent Salvador Salutin ["Salutin"] was employed by petitionerJardine Dav ies, Inc. ["JDI"] on 15 July 1985, as a demonstrator/agronomistto provide servic es relating to, and to give advice on, the promotion anduse of JDI's pesticides and other products. The controversy that spawnedtwo [2] special civil actions fo r certiorari [this instance included] with thisCourt, began when respondent Salu tin filed a complaint against petitionerJDI for illegal dismissal, with prayer f or reinstatement and backwages or, inthe alternative, separation pay plus wage d ifferential, service incentiveleave pay, thirteenth [13th] month pay, holiday pa y, moral and exemplarydamages, and attorney's fees. The complaint was decided by the LaborArbiter in favor of respondent Salutin. JDI appealed the case to the National Labor Relations Commission [NLRC], and it posted a supersedeas bond to answer for the monetary awards. Italso reins tated Salutin, "on payroll only", beginning 26 August 1991, incompliance with th e writ of execution issued by the Labor Arbiter pursuant to Article 223, paragraph 3, of the Labor Code. In a Decision dated 17October 19 91, NLRC dismissed JDI's appeal for lack of merit but modifiedthe decision by el iminating the awards given for holiday pay, serviceincentive leave pay, moral an d exemplary damages. A motion forreconsideration was filed which was denied in N LRC's resolution of 13 January 1992. On 14 February 1992, JDI filed its first petition for certiorari with this Court , docketed as G. R. No. 103720, assailing the 17 October 1991 decision andthe reso lution of 13 January 1992 of respondent Commission. In OurResolution dated 26 Fe

bruary 1992, the petition was dismissed for failureto comply with this Court's C ircular No. 28-91 on forum-shopping. Itssubsequent motion for reconsideration wa s itself denied on 20 May 1992. The Resolution of 26 February 1992 became final and executory on 19 June1992, an d an entry of judgment was accordingly made on 20 August 1992. At the time when the above narrated events were still unfolding, somematerial fa cts occured beginning with JDI's appeal to the NLRC on the 08August 1991 decisio n of the Labor Arbiter. Shortly after the reinstatementof Salutin "on payroll on ly", JDI sent a letter dated 21 September 1991, toSalutin directing him to repor t for work to their Bacolod Branch Manager. Salutin, as directed, reported on the 24th of September 1991 at around 9:20 a.m. He did not stay long, however, since after fifteen minutes or so, he left and was reported not to have thereafter returned for work. JDIforthwith stopped further payment of salary to Salutin. On 17 October 1991, JDI filed a "Manisfestation and Motion" with the respondent Commission stating that Salutin be considered as havingabandoned his work considering his continuous absence of more thanthree (3) weeks since he was required to report for work and that anyaward for reinstatement to his former p osition, without loss of seniorityand other rights, in the Arbiter's decision su bject of this appeal beconsidered and held as waived or lost. Salutin opposed th e motion, claiming that he was forced to leave in haste because he was thensuffering from a serious ailment. He submitted a medical certificate tosupport his claim. On 13 January 1992, respondent Commission denied JDI's "Manifestation & Motion" stating, among other things as to the issue of whether thecomplaint-appe llee Salvador Salutin is guilty of work abandonment, this isa new and factual ma tter which has to be determined and resolved in appropriate proceedings before the Arbitration Branch, more especially inthe pre sent case, where the charge of abandonment is seriouslycontroverted. I: Is Salutin, who was then on payroll reinstatement since 26 August 1991, not guilty of abandonment when his failure to report for work was becausehe was also working for another entity from 01 September 1991 to 31December 1991? Corre latively, did respondent Commission not gravelyabuse its discretion when it did not take into consideration such other employment?

H: The answer is in the negative. The records show that at the time JDIfiled its Manifestation and Motion dated 17 October 1991, the sole basis of its prayer for a declaration that Salutin abandoned his work was his allegedunau thorized absences from the date he was notified to report for work. Ashift to a new focus took place when, on 30 January 1992, JDI, at itsrequest, received a le tter-certification issued by the Officer-in-Charge ofKing's Enterprises of Iloil o City that Salutin was employed by MonsatoPhilippines, Inc., from 01 September to 31 December 1991, as AggressiveCrop Technician, for which he was paid P5,146. 00 per month. Thus, thiswas the reason given by JDI in its ex parte motion dated 16 June 1992, toset for hearing the Manifestation and Motion of 17 October 1991 . NLRCdenied the said ex parte motion in the now assailed resolution of 22 July1 992. When JDI filed its first petition for certiorari [in G. R. No. 103720] with this Court on 14 February 1992, assailing the 17 October 1991 decision ofNLRC, it als o raised, as an added argument on the alleged abandonment ofwork by Salutin, the fact that he was gainfully employed elsewhere. Considering that this matter was thus already taken up by the petitioner inits f irst petition for certiorari, which this Court dismissed with finality, thepetit ioner should really now be barred from invoking anew that issue inthis present [ second] petition. Be that as it may, the same fate of dismissal is still inevitable. Althoughthis Court is not a trier of facts, it may still wade through the records of acase if only to prevent any possible misgiving in its ultimate disposition. The petitioner's evidence to establish Salutin's supposed abandonment ofwork is the certification of employment issued by King's Enterprises at therequest of he rein petitioner to the effect that Salutin had indeed beenemployed by Monsato Ph ilippines, Inc., during the period from 01September to 31 December 1991. For aba ndonment to constitute a validcause for termination of employment there must be a deliberate unjustifiedrefusal of the employee to resume his employment. This r efusal must beclearly shown. Mere absence is not sufficient; it must be accompan ied byovert acts pointing to the fact that the employee simply does not want tow ork anymore. Abandonment of position is a matter of intention expressed in clearlycertain and unequivocal acts. In this instance, however, certainuncontroverted facts show j ust exactly the opposite. Hence, Salutin didreport, as directed, on 24 September 1991, but that he could not stay longbecause he was ailing at that time; he, al though perhaps belatedly made, did seek medical consultation on 7 November 1991, at the Corazon Locsin Montelibano Memorial Regional Hospital, for "peptic ulcer"; and on 11December 19 91, he did, in fact, manifest his desire to assume his work with the petitioner. This Court's Resolution of 26 February 1992, denying the petition in G. R. No. 103720, became final and executory on 19 June 1992. RespondentSalutin's inte rim employment, stressed by the petitioner, did not stain thepicture at all. The petition is hereby dismissed. GSP Manufacturing Corp. v. Cabanban | GR 150454 | July 14, 2006 F: Respondent Paulina Cabanban worked with petitioner GSPManufacturing Corporati on (GSP) as a sewer from February 7, 1985 untilher alleged termination on March 1, 1992. On June 16, 1992, respondentfiled with the National Labor Relations Com mission (NLRC), National CapitalRegion Arbitration Branch, a complaint against p etitioners for illegaldismissal, non-payment of holiday pay, service incentive l eave pay and13th month pay. Respondent claimed she was terminated by petitioners because she failedto dissua de her daughter from continuing her employment at the SylviaSantos Company, a bu

siness competitor of petitioners. In their defense, petitioners argued that respondent abandoned her work on March 14, 1992and that they reported this to the Department of Labor and Employmenton May 15, 1992. On May 7, 1993, labor arbiter Melquiades Sol D. del Rosario foundpetitioners gui lty of illegal dismissal. Petitioners appealed to the NLRC. OnAugust 10, 1995, t he NLRC issued a resolution affirming in toto the decision of the labor arbiter. Hence, this petition. I: WON the findings of fact of the Court of Appeals were arrived atarbitrarily H: The petition is without merit. As petitioners are well aware of, factualfindi ngs of the NLRC, particularly when they are in agreement with those ofthe labor arbiter, are deemed binding and conclusive on this Court. As longas their decisi ons are devoid of any unfairness or arbitrariness in theirevaluation of the evid ence all that is left for us to do is stamp ouraffirmation and declare its final ity. Having perused the records, we find nosuch arbitrariness here. We would like to reiterate some salient points laid down in our priorpronounceme nts concerning abandonment of employment. Abandonmentas a just ground for dismis sal requires the deliberate, unjustified refusal ofthe employee to perform his e mployment responsibilities. Mere absence orfailure to work, even after notice to return, is not tantamount to abandonment. The records are bereft of proof that petitioners evenfurnished resp ondent such notice. Furthermore, it is a settled doctrine that the filing of a complaint for illegal dismissal is inconsistent with abandonment of employment. An employeewho takes s teps to protest his dismissal cannot logically be said to haveabandoned his work . The filing of such complaint is proof enough of his desire to return to work, thus negating any suggestion of abandonment. Clearly, petitioners claim that respondent s complaint was "anafterthought," having been filed a long time after the date of the supposed

abandonment, was utterly without merit. As the Court of Appeals correctlypointed out, citing the case of Pare v. NLRC, respondent had four yearswithin which to institute her action for illegal dismissal. Compared to thesix months it took th e aggrieved employee in that case to file his complaintfor illegal dismissal, re spondent s 84 days was not unreasonably long at all. The petition is hereby DENIED. Shie Jie Corp. v. NFL, GR 153148, July 15, 2005 F: Respondents, in their complaint, alleged that they were employed asfish proce ssors by petitioners. On July 20, 1998, Sammy Yang and MichaelYang, petitioners, confronted them about their union activities. Immediately, they were ordered to go home. The next day, petitionerssuspended th em for one week effective July 22 to 28,1998 (except respondent Wilfredo Toribio ). Upon their return, they wereserved with a notice of petitioners memorandum ter minating theirservices for abandonment of work. Petitioners, in their answer, denied respondents allegations. Theyclaimed that on July 20, 1998, about 2:45 o clock in the afternoon, 13 rankandfile employees staged a walk-out and abandoned their work. Among them were respondents Wilfredo Toribio, Nida Toribio, YolandaLorenzo, Sorraya Am ping, Vivian Mendoza, Merylene Delos Reyes, ArnoldFrancisco, and Manuel Francisc o. As a consequence, petitioners businessoperations were interrupted and paralyze d, prompting them to issue amemorandum suspending respondents for one week or fr om July 22 to 28,1998. However, on July 24, 1998, petitioners, in another memora ndum, directed them to report for work on July 27, 1998. Instead, respondentsErnesto E trata, Sorraya Amping, Yasher Taning, Yolanda Lorenzo, MeryleneDelos Reyes, and Wilfredo Toribio submitted their resignation letters andquitclaims. Subsequently or on July 28, 1998, petitioners sentrespondents Arnold Francisco, Nida Toribio , Vivian Mendoza, and ManuelFrancisco a notice terminating their services for ab andonment of work. On August 20, 1999, the Labor Arbiter rendered a Decision findingrespondents gui lty of unfair labor practice (for dismissing petitionersillegally); and ordering them, jointly and severally, to pay petitioners P843, 960.62. On appeal, the National Labor Relations Commission (NLRC) promulgatedits Decisio n dated April 27, 2000 reversing the Labor Arbiter s Decision anddismissing respon dents complaint. Respondents then filed a motion forreconsideration but were deni ed by the NLRC in a Resolution dated June29, 2000. Hence, they filed with the Co urt of Appeals a petition for certiorari. On November 29, 2001, the Appellate Court rendered aDecision rev ersing and setting aside the NLRC s Decision and reinstatingthe Labor Arbiter s Deci sion. On December 21, 2001, petitioners filed amotion for reconsideration, but w ere denied by the Appellate Court in aResolution dated April 9, 2002. I: WON the CA erred in holding that petitioners failed to prove bysubstantial ev idence that respondents voluntarily resigned and/orabandoned their work. H: Voluntary resignation is defined as the act of an employee, who findshimself in a situation in which he believes that personal reasons cannot besacrificed in favor of the exigency of the service; thus, he has no otherchoice but to disass ociate himself from his employment. Acceptance of aresignation tendered by an em ployee is necessary to make the resignationeffective. No such acceptance, howeve r, was shown in the instant case. Moreover, the fact that respondents immediately filed a complaint forillegal dis missal against petitioners and repudiated their allegedresignation completely ne gated petitioners claim that they voluntarilyresigned.

In Molave Tours Corporation vs. National Labor Relations Commission, it was held: By vigorously pursuing the litigation of his action againstpetitioner, private respondent clearly manifested that he has no intentionof relinquishing h is employment, which act is wholly incompatible topetitioner s assertion that he v oluntarily resigned. Neither do we find any indication that respondents have shown by someovert acts their intention to sever their employment in petitioner company. In this case, respondents did not report back for work on July 27, 1998because t hey were suspended by petitioners for one week effective July 22to 28, 1998. Ver ily, their absence cannot be considered abandonment ofwork, a just cause for ter mination of employment. In fine, considering that respondents did not abandon their work, theirdismissal from the service is illegal. The petition is DENIED. MANUEL C. FELIX, petitioner, vs. ENERTECH SYSTEMS INDUSTRIES, INC. and COURT OF APPEALS, respondents. | G.R. No. 142007. March 28, 2001 F: Enertech System Industries, Incorporated is engaged in the manufactureof boil ers and tanks. Petitioner Manuel C. Felix worked as a welder/fabricator in respondent company. On August 5, 1994, petitionerand three other employees, namely, Dante Tunglapan, Hilario Lamog, andEmerson Yanos, were assigned to install a smokestack at the Big JFeedmills in Sta. Monica, Bulacan. During the entire period they wereworking at the Big J Feedmills, petitioner and his companions accomplisheddaily time records (DTRs). Petitioner wrote in his D TR that he had worked eight hours a day on the basis of which his wages were computed. The work was estimated to be completed within seven days, but it actuallytook th e workers until August 17, 1994, or about two weeks, before it was

finished. On that day, petitioner and his three co-employees were eachgiven noti ce by respondent. Reynaldo Tapiru, petitioner s co-employee and neighbor in SitioKabanatuan, Valenzu ela, also stated in an affidavit that he had seen petitioner either in his house or within their compound on August 6, 7, 8, and 14, 1994, between 3 and 4 o clock in the afternoon, when he was supposed to be working at the Big J Feedmills in Bulacan at that time. On September 9, 1994, respondent required petitioner to report to thecompany law yer on September 13, 1994 for investigation. Then, onOctober 17, 1994, it issued a memorandum placing petitioner underpreventive suspension for 30 days. Finally , on November 21, 1994, respondent sent petitioner a memorandum terminating his employment. Respondent appealed to the NLRC. Pending appeal, a writ of executionwas issued o n September 23, 1997 directing respondent to reinstatepetitioner either physical ly or in the payroll. NLRC rendered a decision reversing the labor arbiter s decision anddismissing peti tioner s complaint for illegal dismissal for lack of merit. The NLRC found sufficient evidence to prove that petitioner put in less than therequ ired eight hours daily work during his detail at the Big J Feedmills and, therefore, held that his dismissal was in accordance with the CompanyCode of Dis cipline and the Labor Code. Petitioner filed a motion forreconsideration, but th e same was denied. CA affirmed. ISSUE and RULING: First. Petitioner prays that the CA reinstate the laborarbiter s decision finding Respondent Corporation guilty of illegaldismissal. The labor a rbiter held as doubtful the statement of JohnnyLegaspi and petitioner s two co-emp loyees to the effect that petitioner andhis co-workers put in only four hours; t hat the statements of Legaspi andYanos were inaccurate as there was no timekeepe r at the job site tomonitor the arrivals and departures of employees; and that t he delay inthe completion of the project could be due to an erroneous estimate o nduration of work, lack of materials, or lack of work coordination. No merit. CA, taking into account the findings of the NLRC, the interviewwith Jo hnny Legaspi and his engineer, and the affidavits of Yanos andTapiru, correctly concluded that there was substantial evidence presented showing that petitioner did not really work eight hours a day, as he hadstated i n his time cards Indeed, the validity of petitioner s dismissal is a factual question. It is not for the reviewing court to weigh the conflicting evidence, determine thecredibil ity of witnesses, or otherwise substitute its own judgment for that ofthe admini strative agency. Well-settled is the rule that the findings of factof quasi-judi cial agencies, like the NLRC, are accorded not only respect butat times even fin ality if such findings are supported by substantialevidence.This is especially s o in this case, in which the findings of theNLRC were affirmed by the Court of A ppeals. The findings of fact madetherein can only be set aside upon a showing of grave abuse of discretion, fraud, or error of law. There is no such showing of grave abuse ofdiscretion in this case. Falsification of time cards constitutes serious misconduct and dishonesty or fraud, which are just causes for thetermination of employment under Art. 282(a) and (c) of the Labor Codewhich provides: ART. 282. Termination by employer. . An employer may terminate anemployment for any of the following causes:

(a) Serious misconduct or willful disobedience by the employee of thelawful orde rs of his employer or representative in connection with hiswork;. .(c) Fraud or willful breach by the employee of the trust reposed inhim by his employer or dul y authorized representative; Second. Petitioner contends that the omnibus motion filed by respondenton Octobe r 10, 1997 during the pendency of the appeal is an admissionthat it is liable fo r reinstatement or, in lieu thereof, for separation pay. No such inference can be derived from a reading of the omnibus motionfiled by re spondent. To the contrary, respondent in fact vehementlyopposed the implementati on of the writ of execution issued by the laborarbiter.20 Thus, respondent said: 2. That reinstatement can no longer be made or is no longer possibleconsidering the nature of the offense or violation (although an issue underappeal) which the complainant committed. This offense or violation has caused serious and severe strained relationship between the complainantand the r espondent employer; 3. That it must be recalled, and as the records of the case will confirm, complainant committed a virtual criminal act of falsifying his daily timerecords based on which he collected his salary. Due to the seriousness of this offense, there is no way by which respondent employer can trustcomplainant again and place the future and welfare of the company toshenanigans who try to d efraud it.

Respondent appears merely to have been mistaken about the options opento it upon promulgation of the labor arbiter s decision. As to the questionof whether separa tion pay in lieu of his reinstatement may be awarded topetitioner, it is settled that such can be done only upon finality ofjudgment, that is, when the judgment is no longer appealable, hence finaland executory, and where reinstatement can no longer be effected, aswhen the position previously held by the employee no lo nger exists orwhen strained relations result in the loss of trust and confidence . If at all, therefore, respondent should have reinstated petitioner in thepayroll , instead of offering him separation pay. Be that as it may, theomnibus motion f iled by respondent cannot be construed as an admissionof its liability for reins tatement. Third. Anent petitioner s claim that he is entitled to backwages from thetime the labor arbiter rendered a decision in his favor until said decision was reversed by the NLRC, this issue should have been raised earlier in theCourt of Appeals and not only now in the present petition. Hence, this matter cannot be considered by the Court. AFFIRMED for lack of showingthat it co mmitted a reversible error. JOSE S. SANTOS, JR., Petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, HAGONOY INSTITUTE INC., ITS DIRECTRESS, MARTA B. ZUNIGA and PRINCIPAL B. BANAG, Respondent. G.R. No. 115795. March 6, 1998 FACTS: Petitioner, a married man, was employed as a teacher by theprivate respon dent Hagonoy Institute Inc. from June 1980 until hisdismissal on June 1, 1991. L ikewise working as a teacher for the privaterespondent was Mrs. Arlene T. Martin , also married. In the course of theiremployment, the couple fell in love. There after, rumors regarding thecouples relationship spread, especially among the fac ulty members andschool officials. Concerned about the rumors, private respondent advised Mrs. Martin totake a leav e of absence which she ignored, as she continued to report forwork. Consequently , on November 9, 1990, she was barred from reportingfor work and was not allowed to enter the private respondents premises, effectively dismissing her from her employment. In view of her termination from the service, Mrs. Martin filed a case for illegal dismissal before the NLRC Regional Arbitration Branch No. III, SanFernan do, Pampanga2 against the private respondent. After the partieshad submitted the ir respective evidence and position paper, Labor Arbiter Ariel Santos rendered a decision dismissing the complaint. NLRC reversedLA. The reversal was anchored on the failure by the private respondent, indismissing Mrs. Martin, to accord her the necessary procedural dueprocess. Private respond ent set up a committee to investigate the veracityof the rumors. After two weeks of inquiry, the committee rendered itsreport confirming the illicit relationshi p between the petitioner and Mrs. Martin. In view of the committees finding, on December 19, 1990, petitioner wascharged a dministratively for immorality and was required to present hisside on the contro versy. Five months later or in May 1991, petitioner wasinformed by the private r espondents Board of Directors of his dismissaleffective June 1, 1991.6 Unable to accept such verdict, petitioner filed acomplaint for illegal dismissal on Augus t 12, 1991 before the NLRCRegional Arbitration Branch No. III, San Fernando, Pam

panga. After a fullblown trial was conducted, Labor Arbiter Quintin C. Mendoza r endered a decision dated January 12, 1993, dismissing petitioners complaint but atthe same time awarding monetary sums as financial assistance. ISSUE: WON petitioner should be dismissed. RULING: We have consistently held that in order to constitute a validdismissal, two requisites must concur: (a) the dismissal must be for any ofthe causes expre ssed in Art. 282 of the Labor Code, and (b) the employeemust be accorded due pro cess, basic of which are the opportunity to beheard and defend himself.9 Private respondent, in justifying the termination of the petitioner, contendstha t being a teacher, he must live up to the high moral standards requiredof his po sition. In other words, it asserts that its purpose in dismissing thepetitioner was to preserve the respect of the community towards theteachers and to strength en the educational system.11 On the other hand, petitioner merely argues that the alleged illicitrelationship was not substantially proven by convincing evidence by theprivate respondent as to justify his dismissal. On the outset, it must be stressed that to constitute immorality, thecircumstanc es of each particular case must be holistically considered andevaluated in light of the prevailing norms of conduct and applicablelaws.12 American jurisprudence has defined immorality as a course of

conduct which offends the morals of the community and is a bad exampleto the you th whose ideals a teacher is supposed to foster and toelevate,13 the same includ ing sexual misconduct. Thus, in petitionerscase, the gravity and seriousness of the charges against him stem from hisbeing a married man and at the same time a teacher. We cannot overemphasize that having an extra-marital affair is an afrontto the s anctity of marriage, which is a basic institution of society. Even ourFamily Cod e provides that husband and wife must live together, observemutual love, respect and fidelity. This is rooted in the fact that both ourConstitution and our laws cherish the validity of marriage and unity of thefamily. Our laws, in implement ing this constitutional edict on marriage andthe family underscore their permane nce, inviolability and solidarity. As ateacher, petitioner serves as an example to his pupils, especially duringtheir formative years and stands in loco parenti s to them. To stress theirimportance in our society, teachers are given substitu te and specialparental authority under our laws. Consequently, it is but stating the obvious to assert that teachers mustadhere t o the exacting standards of morality and decency. There is nodichotomy of morali ty. A teacher, both in his official and personal conduct, must display exemplary behavior. He must freely and willingly acceptrestrictions on his conduct that might be viewed irksome by ordinarycitizens. In other words , the personal behavior of teachers, in and outsidethe classroom, must be beyond reproach. It seems obvious that when ateacher engages in extra-marital relation ship, especially when the partiesare both married, such behavior amounts to immo rality, justifying histermination from employment. Having concluded it is imperative proof rests upon cause, the same that immorality is a just cause for dismissing petitioner, that the private respondent prove the same. Since theburden of the employer to show that the dismissal was fora just and valid must be supported by substantialevidence.

Undoubtedly, the question of immorality by the petitioner is factual innature. T hus, we reiterate the well-settled rule that factual findings by theNLRC, partic ularly when it coincides with those by the Labor Arbiter, areaccorded respect, e ven finality, and will not be disturbed for as long assuch findings are supporte d by substantial evidence. A scrutiny of therecords of the instant petition lead s us to concur with the NLRCs findingthat petitioner indeed entered into an illi cit relationship with his coteacher. This fact was attested to by the testimonies of nine witnesses (a fourth year student, a security guard, a janitor and six co-teachers) whichpetit ioner failed to rebut. We hold henceforth separation pay shall be as a measure of social justiceonly in these instances where the employee is validly dismissed for causeother than ser ious misconduct or those reflecting his moral character. Where the reason for the valid dismissal is, for example, habitualintoxication o r an offense involving moral turpitude, like theft or illicitsexual relationship with a fellow worker, the employer may not be requiredto give the dismissed emp loyee separation pay, or financial assistance, orwhatever other name it is calle d, on the ground of social justice. DISMISSED. RUFINO NORBERTO F. SAMSON vs. NLRC [G.R. No. 121035. April12, 2000] FACTS: This pertains to the case (NCR-00-01-00652-94) filed by thecomplainant Ru fino Norberto F. Samson against the respondents Schering

Plough Corp. ( SPC for brevity) and Mr. Leo C. Riconalla, National SalesManager, fo r money equivalent of rice subsidy for the period April 1990 toDecember 1992 and holiday pay, now deemed submitted for resolutionbased on records available. On February 1, 1994, said complainant filed another case (NCR-00-020088794) for illegal preventive suspension raffled to the Honorable LaborArbiter Dona to G. Quinto, Jr. and consolidated to the above case number. Likewise, on February 4, 1994, complainant filed a Motion to AmendComplaint and averred pertinently that x x x complainant was placedunder an indefinite preventi ve suspension on 25 January 1994 ; and x x xwas arbitrarily and summarily terminate d from employment on 03February 1994 on ground of loss of confidence. In a letter dated 25 January 1994 (Annex A ) addressed to the complainantMr. Samson signed by one J.L. Estingor, the latter called the attention of(sic) the compla inant s conduct x x x in a manner inimical to the interestsof SPC (made utterances of obscene, insulting, and offensive words, referring toor dire cted against SPC s Management Committee, in the presence ofseveral co-employees, t hreats to some co-employees, advising them towatch out for some disruptive actio ns to happen during the National SalesConference.)

Complainant was given two (2) days from receipt of the foregoing letterand to ex plain x x x why no disciplinary action, including termination , should be taken against the complainant and in the meantime was placedon prevent ive suspension effective immediately, until further notice. On the basis of the pleadings filed by the parties and evidence on record, the labor arbiter rendered his Decision, dated 25 August 1994, declaringthe dism issal of petitioner illegal. The labor arbiter ruled that petitioner sconduct is n ot so serious as to warrant his dismissal because: 1) thealleged offensive words were uttered during an informal and unofficial gettogether of employees where there was social drinking and petitioner wasalready tipsy; 2) the words were uttered to show disapproval overmanagement s decision on the "Cua Lim" case; 3) the penalty for theoffense is only "verbal reminder" unde r respondent company s rules andregulations; and 4) petitioner was already admonis hed during a meeting on4 January 1994. Accordingly, respondent company was order ed toreinstate petitioner as District Sales Manager and to pay him backwages. Both parties appealed said decision to the NLRC. Petitioner filed a partialappea l of the denial of his claim for holiday pay and the cash equivalent ofthe rice subsidy. For its part, respondent company sought the reversal ofthe decision of the labor arbiter alleging that the latter erred in ruling thatpetitioner s employ ment was terminated without valid cause and inordering his reinstatement. In rev ersing the labor arbiter s decision, theNLRC found that there was just cause, i.e. , gross misconduct, forpetitioner s dismissal. ISSUE: WON petitioner is validly dismissed RULING: Factual findings of the NLRC are accorded respect. In this case, however, there is compelling reason to deviate from this salutary principlebecau se the findings of facts of the NLRC are in conflict with that of thelabor arbit er. Accordingly, this Court must of necessity review the recordsto determine whi ch findings should be preferred as more conformable tothe evidentiary facts. As borne by the records, petitioner s dismissal was brought about by theutterances he made during an informal Christmas gathering of respondentcompany s Sales and M arketing Division on 17 December 1993. Petitioner was heard to have uttered, "Si EDT (referring to Epitacio D. Titong, GeneralMana ger and President of respondent company), bullshit yan," "sabihin mokay EDT yan" and "sabihin mo kay EDT, bullshit yan," while making the"dirty finger" gesture. Petitioner likewise told his co-employees that theforthcoming national sales co nference of respondent company would be a"very bloody one." The NLRC ruled that the foregoing actuation of petitioner constituted grossmisco nduct warranting his dismissal. Citing jurisprudence, the NLRC heldthat "in term inating the employment of managerial employees, theemployer is allowed a wider l atitude of discretion than in the case ofordinary rank-and-file." We do not agre e with the findings of the NLRC. Misconduct is improper or wrong conduct. It is the transgression of someestablis hed and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error injud gment. The misconduct to be serious must be of such grave andaggravated characte r and not merely trivial and unimportant. Suchmisconduct, however serious, must, nevertheless, be in connection with the employee s work to constitute just cause for his separation. In this case, the alleged misconduct of petitioner, when viewed in itscontext, i s not of such serious and grave character as to warrant hisdismissal. First, pet

itioner made the alleged offensive utterances andobscene gesture during an infor mal Christmas gathering of respondentcompany s district sales managers and marketi ng staff. The gathering wasjust a casual get-together of employees. It is to be expected during thiskind of gatherings, where tongues are more often than not lo osened byliquor or other alcoholic beverages, that employees freely express thei rgrievances and gripes against their employers. Employees should beallowed wider latitude to freely express their sentiments during these kindsof occasions whic h are beyond the disciplinary authority of the employer. Significantly, it does not appear in the records that petitioner possessedany as cendancy over the employees who heard his utterances as to causedemoralization i n the ranks. Second, petitioner s outburst was in reaction to the decision of themanagement in the "Cua Lim" case. Admittedly, using the words "bullshit" and "putang ina" and making lewd gesture to express his dissatisfactionover said management decision were clearly in bad taste but these actswere not intended t o malign or cast aspersion on the person of respondentcompany s president and gene ral manager.

Third, respondent company itself did not seem to consider the offense ofpetition er serious and grave enough to warrant an immediate investigationon the matter. It must be recalled that petitioner uttered the allegedoffensive language at an informal gathering on 17 December 1993. Hethen allegedly made threatening remark s about the forthcoming salesconference on 3 January 1994. During a meeting on 4 January 1994, Mr. Titong, Jr., the president and general manager of respondent company andallegedl y to whom the offensive words were directed, merely admonishedpetitioner stating that, "when there is a disagreement, act in a professionaland civilized manner. " Respondent company allowed several weeks to passbefore it deemed it necessary to require petitioner to explain why nodisciplinary action should be taken again st him for his behavior. Thisseeming lack of urgency on the part of respondent c ompany in taking anydisciplinary action against petitioner negates its charge th at the latter smisbehavior constituted serious misconduct. There being no just cau se forpetitioner s dismissal, the same is consequently unlawful. Petitioner is thu sentitled to reinstatement to his position as District Sales Manager, unlesssuch position no longer exists, in which case he shall be given asubstantially equiv alent position without loss of seniority rights. He islikewise entitled to the p ayment of his full backwages. With respect topetitioner s other monetary claims, h owever, we agree with the findings ofthe labor arbiter that he failed to establi sh his entitlement thereto. GRANTED. Villar v NLRC (High tech manufacturing Corp.) May 11, 2000 NATURE: Petitioners, in this petition forcertiorari, assail for havingbeenrender ed with grave abuse of discretion the 30 May 1997Decision ofthe National Labor R elations Commission (NLRC)vacating and setting asidethe Decision of the Labor Ar biter, aswell as its 31 July 1997 Resolutiondenying reconsideration. FACTS -HI-TECH MANUFACTURING CORPORATION (HI-TECH), a corporation dulyorganized and ex isting under Philippine laws, isengaged in the business ofmanufacturing cartons forcommercial purposes. On different dates, HITECH hiredpetitioners to perform various jobs for the company suchasslitter machine o perator, inkman, silk screen printer, truckhelper, rubberdye setter, forklift op erator and stitchingmachine operator. -Sometime in March 1994 petitioners, who were members oftheFederation of Free Wo rkers Union, filed before theDepartment of Labor apetition for certification ele ction amongthe rank-and-file employees of HITECH. The petition wasgranted and a certification election was conductedinside thecomp any premises on 31 July 1994. However, petitioners lostinthe election as the HITECH employees voted for "No Union." -On 1 August 1994 and the succeeding days thereafter,petitioners failedto report for work. They alleged that they werebarred from entering thepremises of HI-TEC H; hence, theyimmediately filed before the Labor Arbiterseparate complaintsfor i llegal dismissal and labor standards claims againstHI-TECH,Herman T. Go, owner, and Carmen Belano, general manager. -Petitioners claimed that they were summarily dismissed fromemployment by the ma nagement of HI-TECH in retaliation for organizing alabor union in the work premi ses as well as in filingthe petition forcertification election before the Depart ment ofLabor. They further averredthat they were paid daily wagesranging from P8 1.00 to P145.00 whichwere below the minimumfixed by law and that they were requi red to worksix (6) days aweek from 8 o clock in the morning to 7 o clock in theeveni ngwithout being paid for the overtime. Neither were they paidtheirservice incent

ive leave pay and 13th month pay. -The Labor Arbiter ruled for the petitioners. On appeal by HI-TECH, theNLRC in i ts Decision of 30 May 1997 vacated and setaside the LaborArbiter s Decision and or dered petitioners toreport back to work, or if nolonger feasible, directed HI-TE CH topay petitioners their separationbenefits. ISSUE: WON petitioners are entitled to back wages and other monetarybenefits HELD: Ratio: The burden of proving payment of monetary claims rests onthe employ er. In Jimenez v. National Labor Relations Commission we held As a general rule, one who pleads payment has the burden ofproving it. Even where the plaintiff must allege non-payment,the general rule is thatthe bur den rests on the defendant toprove payment, rather than on theplaintiff to prove non-payment. The debtor has the burden of showing withlegalcertainty that the o bligation has been discharged with payment. -The petitioners claims for underpayment of wages, 13th month pay andservice ince ntive leave pay should be upheld. -Petitioners executed a JOINT AFFIDAVIT specifying their dailywages, positions and periods of employment, which was madethe basis of theLabor Arbiter s computation of the monetaryawards. All that the NLRCneeded to do was to refer t o theprevailing minimum wage to ascertain thecorrectness ofpetitioners claims. An d most importantly, the burden ofproving payment of monetary claims rests on the employer. -The reason for the rule records, remittances and overtime, differentials, have been paid are not is that the pertinent personnel files,payrolls, other similar documents which will show that service incentiveleave and other claims of workers inthe possession of the worker but in the custody

and absolutecontrol of the employer. Thus, in choosing not topresentevidence to prove that it had paid all the monetary claimsofpetitioners, HI-TECH failed once again to discharge theon u sprobandi. Consequently, we have no choice but to award those claims to petitioners. SANTIAGO ALCANTARA, JR., petitioner, vs. THE COURT OF APPEALSand THE PENINSULA M ANILA, INC., respondents. FACTS: Petitioner Santiago Alcantara, Jr., an employee of respondent ThePeninsul a Manila, Inc., seeks the reversal of the decision and resolution of the Court of Appeals upholding his dismissal for willful disobedience. At the time of his dismissal, petitioner worked as Commis II of the Food andBeverag e Department of the Peninsula Manila Hotel, Inc. He was also a Director of the National Union of Workers in Hotels Restaurants and Allied Industries (NUWHRAIN)-Manila Peninsula Chapter. The controversy stems from a Memorandum dated August 7, 1998 issuedby respondent Hotel prohibiting the union from using the union office frommidnight until 6:00 in the morning. On August 18, 1998, at about 1:30 in the morning, petitioner was seeninside the union office with Conrad Salanguit and a certain Ma. TheresaCruz. They left the office at about 2:20 in the morning of the same day. On August 20, 1998, petitioner and a male companion were seen enteringthe union office. Later that evening, petitioner was again seen in theoffice, seated with both legs resting on a table. His male companion, whoturned out to be Mr. Salang uit, was lying on the bench. The office lightswere off. DPO Lt. Caronan approach ed petitioner and reminded him of theMemorandum dated August 7, 1998. Petitioner and Mr. Salanguit refusedto leave, however, and replied, Consult that to our Pre sident because wegave a reply to that memorandum. Both petitioner and Mr. Salangu itstayed in the office until 3:30 in the morning of August 21, 1998. On August 28, 1998, Arsenio Olmedilla, Sous Chef-Production, sent amemorandum to petitioner informing him about the Security DepartmentReport dated August 21, 1 998. The memorandum stated that he was seeninside the union office between midni ght until the morning of the followingday and directed him to submit his written explanation within 24 hoursfrom receipt thereof. Petitioner submitted his letter-explanation dated August 28, 1998intimating that the Memorandum prohibiting the use of the union officewas inconsistent with the CBA and was necessarily ineffective. Petitioner argued that inasmuch as the Hotel operated 24 hours a day, the unionoffice shoul d be available whenever the union found it necessary. This was how the CBA had always been applied. Petitioner also pointed out that the charge against him did not pertain to his duties in the Hotel. He claimed he used the union office only during his breaks or when he was off duty. On November 26, 1998, at around 12:50 until 5:50 in the morning, petitioner was again seen lying on the bench inside the union office. DPO Lt. Caronan politely informed him again about the existing Memorandumand asked h im to leave. Petitioner refused and left the union office only ataround 5:50 in the morning of November 26, 1998. In a Memorandum to petitioner dated December 7, 1998, Mr. Noel Silva, Assistant Food and Beverage Manager informed petitioner that Securityhad reporte dly seen him lying on the bench at the basement rank-and-fileunion office on Nov ember 26, 1998 in violation of the Memorandum dated

August 7, 1998. Petitioner was required to explain in writing why nodisciplinary action should be taken against him. On December 9, 1998, petitioner sent a letter to Mr. Silva explaining thatthe un ion had contested the Memorandum dated August 7, 1998. He reiterated that the Memorandum was unreasonable and unlawful. Petitioner invoked Section 4, Article IV of the Collective Bargaining Agreement (CBA) between the Union and the Hotel, stating thatthe hote l shall provide the Union with an office for its exclusive use. He further argued that the Memorandum constituted unlawful interferencewith the emp loyees right to self-organization. On January 4, 1999, private respondent sent petitioner a Notice ofTermination fo r alleged willful and blatant refusal to comply with a lawfuland valid order (HR D Memorandum dated August 7, 1998) issued by his employer. Meanwhile, the Union threatened to go on strike unless the memorandumin question was lifted and petitioner reinstated. Respondent requested theNational Concilia tion and Mediation Board to intervene and conduct preventive mediation proceedings. ISSUE: WON dismissal is valid RULING: Willful disobedience of the employer s lawful orders, as a justcause for t he dismissal of an employee, envisages the concurrence of atleast two requisites : (1) the employee s assailed conduct must have beenwillful or intentional, the wi llfulness being characterized by a wrongful andperverse attitude; and (2) the orde r violated must have been reasonable, lawful, made known to the employee and must pertain to the duties whichhe had be en engaged to discharge.[9] Petitioner avers that his dismissal for willful disobedience is unwarranted because: (1) the Memorandum dated August 7, 1998 is not in connection

with the duties which the employee had been engaged to discharge; (2) the same Memorandum is not reasonable and lawful; and (3) petitioner didnot exhi bit a wrongful and perverse attitude in disobeying saidMemorandum. Petitioner further posits that the use of the union office has no connectionwhat soever with petitioner s duties as Commis II, one of the kitchenpersonnel. However , as respondent points out, every employee ischarged with the implicit duty of c aring for the employer s property; consequently, he is bound to obey the reasonable and lawful orders of theemploye r regulating the use and preservation thereof. Thus, this Court has upheld the dismissal of an employee for violation of a rule prohibitingemplo yees from using company vehicles for private purpose withoutauthority from manag ement.[10] This is not only to prevent loss on thepart of the employer but also to prevent injury to the employees as well asthe customers of the employer. Whether the Memorandum in question is reasonable and lawful is besidethe point. Company policies and regulations are, unless shown to begrossly oppressive or co ntrary to law, generally binding and valid on theparties and must be complied wi th until finally revised or amendedunilaterally or preferably through negotiatio n or by competent authority. The subject Memorandum is not grossly oppressive. It is not patently contrary to law. While petitioner argues that its application wasdiscriminatory the two employees found with him in the union room werenot at all subjected to d isciplinary action the Memorandum was notdiscriminatory on its face. Petitioner s violation of his employer s order, prior to its revocation, was therefore inexcusable. We agree with petitioner that his behavior did not constitute the wrongfuland per verse attitude that would sanction his dismissal. The surroundingcircumstances in dicate that petitioner was motivated by his honest beliefthat the Memorandum was indeed unlawful and unreasonable. Previous practice allowed the use of the union office 24 hours a day. Section 1, Article III of the Collective Bargaining Agreement for 1996-2001 providedthat, Al l practices not expressly provided for in this Agreement whichare presently being enjoyed by the employees shall be continued by theHOTEL . Moreover, the Memorandum regulated the use of the unionoffice and petitioner, a union officer, interprete d such regulation as anunlawful interference with legitimate union activities. V iewed in this light, petitioner s attitude can hardly be characterized as wrongful andperverse. While the se circumstances do not justify his violation of theregulation, they do not just ify his dismissal either. The Hotel cites previous infractions committed by petitioner as additionalground s for his dismissal. The Court finds these to be nothing more thanbelated ration alizations; the Hotel did not refer to these violations in its Notice of Termination to petitioner. The subject Memorandum purports to [secure] the hotel against damageto property in consonance with the hotel s concern to keep the premisespeaceful, orderly and safe . In short, it is a safety regulation. Under respondent s House Code of Discipline, the failure to observe safetyrules/requiremen ts of the hotel is a Class A Offense, the third violationof which the same Code imp oses a three-day suspension. Petition is GIVENDUE COURSE and GRANTED. The formal challenge brought by employee of the reasonableness or themotives of a company s policy is not an excuse for the employee not toobey said policy. (GTE Directories Corp. vs. Sanchez, May 27, 1991.) GTE DIRECTORIES CORP V. SANCHEZ, 197 SCRA 452 (1991)

SUMMARY: GTE through the years adopted several Sales evaluationpolicies. Pursuan t to the latest sales policy, GTE issued 6 memoranda to itsemployees which requi red the Premise Sales Reps (PSRs) to submitindividual reports reflecting target revenues as of deadlines set. None ofthese memoranda were followed by the employ ees, arguing that they werenot consulted. As a result, 14 employees (some of the m Union officers) were dismissed. Union also filed notice of strike before the 4th memo was issued. Court held that GTE s sales policy was pursuant to the validexercise of ma nagement prerogatives and that its implementation is notsuspended merely because of pending negotiations initiated by the Union. ROSARIO V VICTORY RICEMILL 397 SCRA 760 CALLEJO; February19, 2003 NATURE: Petition for review on certiorari seeking to reverse CA decision FACTS-Emilio Uy owned Victory Ricemill. He employed Rosario astruckdriver. Petit ioner was tasked to, among others, haul palayfrom variouspoints and bring them t o respondent s ricemill. Inaddition, petitioner actedas personal driver to the fam ily of Mr.Uy during their trips to Manila. -Uy dismissed Rosario. According to respondent, petitioner wasguilty ofinsubordi nation when he refused to serve as driver ofMr. Uy s son whenthe latter needed a d river. Also, petitionerwas instructed to deliver 600bags of cement to Felix Hard ware.Instead, petitioner delivered the same toone Eduardo Interior,who had not s ince then paid for P60k. Because ofpetitioner stendency to disobey the orders to h im, Uy was constrainedtoengage the services of another driver. Petitioner resent ed thenew driverand became uncooperative, disrespectful andquarrelsome. Petition er, armed with a dagger, fought with theother driver and inflicted an injury on

the latter. Petitionerlikewise inflicted injuries on the head of a coemployee, whenhe intervened in the fight and tried to pacify petitioner. -A complaint for illegal dismissal with money claims was filed by petitioner -Labor arbiter found that there were valid causes for the termination of petitioner s employment. -The NLRC found that petitioner was denied due process duringtheproceedings with the regional labor arbiter as petitioner wasnot given theopportunity to present his additional rebuttalevidence. On the other hand, respondent was allowed to submitin evidence various exhibits to discreditthe reb uttal testimonyof petitioner. Case was remanded. -Petitioner submitted the affidavit ofRoque, who averred thatthe 600 bagsof ceme nt delivered to Eduardo Interior had beenpaid as evidenced by inthe sum of P58,9 50.00 payable torespondent. -Regional labor arbiter promulgated his decision stating that hefound no reason to deviate from his previous decision. -NLRC affirmed the ruling of the regional labor arbiter -CA found that respondent had justifiable cause to dismisspetitioner. CAalso obs erved that although there was no strictcompliance with the twonotice rule, it could be gleaned fromthe records that petitioner was givenample opportunity toexplain his side. Moreover, even granting thatrespondent fellshort of the two-notice requirement, such irregularity, accordingto the CA, does not militate against the legality of the dismissal. ISSUES 1. WON petitioner s termination was for a just and lawful cause 2. WON petitioner s dismissal from his employment was in accordance with the due process requirement of the law 3. WON petitioner is entitled to backwages HELD 1. YES -Petitioner s actuations clearly constituted willfuldisobedienceand se rious misconduct justifying his dismissal underArticle282(a) of the Labor Code w hich provides: Art. 282. Termination by employer. An employer may

terminate an employment for any of the following causes: (a) Serious misconduct or willful disobedience by theemployee of the lawfulorder s of his employer orrepresentative in connection with his work; -Willful disobedience of the employer s lawful orders, as a justcause forthe dismi ssal of an employee, envisages theconcurrence of at least tworequisites: (1) the employee sassailed conduct must have been willful orintentional, thewillfulness b eing characterized by a "wrongful andperverseattitude;" and (2) the order violat ed must have beenreasonable, lawful, made known to the employee and mustpertain to the duties whichhe had bee n engaged to discharge. 2. NO-To effect the dismissal of an employee the law requires notonly thatthere be just and valid cause as provided under Article282. It likewiseenjoins the emp loyer to afford the employee theopportunity to be heardand to defend himself. Th e employer ismandated to furnish the employeewith two written notices: (a)a writ ten notice containing a statement of thecause for thetermination to afford the e

mployee ample opportunity tobeheard and defend himself with the assistance of hi srepresentative, if heso desires; (b) if the employer decides toterminate the se rvices of theemployee, the employer mustnotify him in writing of the decision to dismiss him, statingclearly the reason therefore -While respondent furnished petitioner the written noticeinforming him ofhis dis missal, respondent failed to furnishpetitioner the written noticeapprising him o f the charge orcharges against him. Consequently, petitioner was deprived ofthe opportunity to respond thereto -When the dismissal is effected for a just and valid cause, the failure to observe procedural requirements does not invalidatenor nullifythe dis missal of an employee. The consequence ofthe failure either of theemployer or th e employee to live up tothis precept is to make him liable indamages, not to ren der hisact void. The measure of damages is theamount of wages theemployee should have received were it not for theterminationof his employment without prior not ice. If warranted, nominaland moral damages may also be awarded. 3. YES-Under the Labor Code, only the absence of a just cause forthetermination of employment can make the dismissal of anemployeeillegal. Art. 279. Security of Tenure. In cases of regularemployment, theemployer shall n ot terminate the services ofan employee except for a justcause or when authorize d bythis Title. An employee who is unjustlydismissed from workshall be entitled to reinstatement without loss of seniorityrights and other privileges and to his full backwages,inclusive ofallow ances, and to his other benefits or theirmonetary equivalentcomputed from the ti me hiscompensation was withheld from him up to thetime of hisactual reinstatemen t.

-Thus, only if the termination of employment is not for any ofthe causesprovided by law is it illegal and, therefore, theemployee should bereinstated and paid b ackwages. -On the other hand, if it is shown that the employee wasdismissed for anyof the just causes mentioned in said Art. 282,then, in accordance with thatarticle, he should not bereinstated. However, he must be paid backwagesfrom the timehis empl oyment was terminated until it is determined thatthetermination of employment is for a just cause because thefailure tohear him before he is dismissed renders t hetermination of his employmentwithout legal effect. . NATIONAL BOOKSTORE INC V CA (YMASA,GABRIEL) 378 SCRA 194BELLOSILLO; February 27, 2002 FACTS-Petitioner National Bookstore employed private respondentsYmasaand Gabriel as Cash Custodian and Head Cashier. Theywere routinelytasked with counting the previous day s salesand placing them in separateplastic bags to be deposited inINT ERBANK and PCIB. The bags were heldfor safekeeping in theBranch vault but upon r etrieval to deposit the moneywithroving tellers, the money was counted again but the amount forPCIBwas short of P42,758. -Private respondents were asked by Management to explain inwriting whythey shoul d not be dismissed for the loss ofcompany funds and wereplaced under preventive suspension.Private respondents in turn deniedresponsibility, emphasizingthey had no access to the vault and that theywere thoroughlysearched by the guard before leaving. They also assertedtheirloyalty and sincerity in their work as they had been employedthereover 13 years. -Petitioner found their explanation unsatisfactory and terminated them for gross neglect of duty and loss of confidence. Private respondents filed a complaint for illegaldismissal. TheLabor Arbiter found in their favor, stating that thedismissal was notfounded on valid and justifiable grounds.Petitioners appeal with the NLRCwas denied, as was thei rpetition for certiorari with the CA for lack of merit. ISSUE: WON private respondents were illegally dismissed HELD: YES -The onus of proving that the dismissal of the employee wasfora valid and authorized cause rests on the employer. Failure todischargethe same would me an the dismissal was not justifiedand therefore illegal. -The requisites for a valid dismissal are (a) the employee mustbe affordeddue pr ocess (b) the dismissal must be for a validcause. Petitioner compliedwith the fi rst requisite by furnishingthe employees with written noticesstating cause forte rmination, and having decided to do so, the reasonstherefor.-Petitioner accused private respondents of gross neglect ofdutyand loss of confidence. Gross neglige nce is defined as thefailure toexercise slight care or diligence. A perusal of t herecords show they weren teven remotely negligent of theirduties. They were able to illustrate withcandor and sinceritythe procedure they took prior to the loss petitioner sallegations on the other hand, were not supported byanysubstantive evi dence. Assuming arguendo they were negligent,a singleact cannot be categorized a s habitual and thus cannotbe a just cause fordismissal. -Loss of confidence on the other hand must be based on thewillful breach of trust and founded on clearly established facts.Petitioner failed toestablish with certainty the facts upon whichsuch a breach of confidencecould be based. Pr ivaterespondents were thus illegally dismissed. Petitionis DENIED for lack of me

rit. WORLDWIDE PAPERMILLS, INC. and/or HONORIO POBLADOR, III, Petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and EDWIN P. SABUYA, Respondents.chanrobles virtual law library FACTS: Private respondent was employed by petitioner as a packer on July8, 1982 until his services were terminated on September 28, 1991. Itappears that private respondent incurred excessive unexcused absencesfrom 1986 to 1989, as summarize d in a memorandum dated January 22,1990 prepared and signed by the personnel/adm inistrative officer ofpetitioner thus: In 1986, he incurred a total of 46 days without pay including AWOL butexcluding 30 days VL & SL given to him. The following year, 1987, heaccumulated about 17. 5 days leave without pay including AWOL afterexhausting the 30 days VL/SL with p ay. Followed by 1988, in which afterexhausting the 30 days leave with pay, he ag ain accumulated 60 daysleave without pay, 12 days of which AWOL. Finally, 1989 h e acquired atotal of 26 days leave without pay including 3 days AWOL after exhau stingthe 30 days leave with pay. (Please refer to attached breakdown ofabsences. ) Disciplined for unofficial leaves, in 1986, he was admonished, (1) month. In 1987, he was admonished, warned sternly, and suspendedfor one (1) week. While in 1988 for AWOL he was admonished, warnedsternly and suspended for one (1) month. On Nov. 11, he was warned

sternly for excessive leave without pay. Finally in 1989, he got anadmonition an d consequently warned sternly for AWOL. (Please refer toattached breakdown of DA M.) Sabuya was counselled several times to improve his attendance. Hepromised not to absent himself, yet, no compliance. Due to having incurred12 days AWOL in 1988, he was supposed to be terminated based on ourrule, but due to his asking recons ideration and intervention of R. Brusola, Union President he was only suspended for one (1) month. A promissorynote to thi s effect was executed by Sabuya and witnessed by R. Brusola, stressing among others to improve his attendance in 1989; once heexceeds the VL & SL granted by the company, he accepts to beterminated; and the next time he is declared AWOL he accepts the DA oftermination.(Please see attached notes for re ference.) Private respondent, however again incurred absences without officialleave. A wee k after he had served his latest suspension, privaterespondent applied for sick leave covering the period August 12-18, 1991. Ms. Belinda Luna, the Company nurse, paid private respondent a homevisit. Howeve r, he was not there. Neither was anybody at home, thoughthe radio was on. Ms. Lu na learned from private respondent's son that hisfather was moonlighting as a pe dicab driver at Bayanan, Muntinlupa, market. After petitioner was informed of the incident, private respondent'sapplication f or sick leave was disapproved. Then, on Aug. 29, 1991, petitioner issued a memorandum to private respondent requiring him toexplain wit hin twenty-four (24) hours from receipt why no disciplinaryaction should be impo sed upon him for his excessive absences withoutofficial leave. Petitioner termin ated the employment of private respondent. Thus, the latter filed a complaint for illegal dismissal, praying forreinstateme nt and payment of backwages. LA: illegal dismissal. NLRC: theis just cause for t he dismissal. ISSUE: WON dismissal is illegal. RULING: In the case at bench, it is undisputed that respondent Edwin P. Sabuya had within a span of almost six (6) years been repeatedlyadmonished, warn ed and suspended for incurring excessive unauthorizedabsences. Worse, he was not at home but was out driving a pedicab toearn extra income when the company nurs e visited his residence after he filed an application for sick leave. Such conduct of respondent Edwin P. Sabuya undoubtedly constitutes gross and habitual neglect of duties.c Sabuya was given notice that the next time he again exceeds his allowedvacation and sick leaves or goes on absence without official leave, hewould be terminated from employment. Private respondent did not heedthe warning. His dismissal from employment is, therefore, justified. On the issue of separation pay, we ruled also in Philippine Geothermal, Inc. 12 that separation pay of one-half (1/2) month salary for every year ofserv ice is equitable, even if the employee's termination of employment isjustified. Finally, on the issue of violation of private respondent's right to proceduraldu e process, it is clear that the right was violated when no hearing wasconducted prior to dismissal. WHEREFORE, the decision of respondent NLRC is MODIFIED to read asfollows: The di

smissal of private respondent Edwin P. Sabuya is, under thecircumstances of this case, declared valid and justified. Petitioners are hereby ordered, for humanitarian reasons, to payrespondent Edwin P. Sabuya separation pay equivalent to one-half (1/2) month salary for every year of service and to indemnify him the amount ofFive Th ousand Pesos (P5,000.00) for failure of petitioners to fully complywith the requ irements of procedural due process. JUAN P. VILLENO, Petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, FOURTH DIVISION, SULPICIO LINES, INC., and/orSIXTO ORIG and CARLOS G O, Respondents. G.R. No. 108153December 26, 1995 FACTS: Petitioner Juan P. Villeno was employed on 29 December 1961 aselectrician in one of the vessels of private respondent Sulpicio Lines, Inc. Twenty-seven (27) years later he was separated from the service. M/V Sulpicio Container XI after leaving the port of Cebu for Manila wasforced to return due to the death of the purser on board. Upon reachingport, the crew mem bers were instructed not to leave the vessel as it wouldpursue its voyage immedi ately after turning over the body to the proper

authorities. The ship's cook however was granted permission upon hisrequest to l eave the vessel to buy additional foodstuff for their provisions. The petitioner on the other hand, without seeking permission, left thevessel pur portedly to settle a marital problem. Before leaving hedisconnected the ship's s teering line cable so that the vessel could notleave port without him. His expla nation was that he wanted to preventpranksters from toying around with the steer ing wheel as what hadhappened in the past. According to petitioner, when he returned to the port thirty (30) minuteslater, the ship was only a few inches away from the wharf but wasprevented by a represe ntative of respondent corporation from boardingthe vessel. It turned out that th e vessel had hired another electrician to reconnect the steering line cable. The consequence of petitioner'sactuation was that the departure of the vessel was further delayed. Petitioner was investigated the following day by Atty. Sixto Orig, privaterespon dent and personnel officer of respondent shipping lines. Petitionerwas assisted by a representative of the Philippine Labor Federation. In thatinvestigation he admitted having disconnected the steering line cable. After evaluation of the evidence he was found guilty of intentionallysabotaging the operation of the vessel, a serious misconduct, compoundedby willful disobedi ence justifying the penalty of dismissal. Labor Arbiter ruled that petitioner was indeed guilty of misconduct butfound the penalty of dismissal harsh considering that there was noevidence showing that p etitioner intended to sabotage the voyage of thevessel. (NLRC) held that the circumstances that petitioner had been employed byresponden t corporation for a long period of time and that it was his firstoffense were no t by themselves sufficient to warrant mitigation of theconsequences of his serio us misconduct. NLRC reversed the decision of theLabor Arbiter and dismissed the complaint. 2 ISSUE: whether petitioner's dismissal from the service is justified underthe law . RULING: The crux of the controversy now is whether petitioner's act ofdisconnect ing the steering line cable and disembarking from the vessel without permission constitute serious misconduct and willful disobediencejustify ing his dismissal. Petitioner argues that although his reason for disconnecting the steeringline ca ble was personal yet it was highly commendable since he wasconcerned with family unity. In addition, the disconnection was done toprotect the vessel from pranks ters who in the past would play with thesteering wheel. By terminating his servi ces respondent corporation thusset to naught his twenty-seven (27) years of serv ice, completely ignoringthe fact that it was his first offense. He claims that t he delay he caused tothe vessel was almost nil considering that it took him only thirty (30) minutes to return as compared to the delay that the voyage had alreadyincurred. We find these propositions of petitioner unacceptable. Among the basicduties of an employee are to conduct himself properly and to yieldobedience to lawful orde rs of his employer. It is in this regard that seriousmisconduct or willful disob edience by the employee of the lawful orders ofhis employer or representative in connection with his work is a just causefor his termination. This is explicitly provided under Art. 282, par. (a), ofthe Labor Code. The misconduct must be rel

ated to the performance of hisduties and of such grave character rendering him u nfit to continue workingfor the employer. As regards willful disobedience, we st ated in San MiguelCorporation v. Ubaldo 3that at least two (2) requisites must c oncur: (1) theemployee's assailed conduct must have been willful or intentional, thewillfulness being characterized by a "wrongful and perverse attitude;" and, (2) the order violated must have been reasonable, lawful, made known tothe emplo yee and must pertain to the duties which he had been engagedto discharge. The number of violations and length of service became relevant becausethe infrac tions were minor. Consequently, these have no bearing to thecase at bench where the infractions involved wereserious. In other words, considerations of first offense and length of service are overshadowed bythe ser iousness of the offense. As to whether an offense is minor or serious will have to be determined according to the peculiar facts of each case. And to a shipping company engaged in the transportation of passengersand cargoes any delay of its vessels may greatly affect its business andreputation and expo se the company to unmitigated lawsuits for breach ofcontract and damages. AFFIRM ED. SALAS V ABOITIZ ONE 556 SCRA 376

FACTS: Salas was a material controller of Aboitiz, and was tasked with monitoring andmaintaining the availability and supply of Quickbox neededby Aboit iz in its day-to-day operations. At one point, Salas had run out ofLarge Quickbo x, hamperingAboitiz business operation. Aboitiz then wroteSalas a memorandum requ iringhim to explain in writing within seventytwo hours why he should not bedisciplinarily dealt with for his (i) failureto mo nitor the stock level of LargeQuickbox which led to inventory stockout; and (ii) failure to report to [his]immediate superior the LargeQuickbox problem when the stock level wasalready critical, when the LargeQuickbox level was near stock ou t, and the stocklevel had a stock out. Five days after, an administrative hearing was conductedto give Salasopportunity to e xplain his side. Twenty-two days after, Aboitiz senthim adecision notice, termin ating him for loss of trust and confidence, effectivemid-month. Salas then sent a letter to Mr. Hamoy requestingreconsiderat ion of the decision, asking if he could avail of the earlyretirement plan, havin g workedfor Aboitiz for ten years already. He alsoasked to be allowed to tender hisresignation instead of being terminated. Lastly, he asked to be employed untilthe end of the month, so as to haveenough t ime to look for another job. Mr.Hamoy denied the request for earlyretirement pla n, stating that the company'stable of discipline provided thepenalty of dismissa l for the offenses he hadcommitted. The extension, however, was granted, and even extended for amonth.Claimingtermination without c ause, Salas filed with the Labor Arbiter a complaintagainst Aboitiz and its president Sabin Aboitiz for illegal dismissalwi th prayer forreinstatement, and for payment of full backwages, moral and exemplarydamages, as well as attorney s fees. Aboitizresponded that ther e was validtermination, asserting that Salas wasdismissed for just cause and wit h dueprocess, Salas having willfullybreached his duty when he ran out of LargeQu ickbox , justifying thetermination of his employment.The Labor Arbiter sustained Salas'dismissal. On appeal, the NLRC reversed.Gross negligencebeing characteriz ed by want of even slight care acting oromitting to act ina situation where ther e is a duty to act, willfully andintentionallywith a conscious indifference to c onsequence, Salas could not beheldguilty, having done his duty to make proper re quisition in advance. Failureto follow-up is not an indicator of remission of duty. Salas can onlybe g uilty of negligence, for failing to properly monitor and documentthe stocks in h iscustody. As he admitted during the administrative hearing, there were thosewhich were even missing. Worst, he tampered the recordsto show t hat the stockon 31 May 2003 is for 02 June 2003. While there wasno intention to defraud thecompany. The NLRC thus denied his prayer forbackwages, and ordered th epayment of separation pay instead ofreinstatementAboitiz filed a motion for rec onsideration, while Salas sought partialreconsideration of the decision, both of which were deniedby the N LRC. Salasand Aboitiz filed petitions for certiorari with the CA. Salas questioned the denialof his prayer for backwages and othermonetary benefit s, ad the order directingpayment of separation payinstead of reinstatement. Aboi tiz questioned NLRC'sreversal. TheCA sustained Salas' dismissal, holding that Sa las was guilty of serious misconduct under Art. 282(a) for tampering the records to show thatthestock on M ay 31 2003 was for June 2 2003, gross and habitual neglectunder Art.282(b), and willful breach of the trust (Art. 282 (c)) reposed onSalas by Aboitiz, because a s "warehouseman", and therefore a confidentialemployee, Salasconcededly tampered company records to hide his grossand habitual neglect,and worse, sold the compa ny s eight units ofused airconditioners withoutauthority. ISSUE: Whether simple negligence can be a basis for dismissal on

ground of loss of trust and confidence. RULING: Salas was terminated for neglect of duty and willful breachof trust. Gro ssnegligence connotes want or absence of or failure toexercise slight care ordil igence, or the entire absence of care. To warrantremoval from service, theneglig ence should not merely be gross , but alsohabitual . Although it was Salas'duty to monitor and maintain the availability andsupply of Quickbox, recordsshow that Salas had made a requisition asearly as May 21, 20 03, even makingseveral follow-ups. If there is anythingthat Salas can be faulted for, it is hisfailure to promptly inform hisimmediate supervisor of the non-del ivery of therequisitioned items. Nevertheless, such failure did not amount to gross neglectof duty orto willful b reach of trust, which would justify his dismissalfromservice.Moreover, there app ears nothing to suggest that Salas position was a highly oreven primarily confiden tial position, so that he canbe removed for loss of trustand confidence by the e mployer. A "position oftrust and confidence is onewhere a person is "entrusted wi th confidenceon delicate matters," or with thecustody, handling, or care and pro tectionof the employer s property. In therecords of the case, there is no semblance of willful breach of trust on the partof Salas. It is true that therew as erasure or alteration on the bin card. Aboitiz,however, failed to demonstrate that it was done to cover up Salas allegednegligence. Otherthan the b in card and Aboitiz s barefaced assertion, no otherevidence was offered to prove the alleged cover-up. The CA, therefore, erred inadoptingAboiti z s unsubstantiated assertion to justify Salas dismissal. The lossoftrust must be b ased not on ordinary breach but, in the language ofArticle282(c) of the Labor Co de, on willful breach. A breach is willful if it isdoneintentionally, knowingly and purposely, without justifiable excuse, asdistinguished from an act done carelessly, thoughtlessly, heedlessly orinadvertently. In this case, Aboitiz utterly failed to establish therequiremen tsprescribed by law and jurisprudence for a valid dismissal onthe ground of brea ch of trust and confidence.Neither can Aboitiz validate Salas dismissal on the ground of seriousmisconduct for his allegedfailure to acco unt for unused accountable forms. Thecharge came onlyafter Salas dismissal. The s ubject accountable forms wereissued to Salasin 2001. Inexplicably, this alleged infraction was never includedas ground

in the notice of termination. It was only three (3) months after thefiling ofthe complaint for illegal dismissal that Aboitiz asserted that Salas failedtoaccoun t for these unused accountable forms. It is clear that such assertion of serious misconduct was a mere afterthought to justify the illegaldismissal.Ab oitiz s reliance on the past offenses of Salas for his eventualdismissal islikewis e unavailing. The correct rule has always been thatsuch previousoffenses may be used as valid justification for dismissal fromwork only if theinfractions are re lated to the subsequent offense uponwhich the basis of termination is decreed. W hile it is true that Salas had been suspended on for failure to meet the security requirements of thecompany, a nd for his failure toassist in the loading at the fuel depot , suchoffenses are not related to Salas latest infraction, hence, cannot be used as added justification for the dismissal.Undoubtedly, no just cause exists towar rant Salas dismissal. Consequently, heis entitled to reinstatement tohis former p osition without loss of seniorityrights, and to payment ofbackwages. However, th e award of backwages is modified because Salaswas not entirelyfaultless. ***As stated in the decision notice, Salas was terminated for neglect ofduty and willful breach of trust. Gross negligence connotes want orabsence of or failure to exercise slight care or diligence, or the entireabsence of case. IT evinces a thoughtless disregard of consequenceswithout exerting any effort to avoid them . To warrant removal fromservice, the negligence should not merely be gross, but also habitual. If there is anything that Salas can be faulted for, it is his failure to promptl yinform his immediate supervisor of the non-delivery of the requisitioneditems. Nevertheless, such failure did not amount to gross neglect of dutyor to willful breach of trust, which would justify his dismissal from service. The CA also justified Salas' dismissal on ground of willful breach of trust. Itl ent credence to Aboitiz's posture that Salas was a warehouseman holdinga positio n of trust and confidence. We disagree. Salas, as material controller was tasked with monitoring and maintainingthe avai lability and supply of Quickbox. There appears nothing to suggestthat Salas' pos ition was a highly or even primarily confidential position, sothat he can be rem oved for loss of trust and confidence by the employer. Indeed, an employer has the right, under the law, to dismiss an employeebased on fraud or willful breach of the trust bestowed upon him by hisemployer or the la tter's authorized representative. However, the loss oftrust must be based not on ordinary breach but, in the language of Article282(c) of the Labor Code, on wil lful breach. a breach is willful if it is doneintentionally, knowingly, and purp osely, withouth justifiable excuse, asdistinguished from an act done carelessly, thoughtlessly, heedlessly, orinadvertently. It must rest on substantial grounds and not on theemployer's arbitrariness, whims, caprices, or suspicion; otherwis e, theemployee would eternally remain at the mercy of the employer. It should be genuine and not simulated; now should it appear as a mereafterthought to just ify an earlier action taken in bad faith or a subterfugefor causes which are imp roper, illegal, or unjustified. It has never beenintended to afford an occasion for abuse because of its subjective nature. There must, therefore, be an actual breach of duty committed by theemployee whic h must be established by substantial evidence. In this case, Aboitiz utterly failed to establish the requirements prescribed by law andjurisp rudence for a valid dismissal on the ground of breach of trust andconfidence. Undoubtedly, no just cause exists to warrant Salas' dismissal. Consequently, he is entitled to reinstatement to his former position withoutloss

of seniority rights, and to payment of backwages. However, as Salas was not entirely faultless, and although such negligencewould not justify Salas' termination from employment in view of thestringent condition imposed by the Labor Code on termination ofemployment due to gross and habitual neglect, the same cannot becondoned, much less tolerated. Wah Yuen Restaurant v. Jayona | GR 159448 | Dec. 16, 2005 | J. Carpio-Morales F: Primo Jayona (respondent) was hired in December 1998 as AssistantManager of W ah Yuen Restaurant (petitioner). By respondent s claim, hisinitial monthly salary was P9,000.00, which was increased to P9,450.00 effective January 15, 2000. By letter-memorandum dated January 5, 2000. Betty Chua, the President ofpetition er, directed respondent to explain within 72 hours why he shouldnot be dismissed from the service for grave dishonesty and loss ofconfidence for billing a custo mer in an amount considerably less than thecost of the actual stuff ordered. And Betty warned respondent that arepetition of the same act would cause his automa tic dismissal from theservice. A handwritten note with an unidentified initial a t the lower portionof the letter-memorandum indicates that respondent refused to acknowledge receipt thereof. Subsequently, petitioner through counsel, by letter of April 5, 2000 whichwas se rved upon respondent on even date, terminated his services effective that same date, upon the ground that he was found for thesecond time on April 3, 2000 (the first was on January 3, 2000) to havecharged/billed a custom er an amount, which was considerably less thanthe actual order, [which] is certa inly prejudicial to the interests of [his]

employer, a practice which can bring about the collapse of the business inthe lo ng run; that is if the practice is not checked immediately. Respondent thus filed a complaint for illegal dismissal, recovery ofovertime pay , service incentive leave pay and 13th month pay. The Labor Arbiter dismissed respondent s complaint on the ground that asan assista nt manager, he works for as long as he enjoys the trust andconfidence of his emp loyer, but once the trust and confidence are lost, hehas no more reason to stay as such. On appeal, the National Labor Relations Commission (NLRC), by Resolutionof Decem ber 14, 2001, affirmed the dismissal. On respondent s Petition forCertiorari, the Court of Appeals reversed and set aside the NLRCResolution. The CA gave the peti tion due course. Hence, the present petition for review. Petitioner harps on the unwarranted stress on respondent s rather self-serving claim thathe was granted a salary increase ba rely two (2) weeks after hecommitted his first infraction. I: WON the respondent was illegally dismissed H: In the case at bar, petitioner, which has the onus of provingthat the dismiss al of respondent on account of loss of confidencearose from particular facts, fa iled to discharge the same. On respondent s claim that his salary was increased effective January 15,2000, pet itioner argues that other than respondent s self-serving claim, noevidence was pre sented to show that indeed the salary increase took effecton January 15, 2000. This Court notes that in its Position Paper before the Labor Arbiter, petitioner stated that respondent was hired in December 1998 at a monthlysalary ofP9,540.00 more or less. If respondent was hired at suchamount, contrary to respo ndent s claim that his initial salary was P9,000.00 but that it was increased toP9,450 on January 15, 2000 or twelve days after he was alleged to have committed an infraction on January 3,2000, it would have been easy for petitioner to present documentary proofof its claim. Bu t none was produced. Under Article 277 (b) of the Labor Code, as well as Section 2, Rule XXIII, Book V and Section 2, Rule I, Book VI, of the Implementing Rules andRegulations of the Labor Code, the dismissal of an employee must be for ajust or authorized cause and after due process. Procedural due process requires the employer to give the employee twonotices. Th e first is to apprise him of the particular acts or omissions forwhich his dismi ssal is sought, and the second is to inform him of thedecision to terminate him. Failure to comply with these mandatory procedural requirements taintsthe dismiss al with illegality and any judgment rendered by the employerwithout compliance t herewith can be considered void and inexistent. For petitioner to consider the letter-memorandum of January 5, 2000 asthe first notice, and the letter of April 5, 2000 as the second notice oftermination of em ployment is erroneous. For albeit the two letters dealt with infractions of the same nature, they were separate and distinct. The April 5, 2000 termination letter itself clearly stated that respondentwas be ing terminated for committing a second infraction. As such he

should have been given the chance to give his side thereon. But he was not. In any event, not only did petitioner fail to observe the due processrequirement s. It also failed to establish by substantial evidence that thealleged second in fraction was committed. Loss of confidence then, which is the usual ground for the removal of amanageria l employee, not having been established, like any other lawfulcause, the petitio n must fail.

Although the loss of confidence on petitioner s part is unfounded, reinstating respondent to his former position would not be advisable giventhe so uring of their relationship. This Court now, therefore, directspetitioner to jus t afford respondent his right to separation pay, backwages, and other benefits under the law. Since the records do not provide a basis for the determination of theamount of s eparation pay plus backwages and other benefits to whichrespondent is entitled, a remand of the case to the Labor Arbiter is thus inorder. The decision is AFFIRMEDwith MODIFICATION. The records of this case are REMANDED to the Labor Arbiter, through the National LaborRelations Comm ission, only for the determination of the amount ofseparation pay plus backwages and other benefits to which respondent isentitled. Austria v. NLRC, 310 SCRA 293 F: PHILIPPINE STEEL COATING CORPORATION (PHILSTEEL), privaterespondent, is engag ed in the manufacture of prefabricated steel, galvanized iron and other metal products. On 19 December 1985 it hired petitioner Nazario C. Austria as its Credit and Collection Manager. On 11August 1987 petitioner and private respondent PHILSTEEL entered into a"Confidentiality Agreement" whereby he agreed not to disclose to anyoneoutside the company any te chnical, operational and other such informationacquired in the course of his emp loyment, unless otherwise dulyauthorized by private respondent, on pain of immed iate dismissal. A smooth and satisfactory employee-employer relationship ensuedbetween the two ( 2) parties until 17 August 1989 when petitioner wasunceremoniously terminated by private respondent company on theground that he allegedly disclosed confidentia l information to prospectivecompetitors and had undertaken activities far beyond his official dutiesand responsibilities. On 30 August 1989 Austria filed a case for illegal dismissal againstPHILSTEEL. H e alleged that on 5 August 1989 the President of PHILSTEEL, Abeto Uy, demanded his resignation purportedly due to loss of confidencebut refu sed to shed light on the reasons therefor. Austria further allegedthat on 17 Aug ust 1989, without any prior written notice, he wassummoned to a meeting with the Vice-President for Finance, Primo Valerio, and Vice-President for Legal and Personnel, Gregorio Vega. Therein he was questioned about a certain 13 July 1989 telefax message sent by one FelixLukban to PHILSTEEL's Australian supplier of equipment and machinery, Bliss Fox Manufacturing Corporation (BLISS FOX). The telefax showed that, on behalf of an unnamed client, Lukban was asking for the purchase priceof a com plete line of machinery and equipment for a steel galvanizingplant. Austria deni ed any knowledge of the telex. Petitioner was also asked about his close relationship with Lukban, whichthe for mer admitted, Lukban being the godfather of his child. Immediatelyafter the meet ing Austria was given his notice of termination and requiredto surrender the key s to his company car and to his room which were in hispossession. When he return ed to his room it was already padlocked; whenhe passed by his car it was barrica ded. Austria submitted in support of his complaint the affidavit of Felix Lukbanexecu ted on 13 December 1989 disclaiming any participation of petitionerin the sendin g of the telefax message. In addition, Lukban testified to thesame effect and de nied hearing any answer from BLISS FOX on his telefax.

PHILSTEEL, on the other hand, contended that any information as to thesources of its supply was highly confidential as the steel industry was verycompetitive, a nd the information was disclosed by Austria to Lukban. The basis for this contention was the incident of 5 August 1989 when arepresentative of BLISS FOX named Charles Villa informed Abeto Uy, in thepresence of Primo Val erio and Gregorio Vega, of the fax message sent byLukban to BLISS FOX. Charles V illa was said to have stated that Lukban represented himself to be acting for PHILSTEEL so he verified therepresentation from Uy who however denied it. Forthwith, Villa dialed a certain number from the telefax message.[9] After a brief exchange with theperso n on the other end of the phone, during which time Villa scribbled aname at the back of the telex, he informed Uy that he just talked withLukban who informed hi m that his contact with PHILSTEEL was RudyAustria whose name he had just written . After Villa left, Austria was immediately investigated on the matter. Petitioner admitted having a close relationship with Lukban. Austria also volunteered to disclose secret meetings at ManilaGarden Hot el with Lukban and the latter's son-in-law regarding plans to putup a rival galv anizing business either here in the Philippines or inSingapore, as well as meeti ngs at company premises with a group ofAustralians on the same subject. A second investigation held on 17 August1989 yielded the same result. Testimonies of Veg a and Valerio, as well asthe latter's 29 November 1989 affidavit, the confidenti ality agreement andthe termination letter were presented to buttress private res pondents'evidence. The Labor Arbiter found the evidence of private respondents credible onthe groun d that no other inference other than Austria's guilt could bedrawn from these es tablished circumstances: the Australian representative of BLISS FOX did not know Austria nor the latter's nickname(Rudy) when he called Lukban and inquired who Lukban's contact personwas at PHILSTEEL; Lukban was not only known to Austria, he was close tohim; and, Austria signifie d his intention to join the rival company whichLukban planned to form.

The Labor Arbiter pointed out that petitioner failed to establish any motiveon t he part of private respondents and of Valerio and Vega in terminatinghis employm ent or in testifying against him since his services were stillhighly satisfactor y as of July 1989. Thus, the Labor Arbiter declared the dismissal to be legal but ordered private respondents to paypetitioner P24,000.0 0 separation pay considering that the companysuffered no loss and that there was no proof of a rival company laterestablished by petitioner. On appeal the NLRC agreed with the thesis of the Labor Arbiter thatpetitioner fa iled to prove any other motive by private respondents for histermination conside ring his excellent job performance. The Commission however modified the Labor Arbiter's decision by directing PHILSTEEL topay petit ioner an indemnity of P1,000.00 for non-observance of due process in failing to provide petitioner with a prior written notice of theinves tigation and for not giving him time to answer charges and to seekassistance of counsel. Basic is the rule that judicial review of labor cases does not go so far as toev aluate the sufficiency of evidence on which the labor officials' findingsrest, m ore so when both the Labor Arbiter and the NLRC share the same findings. This, notwithstanding, we cannot affirm the decision of the NLRCespeci ally when its findings of fact on which the conclusion was based arenot supporte d by substantial evidence. By substantial evidence, we meanthe amount of relevan t evidence which a reasonable mind might accept asadequate to justify the conclu sion. The NLRC grounded its findings on the following postulates: (a) thewitnesses of PHILSTEEL are credible for petitioner failed to show anyground for them to false ly testify, especially in the light of his excellent jobperformance; and, (b) re spondents' witnesses are more credible thanpetitioner's -Lukban who, insofar as the source of the information isconcerned, impressed the NLRC as evasive. The NL RC however entertained a patent misapprehension of the burden of proof rule in labortermina tion cases. Unlike in other cases where the complainant has theburden of proof t o discharge, in labor cases concerning illegal dismissals, the burden of proving that the employee was dismissed with just causerests upon the employer. Such is the mandate of Art. 278 of the LaborCode. In brief, the evidence of PHILSTEEL rests ation of Charles Villa, representative of Austria as his contact in PHILSTEEL; (b) stria; and, (c) the admissions of Austria th the close relationship with Lukban and upon the following bases: (a) thealleg BLISS FOX, that Lukban namedpetitioner the close relationship ofLukban and Au during theinvestigation relative to bo theirplans to set up a rival business.

I: WON NLRC committed grave abuse of discretion for its misappreciationof the ev idence and giving it undue weight H: Like a house of cards, the evidence of private respondents collapseswhen we t ake into account the fact that its foundation is made of hearsayevidence or mere speculations. It must be noted that the testimonies of Valerio and Vega relied mainly on the veracity of the assertions ofVilla. They d id not say that they actually heard or observed Lukban admitto Villa that the fo rmer's client was PHILSTEEL and that his contact with PHILSTEEL was Austria. What they seemingly saw was Villa scribbling aname on the telefax purportedly dictated by Lukban. In short, what theyappear to have obser ved was what Villa wanted them to observe, nomatter whether it was the truth or not. Thus, their testimony was clearly hearsay and must not be given weight. Moreover, the veracity of Villa'sassertion s, even as to his being a representative of BLISS FOX, is

suspect. The reliance both by the Labor Arbiter and the NLRC on thehearsay testi monies in assessing the evidence of private respondentsreflects a dangerous prop ensity for baseless conclusions amounting tograve abuse of discretion. Such prop ensity is further shown when publicrespondent gave imprimatur to PHILSTEEL's con clusion that Austria was the one who divulged the so-called confidential information due mainly tohis clo se affinity with Lukban. Of significance here is the fact that nowhere in all the allegations ofPHILSTEEL was there proof of any concrete action by Austria of divulgingconfidential info rmation and of setting up a rival business. Everything wasaccording to what Vill a said or what Lukban supposedly said. Thus, PHILSTEEL's resort to Austria's "admissions." The admission of close relationship is certainly true as it was affirmed by both Austria andLukban. The "admission" however, of their setting up a rival businessstrikes this Court as somewhat forced like squeezing a stone for water. The reality of such admission is negated by subsequent events. At no time did such an envisioned "rival" company come to being. Indeed, after his dismissal, petitioner had to languish for several months inuncertainty while looking for employment, instead of just joining thealleged company. Until he died on 15 March 1997, petitioner never wentinto partnership with Lukban nor joined any other company. Accusation cannot take the place of proof. A suspicion or belief no matterhow si ncerely felt cannot be a substitute for factual findings carefullyestablished th rough an orderly procedure. Such orderly procedure wasdenied petitioner by PHILS TEEL, as correctly found by the NLRC, thus In the instant case, there was at least a partial denial of the complainant'srig ht to due process because there was no showing: (1) that he was giventhe require d first written notice; (2) that he was given sufficient time toanswer the charg es against him; and, (3) that he had the chance to obtainthe assistance of couns el. As there is a finding of illegal dismissal, an award of back wages, instead ofin demnity, computed from the time of dismissal up to the time of hisdeath, with le gal interest plus attorney's fees, might properly assuage thehurt and damages ca used by such illegal dismissal. The petition isGRANTED. General Bank & Trust Co. v. CA, 135 SCRA 569

F: This case starts with the employment of plantiff-appellee with the CebuBranch of the First National City Bank of New York for 18 years, where herose to the p osition of Chief Clerk, Accounting Department (Exhibit 0); thaton January 11, 19 65, plaintiff-appellee joined the defendant bank in itsCebu branch as accountant with an annual compensation of P6,000.00(Exhibit A); that on April 26, 1965, th e Cebu Branch of defendant bankbegan operating and doing business with the publi c; that on January 1,1966, plaintiff received an increase of P50.00 bringing his monthly salaryto P550.00 (Exhibit D); that on April 11, 1967 defendant bank app ointedthe plaintiff to the position of Acting Manager of its Cebu Branch, with t hecorresponding increase of sale to P700.00 a month (Exhibit E); thateffective S eptember 1, 1967, defendant bank granted plantiff a monthlyhousing allowance of P200.00 in addition to his monthly salary (Exhibit F); that on October 3, 1967 defendant bank appointed plaintiff as the regularManager of its Cebu Branch (Exhibit G) effective May 1, 1968; thatdefendant bank increa sed plaintiff's salary to P1800.00 a month (ExhibitH); that on May 16, 1969 whil e the plaintiff was on vacation leave, hehappened to visit the bank and learned that three tellers of defendantbank's branch in Cebu City, namely, Miss Crystal Enriquez, Miss YolandaChu, and Miss Sonia Chiu, had been transferred to the head office in Manila by defendant Jose D. Santos; that the plantiff went to Manila on May 18,1969 to make personal representation with the head office for theretention of the said t ellers in Cebu; that on May 26, 1969 the plaintiffreported back for duty with de fendant bank's branch in Cebu andreinstated immediately the three tellers to the ir respective positions in theCebu branch of defendant bank; that on May 28, 196 9 defendant Jose D. Santos submitted a report to defendant Salvador D. Tenorio alleging thatthere wa s excess personnel in the Cebu Branch; that on the same datedefendant Jose D. Sa ntos submitted a supplementary report to defendantSalvador D. Tenorio charging t he plaintiff of over appraising the real estateoffered by Domingo Chua as collat eral for his credit accommodation(Exhibit 34); that defendant Salvador D. Tenori o immediately dispatched aletter to the plaintiff dated May 30, 1969 requiring h im to explain withintwenty-four hours why no disciplinary action should be taken against himfor alleged repeated violation of defendant bank's policies and dire ctivesregarding credit accommodations and for over-appraisal of the real estatec ollateral for Domingo Chua's account, among others (Exhibit 8); that onJune 6, 1 969, the plaintiff received the said letter of defendant Salvador D. Tenorio but found it impossible to render the required explanation in 24hours; t hat on June 19, 1969 defendant Jose D. Santos went to Cebu Cityand served plaint iff with the letter of defendant Salvador D. Tenorio, datedJune 18, 1969, suspen ding the plaintiff; and that on July 22, 1969 plantiffwas served with the order of his termination signed by defendant Clarencio S. Yujuico, dated July 18, 1969. The Court of First Instance of Cebu rendered a decision, finding thedismissal of plantiff as without just cause or otherwise illegal arbitrary, oppressive and malicious, and ordering defendants to pay to the plaintiff, jointly and severally. The Court of Appeals, affirmed the decision of thelower c ourt. I: WON the dismissal of Manuel E. Batucan was justified on the ground thathe rep eatedly failed to uphold the interests of the bank thus leading to hisemployer's loss of confidence on him. H: After a careful review of the case, we find no error in the finding of theCou rt of Appeals that Mr. Batucan was indeed illegally dismissed. Thepetitioners' c laim that "undisputed documentary evidence show that priorto his dismissal, spec ifically from March 1968 to January 1969, respondentBatucan had been repeatedly cited, warned and finally threatened withdismissal by his superior, petitioner T enorio, for his practice of grantingcredit accommodations without authority duri ng his tenure." They supportsuch claim with six memoranda addressed to Mr. Batuc an, to wit: Exh. "22"

dated April 17, 1968 by Tenorio; Exh. "23" dated March 12, 1968 byTenorio; Exh. "24" dated March 14, 1968 by Tenorio; Exh. "29" datedDecember 9, 1968 by Tenorio ; Exh. "30" dated December 27, 1968 byTenorio; Exh. "34" dated January 28, 1969 by Tenorio. Petitioners' argument is devoid of merit. We agree with the respondentthat these communications are "nothing more than routinary acts and/orprivileged acts of t op management officials which could not in any wayaffect or erode petitioners' c onfidence in respondent Batucan." After the first three aforecited exhibits were dispatched to Cebu on March12, 19 68, March 14, 1968, and April 17, 1968, petitioner San Luis clearedMr. Batucan f rom an exceptions reported by the Central Bank examiners inconnection with their examination conducted in March, 1968. In his reportto the President of the bank in about the first week of March 1968, San Luis commended Mr. Batucan for the good image enjoyed by the bank in thelocality beca use clients, customers, and depositors spoke well and highlyof Mr. Batucan for h is dedication, sincere and upright dealing with people. Because of such commendation, the president of the bank, the lateSenator Quintin Paredes gave Mr. Batucan an increase of P100.00 in hismonthly salary effective May 1, 1968. Mr. Batucan was also asked to speakat the manager's meeting on Octo ber 19, 1968 on his "Techniques inEffective solicitation of Deposits or New Acco unts." Batucan was also givena free hand in the prosecution of a defalcating hea d teller relying on hisgood judgment to protect the interests of the bank. With the foregoing circumstances, we cannot reconcile the management'salleged lo ss of confidence in Mr. Batucan with the latter's commendationsfor efficient per formance, his having been given an increase in salary andhis being asked to spea k to other colleagues on effective bankingtechniques shortly after the supposed loss of confidence. We agree with the Court of Appeals in its finding that preponderance of theevide nce, however, shows that the alleged unauthorized extension oftemporary over-dra ft or credit accommodations referred to creditaccommodations which were granted by and already existing during theterm of the previous management.

Not only did the Court of Appeals establish that there were no impropercredit ac commodations granted during Mr. Batucan's term as manager buthis competence at b eing able to regularize these accounts and hiscontributions to the improvement o f the bank were clearly ascertained. There is no question that managerial employees should enjoy theconfidence of top management. This is especially true in banks whereofficials handle big sums of money and engage in confidential or fiduciarytransactions. However, loss of conf idence should not be simulated. It should not be used as a subterfuge for causes which are improper, illegal, or unjustified. Loss of confidence may not be arbitrarily asserted in theface of overwhelming evidence to the contrary. It must be genuine, not amere afterthoug ht to justify earlier action taken in bad faith. We now come to the issue of damages. Petitioners question the proprietyof awardi ng moral and exemplary damages to the respondent. UnderArticle 2217 of the Civil Code: Moral damages include physical suffering, mental anguish, fright, seriousanxiety , besmirched reputation, wounded feelings, moral shock, socialhumiliation, and s imilar injury. Though incapable of pecuniarycomputation, moral damages may be re covered if they are the proximateresult of the defendant's wrongful act or commi ssion. Mr. Batucan left a stable job with a reputable bank to join the petitionerbank. He had been an employee of the First National City Bank of New Yorkfor eighteen (18) years. Undoubtedly, before he accepted petitionerTenorio's invitation, he m ust have thought the matter over several times. And from the time he joined the petitioner bank, the records show that Mr. Batucan has indeed worked his way up from accountant to permanentbranch manager of the bank. During his term as manager, he was able toincrease the income and r esources of the bank. He raised the image ofpetitioner bank in the business and banking community and placed itsoperations on a good and competitive basis. His peremptory dismissal fromthe bank was certainly a shock to him and damaged his m oral feelings andpersonal pride after all the loyalty and hard work he had dedic ated to thebank. The only reason for his dismissal found in the records is his failure to followt op-management orders with regards to the transfer of the three tellers. Petitioners alleged it to be insubordination. Nevertheless, insubordinationmust be proven to justify dismissal (St. Luke's Hospital v. Ministry of Laborand Empl oyment, 116 SCRA 240). And we do not think that his earnestefforts in making rep resentations to retain the three tellers warrant hisdimissal. A manager or super visor must stand up for his subordinatesunless the latter are guilty of wrongdoi ng or some conduct prejudicial tothe employer. Only after as representations was Mr. Batucan questionedon the several "unauthorized credit accommodations." His failure to explain within 24 hours which, in the light of the circumstances, was too short, caused his suspension and later, his dismissal retroactive to the dateof suspension. There was no valid reason for his dismissal, much less for allthe ch arges and accusations made against him. The dismissal followed bythe efforts to justify it was tainted by bad faith or malice on the part of thepetitioners who wanted Mr. Batucan removed from his post. The employer's right to ot be confused with the The manner in which the was abusive; hence, it dismiss his employee, however, differs from, andshould n manner in which the right is exercised. company exercised its right to dismiss in the caseat bar is liable for moral damages, as previouslydiscussed.

A review of the records, however, indicates that the moral and exemplarydamages awarded may be somewhat excessive. Hence, in the exercise ofour discretion and a fter considering all factors, we have decided to reduceto P20,000.00 the award f or moral and exemplary damages and toP5,000.00 the award for attorney's fees. The award of P1,000.00 a month from the time Mr. Batucan's employmentwas termina ted up to the date this case becomes final and executory islikewise excessive. A t the same time, pursuant to Republic Act 1052 asamended by Republic Act 1787, w hich provides that in case of employmentwithout a definite period, an employer m ay terminate an employee'sservices without just cause by serving to the employee a written notice atleast one month in advance or by granting him pay equivalent to one-halfmonth salary for every year of service, whichever is longer. Considering the facts and equities of this case, however, we have decidedto limi t compensatory damages to only P12,000.00, as explainedabove.chanroblesvirtualaw library chanrobles virtual law library Lastly, petitioners raise the issue that "individual petitioners, having actedin their official capacities as bank officers, did not incur any personalliability in favor of Batucan. We quote with favor the finding of therespondent Court: Th e evidence shows that the individual defendantsacted jointly in causing the ille gal and unjustifiable dimissal of the plaintiffappellee. Hence, the trial court is correct in holding the individualdefendants jointly and severally liable to the plaintiff-appellee. " Clearly, the petitioners acted beyond their authority and against what thelaw pr ovides. WHEREFORE, the decision appealed from is MODIFIED. Sy v. Metrobank, 506 SCRA 580

F: Petitioner Dennis D. Sy, herein substituted by his heirs Soledad Y. Sy, Ronald Allan Y. Sy, and Melinda S. Pompenada, was the branch manager inBajada, D avao City, of respondent Metropolitan Bank and Trust Company. Under the bank s Retirement Plan, an employee must retire upon reachingthe age of 55 years or after rendering 30 years of service, whichevercomes first. Sy would have rendered 30 years of service by August 18,1999. However, on February 5, 199 9, he was reappointed as branchmanager for a term of one year starting August 18 , 1999 until August 18,2000. His monthly compensation was accordingly increased from P50,400 to P54,500, effective August 16, 1999. Meanwhile, on November 10 and 15, 1999, the bank released the results of the audit conducted in its Bajada branch. On November 15, 1999, Sytendered an ir revocable letter of retirement. In his letter, he requested thetimely release of his retirement pay and other benefits. His request wasdenied. The bank alleged that Sy allowed spouses Gorgonio and Elizabeth Ong toconduct "k iting" activities in their account with the bank. Thus, the bankplaced Sy under preventive suspension and gave him 48 hours to submit awritten explanation. In r esponse, Sy wrote a letter explaining that he onlymade a wrong credit judgment. Not satisfied with his answer, the banknotified Sy of other alleged violations o f company policies. In reply, Sy explained in writing that the accommodation granted tospouses Samue l Aquino and Charito Sy-Aquino was only P650,000, not P9.11M as claimed by the bank. He added that the spouses evenoffered a parce l of land as collateral and were willing to sell a vehicle insettlement of their obligation with the bank. Unconvinced, the bankdismissed Sy on December 15, 199 9. Sy filed against the bank a complaint for illegal suspension, illegaldismissal a nd money claims, docketed as RAB-11-01-00024-0. However, the Labor Arbiter dismissed the case for lack of merit. On appeal, the National Labor Relations Commission (NLRC) deemed Sycompulsorily retired. Thus, the NLRC awarded him retirement benefits, unpaid salary, monetary value of unused leave credits, 13th month pay, Christmas bonus, and refund of provident fund. The parties sought reconsideration, which were both denied for lack ofmerit. Res pondent bank elevated the matter to the Court of Appeals, whichset aside the rul ing of the NLRC and reinstated the Decision of the LaborArbiter. On motion for r econsideration, however, the Court of Appealsmodified its ruling and ordered the bank to reimburse Sy s contribution tothe provident fund. I: (1) Was petitioner illegally terminated? (2) If his dismissal was valid, would he still be entitled to retirement benefits? H: Sy was validly dismissed on the ground of fraud and willful breach oftrust un der Article 282 of the Labor Code. Records show that as bank manager, he authorized "kiting" or drawing of checks against uncollectedfunds in wanton violation of the bank s policies. 19 It was sufficient basis for the bank to lose trust in him. Unlike a rank-and-file worker, where breach of trust as a ground for validdismis sal requires proof of involvement in the alleged anomaly and wheremere uncorrobo rated accusation by the employer will not suffice, the sheerexistence of a basis for believing that the employer s trust has beenbreached is enough for the dismis sal of amanagerial employee. Petitioner s conduct betrays his culpability. Shortly after the auditconducted in

the Bajada branch, he tendered an "irrevocable letter ofretirement." In the said letter, he requested that his retirement be madeeffective December 1, 1999. Sai d request arouses suspicion consideringthat he had previously agreed to the exte nsion of his employment asbranch manager until August 18, 2000. Petitioner s evide nt failure to offerany reasonable explanation for such sudden shift in his plans is prejudicialto his cause. As for the requirement of due process, records show that it has been fullysatisf ied in the instant case. The bank had complied with the two-noticerequirement, i .e.: (a) a written notice of the cause for his dismissal toafford him ample oppo rtunity to be heard and to defend himself with theassistance of counsel, if he s o desires; and (b) a written notice of thedecision to terminate him, stating cle arly the reason therefor. Petitioner, however, theorizes that having been compulsorily retired, hecould no longer be dismissed by the bank. His premise is absurd. Indeed, he would have qualified for compulsory retirement under the bank sRetirement Plan. However, he opted to accept the bank s offer ofextending his employment for anoth er year with a corresponding salaryincrease. Thus, in effect, he had never retir ed. Unfortunately for him, whileserving such extended term, the bank discovered his unauthorized grant ofaccommodation to accounts engaged in "kiting" activity. Such act is a clearbreach of the trust reposed in him by the bank. He cannot no w eludedismissal for a just cause by claiming he was already retired compulsoril y. Is petitioner nevertheless entitled to retirement benefits? Under the LaborCode, only unjustly dismissed employees are entitled to retirementbenefits and other privileges including reinstatement and backwages. Since petitioner s dismissal was for a just cause, he is not entitled to anyretire ment benefit. To hold otherwise would be to reward acts of willful breach of trust by the employee. It would also open the floodgate topotential an omalous banking transactions by bank employees whose

employments have been extended. Since a bank s operation is essentiallyimbued with public interest, it owes great fidelity to the public it deals with. In turn, it cannot be compelled to continue in its employ a person in whomit has lost trust and confidence and whose continued employment wouldpatently be inimi cal to the bank s interest. While the scale of justice istilted in favor of worker s, the law does not authorize blind submission to the claim of labor regardless of merit. While the Court commiserates with petitioner who has spent with the bankthe best three decades of his employable life, we find no room to accordhim compassionat e justice. Records showed that he violated the bankpolicies prior to his compuls ory retirement. Thus, there can be no earnedretirement benefits to speak of. No such provision is provided for by theLabor Code. In fact, even the Civil Service Law imposes forfeiture ofretirement benefits in valid dismissal cases. Notably, the Court has also disallowed claims for retirement benefits invalid di smissal cases because the retirement plan itself precludedemployees dismissed fo r cause from availing it. Although no suchprohibition in the retirement plan was alleged or proved in this case, wenevertheless deny petitioner s claims because h is offenses, vis--vis hislong years of service with the bank, reflect a regrettab le lack of loyaltywhich he should have strengthened instead of betrayed. The pet ition ishereby DENIED. Jardine Davies v. NLRC, 311 SCRA 289 F: Petitioner is a domestic corporation engaged in general trading, including the exclusive distribution in the country of the world-renowned Union 76 lubricating oil manufactured by Unoco Philippines, Inc. Privaterespondent was a former sales representative of petitioner. A review of the records of this case reveals that petitioner engaged theservices of a private investigation agency to conduct surveillance andinvestigation pert inent to reports that some of petitioner s products, particularly the Union 76 lubricating oil, were being illegallymanufactured, blend ed, packed and distributed. Consequently, a privateinvestigator of the said inve stigation agency, confirmed that there werereally fake Union 76 lubricating oil in the market and reported furtherthat the same were indeed being illegally manufa ctured, blended, packedand distributed by private respondent Virgilio Reyes. Pet itioner thensecured a search warrant which led to the seizure of some of the all egedfake items found in the apartment complex reportedly occupied by saidprivate respondent. Thereafter, a criminal complaint for violation of Article 189 on unfaircompetiti on of the Revised Penal Code [2] was filed against privaterespondent and others. Subsequently, private respondent was likewisecharged administratively for havin g committed serious misconduct inimicalto the interest of petitioner company. Ac cordingly, he was advised to go onan indefinite leave. This eventually led to hi s termination from employmenton February 23, 1983. Meanwhile, all the materials seized by virtue of the search warrant issuedwere r eleased by order of the same court in view of a petition filed byprivate respond ent s younger brother, Donato Reyes. Apparently, theyounger Reyes convinced the co urt that he was the legal tenant of theapartment complex searched and that all t he materials seized are legallyowned by him. He further proved that he was legal ly engaged in thebusiness of general merchandising, operating under the trade na me ofLubrix Conglomerate, a single proprietorship duly licensed by thegovernment in dealing with oil and lubricant products. Furthermore, hepresented the receip ts covering the purchases of the seized Unocoproducts purposely for packing the same in small containers to be resold tothe public.

Relying on the foregoing facts, private respondent sued petitioner forillegal di smissal. But the Labor Arbiter, Manuel R. Caday, dismissed hiscomplaint. In a De cision dated September 24, 1985, the labor arbiterstated that the apartment comp lex allegedly occupied by privaterespondent was indeed the situs of the illegal manufacture, blending andpackaging of Union 76 oil and lubricating products. Convi nced thatprivate respondent was personally involved in the aforementioned illega lactivity, the labor arbiter ruled that the private respondent committed anact o f serious misconduct, fraud or willful breach of trust reposed in him bypetition er, a just cause for terminating employment. Private respondent appealed to the NLRC. In its Decision dated March 17,1986, th e NLRC reversed the labor arbiter s judgment on the ground thatthere is no cogent reason for petitioner to lose its trust and confidence onprivate respondent. I: WON public respondent committed grave abuse of discretion inreversing the lab or arbiter s judgment which found a just and valid causefor dismissal of private r espondent by petitioner. H: Petitioner s attack on the alleged misappreciation of facts and distortedevalua tion of evidence by public respondent stands, in our view, on hollow

ground. Resort to judicial review of the decisions of the National LaborRelation s Commission by way of a special civil action for certiorari underRule 65 of the Rules of Court is confined only to issues of want or excess ofjurisdiction and grave abuse of discretion on the part of the labor tribunal. It does not include an inquiry as to the correctness of the evaluation ofevidenc e which was the basis of the labor agency in reaching itsconclusion. Neither is it for this Court to re-examine conflicting evidence, re-evaluate the credibility of the witnesses nor substitute findings of factfor those of an administrative body which has gained expertise in itsspecialized fie ld. Arguably, there may even be an error in judgment. This, however, is not within the ambit of the extraordinary remedy of certiorari. It is beyond dispute that loss of trust and confidence constitutes a validground for dismissing an employee. It is settled that loss of confidence as ajust caus e for terminating employment must be premised on the fact thatan employee concer ned holds a position of trust and confidence. Thissituation obtains where a pers on is entrusted with confidence on delicatematters, such as care and protection, handling or custody of theemployer s property as in this case. But, in order to c onstitute a just causefor dismissal, the act complained of must be work-related su ch as wouldshow the employee concerned to be unfit to continue working for theem ployer. Likewise, it must be noted that proof beyond reasonable doubtis not requ ired to dismiss an employee on the ground of loss of confidence. It is sufficient that there is some basis for such loss of confidence, such as when the employer has reasonable ground to believe that the employeeconcerned is responsible for the purported misconduct, and the nature ofhis participation th erein renders him unworthy of the trust and confidencedemanded of his position. This Court, however, has repeatedly stressed that the right of an employerto dis miss employees on account of loss of trust and confidence must notbe exercised a rbitrarily and without showing just cause, so as not to renderthe employee s const itutional right to security of tenure nugatory. Thus, although the dropping of a criminal charge for an employee s allegedmisconduct doe s not bar his dismissal, and proof beyond reasonable doubtis not necessary to ju stify the same, still the basis thereof must be clearlyand convincingly establis hed. Besides, for loss of confidence to be a validground for dismissal, such los s of confidence must arise from particularproven facts. In other words, this gro und must be founded on factsestablished by the employer who must clearly and con vincingly prove bysubstantial evidence the facts and incidents upon which loss o f confidencein the employee may be fairly made to rest; otherwise the dismissal will berendered illegal. In the case at bar, private respondent was suspended and eventuallydismissed for allegedly committing fraudulent acts and unfairly competingwith petitioner. To justify its administrative action, petitioner somehowgrave credence to the surve illance report implicating private respondent inthe illegal manufacture, blendin g, packing and distribution of petitioner sproducts. Petitioner likewise relied on the result of the search on theapartment reportedly leased by private responden t from which allegedcounterfeit Union 76 oil products were seized. Unfortunately, these couldnot be deemed sufficient basis for petitioner to lose its trust andco nfidence on private respondent so as to justify the latter s dismissal. For evidently, the surveillance report is unreliable. As found by the NLRC, the conclusions therein were mere deductions not supported by anysubstantial cor roborating evidence. Public respondent also observed thatthe petitioner failed t o show concrete evidence to controvert the proofpresented by private respondent that the packing of genuine Union 76 oil in small containers was in support of the marketing policy of petitioner. Furthermore, as the Solicitor General points out, petitioner s agentssurprisingly did not submit to laboratory test the alleged fake merchandiseseized during the

search, to determine its genuineness. This deficiencycould be attributed to the misstep of the private detectives who werespecifically instructed to investigate precisely the reported counterfeitingof petitioner s products. Another virtual confirmation that petitioner lacks factual basis for itsdistrust of private respondent was the subsequent judicial order releasingthe articles s eized during the search. As it appears on record, the courtbelieved the explanat ion of Donato Reyes, brother of private respondent, that he was the lessee of the aforesaid apartment. In sum, we hold that public respondent did not gravely abuse its discretionin ru ling that petitioner failed to duly prove that the dismissal of privateresponden t was justified on account of loss of trust and confidence. Hence, private respondent s dismissal was found illegal. With the finding that private respondent was illegally dismissed, an awardof bac kwages is proper. It must be emphasized, though, that jurisprudencedistinguishes between employees illegally dismissed prior to the effectivityof Republic Act N o. 6715 on March 21, 1989, and those whose illegaldismissals were effected after such date. Thus, employees illegallydismissed prior to March 21, 1989, are enti tled to backwages up to three (3) years without deduction or qualification, while those illegally dismissedaft er are granted full backwages inclusive of allowances and other benefitsor their monetary equivalent from the time their actual compensation waswithheld from th em up to the time of their actual reinstatement.

Considering that private respondent was terminated from the service onFebruary 2 3, 1983, he is entitled to backwages up to three years only, computed on the basis of his last monthly salary or pay. In addition to backwages, illegally dismissed employees are entitled toeither re instatement, if feasible, or separation pay, if reinstatement is nolonger viable . Petition is DENIED for lack of merit. Central Pangasinan Electric Cooperative c. Macaraeg | GR 145800 | Jan. 22, 2003 F: Petitioner is an electric cooperative duly organized and existing underPhilip pine laws. Respondent Geronima Macaraeg and Maribeth de Vera areemployees of pet itioner at its office in Area V, Bayambang, Pangasinan. Respondent de Vera was employed as teller whose primary duty was toaccept paymen ts from petitioner s consumers in Bayambang and remit hercollections to the cashie r, herein co-respondent GeronimaMacaraeg. Respondent Macaraeg s duty was to deposi t the dailycollections of the office to petitioner s account at the Rural Bank of CentralPangasinan in Bayambang. From January 1998 to January 1999, respondent de Vera accommodatedand encashed t he crossed checks of her sister, Evelyn Joy Estrada. Evelyn issued two hundred eleven (211) crossed checks amounting to P6, 945,128.95 payable to petitioner cooperative despite the absence of anytransacti on or any outstanding obligation with petitioner. In turn, respondent de Vera, with the knowledge and consent of respondentMacaraeg, paid t he full value of these checks from the cash collections ofpetitioner. At the end of the day, respondents credited the checks as partof their collection and depo sited the same together with their cashcollection to the account of petitioner a t the Rural Bank of CentralPangasinan. Sometime in January 1999, petitioner, through its Finance Department, noticed that several checks payable to petitioner from the collections inthe Are a V office were returned due to insufficiency of funds. On January19, 1999, Jose fina Mandapat, Sandra Frias and Marites Radac, petitioner sFinance Manager, Chief Accountant and Legal Assistant, respectively, confronted respondents with their discovery. Respondent de Veraadmitted that the checks were issued by her sister and that she encashedthem from the money colle cted from petitioner s customers. On January21, 1999, Mrs. Josefina Mandapat submi tted a memorandum to petitioner sGeneral Manager, Salvador M. de Guzman, detailing their findings aboutthe bounced checks. On February 2, 1999, she submitted an a ddendum toher memorandum. On February 4, 1999, petitioner, through de Guzman, issued a memorandum to respondents placing them under preventivesuspension and r equiring them to explain in writing within forty-eight (48) hours why they misappropriated cooperative funds. In the same communication, a hearing was set on February 13, 1999 at 9:30 a.m. at the Board Room of petitioner before Atty. Teodoro Fernandez. In their respective Answers/Explanations, respondents denied havingmisappropriat ed the funds of petitioner cooperative. They alleged that: (1) the checks that bounced were redeposited with the Rural Bank of CentralPangasina n; (2) the amount representing the face value of the checks hadbeen used by peti tioner as of December 15, 1998; (3) there was never anyshortage in the cooperati ve money or funds in their possession; and (4) they never violated any policy of the cooperative and on the contrary, theyhave been very religious in remitting the funds and money of petitioner. At the scheduled hearing on February 13, 1999, respondents, withassistance of co unsel, appeared before Atty. TeodoroFernandez. Respondent de Vera testified and admitted that she encashedthe checks of Evelyn Joy Estrada because the latter is

her older sister andthat she has a soft spot for her; that Mrs. Estrada owns a sash factory andthat she merely wanted to help her sister meet her business obli gations; that sometime in November 1998, Mrs. Marites Radoc, Chief Accountant of petitioner, called her attention to one check which bounced thrice; that thische ck was eventually replaced by her sister with cash; that despite thebouncing of some other checks, all checks were eventually funded andpaid to petitioner, henc e, petitioner incurred no losses in its collections; that she has worked for petitioner for nineteen (19) years and this is thefirst time she has been charged administratively by petitioner. Respondent Macaraeg admitted that she knew of the accommodationsgiven by respond ent de Vera to her sister; that she allowed hersubordinate to do it because resp ondent de Vera is her kumare, and that she knew that Mrs. Estrada s checks were sufficiently funded. She worked for petitioner for twenty-two (22) years and has never had anadministrative char ge. Mrs. Josefina Mandapat, Finance Manager of petitioner, testified aspetitioner s wi tness. She stated that she prepared a report on the findingsof their accountant regarding the encashment of Evelyn Joy Estrada schecks, and that the encashment of said checks is prohibited under anoffice memorandum. On March 10, 1999, Atty. Fernandez submitted his findings to the GeneralManager of petitioner. On March 19, 1999, on the basis of said findingsand recommendatio n, the General Manager issued to respondentsseparate notices of termination, eff ective April 9, 1999, for seriousmisconduct, and breach of trust and confidence r eposed on them bymanagement. Respondents, with the help of the President and representative of theUnion, Cent ral Pangasinan Electric Cooperative (CENPELCO) Employees Association-Tupas Local C hapter No. R01-0012, questioned their dismissalbefore the National Conciliation and Mediation Board (NCMB). Theyclaimed that their dismissal was without just ca use and in violation of theCollective Bargaining Agreement (CBA), which requires that the caseshould first be brought before a grievance committee. Eventually, theparties agreed to submit the case to a voluntary arbitrator for arbitration.

On August 12, 1999, the voluntary arbitrator rendered a decision in favorof resp ondents. Petitioner appealed to the Court of Appeals via a petition for review. On August 17, 2000, the Court of Appeals rendered a decisiondismissi ng the petition and affirming the decision of the voluntaryarbitrator. Hence, th e present course of action. I: WON the CA gravely abused its discretion in holding that petitionerillegally terminated the services of herein private respondents. H: The petition is impressed with merit. At the outset, we hold that the firstis sue raised in the petition pertaining to the alleged violation of the CBAgrievan ce procedure is moot and academic. The parties activeparticipation in the volunta ry arbitration proceedings, and their failure toinsist that the case be remanded to the grievance machinery, shows aclear intention on their part to have the is sue of respondents illegaldismissal directly resolved by the voluntary arbitrator . We therefore find it unnecessary to rule on the matter in light of their preference to bring theilleg al dismissal dispute to voluntary arbitration without passing throughthe grievan ce machinery. This leads us to the next issue of whether respondents were validlydismissed. To constitute a valid dismissal from employment, tworequisites must be met, namely : (1) it must be for a just or authorizedcause, and (2) the employee must be aff orded due process. We hold that there exists a valid reason to dismiss both employees. Article 282(c) of the Labor Code allows an employer to dismiss employees forwillful brea ch of trust or loss of confidence. Proof beyond reasonable doubtof their miscond uct is not required, it being sufficient that there is somebasis for the same or that the employer has reasonable ground to believethat they are responsible for the misconduct and their participation thereinrendered them unworthy of the tru st and confidence demanded of theirposition. To be sure, the acts of the respondents were clearly inimical to thefinancial in terest of the petitioner. During the investigation, they admittedaccommodating E velyn Joy Estrada by encashing her checks from itsfunds. They did so without pet itioner s knowledge, much less itspermission. These inimical acts lasted for more than a year, and probablywould have continued had it not been discovered in time . All along, theywere aware that these acts were prohibited by the Coop Checks P olicy. Clearly, there was willful breach of trust on the respondents part, as theytook a dvantage of their highly sensitive positions to violate their duties. Moreover, the acts of the respondents caused damage to thepetitioner. During tho se times the checks were illegally encashed, petitioner was not able to fully utilize the collections, primarily in servicing its debts. In her memorandum dated January 21, 1999, Finance ManagerJosefina Man dapat reported how petitioner is prejudiced. It is not material that they did not misappropriate any amount of money, nor incur any shortage relative to the funds in their possession. The basic premise for dismissal on the ground of loss of confidence is that theemployees c oncerned hold positions of trust. The betrayal of this trust isthe essence of th e offence for which an employee is penalized. In the caseat bar, the respondents held positions of utmost trust and confidence. As teller and cashier, respectively, they are expected to possess a highdegree of f idelity. They are entrusted with a considerable amount ofcash. Respondent de Ver a accepted payments from petitioner sconsumers while respondent Macaraeg received remittances for deposit atpetitioner s bank. They did not live up to their duties and obligations.

Nor is there any doubt that petitioner observed procedural due process indismiss ing the respondents. In separate memoranda dated February 4,1999 and signed by t he General Manager ( de Guzman), the respondentswere both appraised of the parti cular acts or omissions constituting thecharges against them. They gave their ow n answer/explanation to the charges. They participated in the investigation conducted at petitioner sboard roo m. We are aware that the respondents Macaraeg and de Verahave been employed with the petitioner for 22 and 19 years of continuousservice, respectively, and this is the first time that either of them has beenadministratively charged. Nonethe less, it is our considered view that their dismissal is justified considering the breach of trust they havecommitted. Well to emphasize, the longer an employee stays in the serviceof the company, the gre ater is his responsibility for knowledge andcompliance with the norms of conduct and the code of discipline in thecompany. Considering that they have mishandled the funds of thecooperative and the danger they have posed to its members, thei rreinstatement is neither sound in reason nor just in principle. It is irreconcilable with trust and confidence that has been irretrievably lost. The petition is GRANTED. Mcleod v. NLRC, 512 SCRA 222 F: John F. McLeod filed a complaint for retirement benefits, vacation andsick le ave benefits, non-payment of unused airline tickets, holiday pay, underpayment of salary and 13th month pay, moral and exemplarydamages, attorney s fees plus interest against Filipinas SyntheticCorporation (Filsyn), Far Eastern Textile Mills, Inc., Sta. Rosa Textiles, Inc., Patricio Lim and Eric Hu. He alleges that at the time of his retirementcomplaina nt was receiving P60, 000.00 monthly with vacation and sickleave benefits; 13th month pay, holiday pay and two round trip businessclass tickets on a Manila-Lond on-Manila itinerary every three years which isconvertible to cash if unused. Res pondents accordingly failed to payvacation and leave credits and requested compl ainant to wait as it wasshort of funds but the same remain unpaid at present. Re spondentslikewise failed to pay complainant s holiday pay up to the present. There were more benefits which were not honored. The Labor Arbiter, held all respondents jointly and severally liable for themone y claims of Mcleod. However, the NLRC reversed and made PeggyMills as the sole e ntity liable for the retirement pay of Mcleod. This wasaffirmed by the CA.

I: WON an employer-employee relationship exists between the privaterespondents a nd the petitioner for purposes of determining employerliability to the petitione r. H: No employer-employee relationship, McLeod was a managerialemployee of PMI fro m 20 June 1980 to 31 December 1992. McLeod couldhave presented evidence to suppo rt his allegation of employer-employeerelationship between him and any of Filsyn , SRTI, and FETMI, but he didnot. Appointment letters or employment contracts, p ayrolls, organizationcharts, SSS registration, personnel list, as well as testim ony of coemployees, may serve as evidence of employee status. It is a basic rule inevidence that par ties must prove their affirmative allegations. Whiletechnical rules are not stri ctly followed in the NLRC, this does not meanthat the rules on proving allegatio ns are entirely ignored. Bare allegationsare not enough. They must be supported by substantial evidence at thevery least. McLeod s reliance on Annex M can hardly carry the day for him. Annex M, which is McLeod s letter addressed to "Philip Lim, VP Administration," merely contains McLeod s proposals for the grant of some benefits tosupervisory an d confidential employees. Contrary to McLeod s allegation, Patricio did not sign the letter. Hence, the letter does not embody anyagreement between McLeod and the management that would entitleMcLeod to his money claims. Neither can McLeod s assertions find supportin Annex U. Annex U is the Agreement which McLeod and Universal TextileMills, Inc. executed in 1959. The Agreement me rely contains the renewal ofthe service agreement which the parties signed in 19 56. John Hancock Life Insurance Corp. v. Davis | GR 169549 | Sept. 3,2008 F: Respondent Joanna Cantre Davis was agency administration officer ofpetitioner John Hancock Life Insurance Corporation. On October 18, 2000, Patricia Yuseco, petitioner's corporate affairs manager, discovered that herwall et was missing. She immediately reported the loss of her credit cardsto AIG and BPI Express. To her surprise, she was informed that "PatriciaYuseco" had just ma de substantial purchases using her credit cards invarious stores in the City of Manila. She was also told that a proposedtransaction in Abenson's-Robinsons Plac e was disapproved because "she" gave the wrong information upon verification. Because loss of personal property among its employees had becomerampant in its o ffice, petitioner sought the assistance of the NationalBureau of Investigation ( NBI). The NBI, in the course of its investigation, obtained a security video from Abenson's showing the person who usedYuseco's cre dit cards. Yuseco and other witnesses positively identified theperson in the vid eo as respondent. Consequently, the NBI and Yuseco filed a complaint for qualified theftagainst re spondent in the office of the Manila city prosecutor. But becausethe affidavits presented by the NBI (identifying respondent as the culprit) were not properly verified, the city prosecutor dismissed the complaint dueto in sufficiency of evidence. Meanwhile, petitioner placed respondent under preventive suspension andinstructe d her to cooperate with its ongoing investigation. Instead of doingso, however, respondent filed a complaint for illegal dismissal alleging thatpetitioner termi nated her employment without cause. The labor arbiter, in a decision dated May 21, 2002, found that respondentcommit ted serious misconduct (she was the principal suspect for qualifiedtheft committ ed inside petitioner's office during work hours). There was avalid cause for her dismissal. Thus, the complaint was dismissed for lack ofmerit.

Respondent appealed the labor arbiter's decision to the National LaborRelations Commission (NLRC) which affirmed the assailed decision on July31, 2003. Responde nt moved for reconsideration but it was denied in aresolution dated October 30, 2003. Aggrieved, respondent filed a petition for certiorari in the Court of Appeals(CA ) claiming that the NLRC committed grave abuse of discretion inaffirming the dec ision of the labor arbiter. She claimed there was no validcause for her terminat ion because the city prosecutor of Manila "did notfind probable cause for qualif ied theft against her." The dismissal of thecomplaint proved that the charges ag ainst her were based on suspicion. The CA, in its July 4, 2005 decision found that the labor arbiter and NLRCmerely adopted the findings of the NBI regarding respondent's culpability. Because the affidavits of the witnesses were not verified, they did notconstitut e substantial evidence. The labor arbiter and NLRC should have assessed evidence independently as "unsubstantiated suspicions, accusations and conclusions of employers (did) not provide legaljustification fo r dismissing an employee." Thus, the CA granted thepetition. Petitioner moved fo r reconsideration but it was denied. Hence, this petition. I: WON petitioner substantially proved the presence of valid cause forrespondent 's termination. H: We grant the petition. Misconduct involves "the transgression of someestablis hed and definite rule of action, forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error injudgment. " In this case, petitioner dismissed respondent based on the NBI's findingthat the latter stole and used Yuseco's credit cards. But since the theft was

not committed against petitioner itself but against one of its employees, respondent's misconduct was not work-related and therefore, she couldnot be dism issed for serious misconduct. Nonetheless, Article 282(e) of the Labor Code talks of other analogouscauses or those which are susceptible of comparison to another in generalor in specific de tail. For an employee to be validly dismissed for a causeanalogous to those enum erated in Article 282, the cause must involve avoluntary and/or willful act or o mission of the employee. A cause analogous to serious misconduct is a voluntary and/or willful act oromis sion attesting to an employee's moral depravity. Theft committed byan employee a gainst a person other than his employer, if proven bysubstantial evidence, is a cause analogous to serious misconduct. Did petitioner substantially prove the existence of valid cause forrespondent's separation? Yes. The labor arbiter and the NLRC relied notonly on the affidavits of the NBI's witnesses but also on that of respondent. They likewise considered petitioner's own investigative findings. Clearly, they did not merely adopt the findings of the NBI but independentlyassessed evid ence presented by the parties. Their conclusion (that therewas valid cause for r espondent's separation from employment) wastherefore supported by substantial ev idence. All things considered, petitioner validly dismissed respondent for cause analogous to seriousmisconduct . Petition is hereby GRANTED. Security and Credit Investigation v. NLRC, 350 SCRA 357 F: Private respondents Mercado, Somosot and Oliver were employed assecurity guar ds by petitioner and assigned to the CHR which waspetitioner s client. Sometime in February 1990, about eighteen (18) ofpetitioner s security guards detailed at the CHR, including Mercado, Somosot and Oliver, filed a complaint for money claims againstpetitioner. Howeve r, upon petitioner s request that the security guardswithdraw the complaint, each of the complainants, except for Mercado, Somosot and Oliver, signed a Release and Quitclaim in favor of petitioner. Mercado averred that he was being pressured by petitioner to sign aRelease and Q uitclaim, so he went on leave from work on March 22, 1990. When he called petitioner s office on the afternoon of the same dayto inquir e about his work assignment, petitioner s officer-in-charge, RogelioVecido, inform ed him that he was not assigned anywhere because he wassuspended from work. Somosot likewise claimed that on March 22, 1990, Mr. Igmedio Tomenio, petitioner s shift-in-charge at the CHR, tried to pressure him to sign aRelease an d Quitclaim but he refused. That afternoon, Somosot learned that he had been suspended from work. When he attempted to report forwork the ne xt day, he was informed verbally that his employment wasalready terminated. The next day, March 23, 1990, Mercado and Somosot filed a complaint forillegal d ismissal and underpayment of wages, overtime pay, legal holidaypay, premium pay for holiday and rest day, 13th month pay, serviceincentive leave benefits and ni ght differential against petitioner. The case was docketed as NLRC-NCR Case No. 00-03-01791-90. Like Mercado and Somosot, respondent Oliver asseverated that on March27, 1990 he went to petitioner s office to reiterate his money claims andwas forced by Mr. Re ynaldo Dino, petitioner s operations manager, to signa Release and Quitclaim. Beca use of his refusal to sign the same, he wasnot given any new assignment by petit ioner. He was thus surprised toreceive on March 29, 1990 a telegram from petitio

ner requiring him toexplain his absence from work without leave from March 27,19 90. Subsequently, Oliver filed a complaint for illegal dismissal andunderpayment of backwages against petitioner, which case was docketedas NLRC-NCR Case No. 00 -03-01886-90. Upon motion of petitioner, the two cases were consolidated. Petitioner, onthe ot her hand, denied that it dismissed Mercado, Somosot and Oliver and alleged that the latter abandoned their employment. Meanwhile, on February 18, 1991, petitioner filed a third-party complaintagainst the CHR, claiming that its failure to effect the increase in theminimum wage of respondent security guards from July 1, 1989 to March31, 1990, was due to the f ailure of the CHR to promptly pay the increasesin the wage rates of said guards pursuant to Section 6 of Republic Act No. 6727 (R.A. 6727). The CHR approved payment of increased wage ratesonly from Apri l 16, 1990. Petitioner claimed that under R.A. 6727, the CHR was mandated to pay increased wages to the security guards commencingfrom July 1 , 1989. The CHR denied that it was obliged to pay the increase in the wage rates ofthe r espondent guards. It averred that R.A. 6727 is not applicable to it, because it had already been paying the respondent security guards morethan P100. 00 a day even before the effectivity of said law. Its decision to increase the salaries of respondent guards effective August 16, 1990 wasdue only to humanitarian reasons. In his Decision dated November 18, 1991 the Labor Arbiter found that there was neither dismissal by petitioner of the respondent security guardsnor a bandonment of employment by the latter, and that the controversyresulted from mi scommunication and misapprehension of facts by theparties. The Labor Arbiter, ho wever, ruled that there was underpayment ofrespondent guards salaries, holiday pa y, premium pay for holidays andrest days, overtime pay, 13th month pay and servi ce incentive leavebenefits. All parties filed their respective appeals with the National Labor RelationsComm ission. In their partial appeal, respondents Mercado andSomosot argued that the Labor Arbiter erred in not finding that they wereillegally dismissed and in not awarding backwages in their favor.

Petitioner, on the other hand, claimed that the Labor Arbiter erred in not finding that respondent security guards abandoned their employment, andthat it i s the CHR which should be held liable for the monetary award givento respondent security guards. The CHR for its part contended that the Labor Arbiter erred in not findingthat R .A. 6727 does not apply to it, and in failing to appreciate the CHR sLetter dated April 16, 1990 which stated that it was increasing the wagerates of the security guards beginning April 16, 1990. I: WON NLRC committed grave abuse of discretion amounting to lack ofjurisdiction when it ruled that private respondents did not abandon their posts H: The Court finds that the NLRC committed no grave abuse of discretionin affirm ing the finding that petitioner did not dismiss respondent securityguards, and t hat the latter did not abandon their employment. Both the NLRC and the Labor Arbiter found no clear proof that petitionerhad in f act dismissed respondent security guards. Mercado based his claimof illegal dism issal only on the statement of officer-in-charge Mr. Vecidothat he had not been assigned to any post. Similarly, Somosot relied merely on the verbal information relayed to him that he had beenterminated. Oliv er s belief that he had been illegally dismissed wasfounded on the telegram from p etitioner requiring him to explain hisabsence without leave which he received on March 29, 1990. None of them exerted efforts to confirm from petitioner s office whether they hadin fact b een dismissed. Furthermore, petitioner denied the allegation that ity guards employment without just cause and even bandoned their employment. Thus, absent anyshowing roving that petitioner had dismissed Mercado, Somosot and Oliver, their claim sustained. it terminated respondentsecur alleged thatrespondent guards a of an overt or positive act p of illegal dismissalcannot be

There being no finding that respondent security guards were illegallydismissed, there is no basis for an award of backwages in their favor. It is axiomatic that before backwages may be granted, there must be unjust orillegal d ismissal from work. Neither did the NLRC find evidence to support petitioner s allegation thatMercado, Somosot and Oliver abandoned their employment. The records reveal that their failure to report for duty was not caused by a willful anddeli berate intent to abandon their employment. Rather, such failure resulted from their belief, though mistaken, that they had been suspendedor term inated from work. The rule is that for abandonment to exist, two elements must concur: first, the employee must have failed to report forwork or must have been absent without justifiable reason; and second, there must have been a clear intention to sever the employer-employeerelationshi p manifested by some overt acts. The filing by Mercado, Somosot and Oliver of their complaints for illegal dismissal negates theexistenc e of any intention on their part to abandon their employment. On the other hand, there is merit in petitioner s argument that there wasan error in the computation of the amounts constituting underpayment ofovertime pay, 13th month pay and service incentive leave benefits torespondent security guards by the Labor Arbiter, which in turn wasaffirmed by the NLRC. However, in computing the underpayment for overtime, 13th month andservice incen

tive leave benefits, the Labor Arbiter erroneously included theperiod from Septe mber 1, 1988 to June 30, 1989 in spite of his finding thatthere was no underpaym ent in wages during said period. The Court also finds merit in petitioner s argument that the NLRC shouldnot have r eversed the Labor Arbiter s finding that the CHR is liable for thepayment of P28,5 00.00 representing the differentials of respondentsecurity guards wage, overtime, 13th month and service incentive leavebenefits for the period July 1, 1989 to A pril 15, 1990. The record shows that petitioner informed the CHR regarding the increasein the w ages of the security guards effective July 1, 1989, pursuant to R.A. 6727 which mandated a Twenty Five Peso (P25.00) increase in the dailywage rate i n a Letter dated August 7, 1989. In its reply letter dated April16, 1990, the CH R stated that it had approved the increase in the wageseffective April 16, 1990. The CHR, however, maintains that it is not liable to pay increased wages tothe s ecurity guards and claims that there is a proviso in Section 4 of R.A. 6727 which exempts employees already receiving more than P100.00 dailyfrom recei ving the P25.00 increase required under said law. The CHR argues that since the security guards were receiving P103.56 daily for theyear 1 989, it was not required to pay them the P25.00 per day increaseunder R.A. 6727. The CHR further asserts that its approved increase in thesecurity guards wages f rom April 16, 1990 was due only to humanitarianreasons and was not an admission of any obligation to increase the sameunder R.A. 6727. It must be noted that both the Labor Arbiter and the NLRC found that there were discrepancies in the minimum wage prescribed under R.A. 6727 andwhat were a ctually received by respondent security guards from July 1,1989. The rule is tha t the factual findings of the Labor Arbiter, whenaffirmed by the NLRC are accord ed to great weight and respect whensupported by substantial evidence, and devoid of any unfairness andarbitrariness. It is clear that the CHR is the party liable for payment of the wage increasedue to respondent security guards. While petitioner, as the contractor, isheld soli darily liable for the payment of wages, including wage increases, as prescribed under the Labor Code, the obligation ultimately belongs tothe CHR as principal. The Labor Arbiter was therefore correct in requiringthe CHR to rei mburse petitioner the amount of P28, 500.00 representingthe unpaid wage increase s of respondent security guards for the period

July 1, 1989 to April 15, 1990. The assailed decision of the affirmed withthe MO DIFICATION CALS Poultry Supply v. Roco, 385 SCRA 479 F: CALS Poultry Supply Corporation is engaged in the business of sellingdressed chicken and other related products and managed by Danilo Yap. On March 15, 1984, CALS hired Alfredo Roco as its driver. On the same date, CALS hired Edna Roco, Alfredo s sister, as a helper in the dressingroom of C ALS. On May 16, 1995, it hired Candelaria Roco, another sister, as helper, also at its chicken dressing plant on a probationary basis. On March 5, 1996, Alfredo Roco and Candelaria Roco filed a complaint forillegal dismissal against CALS and Danilo Yap alleging that Alfredo andCandelaria were i llegally dismissed on January 20, 1996 and November 5,1996, respectively. Both a lso claimed that they were underpaid of theirwages. Edna Roco, likewise, filed a complaint for illegal dismissal, allegingthat on June 26, 1996, she was reassig ned to the task of washing dirtysacks and for this reason, in addition to her be ing transferred from nightshift to day time duties, which she considered as mana gement act ofharassment, she did not report for work. According to Alfredo Roco, he was dismissed on January 20, 1996 when herefused t o accept P30,000.00 being offered to him by CALS lawyer, Atty. Myra Cristela A. Yngcong, in exchange for his executing a letter ofvoluntary res ignation. On the part of Candelaria Roco, she averred thatshe was terminated wit hout cause from her job as helper after servingmore than six (6) months as proba tionary employee.red The Labor Arbiter on April 16, 1998, issued a decision dismissing thecomplaints for illegal dismissal for lack of merit. The Labor Arbiter found that Alfredo Roco applied for and was granted a leave of absence for theperiod f rom January 4 to 18, 1996. He did not report back for work afterthe expiration o f his leave of absence, prompting CALS, through its ChiefMaintenance Officer to send him a letter on March 12, 1996 inquiring if hestill had intentions of resum ing his work. Alfredo Roco did not respond tothe letter despite receipt thereof, thus, Alfredo was not dismissed; it washe who unilaterally severed his relation with his employer. In the case of Candelaria Roco, the Labor Arbiter upheld CALS decision notto cont inue with her probationary employment having been found herunsuited for the work for which her services were engaged. She was hiredon May 16, 1995 and her servi ces were terminated on November 15, 1995. Edna Roco, according to the Labor Arbiter, began absenting herself on June25, 19 96. She was sent a memo on July 1, 1996 requiring her to report forwork immediat ely, but she did not respond. In their position papers, thecomplainants claimed that they were not given their overtime pay, premium pay for holidays, premium pay for rest days, 13th month pay, allowances. They were also not given their separation pay after their dismissal. The Labor Arbiter, however, denied their claims, stating thatthey had not substantiated the same; on the other hand, CALS presentedevidence showing t hat complainants received the correct salaries andrelated benefits. The National Labor Relations Commission (NLRC), in a decisionpromulgated on Janu ary 17, 2000, affirmed the judgment of the LaborArbiter. On appeal by Alfredo, Candelaria and Edna Roco to the Court of Appeals, the appellate court set aside the NLRC s decision and orderedreinstatement of Alfr edo and Candelaria Roco to their former positionswithout loss of seniority of ri

ghts and benefits, with full payment ofbackwages. However, in the case of Edna R oco, the Court of Appealsfound that her appeal cannot be favorably considered as she actuallyabandoned her work without justification. In considering that Alfredo Roco was illegally dismissed, the Court ofAppeals re lied on his allegation that on January 20, 1996 when hereported for work, follow ing his leave of absence from January 10 to 18,1996, he learned from Elvie Acant elado, a secretary of Danilo Yap that hewas already separated from his employmen t. I: WON there was illegal dismissal by CALS H: From the facts established, we are of the view that Alfredo Roco has not established convincingly that he was dismissed. No notice of termination was given to him by CALS. There is no proof at all, except his self-servingasser tion, that he was prevented from working after the end of his leave ofabsence on January 18, 1996. In fact, CALS notified him in a letter dated March 12, 1996 to resume his work. Both the Labor Arbiter and the NLRC found that Alfredo, as well as Candelaria Roco, was not dismissed. Their findings of fact are entitled to great weight. With respect to Candelaria Roco, there is no dispute that she wasemployed on pro bationary basis. She was hired on May 16, 1995 and herservices were terminated o n November 15, 1995 due to poor workperformance. She did not measure up to the w ork standards on thedressing of chicken. The Labor Arbiter sustained CALS in ter minating her employment. The NLRC affirmed the Labor Arbiter s ruling. The Court of Appeals did not disagree with the NLRC s finding thatCandelaria was d ismissed because she did not qualify as a regularemployee in accordance with the reasonable standards made known bythe company to her at the time of her employm ent.

CALS argues that the Court of Appeals computation of the 6-monthprobationary peri od is erroneous as the termination of Candelaria sservices on November 15, 1995 wa s exactly on the last day of the 6-monthperiod. We agree with CALS contention as upheld by both the Labor Arbiter andthe NLRC tha t Candelaria s services was terminated within and not beyondthe 6-month probationa ry period. As there is no mention of the basis of the above order, we may assume itwas the temporary payroll authority submitted by the petitioner showingthat the private respondent was employed on probation on February 16,1978. Even supposing that it is not self-serving, we find nevertheless thatit is self-defeating. The six-mon th period of probation started from the saiddate of appointment and so ended on August 17, 1978, but it is not shownthat the private respondent s employment also ended then; on thecontrary, he continued working as usual. Under Article 282 of the Labor Code, an employee who is allowed to work after a probationary periodshall be cons idered a regular employee.' Hence, Pilones was already onpermanent status when he was dismissed on August 21, 1978, or four daysafter he ceased to be a probation er. WHEREFORE, our Resolution of April 1, 2002 denying the petition is herebySET ASI DE and another one entered REVERSING the decision of the Court of Appeals insofar as it ruled in favor of herein respondents and thedecisions o f the Labor Arbiter and the National Labor Relations Commission REINSTATED. Jardine Davies v. NLRC, 225 SCRA 757 Nature: The instant Petition for Certiorari seeks the reversal of the resolution of respondent National Labor Relations Commission, dated 22July 1992, which declared private respondent Salvador Salutin as nothaving abandoned his w ork by his alleged failure to report for work duringthe pendency of the petition er's appeal before the respondentCommission. F: Respondent Salvador Salutin ["Salutin"] was employed by petitionerJardine Dav ies, Inc. ["JDI"] on 15 July 1985, as a demonstrator/agronomistto provide servic es relating to, and to give advice on, the promotion anduse of JDI's pesticides and other products. The controversy that spawnedtwo [2] special civil actions fo r certiorari [this instance included] with thisCourt, began when respondent Salu tin filed a complaint against petitionerJDI for illegal dismissal, with prayer f or reinstatement and backwages or, inthe alternative, separation pay plus wage d ifferential, service incentiveleave pay, thirteenth [13th] month pay, holiday pa y, moral and exemplary damages, and attorney's fees. The complaint was decided by the LaborArbiter in f avor of respondent Salutin. JDI appealed the case to the National Labor Relations Commission [NLRC], and it posted a supersedeas bond to answer for the monetary awards. Italso reins tated Salutin, "on payroll only", beginning 26 August 1991, incompliance with th e writ of execution issued by the Labor Arbiter pursuantto Article 223, paragrap h 3, of the Labor Code. In a Decision dated 17October 1991, NLRC dismissed JDI's appeal for lack of merit but modifiedthe decision by eliminating the awards giv en for holiday pay, serviceincentive leave pay, moral and exemplary damages. A m otion forreconsideration was filed which was denied in NLRC's resolution of 13 January 1992. On 14 February 1992, JDI filed its first petition for certiorari with this Court ,

docketed as G. R. No. 103720, assailing the 17 October 1991 decision andthe reso lution of 13 January 1992 of respondent Commission. In OurResolution dated 26 Fe bruary 1992, the petition was dismissed for failureto comply with this Court's C ircular No. 28-91 on forum-shopping. Itssubsequent motion for reconsideration wa s itself denied on 20 May 1992. The Resolution of 26 February 1992 became final and executory on 19 June1992, an d an entry of judgment was accordingly made on 20 August 1992. At the time when the above narrated events were still unfolding, somematerial fa cts occured beginning with JDI's appeal to the NLRC on the 08August 1991 decisio n of the Labor Arbiter. Shortly after the reinstatementof Salutin "on payroll on ly", JDI sent a letter dated 21 September 1991, toSalutin directing him to repor t for work to their Bacolod Branch Manager. Salutin, as directed, reported on the 24th of September 1991 at around 9:20 a.m. He did not stay long, however, since after fifteen minutes or so, he left and was reported not to have thereafter returned for work. JDIforthwith stopped further payment of salary to Salutin. On 17 October 1991, JDI filed a "Manisfestation and Motion" with the respondent Commission stating that Salutin be considered as havingabandoned his work considering his continuous absence of more thanthree (3) weeks since he was required to report for work and that anyaward for reinstatement to his former p osition, without loss of seniorityand other rights, in the Arbiter's decision su bject of this appeal beconsidered and held as waived or lost. Salutin opposed th e motion, claiming that he was forced to leave in haste because he was thensuffering from a serious ailment. He submitted a medical certificate tosupport his claim.

On 13 January 1992, respondent Commission denied JDI's "Manifestation & Motion" stating, among other things as to the issue of whether thecomplaint-appe llee Salvador Salutin is guilty of work abandonment, this isa new and factual ma tter which has to be determined and resolved in appropriate proceedings before the Arbitration Branch, more especially inthe pre sent case, where the charge of abandonment is seriouslycontroverted. I: Is Salutin, who was then on payroll reinstatement since 26 August 1991, not guilty of abandonment when his failure to report for work was becausehe was also working for another entity from 01 September 1991 to 31December 1991? Corre latively, did respondent Commission not gravelyabuse its discretion when it did not take into consideration such other employment? H: The answer is in the negative. The records show that at the time JDIfiled its Manifestation and Motion dated 17 October 1991, the sole basis of its prayer for a declaration that Salutin abandoned his work was his allegedunau thorized absences from the date he was notified to report for work. Ashift to a new focus took place when, on 30 January 1992, JDI, at itsrequest, received a le tter-certification issued by the Officer-in-Charge ofKing's Enterprises of Iloil o City that Salutin was employed by MonsatoPhilippines, Inc., from 01 September to 31 December 1991, as AggressiveCrop Technician, for which he was paid P5,146. 00 per month. Thus, thiswas the reason given by JDI in its ex parte motion dated 16 June 1992, toset for hearing the Manifestation and Motion of 17 October 1991 . NLRCdenied the said ex parte motion in the now assailed resolution of 22 July1 992. When JDI filed its first petition for certiorari [in G. R. No. 103720] with this Court on 14 February 1992, assailing the 17 October 1991 decision ofNLRC, it als o raised, as an added argument on the alleged abandonment ofwork by Salutin, the fact that he was gainfully employed elsewhere. Considering that this matter was thus already taken up by the petitioner inits f irst petition for certiorari, which this Court dismissed with finality, thepetit ioner should really now be barred from invoking anew that issue inthis present [ second] petition. Be that as it may, the same fate of dismissal is still inevitable. Althoughthis Court is not a trier of facts, it may still wade through the records of acase if only to prevent any possible misgiving in its ultimate disposition. The petitioner's evidence to establish Salutin's supposed abandonment ofwork is the certification of employment issued by King's Enterprises at therequest of he rein petitioner to the effect that Salutin had indeed beenemployed by Monsato Ph ilippines, Inc., during the period from 01September to 31 December 1991. For aba ndonment to constitute a validcause for termination of employment there must be a deliberate unjustifiedrefusal of the employee to resume his employment. This r efusal must beclearly shown. Mere absence is not sufficient; it must be accompan ied byovert acts pointing to the fact that the employee simply does not want tow ork anymore. Abandonment of position is a matter of intention expressed in clearlycertain and unequivocal acts. In this instance, however, certainuncontroverted facts show j ust exactly the opposite. Hence, Salutin didreport, as directed, on 24 September 1991, but that he could not stay longbecause he was ailing at that time; he, al though perhaps belatedly made, did seek medical consultation on 7 November 1991, at the Corazon Locsin Montelibano Memorial Regional Hospital, for "peptic ulcer"; and on 11December 19 91, he did, in fact, manifest his desire to assume his work with the petitioner. This Court's Resolution of 26 February 1992, denying the petition in G. R.

No. 103720, became final and executory on 19 June 1992. RespondentSalutin's inte rim employment, stressed by the petitioner, did not stain thepicture at all. The petition is hereby dismissed. GSP Manufacturing Corp. v. Cabanban | GR 150454 | July 14, 2006 F: Respondent Paulina Cabanban worked with petitioner GSPManufacturing Corporati on (GSP) as a sewer from February 7, 1985 untilher alleged termination on March 1, 1992. On June 16, 1992, respondentfiled with the National Labor Relations Com mission (NLRC), National CapitalRegion Arbitration Branch, a complaint against p etitioners for illegaldismissal, non-payment of holiday pay, service incentive l eave pay and13th month pay. Respondent claimed she was terminated by petitioners because she failedto dissua de her daughter from continuing her employment at the SylviaSantos Company, a bu siness competitor of petitioners. In their defense, petitioners argued that respondent abandoned her work on March 14, 1992and that they reported this to the Department of Labor and Employmenton May 15, 1992.

On May 7, 1993, labor arbiter Melquiades Sol D. del Rosario foundpetitioners gui lty of illegal dismissal. Petitioners appealed to the NLRC. OnAugust 10, 1995, t he NLRC issued a resolution affirming in toto the decision of the labor arbiter. Hence, this petition. I: WON the findings of fact of the Court of Appeals were arrived atarbitrarily H: The petition is without merit. As petitioners are well aware of, factualfindi ngs of the NLRC, particularly when they are in agreement with those ofthe labor arbiter, are deemed binding and conclusive on this Court. As longas their decisi ons are devoid of any unfairness or arbitrariness in theirevaluation of the evid ence all that is left for us to do is stamp ouraffirmation and declare its final ity. Having perused the records, we find nosuch arbitrariness here. We would like to reiterate some salient points laid down in our priorpronounceme nts concerning abandonment of employment. Abandonmentas a just ground for dismis sal requires the deliberate, unjustified refusal ofthe employee to perform his e mployment responsibilities. Mere absence orfailure to work, even after notice to return, is not tantamount to abandonment. The records are bereft of proof that petitioners evenfurnished resp ondent such notice. Furthermore, it is a settled doctrine that the filing of a complaint for illegal dismissal is inconsistent with abandonment of employment. An employeewho takes s teps to protest his dismissal cannot logically be said to haveabandoned his work . The filing of such complaint is proof enough of his desire to return to work, thus negating any suggestion of abandonment. Clearly, petitioners claim that respondent s complaint was "anafterthought," having been filed a long time after the date of the supposedabandonment, was utterly w ithout merit. As the Court of Appeals correctlypointed out, citing the case of P are v. NLRC, respondent had four yearswithin which to institute her action for i llegal dismissal. Compared to thesix months it took the aggrieved employee in th at case to file his complaintfor illegal dismissal, respondent s 84 days was not u nreasonably long at all. The petition is hereby DENIED. Shie Jie Corp. v. NFL, GR 153148, July 15, 2005 F: Respondents, in their complaint, alleged that they were employed asfish proce ssors by petitioners. On July 20, 1998, Sammy Yang and MichaelYang, petitioners, confronted them about their union activities. Immediately, they were ordered to go home. The next day, petitionerssuspended th em for one week effective July 22 to 28,1998 (except respondent Wilfredo Toribio ). Upon their return, they were served with a notice of petitioners memorandum terminating theirservices for aban donment of work. Petitioners, in their answer, denied respondents allegations. Theyclaimed that on July 20, 1998, about 2:45 o clock in the afternoon, 13 rankandfile employees staged a walk-out and abandoned their work. Among them were respondents Wilfredo Toribio, Nida Toribio, YolandaLorenzo, Sorraya Am ping, Vivian Mendoza, Merylene Delos Reyes, ArnoldFrancisco, and Manuel Francisc o. As a consequence, petitioners businessoperations were interrupted and paralyze d, prompting them to issue amemorandum suspending respondents for one week or fr om July 22 to 28,1998. However, on July 24, 1998, petitioners, in another memora ndum, directed them to report for work on July 27, 1998. Instead, respondentsErnesto E trata, Sorraya Amping, Yasher Taning, Yolanda Lorenzo, MeryleneDelos Reyes, and Wilfredo Toribio submitted their resignation letters andquitclaims. Subsequently or on July 28, 1998, petitioners sentrespondents Arnold Francisco, Nida Toribio

, Vivian Mendoza, and ManuelFrancisco a notice terminating their services for ab andonment of work. On August 20, 1999, the Labor Arbiter rendered a Decision findingrespondents gui lty of unfair labor practice (for dismissing petitionersillegally); and ordering them, jointly and severally, to pay petitioners P843, 960.62. On appeal, the National Labor Relations Commission (NLRC) promulgatedits Decisio n dated April 27, 2000 reversing the Labor Arbiter s Decision anddismissing respon dents complaint. Respondents then filed a motion forreconsideration but were deni ed by the NLRC in a Resolution dated June29, 2000. Hence, they filed with the Co urt of Appeals a petition for certiorari. On November 29, 2001, the Appellate Court rendered aDecision rev ersing and setting aside the NLRC s Decision and reinstatingthe Labor Arbiter s Deci sion. On December 21, 2001, petitioners filed amotion for reconsideration, but w ere denied by the Appellate Court in aResolution dated April 9, 2002. I: WON the CA erred in holding that petitioners failed to prove bysubstantial ev idence that respondents voluntarily resigned and/orabandoned their work. H: Voluntary resignation is defined as the act of an employee, who findshimself in a situation in which he believes that personal reasons cannot besacrificed in favor of the exigency of the service; thus, he has no otherchoice but to disass ociate himself from his employment. Acceptance of a

resignation tendered by an employee is necessary to make the resignationeffectiv e. No such acceptance, however, was shown in the instant case. Moreover, the fact that respondents immediately filed a complaint forillegal dis missal against petitioners and repudiated their allegedresignation completely ne gated petitioners claim that they voluntarilyresigned. In Molave Tours Corporation vs. National Labor Relations Commission, it was held: By vigorously pursuing the litigation of his action againstpetitioner, private respondent clearly manifested that he has no intentionof relinquishing h is employment, which act is wholly incompatible topetitioner s assertion that he v oluntarily resigned. Neither do we find any indication that respondents have shown by someovert acts their intention to sever their employment in petitioner company. In this case, respondents did not report back for work on July 27, 1998because t hey were suspended by petitioners for one week effective July 22to 28, 1998. Ver ily, their absence cannot be considered abandonment ofwork, a just cause for ter mination of employment. In fine, considering that respondents did not abandon their work, theirdismissal from the service is illegal. The petition is DENIED. MARK ROCHE V NLRC 313 SCRA 356 BELLOSILLO; August 31, 1999 FACTS -On different dates, private respondents filed separatecomplaintsfor under payment of wages and non-payment ofovertime pay againstpetitioners Mark Roche In ternational(MRI), Eduardo Dayot and SusanDayot. Private respondentssought the as sistance of a labor organizationwhich helpedthem organize the Mark Roche Workers Union(MRWU).Apparently irked by the idea of a union within thecompany,petitione rs ordered private respondents to withdraw thepetitionand further threatened the m that should they insist intheorganization of a union they would be dismissed. Unfazed,privaterespondents refused. As expected, private respondentswere dischar gedfrom work. Petitioners disclaimed knowledgeof any deficiency owing toprivate respondents since all thebenefits due them as required by law werefully paid, ex ceptovertime pay which they were not entitled to on accountoftheir being piece-r ate workers. The Labor Arbiter rendered hisdecision declaring as illegal the constructive dismissal of privaterespondents andordered their reinstatement, payment ofbackwages, salary differentialsand proportionate 13th monthpay and service incentive leave pay. Onappeal, the NationalLabor Rela tions Commission (NLRC) affirmed thedecision of theLabor Arbiter, but set aside the award of service incentive leave on the ground that private respondents were not entitledthereto asthey wer e piece-rate workers. Petitioners moved forreconsideration, but itwas denied. He nce, the present petition. ISSUE: WON the dismissal of private respondents was a constructivedismissal or a n illegal dismissal HELD -Constructive dismissal or a constructive discharge has beendefinedas a qui tting because continued employment isrendered impossible, unreasonable or unlikely, as an offerinvolving a demotion in rank and adiminutio n in pay. In theinstant case, private respondents were notdemoted in rank northe ir pay diminished considerably.They were simplytoldwithout prior warning or noti ce that there was no more workforthem.After receiving the notice of hearing of t he petition forcertificationelection on 27 October 1992, petitioners immediately told privaterespondents that they were no longer employed. Evidently it was the

filingof the petition forcertification election and organization of a union wit hinthecompany which led petitioners to dismiss private respondentsand notpetitio ners' allegations of absence or abandonment byprivaterespondents.The formation o f a labor union has never been a ground forvalid termination, and where there is anabsence of clear, valid and legalcause, the law considers the termination ill egal. *** In case of employees money claims, the employer bears the burden toprove that employees have received their wages and benefits and that thesame were paid in accordance with law. It is incumbent upon theemployer to present the necessary d ocuments to prove such claims. In their position paper, petitioners failed to present necessary documentaryevidenc e to substantiate their allegation that private respondents moneyclaims were full y paid. They cannot use the absence of trial as an excusefor their failure as th ey could have presented documentary evidence atany time before the Labor Arbiter and, on appeal, before the NLRC. Hence, they cannot at this late stage bewail that they were not afforded due process. As correctly held by the NLRC, private respondents as piece-rateemployees are no t entitled to service incentive leave pay as well asholiday pay even if they are entitled to other benefits like COLA and 13thmonth pay. Service incentive leave pay shall not apply to employeeswhose performance is unsupervised by the employ er, including those whoare paid in a fixed amount for performing work irrespecti ve of the timeconsumed in the performance thereof.[7] This Court finds that private respondents Eileen Rufon, Lilia Briones, Beatriz Managaytay, Delia Arellano, Anita Marcelo, Rio Mariano, MarissaSadili, W ilma Patacay, Estrella Mallari, Delia Laroya and Divina Villarbawere illegally d ismissed -not merely illegally constructively dismissed -by

petitioners Mark Roche International and/or Eduardo Dayot and SusanDayot, and to this extent, the assailed Decision of public respondentNational Labor Relations Commission affirming that of the Labor Arbiter, isMODIFIED. However, it is AFFI RMED insofar as it ordered the reinstatement of private respondents with back wages, salary differentials and 13thmonth pay. The service incentive leave pay awarded by the Labor Arbierbut deleted by the Na tional Labor Relations Commission is likewiseDELETED. E. RAZON, INC. [formerly known as Metro Services, Inc.], vs. THE HONORABLE SECRETARY OF LABOR AND EMPLOYMENT (DOLE) andMARINA PORT SERVICES, INC. (MARINA), G.R. No. 85867 May 13,1993 FACTS: ERI became Metro Port Services, Inc. (MPSI) in 1978 when partiesclose to then Presient Marcos, specifically his brother-in-law, Alfredo "Bejo" Romualdez, allegedly coerced Enrique Razon, who owned 93% of ERI'sequity, into e ndorsing in blank stock certificates covering 60% of suchequity. Upon the expira tion of the management contract in 1978, it wasextented to June 30, 1980. The PP A then executed a new contract with ERI/MPSI for a term of eight (8) years beginning July 1, 1980 two yearsbefore th e expiration of the eight-year term, the PPA cancelled themanagement contract fo r alleged violations thereof. PPA took over thecargo-handling operations as well as all the equipment of MPSI. PPA issued a Permit. The permit, which was to take effect for one-yearperiod or until July 20, 1987, 1 contained the following pertinent paragraphas part of the additional terms and conditions: Labor and personnel ofprevious operator, excep t those positions of trust and confidence, shall beabsorbed by grantee. Labor or employees benefits provided for underexisting CBA shall likewise be honored. MARINA began the arrastre services and required all workers of ERI/MPSI toaccomp lish individual information sheets. Weeks later, the bulk of the2,700 employees concerned discovered that they had been hired byMARINA as new employees effectiv e July 21, 1986. Hence, they clamoredfor the payment of their separation pay but both the MARINA and ERI/MPSIrefused to be liable therefor. In a bid to prevent disruption of work, PPAauthorized MARINA to deduct P2,000,000.00 from the amount due the MPSI as MARINA's rentals for MPSI equipment, as partial payment of theemployees' separation pay The employees who were members of the Associated Workers Union (AWU) filed a notice of strike on October 12, 1987. This move prompted the PPA, MARINA, ERI, and representatives of the AWU, Associated Port CheckersWorkers Uni on (ASTEU), and Marina Management Employees (MARINE ME) to meet and forge an Agreement on November 3, 1987 for the "immediateand reasona ble resolution of the long standing claim of separation benefitswhich resulted i n impending labor strikes". The agreement provided that the separation benefits would be computed at "one (1) month for everyyear of ser vice". MPSI then requested the Secretary of Labor and Employment toimmediately assume j urisdiction over the dispute to prevent paralyzationof the vital operations of t he Port of Manila. Invoking Article 263(g) of theLabor Code, then Secretary of L abor Franklin M. Drilon issued the order ofDecember 23, 1987 holding that the la bor dispute was "imbued withnational interest" and ordering the striking workers to return to work within24 hours and the management to accept them back. He als o directed theparties to comply faithfully with the Agreement of November 3, 198 7 and, pending the appraisal of the reasonable rental and market value of theMPSI equip ment, the amount of P5 million which the PresidentialCommission on Good Governme

nt (PCGG) had committed to unfreeze fromthe account of MPSI was made available. He also directed the National Conciliation and Mediation Board to form a committee to monitor and assist in the implementation of the November 3, 1987 Agreement. The separation pay of the workers was later taken from the proceeds ofthe sale t o PPA of ERI cargo-handling equipment and the rentals from July21, 1986 to Janua ry 29,1988 of MARINA for the said equipment. ISSUE: whether or not separation pay should be paid to the workers ofERI/MPSI. T he controversy actually is: which of the contendingcorporations, petitioner ERI/ MPSI or private respondent MARINA, shouldpay such benefit to the employees conce rned. RULING: Separation or severance pay is an allowance usually based onlength or se rvice that is payable to an employee on severance exceptusually in case of disci plinary discharge, or as compensation due anemployee upon the severance of his e mployment status with the employer(Marcopper Mining Corporation vs. NLRC, 200 SC RA 167 [1991]). UnderArticle 283 of the Labor Code, separation pay is required w here thetermination of employment relationship is occasioned by the "cessation o foperations" of an establishment. The said article, therefore, puts theburden of paying separation pay on ERI/MPSI, the employer for whomservices had been rende red by the employees who were separated fromemployment in view of the cessation of its business operations by thecancellation of its management contract with th e PPA. Petitioner, however, argues otherwise and would shift liability for separation pay to MARINA onthe st rength of Paragraph 7 of the additional terms and conditionsappended to the perm it to operate granted to MARINA. By absorbing ERI/MPSI employees and honoring the terms and conditionsin the coll ective bargaining agreement between ERI/MPSI and theemployees, MARINA did not as sume the responsibility of ERI/MPSI to payseparation pay to its employees. As co rrectly put by public respondent, Paragraph 7, insofar as it refers to employees' benefits, should be appliedprosp ectively with respect to MARINA. This conclusion is supported byParagraph 14 of Permit No. 104286 granted to MARINA which states: 14. Grantee shall be responsible for all obligations, liabilities or claims arising

out of any transactions or undertakings in connections with their cargohandling operations as of the actual date of transfer thereof to grantee. MARINA might have been impelled not only by compassion for theemployees but also by their tested skills in hiring them back upon theirseparation from the employ ment of ERI/MPSI. The situation in this case is completely different from that obtainingin Filipin as Port Services, Inc. vs. NLRC (200 SCRA 773 [1991]), where thepetitioner was o bligated "not only to absorb the workers of the dissolvedcompanies but also to i nclude the length of service earned by the absorbedemployees with their former e mployers as well" because said caseinvolved a merger of different companies into a single company as a resultof the PPA's integration of stevedoring/arastre ser vices. On the other hand, in the case at bar, there is no privity of contract between ERI/MPSI andMARINA s o as to make the latter a common or even substitute employerthat it should be bu rdened with the obligations of the former. DISMISSED. CENTRAL PHILIPPINES BANDAG RETREADERS, INC., VS. PRUDENCIO J. DIASNES. [G.R. No. 163607, July 14, 2008] FACTS: Respondent Prudencio J. Diasnes was initially hired by petitionerCentral Philippines Bandag Retreaders, Inc. (Bandag) as technical servicerepresentative for the Visayas and Bicol areas. In the course of hisemployment with Bandag, Dia snes was able to show his strengths andreceived numerous awards and citations. I n 1995, Diasnes received a promotional appointment as sales manager/officer-in-charge and wasassigned to ma nage Eastern Visayas Retreaders, Inc. based in TaclobanCity, with a service area covering the whole of Region VIII. It was at this latest posting that Diasnes' work performance started todeteriora te. From July to September in 1995, six (6) company-issuedchecks were dishonored for causes attributable to Diasnes and for which he was suspended for six (6) days. It was also during this two-monthstretch that his absences and tardiness became more frequent. Diasnes received a memorandum from his supervisor, Loreto C. Rico, relieving him from his duties as sales manager of Region VIII. Two daysafter, Di asnes received a notice to appear before the EmployeeAdjudication Committee on J anuary 9, 1996 to resolve the matter of hisrelief. After the meeting, the commit tee issued the following report andrecommendations: The committee unanimously ag reed that SM-OICPrudencio Diasnes be: Relieved for three (3) months. This will g ive himenough time to help his wife's problem; After the period lapsed he mayret urn to work, but with another position or function; if he desire[s] toretire fro m the company separation/retirement pay may be granted to him. Diasnes, however, did not avail himself of any of the options set forth inthe co mmittee's report and recommendations, but requested a Cebu Cityassignment which his employer granted. In Cebu City, Diasnes' performance as sales supervisor was far from encouraging. His attendanceand punc tuality were likewise very poor. To top it all, Diasnes did not at allreport for work from October 12, 1996 to November 11, 1996. Bandag, through supervisor Rico, addressed a show-cause letter-memorandum toDiasnes: SUB JECT: Habitual tardiness and Absenteeism. Then, he was terminated. ISSUE: WHETHER OR NOT A VALIDLY AND LEGALLY SEPARATED EMPLOYEE MAY BE ENTITLED TO SEPARATION PAY.

RULING: The petition has merit. We agree with Bandag that the report ofits Emplo yee Adjudication Committee recommending the grant to Diasnesof separation pay in case he opts to retire or voluntarily leave the companywas merely in the nature of an offer. Contrary to the perception of thelabor arbiter and the CA, the off er was not an open-ended arrangementwhich Diasnes was free to accept or reject w hen convenient. We also agree with the NLRC's October 29, 1999 Decision where it heldthat Diasne s failed to prove that Bandag regularly grants separation pay todismissed employ ees, as a policy, and without regard as to the cause ofdismissal. Absent substan tial proof to the contrary, we refuse to disturb thefactual findings of the NLRC . LA erred in awarding separation pay based onsocial justice. The only cases when separation pay shall be paid, although the employeewas lawfu lly dismissed, are when the cause of termination was notattributable to the empl oyee's fault but due to: (1) the installation of laborsaving devices, (2) redund ancy, (3) retrenchment, (4) cessation ofemployer's business, or (5) when the emp loyee is suffering from a diseaseand his continued employment is prohibited by l aw or is prejudicial to hishealth and to the health of his co-employees (Article s 283 and 284, LaborCode.) Other than these cases, an employee who is dismissed for a justand lawful cause is not entitled to separation pay even if the award w ere tobe called by another name.[10] Separation pay is likewise awarded in lieu of reinstatement ifreinstatement is n o longer feasible, as when the relationship between theemployer and employee has become strained. But where the cause of the separation is more serious than mereinefficiency, the generosity of the law must be more discerning. There is nodoubt it is compassio nate to give separation pay to a salesman if he isdismissed for his inability to fill his quota but surely he does not deservesuch generosity if his offense is misappropriation of the receipts of hissales. This is no longer mere incompetenc e but clear dishonesty. A securityguard found sleeping on the job is doubtless s ubject to dismissal but maybe allowed separation pay since his conduct, while in ept, is not depraved. But if he was in fact not really sleeping but sleeping with a prostituteduring h is tour of duty and in the company premises, the situation ischanged completely. This is not only inefficiency but immorality and thegrant of separation pay wou ld be entirely unjustified. We hold that henceforth separation pay shall be allowed as a measure ofsocial ju stice only in those instances where the employee is validlydismissed 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, likethef t or illicit sexual relations with a fellow worker, the employer may notbe requi red to give the dismissed employee separation pay, or financialassistance, or wh atever other name it is called, on the ground of socialjustice. The attendant circumstances in the present case considered, we areconstrained to deny Diasnes separation pay since the cause for thetermination of his employmen t amounts to gross and habitual neglect of his duties. His repeated and continuous absences without prior leaveand his f requent tardiness within the last two months prior to his dismissalexemplify his utter disregard for his employment and his employer'sinterest. Diasnes' charact er is also put into question if we take intoconsideration that he should have be en dismissed as early as January1996, if not for Bandag's benevolence and goodwi ll. It is unthinkable toaward separation pay or financial assistance to an unwor thy employee whoexploited and took advantage of his employer's past generosity a ndaccommodation. REVERSED and SET ASIDE. CENTRAL PHILIPPINES BANDAG RETREADERS, INC. vs.PRUDENCIO J. DIASNES (G.R. No. 163607, July 14, 2008) which deals with Separation Pay. The issue in this case was WHETHER OR NOT A VALIDLY AND LEGALLY SEPARATED EMPLOYEE MAY BE ENTITLED TO SEPARATION PAY. In resolvingsaid issue the Supreme Court gave a very helpful discussion of the topic, the main points of which I shall try to outline below: 1. Definition of separation pay. Separation pay is defined as the amount that an employee receives at the time of his severance and is designed to provide an employee with the wherewithal during the period he is looking for another employment. 2. When is separation pay authorized? a) In situations dealt with in Art. 283 (Closure of Establishment and Reduction of Personnel) and 284 (Disease as Ground for Termination) of the Labor Code, but not in terminations of employment based on instances enumerated in Art. 282 (Just Causes for Termination by Employer). As held by the Court in Eastern Paper Mills, Inc. v. NLRC (February 24, 1989) The only cases when separation pay shall be paid, although the employee was lawfully dismissed, are when the cause of termination was not attributable to the employee s fault but due to: (1) the installation of labor saving devices, (2) redundancy, (3) retrenchment, (4) cessation of employer s business, or (5) when the employee is suffering from a disease and his continued employment is prohibited by law or is prejudicial to his health and to the health of his coemp loyees (Articles 283 and 284, Labor Code.) Other than these cases, an employee who is dismissed for a just and lawful cause is not entitled toseparati on pay even if the award were to be called by another name. b) In lieu of reinstatement if reinstatement is no longer possible, as whenthe r elationship between the employer and employee has becomestrained. c) In some cases, as a measure of social justice. As held by the Court inPLDT vs . NLRC (August 23, 1988) We hold that henceforth separation pay shall be allowed as a measure ofsocial jus tice only in those instances where the employee is validlydismissed for causes o ther than serious misconduct or those reflecting onhis moral character. Where th e reason for the valid dismissal is, for example, habitual intoxication or an offense involving moral turpitude, likethef

t or illicit sexual relations with a fellow worker, the employer may notbe requi red to give the dismissed employee separation pay, or financialassistance, or wh atever other name it is called, on the ground of socialjustice. In the above-mentioned case the SC concluded its discussion of separationpay wit h these strong words: It is unthinkable to award separation pay orfinancial assis tance to any unworthy employee who exploited and tookadvantage of his employer s p ast generosity and accomodation. Thus, itdenied Diasnes separation pay since the c ause for the termination of hisemployment amounts to gross and habitual neglect of his duties. * PHILIPPINE DAILY INQUIRER, INC., v. LEON M. MAGTIBAY, JR. and PHILIPPINE DAILY INQUIRER EMPLOYEES UNION (PDIEU), July 24, 2007 FACTS: PDI hired Magtibay, on contractual basis, to assist, for a period offive months from February 17, 1995, the regular phone operator. Beforethe expiration of Magtibay s contractual employment, he and PDI agreed toa fifteen-day contract e xtension, or from July 17, 1995 up to July 31, 1995, under the same conditions as the existing contract. After the expiration of Magtibay s contractual employment, as extended, PDI announced the creation and availability of a new position for a secondteleph one operator who would undergo probationaryemployment. Apparently, it was PDI s po licy to accord regular employeespreference for new vacancies in the company. Thu s, Ms. Regina M. Layague, a PDI employee and member of respondent PDI Employees Union(PDIEU), fil ed her application for the new position. However, she laterwithdrew her applicat ion, paving the way for outsiders or non-PDIemployees, like Magtibay in this cas e, to apply. After the usual interview for the second telephone operator slot, PDI choseto hi re Magtibay on a probationary basis for a period of six (6) months. The signing of a written contract of employmentfollowed. A week before t he end the agreed 6-month probationary

period, PDI officer Benita del Rosario handed Magtibay his terminationpaper, gro unded on his alleged failure to meet company standards. Aggrieved, Magtibay immediately filed a complaint for illegal dismissal anddamag es before the Labor Arbiter. PDIEU later joined the fray by filing asupplemental complaint for unfair labor practice. Magtibay anchored hiscase principally on t he postulate that he had become a regular employeeby operation of law, consideri ng that he had been employed by and hadworked for PDI for a total period of ten months, i.e., four months more than the maximum six-month period provided for by law on probationaryemployment. He a lso claimed that he was not apprised at the beginning ofhis employment of the pe rformance standards of the company, hence, there was no basis for his dismissal. Finally, he described his dismissal astain ted with bad faith and effected without due process. PDI, denied all the factual allegations of Magtibay, adding that his previouscon tractual employment was validly terminated upon the expiration of theperiod stat ed therein. Pressing the point, PDI alleged that the periodcovered by the contra ctual employment cannot be counted with or tackedto the period for probation, in asmuch as there is no basis to considerMagtibay a regular employee. PDI addition ally claimed that Magtibay wasdismissed for violation of company rules and polic ies, such as allowing hislover to enter and linger inside the telephone operator s booth and forfailure to meet prescribed company standards which were allegedly madeknown to him at the start through an orientation seminar conducted by the company. LA found for PDI and accordingly dismissed Magtibay s complaint forillegal dismiss al. LA further ruled that Magtibay s dismissal from hisprobationary employment was for a valid reason. ISSUE: THE COURT OF APPEALS COMMITTED GRAVE ERROR IN FINDING THAT A PROBATIONARY EMPLOYEE S FAILURE TO FOLLOW AN EMPLOYER S RULES AND REGULATIONS CANNOT BE DEEMED FAILURE BY SAID EMPLOYEE TO MEET THE STANDARDS OF HIS EMPLOYER THUS EMASCULATING PETITIONER S RIGHT TO CHOOSE ITS EMPLOYEES. RULING: We GRANT the petition. This Court, to be sure, has for a reason, consistently tended to be partial in favor of workers or employees in laborcases whenever social legislations are involved. Management and labor, or the employer and the employee are more often not situated on thesame level pl aying field, so to speak. Recognizing this reality, the State hasseen fit to ado pt measures envisaged to give those who have less in lifemore in law. Article 27 9 of LC which gives employees the security oftenure is one playing field levelin g measure: Security of Tenure.. In cases of regular employment, the employer shall not terminate theservices of an employee except for a just cause or when authorized by thisTitle. x x x. Within the limited legal six-month probationary period, probationaryemployees ar e still entitled to security of tenure. It is expressly provided inthe afore-quo ted Article 281 that a probationary employee may be terminated only on two grounds: (a) for just cause, or (b) when he fails toquali fy as a regular employee in accordance with reasonable standardsmade known by th e employer to the employee at the time of his engagement. Magtibay had previously 5 to July 31, 1995 as a the Court entertains no gtibay was already very worked for PDI as telephone operatorfrom February 7, 199 contractual employee. Thus, doubt that when PDI took him in on September 21,1995, Ma much aware of the level of competencyand professionalism

PDI wanted out of him for the entire duration of hisprobationary employment. PDI was only exercising its statutory hiring prerogative when it refused tohire Magtibay on a permanent basis upon the expiration of the six-monthprobationary p eriod. This was established during the proceedings beforethe labor arbiter and b orne out by the records and the pleadings before theCourt. When the NLRC disrega rded the substantial evidence establishingthe legal termination of Magtibay s prob ationary employment andrendered judgment grossly and directly contradicting such clearevidence, the NLRC commits grave abuse of discretion amounting to lack or excess of jurisdiction. It was, therefore, reversible error on the parto f the appellate court not to annul and set aside such void judgment of theNLRC. REVISED and SET ASIDE. KAMS INTERNATIONAL INC., ESVEE APPAREL MFG. INC., and/orTHANWARDASH JESWANI and KAMLESH JESWANI, petitioners, vs.NATIONAL LABOR RELATIONS COMMISSION, FIRST DIVISION, and MERCEDITA T. TORREJOS, respondents. [G.R. No. 128806. September 28, 1999] FACTS: KAMS and ESVEE are sister companies engaged in garmentsmanufacturing loca ted at 201-E De La Paz Street, Mandaluyong City. Both are managed by petitioner Thanwardash Jeswani and his son, his copetitioner Kamlesh Jeswani. ESVEE hired private respondent Mercedita T. Torrejos as a utility worker inthe f actory. Torrejos performed her assigned task dutifully, and theJeswanis were ver y much pleased with her work. The managementdiscovered a shortage in the invento ry of KAMS. Consequently, strictersecurity measures were implemented and each em ployee was thoroughlyinspected before leaving company premises. Private respondent's personal travails started in August of 1994 when shebought six (6) yards of fabric from petitioners. In order to bring thepurchased fabric out of the factory she had to secure a gate pass andpresent it to the security g uard on duty at the gate. When security guardNena Blancaflor inspected the fabri c and measured it using her arms, sheestimated the length to be eight (8) yards instead of six (6) yards asindicated in the gate pass.[2] Torrejos was then made to sign the securitylogbook which stated that Mercy Torrejos tried to bring-out two (2) yardsof tela. [3] However, both parties gave conflicting versions of the e ventsthat happened after.

According to petitioners, Torrejos admitted to Thanwardash Jeswani thatshe had m ade a mistake in measuring the fabric and promised to pay forthe difference. The reafter, Thanwardash Jeswani accompanied Torrejos tothe gate and instructed the security guard to permit her to leave thepremises. Torrejos asseverated that the re was really no excess yardage inthe fabric she bought. According to her, after the fabric was re-measured, it was confirmed that it was only six (6) yards. Thus, Thanwardash Jeswani eventually allowed her to go home.[5] Nonetheless, what stands out in the records of the case is the fact that security guard Nena Blancaflor admitted before the Labor Arbiter that hermeasure ment of the fabric was inaccurate considering that she used onlyher arms, instea d of an actual yardstick.[6] Moreover, no disciplinary actionwas ever taken by m anagement against Torrejos with regard to thepurported pilferage. Thus, Torrejos continued performing her duties andresponsibilities even after the alleged misd emeanor. But on 3 October 1994 she failed to report for work because she had sore eyes. Sheinstructed her si ster Antonia, who also worked for petitioners, to inform theJeswanis that she wo uld be absent that day. When Antonia arrived from work later that day, she told private respondent that management haddecided to t erminate her services. To verify this, Torrejos called up Kamlesh Jeswani at his office. The latter instructed her to talk to his father instead. It was Thanwardash Jeswani who later confirmed through thetelephone tha t she had indeed been terminated because of abandonmentof work. Torrejos decided to go to petitioners office, but she was barred by thesecurity g uard from entering the company premises. The Jeswanis refused to talk to her personally; they only informed her through the telephonethat she had been terminated effective 3 October 1994 for abandonment of work. Torrejos filed a complaint for illegal dismissal against petitionerswit h the arbitration branch of the (NLRC) Manila. She prayed for thepayment of sala ry differential, service incentive leave pay, 13th month payfor 1994, moral and exemplary damages, and attorney s fees. = ILLEGALLY DISMISSED. ISSUE: whether Torrejos was illegally dismissed and whether the monetaryaward fo r salary differential was correctly computed by the NLRC. RULING: It cannot be overly emphasized that the dismissal of an employeeshould b e for any of the just and authorized causes enumerated in theLabor Code.[18] And since petitioners utterly failed to justify Torrejos discharge on the basis of ab andonment of work, we do not hesitate tostrike it down as illegal. Furthermore, it must be stressed that abandonment of work does not per se sever the employer-employeerelationship. It is merely a form of neglect of duty, which is in turn a justcause for terminatio n of employment. The operative act that willultimately put an end to this relati onship is the dismissal of the employeeafter complying with the procedure prescr ibed by law.[19] As frequently held by the Court, the termination of an employee must beeffected in accordance with law. Therefore the employer must furnish theworker or employe e sought to be dismissed with two (2) written notices, i.e., (a) notice which apprises the employee of the particular acts oromissions for which his dismissal is sought; and, (b) subsequent noticewhich informs the e mployee of the employer s decision to dismiss him. [20] Rule XIV, Sec. 2, of the Omnibus Rules Implementing the Labor Code provides -Sec. 2. Any employer who seeks to dismiss a worker shall

furnish him a written notice stating the particular acts or omission constituting the grounds for his dismissal. In case of abandonment of work, the notice shall be served at the worker s last known address (emphasis supplied). However, it must be mentioned that no written notice was ever sent bypetitioners informing Torrejos that she had been terminated due toabandonment of work. This failure on the part of petitioners to complywith the twin-notice requirement in deed underscored the irregularitysurrounding Mercedita T. Torrejos dismissal. As to the issue of salary differential, petitioners plead that theunderpayment ( salary differential) was computed when Torrejos was thena housemaid and not an i ndustrial worker. Consequently, the NLRCgravely abused its discretion when it ru led that Torrejos was an industrialworker when she was still a housemaid.[21] Pe titioners cite the resolution of the NLRC dated 7 February 1997 where it held that anent the amount ofsalary diff erential due Torrejos, there being evidence that she worked asan alternate from January to May 1993, salaries received being in accordwith the rates prescribed by law corresponding to that period, a reductionof the claim was thus justified under such circumstances.[22] This indicates that before January 1993 Torrejos was indeed hired as a domesticemployee and not an industrial employee, as she pretended to be. Thus, according to petitioner, the minimum wage law cannot be applied toTorrejos befor e January 1993 since at that time she was still a domesticemployee. We do not agree. Contrary to what petitioners claim, the only conclusionsthat ca n be gleaned from the NLRC Resolution of 7 February 1997 are: (a) that Torrejos only worked two (2) to four (4) days a week from January1993 to Ma y 1993; (b) that during this period she was paid the legalminimum wage; and, (c) that, consequently, the earlier award of salarydifferential of P23,075.00 must accordingly be reduced to P18,603.00. Indeed, there is nothing in the Resolution from which wecan logic ally infer that Torrejos was truly a domestic helper prior to Januaryof 1993. As the employer of private respondent, petitioner ESVEE had the burden ofproving that Torrejos was hired only as a domestic helper on 21 July 1991and that it wa s only on 21 January 1993 that she was absorbed bypetitioner ESVEE as an industr ial employee. However, petitioners failed to discharge such burden. The records are bereft of any evidence showingthat Torrej os was initially hired by petitioners as a domestic helper so as topreclude the application of the minimum wage law. DISMISSED. Jo vs. NLRC 324 SCRA 437 February 2, 2000

FACTS: Peter Mejila was a barber employed by a barbershop. Peter Mejilaworked as barber on a piece rate basis at Dina s Barber Shop. In 1970, theowner, Dina Tan, sold the barbershop to petitioners Paz Martin Jo andCesar Jo. All the employees, including private respondent, were absorbedby the new owners. The name of the b arbershop was changed to WindfieldBarber Shop. The owners and the barbers shared in the earnings of thebarber shop. The barbers got two-thirds (2/3) of the fee paid for everyhaircut or shaving job done, while one-third (1/3) went to the own ers of theshop. The owners of the shop attempted to mediate in the incessant squabblingbetween M ejila and a fellow employee. Mejila then unilaterally demandedhis separation pay and other benefits, despite his employers'assurancesthat he was not being dismi ssed. He then turned over the duplicate keys ofthe shop(which he held as caretak er) to the cashier and took all hispersonal belongings from his work place, and found similar employment inanother shop. He then filed a complaint for illegal d ismissal. ISSUE: 1. Whether or not there exists an employer-employee relationshipbetween p etitioners and private respondent. 2. Whether or not privaterespondent was dismi ssed from or had abandoned his employment. HELD: (1) Absent a clear showing that petitioners and private respondenthad inte nded to pursue a relationship of industrial partnership, weentertain no doubt th at private respondent was employed by petitioners ascaretaker-barber. Initially, petitioners, as new owners of the barbershop, hired private respondent as barber by absorbing the latter in their employ. Undoubtedly, the services performed by private respondent as barber isrelated to , and in the pursuit of the principal business activity ofpetitioners. Later on, petitioners tapped private respondent to serveconcurrently as caretaker of the shop. Certainly, petitioners had the powerto dismiss private respondent being th e ones who engaged the services ofthe latter. (2) He abandoned his work. This was manifested by: His having bragged tofellow w orkers his intention to quit his work in the shop; his surrender ofthe shop's ke ys and his taking all of his personal belongings from the saidplace; his failure to report for work and not giving any valid reason forsuch; he acquired employm ent in another shop immediately, despitereassurance that he could stay in his ol d place of work; and finally, hiscomplaint for illegal dismissal did not include a prayer for reinstatement. All of these show concurrence of the intent to abandon his work and overt acts that show his lack of interest in continuing his work. GRANTED. HANTEX TRADING CO., INC., and/or MARIANO CHUA, vs. CA, Special Former Tenth Division, and BERNARDO SINGSON. FACTS: Private respondent Bernardo Singson was employed by petitionerHantex Trad ing Co., Inc. (HANTEX) on 8 November 1994 as sales representative. HANTEX was engaged in selling laminating machines and ID supplies. He was paid a regular salary of P165.00/day in addition to P500.00 travelling allowance and a 3% -5% commission from hissales. Sometime in February 1996 the management of HANTEX called theattention of Singson regardi ng his deteriorating salesperformance. Despite thereof, Singson's performance sh owed no sign ofimprovement as it remained inadequate and unsatisfactory. Thus, HANTEX, through its president, petitioner Mariano Chua, held a "one-onone" conference with him on 5 August 1996. The parties presented conflicting versions of what actually transpiredduring the conference. Singson alleged that petitioner Mariano Chuaasked for his resignati on from the company, and required him to submit aresignation letter otherwise hi

s separation pay, 13th month pay and othermonetary benefits would not be paid. W hen he refused, petitioner MarianoChua ejected him from the premises of HANTEX a nd left instructions to theguards on-duty to refuse him admittance. Petitioners denied that they dismissed Singson and maintained that theconference was merely intended to motivate him "to exert more effort inhis job and mend hi s work attitude;" and that Singson apparently resentedpetitioner Chua for it tha t he never reported back for work after theconference. Singson filed a complaint with the Labor Arbiter for illegal dismissal withpraye r for reinstatement asserting that he was dismissed from hisemployment without p rior notice and hearing.[2] On the contrary, HANTEXaverred that Singson was not dismissed but abandoned his job after hewas reprimanded. LA: illegally dismissed . NLRC: affirmed. CA: denied. ISSUE: whether private respondent Bernardo Singson deliberatelyabandoned his emp loyment, or was illegally dismissed by the managementof petitioner HANTEX. RULING: DENIED. Considering the hard times in which we are in, it isincongruous for respondent to simply give up his work after receiving amere reprimand from h is employer. No employee would recklesslyabandon his job knowing fully well the acute unemployment problem andthe difficulty of looking for a means of livelihoo d nowadays. With a family to support, we doubt very much that respondent would so easily sacrifice his only source of income and unduly expose his family tohunger and untold hardships. Certainly, no man in his right mind would do such thing. What is more telling is that on 8 June 1996, or three (3) days after hisemployme nt was terminated, respondent immediately instituted theinstant case for illegal dismissal with a prayer for reinstatement against hisemployer. An employee who loses no time in protesting his layoff cannotby any reasoning be said to have ab andoned his work, for it is already awell-settled doctrine that the filing by an employee of a complaint forillegal dismissal with a prayer for reinstatement is proof enough of hisdesire to return to work, thus negating the employer's charg e of

abandonment. Verily, it would be illogical for respondent Singson to haveleft hi s job and thereafter file the complaint against his employer. Abandonment is a matter of intention and cannot lightly be presumed fromcertain equivocal acts. For abandonment to exist, it is essential (a) thatthe employee m ust have failed to report for work or must have beenabsent without valid or just ifiable reason; and, (b) that there must havebeen a clear intention to sever the employer-employee relationshipmanifested by some overt acts -the second element is the moredeterminative factor. Mere absence of the employee is not sufficient . The burden of proof is on the employer to show a clear and deliberate intent onthe p art of the employee to discontinue employment without any intentionof returning. PANTRANCO NORTH EXPRESS, INC. vs. (NLRC) and ALFONSOAYENTO, SR. G.R. No. 106516 September 21, 1999 FACTS: Pantranco implemented a job classification program for purposesof manpowe r reduction. Under the old job classification of employees, salaries ranged from salary grades 1 to 23. In the new program, the salarygrades were reclassified. Private respondent, Ayento, was an employee ofpetitioner. He started as a filing clerk and promoted to Head RegistrationSection on April 1, 1982. Private respondent's position as Head of theRegistration Section had a Sal ary Grade of 11-R-5 with a basic salary ofP1,320.00. Based on his Salary Grade o f 11, private respondent's rankingwas that of a Technical Assistant. With the co mpany's reorganization, positions were reclassified and restructured. Private respondent's positionwas a bolished. Consequently, he was appointed as Registration Assistantwith a Salary Grade of 9-R-2. The basic salary was increased fromP1,320.00 to P1,855.00. As a Registration Assistant, he actually wasrelieved of his supervisory function, no longer had any field work, norentitled to overtime pay averaging from P700.00 to P800.00. Hisrepresentation expenses and discretionary funds of P1,000.00 were a lsocancelled. He received instead a fixed amelioration allowance of P350.00. Private respondent filed a Complaint against petitioner for unfair laborpractice . It specifically alleged demotion of position and diminution ofsalary and benef its. Respondent company, on the other hand, argued thatthere was no demotion but a job-reclassification where petitioner's positionwas abolished due to the comp any's financial problems. LA ruled in favorof private respondent. NLRC affirmed. ISSUE: Right or prerogative of management to abolish a position no longernecessa ry as a result of a valid reorganization. RULING: (OSG) contends that private respondent's position was not trulyabolished and the reorganization was a mere ploy to accommodatepetitioner's own protege. We are unable to agree with both the LaborArbiter and the Commission. The State affords the constitutional blanket of rendering protection to labor, but it must also protect the right of employers to exercise what are clearly management prerogatives, so longas the ex ercise is without abuse of discretion. It is a well-settled rule that labor laws discourage interference with an employer's judgment in theconduct of his business. 17 Absent any unfair or oppressive act againstprivate respondent, the Court cannot and should not interfere withmanagement decisions validly under taken by petitioner. To do so would bemeddling with the control and management o f the corporation withoutlegal justification. Private respondent has not shown concretely any arbitrary act and badfaith on th

e part of the petitioner. Neither could he show persuasively thatthe reorganizat ion was effected to remove unwanted employees andreplace them with favored ones, rather than purposely to show up itsdevastated finances through reorganization, retrenchment and costcutting. GRANTED. Hyatt Taxi Services, Inc. v. Catinoy June 26, 2001 FACTS: Catinoy was a taxi driver of Hyatt Taxi Services, Inc. He is also amember and officer ofHyatt Taxi Employees Association, a legitimate labororganization registered with the DOLE andis the exclusive bargainingrepresentative of all tax i drivers of the company. One day he foundout thathis desk was forcibly opened a nd he found out that it was the acting unionpresidentwho opened it so an argumen t began that ended in blows wherehe was injured so he filed acriminal complaint against the president. Theunion asked the company to suspend them bothfor fighti ng and a memowas issued. It said that company rules and the union s by-laws hadbee nviolated so they were put on indefinite suspension. Catinoy then filed acomplai nt for illegalsuspension. After 30 days of suspension, he reportedfor work but h e was not allowed to bec ofthe 2 cases he filed. He then amended his complaint to constructive dismissal. The LA ruled thattherewas illeg al dismissal and the NLRC affirmed it but did not award backwagesbec therewas no concrete showing of illegal dismissal and it was onlyconstructive illegal dismi ssal. TheCA reversed it and ruled that there wasillegal dismissal and awarded fu ll backwages. ISSUE: W/N there was illegal dismissal or constructive dismissal. HELD: The SC ruled that there was illegal dismissal, not merelyconstructive dism issal. Therewas no justification for the deletion of theaward of backwages. The factual findings of the LA,which the NLRC initiallyadopted, show that respondent was not taken back after the 30daysuspension. The LA appreciated the events as badges of constructivedismissal. Constructivedi smissal is when the employee wants to work butcannot due to the prevailing condi tions. Buthere, what made it impossibleor unacceptable for respondent to resume work was aninsistence that hefirst desist from filing his complaints before he b e allowed to return. Herefused and amended his complaint to include constructive dismissal. His refusal to yield isunderstandable for he has every right not to bargain

away his right to prosecute his complaintsin exchange for the employmentto which he was in the first place rightfully entitled. Jo Cinema v. NLRC June 28, 2001 FACTS: Petitioner is in the movie business. Respondent was a theaterporter. A me mo wasissued saying that no checks should be encashed butrespondent, for her fri end, encashedwithout permission 4 checks with theticket seller. The checks bounc ed so she was asked toshow cause why sheshouldn t be disciplined but she didn t answ er so she waspreventivelysuspended. An investigation was held where she particip atedin. During the investigation shefiled a case for illegal dismissal bec whens he was suspended, she was allegedly terminatedalso. The LA and NLRCruled that th ere was illegal dismissal or at least constructive dismissalandordered separatio n pay and full backwages. The LA ruled that since thecompany insisted on making her pay the amount she couldn t come backto work even if she wanted to. The NLRC r uled that even thoughrespondent had no cause of action against the company as sh ewas merelyplaced on preventive suspension she was still illegally dismissed. ISSUE: W/N respondent was illegally dismissedHELD: It is clear that respondent w as not dismissed but merely placedunder preventivesuspension. It cannot be const rued as dismissal since thecessation from work is onlytemporary. She could not h ave been dismissedbecause a formal investigation was still beingconducted. She e venattended the investigation admitted the allegations. If she wasindeeddismisse d the investigation wouldn t have continued. There was alsono constructive dismiss al. Constructive discharge is quitting because continued employment isrendered impos sible,unreasonable or unlikely. This does not hold. Thedemand for payment out of her own pocketswas reasonable as it wasattributed to her. As she was not illega lly dismissed, separation payandbackwages are not in order. TEMPORARY RETRENCHMENT: SEBUGERO V NLRC (GTISPORTSWEAR) 248 SCRA 532 DAVIDE JR; September 27, 1995. NATURE: Special civil action for certiorari FACTS: Petitioners were among the thirty-eight (38) regular employees ofprivate respondent GTI Sportswear who were given "temporary layoff" notices due to alleged lack of work andheavy losses caused by thecancellation of orders from abroad and by the garments embargo. Believing that their "temporary lay-off" was a ploy to dismiss them, resorted to because of theirunion activities and was in violation of their right to security of tenure, laid-off employees filed complaint with LaborArbite r. -GTI denied the claim of illegal dismissal and asserted that itwas itsprerogativ e to lay-off its employees temporarily for a period not exceedingsix months to p revent losses, and that thelay-off affected both union andnon-union members. It justified its failure to recall the 38 laid-offemployees after the lapse ofsix m onths because of the subsequentcancellations of job orders made by its foreign p rincipals. -22 of the 38 complainants accepted the separation pay.The petitionersherein did not. -LA said there was justification to lay-off temporarily some employees.Thattheir principals transferred their orders were proven by correspondence. Although, as a general rule,Respondent company has the prerogative andright to r esort totemporary lay-off, such right is likewise limited to a periodof six(6) m onths applying Art. 286.However, Respondent companyshouldhave recalled them afte r the end of the six month periodor at the leastreasonably informed them (compla inants) thatthe Respondent company isstill not 'in a position to recall them,and if the same cannot be met, thenthe company shouldimplement retrenchment and pay

its employeesseparation pay.Hence, there is in this complaint a clear case ofco nstructivedismissal.Reinstatement is not prudent, separation pay isinorder. -GTI appealed to NLRC.NLRC concurred with the findings ofthe LaborArbiter that t here was a valid lay-off of the petitionersdue to lack of work, but disagreed with the latter's rulinggranting back wages.NLRC said thathaving e stablished lack of work, it follows that retrenchment took placeand notconstruct ive dismissal. -Petitioners filed this action. ISSUES: 1. WON the ground for termination of employment wasredundancy 2.WON term ination was legal HELD 1.NO, the ground in this case is retrenchment. -Redundancy exists where the services of an employee are inexcess ofwhat is reas onably demanded by the actualrequirements of the enterprise. -Retrenchment on the other hand, is used interchangeably withthe term"lay-off." It is the termination of employment initiatedby the employerthrough no fault of the employee's and withoutprejudice to the latter, resorted to by management duringperiods of business recession, industrialdepress ion, or seasonalfluctuations, or during lulls2.YES, it is legal, but it is defec tive. -Six months is the period set by lawthat the operation of abusiness or und ertaking may be suspended therebysuspendingthe employment of the employees conce rned. Thetemporarylay-off wherein the employees likewise cease to work shouldals onot last longer than six months. After six months, theemployees shouldeither be recalled to work or permanentlyretrenched. -Failing to comply with this would be tantamount to dismissingtheemployees and t he employer would thus be liable for suchdismissal. -We must determine whether there was compliance with thelaw regardinga valid ret renchment at anytime within the sixmonth-period that they weretemporarily laid-o ff.Three basicrequisites for valid retrenchment: -it is necessary to prevent losses and losses are proven -written notice toemplo yees and DOLE at least 1 mo prior to intended date of retrenchment-separation pa y-Here, both the Labor Arbiter and the NLRC found that theprivaterespondent was suffering and would continue to sufferserious losses. -In this case, it is undisputed that the petitioners were givennotice of thetemp orary lay-off. There is, however, no evidencethat any written notice topermanent ly retrench them was givenat least one month prior. There is

also nothing in the records toprove that a written notice was ever given tothe D OLE. -With respect to the payment of separation pay, the NLRCfound that GTIoffered to give the petitioners their separation pay but that the latterrejected such offe r which was accepted only by 22 out of the 38 originalcomplainants. -CONCLUSION:RETRENCHMENT IS DEFECTIVE IN THE FACE OFFINDING THAT REQUIRED NOTICES TO PETITIONERS AND DOLEARE NOT GIVEN.But this doesn t make the retrenchment illegal. -Where the dismissal ofemployee is for just cause and isproven to be but he is not accorded rightto due process, dismi ssal is upheld but employer must be sanctioned fornon-compliance. ORIGINAL DISCUSSION OF RULING: Under the aforequoted Article 283 ofthe Labor Cod e, there are three basic requisites for a valid retrenchment: (1) the retrenchment is necessary to prevent losses and such losses areproven; ( 2) written notice to the employees and to the Department ofLabor and Employment at least one month prior to the intended date ofretrenchment; and (3) payment of separation pay equivalent to one monthpay or at least 1/2 month pay for every y ear of service, whichever ishigher. As for the first requisite, whether or not an employer would imminentlysuffer se rious or substantial losses for economic reasons is essentially aquestion of fac t for the Labor Arbiter and the NLRC to determine. 14 Both LA and the NLRC found that the private respondent was suffering and wouldcontinue t o suffer serious losses, thereby justifying the retrenchment ofsome of its emplo yees, including the petitioners. In the instant case, noclaim was made by any of the parties that such a finding was notsupported by substantial evidence. Furth ermore, the petitioners did notappeal the finding of the Labor Arbiter that thei r temporary lay-off toprevent losses was amply justified. They cannot now questi on this findingthat there is a valid ground to lay-off or retrench them. The requirement of notice to both the employees concerned and the(DOLE) is manda tory and must be written and given at least one monthbefore the intended date of retrenchment. In this case, it is undisputedthat the petitioners were given not ice of the temporary lay-off. There is, however, no evidence that any written notice to permanently retrenchthem was giv en at least one month prior to the date of the intendedretrenchment. The NLRC fo und that GTI conveyed to the petitioners theimpossibility of recalling them due to the continued unavailability ofwork. 17 But what the law requires is a writte n notice to the employeesconcerned and that requirement is mandatory. 18 The not ice must also be given at least one month in advance of the intended date of retrenchmentto enabl e the employees to look for other means of employment andtherefore to ease the i mpact of the loss of their jobs and the correspondingincome. 19 That they were a lready on temporary lay-off at the time noticeshould have been given to them is not an excuse to forego the one-month written notice because by this time, their lay-off is to become permanentand the y were definitely losing their employment. There is also nothing in the records to prove that a written notice was evergive n to the DOLE as required by law. The lack of written notice to thepetitioners a nd to the DOLE does not, however, make the petitioners'retrenchment illegal such that they are entitled to the payment of backwages and separation pay in lieu o f reinstatement as they contend. Theirretrenchment, for not having been effected with the required notices, ismerely defective. In those cases where we found th e retrenchment to beillegal and ordered the employees' reinstatement and the pay ment of backwages, the validity of the cause for retrenchment, that is the exist ence ofimminent or actual serious or substantial losses, was not proven. 26 But here, such a cause is present as found by both the Labor Arbiter and theNLRC. Th

ere is only a violation by GTI of the procedure prescribed in Article283 of the Labor Code in effecting the retrenchment of the petitioners. GRANTED and the challenged decision of public respondent National LaborRelations Commission in NLRC NCR CA Case No. 004673-93 is modified byreversing and settin g aside its deletion of the awards in the Labor Arbiter'sdecision of proportiona te 13th month pay for 1991 and attorney's fees, thelatter being reduced to P25,0 00.00. Separation pay equivalent to one-half(1/2) month pay for every year of se rvice shall be computed from the datesof the commencement of the petitioners' re spective employment until theend of their six-month temporary lay-off which is 2 2 July 1991. In addition, private respondent G.T.I. Sportswear Corporation is ordered to pay each ofthe pe titioners the sum of P2,000.00 as indemnification for its failure toobserve due process in effecting the retrenchment. SIEMENS PHILIPPINES, INC. AND MR. ERNST H. BEHRENS, VS. ENRICO A. DOMINGO. [G.R. No. 150488, July 28, 2008] FACTS: Domingo signed an Employment Contract with Maschinen & Technik, Inc. (MATEC) as a consultant, with a compensation package ofPhp8,000.00 /month salary and an allowance of Php400.00/month. MATECis a subsidiary of Sieme ns Philippines.[4] Thereafter, Domingo was givenadditional work by MATEC, in whi ch he was paid DM1,800.00/month on topof his original salary. The extra work was the result of a contract enteredinto by MATEC and Siemens Aktiengesellschaft[5] (Siemens Germany), whereby MATEC, at the request of Siemens Germany, hired Domingo tohandle the ope ration of OEN OEV TD.[6] Siemens Germany is a Germancompany which has an investm ent in Siemens Philippines.[7] Electronic Telephone System Industries, Inc. (ETSI) availed of Domingo'sservices as assistant manager. ETSI, like MATEC is a subsidiary of SiemensPhilippines.[8 ] The Contract of Employment[9] of Domingo with ETSI providesthat the latter sha ll have the right to assign the said contract in favor ofSiemens Philippines, wh ich is a corporation to be incorporated under thelaws of the Philippines. While still an assistant manager of ETSI, Domingowas hired as a consultant by Siemens Germany in the field of text and data

networks for a period of twelve (12) months.[11] As compensation, hereceived DM2 0,000.00, payable once for every twelve-month period. Siemens Germany sent a letter to ETSI guaranteeing the consultancyagreement betw een Siemens Germany and Domingo. Domingo filed a complaint for illegal dismissal and prayed for the paymentof sal aries, 13th month pay, backwages, damages, separation pay and attorney's fees.[22] Domingo alleged that he was forced to resign because ofthe act of Siemens Philippines of not renewing the consultancy agreement. [23] Siemens Philippines countered that Domingo's resignation wasvoluntary and t hat they were not privy to the consultancy agreementbetween Domingo and Siemens Germany. LA: illegal dismissal. NLRC: affirmed. ISSUE: whether there was constructive dismissal that would entitle Domingo to his monetary claims. RULING: We believe, and so hold, that Domingo was constructivelydismissed from e mployment. A diminution of pay is prejudicial to the employee and amounts toconstructive di smissal.[35] The gauge for constructive dismissal is whether areasonable person in the employee's position would feel compelled to giveup his employment under t he prevailing circumstances. Constructivedismissal is defined as quitting when c ontinued employment is renderedimpossible, unreasonable or unlikely as the offer of employment involves ademotion in rank or diminution in pay.[36] It exists wh en the resignation onthe part of the employee was involuntary due to the harsh, hostile andunfavorable conditions set by the employer. It is brought about by th eclear discrimination, insensibility or disdain shown by an employer whichbecome s unbearable to the employee. An employee who is forced tosurrender his position through the employer's unfair or unreasonable actsis deemed to have been illega lly terminated and such termination isdeemed to be involuntary.[37] We have, under the law's mandate, consistently resolved this situation infavor o f the employee in order to protect his rights and interests from thecoercive act s of the employer. While admittedly, Siemens Philippines is not a party to the arrangementbetween S iemens Germany, ETSI and Domingo, knowledge of andacquiescence to -if not actual concurrence in -the arrangement can beimputed to Siemens Philippines as to bind it to the arrangement. Thisconclusion finds support in the following: First, based on the findings of facts of the LA, NLRC and CA MATEC, ETSI, Siemens Philippines and Siemens Germany are related companies, the first three being subsidiaries of the parent company, and the fourth, Siemens Germany, having an investment in Siemens Philippines. Short ofpiercing t he veil of corporate fiction, we note the intimate corporaterelationship of Siem ens Germany and Siemens Philippines, including thepractice of the two companies of integrating their workforce. Second, in Domingo's contract of employment with Siemens Philippines, itis provi ded that Domingo shall not be connected in any other workcapacity or employment or be otherwise involved, directly or indirectly, with any other business or concern without first having obtained thewritten cons ent of the company. Yet, Siemens Philippines never questionedthe continued consu ltancy work of Domingo with Siemens Germany, noteven when the consultancy agreem ent was renewed twice during thelifetime of Domingo's contract of employment wit h Siemens Philippines.

Third, the guarantee letter issued by Siemens Germany in favor ofDomingo was nev er questioned, much less revoked by Siemens Philippineswhen it assumed the emplo yment of Domingo. The Guarantee Letter was asecurity given to Domingo by Siemens Germany assuring Domingo thatSiemens Philippines would ensure that Siemens Germ any would extend theconsultancy agreement as long as Domingo was under its emplo y. Fourth, the consultancy agreement was a form of benefit or privilege givento Dom ingo by ETSI, a privilege that was allowed by Siemens Philippines tocontinue whe n it took over the majority of the business activities of ETSIand, consequently, became Domingo's employer. The outright removal ofthe privilege contravenes the law, because it resulted in the effectivediminution of Domingo's salary. Domingo's constructive dismissal entitles him to his monetary claims, subject to the following modifications: First, we are not in accord with the Decision of the LA finding Behrens, thePres ident and Chief Executive Officer of Siemens Philippines, solidarilyliable with the company. A corporation, being a juridical entity, may actonly through its di rectors, officers and employees. Obligations incurred bythem, while acting as co rporate agents, are not their personal liability butthe direct accountability of the corporation they represent. As a rule, theyare only solidarily liable with the corporation for the termination ofemployees if they acted with malice or bad faith.[38] In the case at bar, malice or bad faith on the part of Behrens in the constructive dismissal ofDomin go was not sufficiently proven to justify a ruling holding himsolidarily liable with Siemens Philippines. Second, an illegally or constructively dismissed employee is entitled to: (1) either reinstatement, if viable, or separation pay if reinstatement is nolonger viable; and (2) backwages. These two reliefs are separate anddistinct from each other and are awarded conjunctively.[39] As a rule, separation pay is awarded to an illegally dismissed employee,

computed at the rate of one month pay per year of service. Accordingly, the LA decision granting separation pay equivalent to two months salaryper year of service must be modified. There is nothing on record that evenremotely sugges ts that it is the company policy of Siemens Philippines togrant its employees se paration pay of two months' salary for every year ofservice. Thus, in consonance with our previous rulings,[40] Domingo shall beawarded separation pay in the am ount of one month pay for every year ofservice, but consultancy fees shall not b e included in the computation ofhis separation pay. As discussed above, the evid ence presented byDomingo is not sufficient to pierce the veil of corporate ficti on betweenSiemens Philippines and Siemens AG, which would make SiemensPhilippine s liable for the monetary obligations of Siemens AG. Third, the backwages that should be awarded to Domingo shall bereckoned from the time his constructive dismissal took effect until the finality of this decision. This is in conformity with Article 279 of the LaborCo de which provides that an employee who is unjustly dismissed fromwork shall be e ntitled to full backwages, inclusive of allowances, and to hisother benefits or their monetary equivalent, computed from the time hiscompensation was withheld f rom him up to the time of his actualreinstatement. Since reinstatement of Doming o is no longer possible dueto his strained relations with the management of Siem ens Philippines, andconsidering the position he held in the company, he is lawfu lly entitled toreceive backwages. For the same reason cited above, consultancy f eesshall be excluded in the computation of Domingo's backwages. Finally, moral damages may be recovered when the dismissal of theemployee was ta inted by bad faith or fraud; or when it constituted an actoppressive to labor or done in a manner contrary to morals, good customsor public policy. Exemplary da mages are recoverable if the dismissal wasdone in a wanton, oppressive, or malev olent manner.[41] In this case, we have found that there was bad faith in the failure or refusal of Siemens Philippines to work for the renewal of Domingo's consultancy contract withSiemen s Germany. But while we affirm Domingo's entitlement to thesedamages, they are n ot intended to enrich the dismissed employee. Consequently, we find the amount of P50,000.00 for moral damages andP50,000.00 f or exemplary damages sufficient to allay the sufferingsexperienced by Domingo an d by way of example or correction for publicgood, respectively. William Endeliseo Barroga v Data Center College of thePhilippines. June 27, 2011 . FACTS: petitioner was employed as an Instructor inDataCenterCollegeLaoagCitybran ch in Ilocos Norte. In a Memorandum dated June 6, 1992, respondents transferred him toUniversity of North ern Philippines (UNP) in Vigan, Ilocos Sur where theschool had a tie-up program. Petitioner was informed through aletter dated June 6, 1992 that he would be rec eiving, in addition to hismonthly salary, a P1,200.00 allowance for board and lo dging during his stint as instructor in UNP-Vigan. In 1994, he was recalled to Laoagcampus. On Oc tober 3, 2003, petitioner received aMemorandum transferring him to Data Center C ollege Bangued, Abrabranch as Head for Education/Instructor due to an urgent nee d for anexperienced officer and computer instructor thereat. Petitioner declined to accept his transfer to Abra citing the deterioratinghealt h condition of his father and the absence of additional remuneration to defray expenses for board and lodging which constitutes implicitdiminution of his salary. He filed a Complaint for constructive dismissalagainst respondents. Petitioner alleged that his proposed transfer to Abraconstitutes a demotion in rank and diminution in pay and would causepersonal inconvenience and hardship. H

e argued that although he wasbeing transferred to Abra branch supposedly with th e same position hewas then holding in Laoag branch as Head for Education, he lat er learnedthrough a Memorandum from the administrator of Abra branch that he wil lbe re-assigned merely as an instructor, thereby relegating him from anadministr ative officer to a rank-and-file employee. Moreover, the elimination of his allowance for board and lodging will result to an indirectred uction of his salary which is prohibited by labor laws. Petitioner also claimed that when he questioned the indefinite suspension of thescholarship for post-graduate studies extended to him by respondents, thelatter became indiffere nt to his legitimate grievances which eventually ledto his prejudicial re-assign ment. He averred that his transfer is not indispensable to the school s operation considering that respondents evensuggested that he take an indefinite leave of absence in the meantime ifonly to address h is personal difficulties. Petitioner thus prayed for his reinstatement and backwages. Respondents claimed that they were merely exercising their managementprerogative to transfer employees for the purpose of advancing theschool s interests. They ar gued that petitioner s refusal to be transferredto Abra constitutes insubordinatio n. LA: dismiss for lack of merit. NLRC affirmed. CA dismissed petition. ISSUE: Petitioner imputes grave abuse of discretion on the CA in not givingdue c ourse to his petition despite substantial compliance with the requisiteformaliti es as well as on the NLRC in not ruling that he was constructivelydismissed by r espondents. RULING: Petitioner s substantial compliance calls for the relaxation of therules. Therefore, the CA should have given due course to the petition. Petitioner s transfer is not tantamount to constructive dismissal. Nevertheless, the instant petition merits dismissal on substantial grounds. After a careful review of the records and the arguments of the parties, wedo not find any sufficient basis to conclude that petitioner s re-assignmentamounted to constructive dismissal.

Constructive dismissal is quitting because continued employment isrendered impos sible, unreasonable or unlikely, or because of a demotion inrank or a diminution of pay. It exists when there is a clear act of discrimination, insensibility or disdain by an employer which becomesunbearable for the employee to continue his employment. Petitioner alleges that the real purpose of his transfer is to demote him to the rank ofan instructor from being the Head for Education performing administrativefunctions. Petitioner further argues that his re-assignment will entail anindirect reducti on of his salary or diminution of pay considering that noadditional allowance wi ll be given to cover for board and lodging expenses. He claims that such additional allowance was given in the pastand ther efore cannot be discontinued and withdrawn without violating theprohibition agai nst non-diminution of benefits. These allegations are bereft of merit. Petitioner was originally appointedas ins tructor in 1991 and was given additional administrative functions asHead for Edu cation during his stint in Laoag branch. He did not denyhaving been designated a s Head for Education in a temporary capacity forwhich he cannot invoke any tenur ial security. Hence, being temporary incharacter, such designation is terminable at the pleasure of respondentswho made such appointment. Moreover, respondents r ight to transferpetitioner rests not only on contractual stipulation but also on jurisprudential authorities. The Labor Arbiter and the NLRC both relied on the condition laid down in petitioner s employment contract thatrespondents have t he prerogative to assign petitioner in any of itsbranches or tie-up schools as t he necessity demands. In any event, it ismanagement prerogative for employers to transfer employees on just andvalid grounds such as genuine business necessity. It is also important tostress at this point that respondents have shown that it was experiencingsome financial constraints. Because of this, respondents opted totemporarily suspend the post-graduate studies of petitioner and someother empl oyees who were given scholarship grants in order to prioritizemore important exp enditures. Indeed, we cannot fully subscribe to petitioner s contention that his reassignment was tainted with bad faith. As a matter of fact, respondentsdisplayed commiserat ion over the health condition of petitioner s fatherwhen they suggested that he ta ke an indefinite leave of absence to attendto this personal difficulty. Also, du ring the time when respondents directedall its administrative officers to submit courtesy resignations, petitioner sletter of resignation was not accepted. This b olsters the fact thatrespondents never intended to get rid of petitioner. In fin e, petitioner sassertions of bad faith on the part of respondents are purelyunsubs tantiated conjectures. The Court agrees with LA that there was no violation of the prohibition ondiminu tion of benefits. Indeed, any benefit and perks being enjoyed byemployees cannot be reduced and discontinued, otherwise, theconstitutional mandate to afford ful l protection to labor shall be offended. But the rule against diminution of benefits is applicable only if the grant orbe nefit is founded on an express policy or has ripened into a practice over a long period which is consistent and deliberate. Petitioner failed to present any other evidence that respondents committed to provide theadditional a llowance or that they were consistently granting such benefitas to have ripened into a practice which cannot be peremptorilywithdrawn. Moreover, there is no con clusive proof that petitioner s basicsalary will be reduced as it was not shown th at such allowance is part ofpetitioner s basic salary. Hence, there will be no vio lation of the rule against diminution of pay enunciated under Article 100 of the Labor Code.

CHENIVER DECO PRINT TECHNICS CORP v. NLRC | 325 SCRA 758 | February 17, 2000 FACTS -Cheniver is a corporation operating its printing business in Makati. The respondents are members of the labor union and former employees of Cheniver. -June 5, 1992 Cheniver informed its employees that it will transfer its operations to Batangas. Reasons for the transfer are expiration of lease contract on the premises of the Makati palnt, and local authorities action to force out Cheniver s operations from Makati because of alleged hazards to residents nearby. -Cheniver gave its employees until the end of June to inform management if they wanted with Cheniver in its transfer, otherwise it would hire replacements. Aug1 was the scheduled start of operations in the new plant in Batangas. -Aug 4, 1992 Cheniver wrote its employees to report to the new location within 7days, otherwise they will be deemed to have lost interest in the job and would be replaced. However, no one reported for work in batangas, even after extension of period of time to report to work. -Respondents filed a complaint for unfair labor practice and illegal dismissal, and demanded separation pay (among others). -LA ruled that the transfer of operations was valid and absolved cheniver of charges for unfair labor practice and illegal dismissal. It however ordered payment of separation pay. NLRC affirmed. cheniver contends that the transfer of its business is neither closure nor retrenchment, thus separation pay should not be awarded. Also, employees were not terminated but they resigned because they find the new site to far from their residences

ISSUE: WON employees are entitled to separation pay considering that the transfer of the plant was valid HELD: YES Ratio Art. 283 of the Labor Code provides (in part): ART. 283. Closure of establishment and reduction of personnel. -The employer may 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 -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. xxx Reasoning -there appears no complete dissolution of Cheniver s business undertaking but the relocation of its plant to Batangas, in our view, amounts to cessation of petitioner's business operations in Makati. It must be stressed that the phrase closure or cessation of operation of an establishment or undertaking not due to serious business losses or reverses under Art. 283 includes both complete cessation of all business operations and the cessation of only part of a company's business -There is no doubt that petitioner has legitimate reason to relocate its plant because of the expiration of the lease contract on the premises it occupied. That is its prerogative. But even though the transfer was due to a reason beyond its control, Cheniver has to accord its employees some relief in the form of severance pay. -Since the closure of the plant is not on account of serious business losses, Cheniver shall give respondents separation pay equivalent to at least 1 month or month pay for every year of service -that the employees resigned is not convincing. The transfer of Cheniver to another place hardly accessible to its workers resulted in the latter's untimely separation from the service not to their own liking, hence, not construable as resignation Disposition: petition denied. NLRC resolutions AFFIRMED. PT&T v. NLRC | 456 SCRA 264 | G.R. No. 147002. April 15, 2005 F: Agnes Bayao and Mildred Castillo were hired by the Philippine Telegraph & Telephone Corporation (PT&T) in November 1991 and August 1995, respectively, both as account executives stationed in Baguio City. Both Bayao and Castillo received a Memorandum dated May 21, 1998coming from Ma. Elenita V. Del Rosario, Vice-President of the CommercialOperations Group (COG) o

f PT&T, inviting them to consider a two to threemonth assignment to the provinces of Rizal and Laguna in view of PT&T sexpansion i n the aforesaid area. Bayao and Castillo refused the offer, onthe ground that th e transfer would entail additional expense on their partand there were no clear guidelines and procedures for its implementation. Meanwhile, the expansion project of PT&T failed to materialize due to lackof cap ital. PT&T realized that it needed to undertake measures againstlosses to preven t the company from going bankrupt, particularly byreducing its workforce from 2, 500 to 900 employees. Pursuant thereto, it implemented a Voluntary Staff Reduction Program (VSRP) which wasavailed of by 47 8 employees. Failing to attain its target, PT&Timplemented an extended VSRP, but still not enough employees availed ofthe program. PT&T decided to implement a temporary retrenchment of some employeesdubbed as Te mporary Staff Reduction Program (TSRP) lasting for not morethan five and a half (5) months, to commence from September 1, 1998 toFebruary 15, 1999. Pursuant to t he program, affected employees wouldreceive financial assistance equivalent to 1 5 days salary and a loanequivalent to two months salary chargeable to the accoun t of theemployee concerned. Bayao and Castillo received a Letter from Del Rosario, dated August 21,1998, inf orming them that the cumulative net losses of PT&T for the lastfour years had re ached P293.4 million and that they were among theemployees affected by the TSRP. When Bayao and Castillo reported for work on September 2, 1998, theywere informe d that the position of account executive no longer existed; inits stead, the pos itions of Service Account Representatives (SAR) and

Service Account Specialists (SAS) were created per COG Bulletin Order No. 98-014 effective August 21, 1998, and had already been filled up. That same day, Bayao and Castillo promptly filed a complaint for illegaldismissa l with the NLRC, Regional Arbitration Branch, CordilleraAdministrative Region, a gainst PT&T and Delia Oficial in her capacity asmanager for Baguio City. Labor Arbiter Monroe C. Tabingan rendered a Decision in favor of Bayaoand Castil lo. PT&T and Oficial interposed their appeal to the NLRC. On October 12, 1999, the NLRC issued its Resolution dismissing the appealand affirm ed the decision of the Labor Arbiter, deleting, however, theaward of legal inter est, exemplary damages, indemnity and attorney s feesfor lack of merit. On July 31, 2000, the CA issued its Decision dismissing the petition andaffirmed the findings of the NLRC. The CA declared that there was no valid ground for retrenchment, considering that when Bayao and Castilloreturned, their positions were already filled up; at the same time, PT&T didnot inform its empl oyees and the Department of Labor and Employment(DOLE) of the scheduled retrench ment at least one month before itsimplementation. A motion for reconsideration w as filed, but the same was denied by the CA. Hence this petition. I: WON the retrenchment program implemented by petitioner PT&T isvalid. H: Retrenchment has been defined as the termination of employmentinitiated by th e employer through no fault of the employees and withoutprejudice to the latter, resorted by management during periods of businessrecession, industrial depressi on, or seasonal fluctuations, or during lullsoccasioned by lack of orders, short age of materials, conversion of the plantfor a new production program or the int roduction of new methods or moreefficient machinery, or of automation. It is a m anagement prerogativeresorted to by an employer to avoid or minimize business lo sses which isconsistently recognized by the Court. The Court has previously ruled that financial statements audited byindependent e xternal auditors constitute the normal method of proof of theprofit and loss per formance of a company. In this case, to prove that thecompany incurred losses, t he petitioners presented its audited financialstatements for the corporate fisca l years 1996 to 1998 and emphasizedthat, in the October 20, 1998 Audit Report pr epared by SGV & Co., theauditing firm declared that petitioner PT&T incurred a s ubstantial loss ofabout P558 million for the fiscal year ending June 30, 1998, r esulting to atotal deficit of about P574 million as of the same date; and that p etitionerPT&T even negotiated with its creditors for the suspension of payments ofits outstanding balances until the completion of an acceptablerestructuring pl an. The foregoing clearly indicates that the petitioner PT&Tsufficiently complie d with its burden to prove that it incurred substantiallosses as to warrant the exercise of the extreme measure of retrenchment to prevent the company from totally going under. While an employer may have a valid ground for implementing aretrenchment program , it is not excused from complying with the requiredwritten notice served both t o the employee concerned and the DOLE atleast one month prior to the intended da te of retrenchment. The purposeof this requirement is not only to give employees some time to prepare forthe eventual loss of their jobs and their corresponding income, look forother employment and ease the impact of the loss of their jobs but also togive the DOLE the opportunity to ascertain the verity of the alleged causeof termination. In the case at bar, the memorandum of Del Rosario, the vice-president ofthe COG, to respondents Bayao and Castillo informing the latter that theywere included i n the TSRP to be implemented effective September 1, 1998was dated August 21, 199 8. The said memorandum was received byCastillo on August 24, 1998 and Bayao on A

ugust 26, 1998. Therespondents had barely two weeks notice of the intended retren chment program. Clearly then, the one-month notice rule was not complied with. At the same time, the petitioners never showed that any notice of theretrenchmen t was sent to the DOLE. The petitioners adherence to the above pronouncement of the Court ismisplaced. Th e particular issue involved in the said decision was theduration of the period o f temporary lay-off, and not the compliance withthe one month notice requirement . The requirement of notice to both the employees concerned and theDepartment of L abor and Employment (DOLE) is mandatory and must bewritten and given at least on e month before the intended date ofretrenchment. In this case, it is undisputed that the petitioners were givennotice of the temporary lay-off. There is, howeve r, no evidence that anywritten notice to permanently retrench them was given at least one monthprior to the date of the intended retrenchment. The NLRC found th at GTI conveyed to the petitioners the impossibility of recalling them due to thecontin ued unavailability of work. But what the law requires is a written notice to the employees concerned and that requirement ismandatory. Th e notice must also be given at least one month in advanceof the intended date of retrenchment to enable the employees to look forother means of employment and t herefore to ease the impact of the loss oftheir jobs and the corresponding incom e. That they were already ontemporary lay-off at the time notice should have bee n given to them is notan excuse to forego the one-month written notice because b y this time, their lay-off is to become permanent and they were definitely losing theiremploy ment. There is also nothing in the records to prove that a written notice was evergive n to the DOLE as required by law. Interestingly enough, the evidenceon record in dicates that respondents Bayao and Castillo were not merelytemporarily laid-off. The October 26, 1998 Letter of Del Rosario addressed to the respondents clearly stated that the latter were to be consideredseparated from the company effective August 31, 1998 and that they wereeach being extende d a separation package.

It must be stressed, however, that compliance with the one-month noticerule is m andatory regardless of whether the retrenchment is temporary or permanent. This is so because Article 283 itself does not speak oftemporary or p ermanent retrenchment; hence, there is no need to qualifythe term. Ubi lex non d istinguit nec nos distinguere debemus (when the law does not distinguish, we must not distinguish). However, the employer s failure to comply with the one month noticerequirement pri or to retrenchment does not render the termination illegal; it merely renders the same defective, entitling the dismissed employee topayment of indemnity in the form of nominal damages. Based onprevailing jurisprudence, the amount of indemnity is pegged atP30,000.00. Finally, since petitioner PT&T was able to establish that it incurred seriousbus iness losses, justifying the retrenchment, the final requisite is thepayment of separation pay. Pursuant to Section 283 of the Labor Code, as amended, the retrenchment having been effected due to serious businesslosses, re spondents Bayao and Castillo are each entitled to one month payor to at least on e-half month pay for every year of service, whichever ishigher. A fraction of at least six months shall be considered one whole year. Petition partially granted. WILTSHIRE FILE CO INC v. NLRC | 193 SCRA 665 | February 7, 1991 FACTS -Private respondent Vicente T. Ong was the Sales Manager of petitionerWiltshire File Co., Inc. ("Wiltshire") from 16 March 1981 up to 18 June 1985. On 13 June 1985, upon private respondent's return from a business andpleasure tr ip abroad, he was informed by the President of petitionerWiltshire that his serv ices were being terminated. Private respondentmaintains that he tried to get an explanation from management of hisdismissal but to no avail. On 18 June 1985, wh en private respondent againtried to speak with the President of Wiltshire, the c ompany's security guardhanded him a letter which formally informed him that his services werebeing terminated upon the ground of redundancy. -Private respondent filed, on 21 October 1985, a complaint before theLabor Arbit er for illegal dismissal alleging that his position could notpossibly be redunda nt because nobody (save himself) in the company wasthen performing the same duti es. Private respondent further contendedthat retrenching him could not prevent f urther losses because it was in factthrough his remarkable performance as Sales Manager that the Companyhad an unprecedented increase in domestic market share t he precedingyear. For that accomplishment, he continued, he was promoted toMarke ting Manager and was authorized by the President to hire four (4) Sales Executives five (5) months prior to his termination. -In its answer, petitioner company alleged that the termination ofrespondent's s ervices was a cost-cutting measure: that in December 1984, the company had experienced an unusually low volume of orders: and that it was in fact forced to rotate its employees in order to save the company. Despite the rotation of employees, petitioner alleged; it continued toexperience financial losses and private respondent's position, SalesManager of the company , became redundant. -On 2 December 1986, during the proceedings before the Labor Arbiter, petitioner, in a letter 1 addressed to the Regional Director of the thenMinistry of Labor and Employment, notified that official that effective 2January 1987, p etitioner would close its doors permanently due tosubstantial business losses. -In a decision dated 11 March 1987, the Labor Arbiter declared the termination of private respondent's services illegal and ordered petitionerto pa y private respondent backwages, unpaid salaries in the amount of,

accumulated sick and vacation leaves in the amount of, hospitalizationbenefit pa ckage in the amount, unpaid commission in the amount of, moraldamages in the amo unt of and attorney's fees in the amount of. On appealby petitioner Wiltshire, t he National Labor Relations Commission ("NLRC") affirmed in toto on 9 February 1988 the decision of the Labor Arbiter. -In this Petition for Certiorari, it is submitted that private respondent'sdismi ssal was justified and not illegal. Petitioner maintains that it had beenincurri ng business losses beginning 1984 and that it was compelled toreduce the size of its personnel force. Petitioner also contends thatredundancy as a cause for ter mination does not necessarily meanduplication of work but a "situation where the services of an employee arein excess of what is demanded by the needs of an und ertaking ISSUE: WON private respondent s dismissal was justified on the ground ofretrenchme nt HELD: YES -The Court resolved to grant due course to the Petition for Certiorari. The Resolutions of the National Labor Relations Commission dated 9 February1988 and 7 March 1988 are hereby SET ASIDE and NULLIFIED. TheTemporary Restraining Order issued by this Court on 21 March 1988 ishereby made PERMANENT. Ratio. Having reviewed the record of this case, the Court has satisfieditself th at indeed petitioner had serious financial difficulties before, duringand after the termination of the services of private respondent. For onething, the audited financial statements of the petitioner for its fiscal yearending on 31 July 198 5 prepared by a firm of independent auditors, showed a net loss in the amount of P4,431,321.00 and a total deficit or capital impairment at the end of year of P6,776,493.00. 2 In the precedingfiscal year (1983-1984), while the company showed a net after tax incomeof P843,506.00 , it actually suffered a deficit or capital impairment ofP2,345,172.00. Most imp ortantly, petitioner Wiltshire finally closed itsdoors and terminated all operat ions in the Philippines on January 1987, barely two (2) years after the termination of private respondent'semployment. We consider that finally shutting down business operationsconstitutes strong confi rmatory evidence of petitioner's previous financialdistress. The Court finds it very difficult to suppose that petitioner Wiltshirewould take the final and irre vocable step of closing down its operations in

the Philippines simply for the sole purpose of easing out a particular officeror employee, such as the private respondent. -Turning to the legality of the termination of private respondent'semployment, w e find merit in petitioner's basic argument. The Court wasunable to sustain publ ic respondent NLRC's holding that privaterespondent's dismissal was not justifie d by redundancy and hence illegal. In the first place, while the letter informing private respondent of theterminat ion of his services used the word "redundant", that letter also referred to the company having "incur[red] financial losses which [in] facthas c ompelled [it] to resort to retrenchment to prevent further losses". 3 Thus, what the letter was in effect saying was that because of financiallosses, retrenchment was necessary, which retrenchment in turn resultedin the redundancy of private respondent's position. -In the second place, the Court does not believe that redundancy in anemployer's personnel force necessarily or even ordinarily refers toduplication of work. Th at no other person was holding the same positionthat private respondent held pri or to the termination of his services, doesnot show that his position had not be come redundant. Indeed, in any wellorganized business enterprise, it would be surprising to find duplication ofwork and two (2) or more people doing the work of one person. Redundancy, for purposes of our Labor Code, exists where the services ofan emplo yee are in excess of what is reasonably demanded by the actualrequirements of th e enterprise. Succinctly put, a position is redundantwhere it is superfluous, an d superfluity of a position or positions may bethe outcome of a number of factor s, such as overhiring of workers, decreased volume of business, or dropping of a particular product line orservice activity previously manufactured or undertaken by the enterprise. 4 The employer has no legal obligation to keep in its payroll moreemployees than are necessarily for the operation of its business. -In the third place, in the case at bar, petitioner Wiltshire, in view of thecon traction of its volume of sales and in order to cut down its operatingexpenses, effected some changes in its organization by abolishing somepositions and thereb y effecting a reduction of its personnel. Thus, theposition of Sales Manager was abolished and the duties previouslydischarged by the Sales Manager simply added to the duties of the GeneralManager, to whom the Sales Manager used to report. -It is of no legal moment that the financial troubles of the company werenot of private respondent's making. Private respondent cannot insist on theretention of his position upon the ground that he had not contributed tothe financial proble ms of Wiltshire. The characterization of privaterespondent's services as no long er necessary or sustainable, and thereforeproperly terminable, was an exercise o f business judgment on the part ofPetitioner Company. The wisdom or soundness of such characterization ordecision was not subject to discretionary review on the part of the LaborArbiter nor of the NLRC so long, of course, as violation of la w or merelyarbitrary and malicious action is not shown. It should also be noted that theposition held by private respondent, Sales Manager, was clearlymanageria l in character. De Ocampo v. NLRC, 213 SCRA 652 F: Petitioners Cecile de Ocampo, et. al. are employees of privaterespondent Bali wag Mahogany Corporation. They are either officers ormembers of the Baliwag Maho gany Corporation Union-CFW, the existingcollective bargaining agent of the rank and file employees in the company. Private respondent Baliwag Mahogany Corporation is an enterpriseengaged in the p roduction of wooden doors and furniture and has a totalworkforce of about 900 em ployees. In 1988, private respondent Baliwag Mahogany Corporation (company) andBaliwag Ma hogany Corporation Union-CFW (union) entered into a collectivebargaining agreeme nt containing, among other things, provisions onconversion into cash of unused v

acation and sick leaves; grievancemachinery procedure; and the right of the comp any to schedule work onSundays and holidays. In November, 1989, the union made several requests from the company, one of which was the cash conversion of unused vacation and sick leave for 1987-1988 and 1988-1989. Acting on the matter, the company ruled toallow pay ment of unused vacation and sick leaves for the period of 19871988 but disallowed cash conversion of the 1988-1989 unused leaves. The company issued suspension orders affecting twenty (20) employeesfor failure to render overtime work on December 30, 1989. The suspensionwas for a period of three (3) days effective January 3, 1996 to January 5,1990. On the same day, the union filed a notice of strike on the grounds ofunfair labor practice particula rly the violation of the CBA provisions on nonpayment of unused leaves and illegal dismissal of seven (7) employees inNovember, 1989. On January 13, 1990, the company issued a notice of termination to three (3) employees or union members, namely, Cecile de Ocampo, ReneVillanueva and Mar celo dela Cruz, of the machinery department, allegedlyto effect cost reduction a nd redundancy. The members of the unionconducted a picket at the main gate of th e company on January 18, 1990. On the same day, the company filed a petition to declare the strike illegalwith prayer for injunction against the union, Cecile de Ocampo, WilfredoSan Pedro and Rene Aguilar. An election of officers was conducted by theunion on January 19, 1990. Consequently, Cecile de Ocampo was electedas president. During the conciliation meeting held at National Conciliation and MediationBoard (NCMB) on January 22, 1990 relative to the notice of strike filed bythe union o n January 3, 1990, the issue pertaining to the legality of thetermination of thr ee (3) union members was raised by the union. However, both parties agreed to discuss it separately. Subsequently, in a letter datedJan uary 28, 1990, the union requested for the presence of a NCMBrepresentative duri ng a strike vote held by the union. The strike voteresulted to 388 votes out of 415 total votes in favor of the strike. Consequently, the union staged a strike on February 6, 1990.

On February 7, 1990, the company filed a petition to assume jurisdictionwith the Department of Labor and Employment. On February 16, 1990, thecompany filed an a mended petition, praying among other things, that thestrike staged by the union on February 6, 1990 be declared illegal, therebeing no genuine strikeable issue and the violation of the no-strike clauseof the existing CBA between the parties . The Secretary of Labor in an order dated February 15, 1990, certified theentire labor dispute to the respondent Commission for compulsoryarbitration and directe d all striking workers including the dismissedemployees to return to work and th e management to accept them back. The company filed an urgent motion for assignment of a sheriff to enforcethe ord er of the Secretary. In an order dated February 22, 1990, the Secretary of Labor directedSheriff Alfr edo Antonio, Jr., to implement the order. On February 23, 1990, the sheriff, with the assistance of the PC/INP of SanRafae l, removed the barricades and opened the main gate of the company. Criminal complaints for illegal assembly, grave threats, and grave coercionwere filed against Cecile de Ocampo, Timoteo Mijares, Modesto Mamesiaand Domingo Sila rde by the local police authorities on February 24, 1990. On February 25, 1990, the company caused the publication of his return towork or der in two (2) newspapers, namely NGAYON and ABANTE. In itsletter dated February 27, 1990, the union, through its President Cecile deOcampo, requested the Regio nal Director of DOLE, Region III to intervenein the existing dispute with manage ment. Meanwhile, the companyextended the February 26, 1990 deadline for the work ers to return to workuntil March 15, 1990. The respondent Commission rendered a decision on October 23, 1990, declaring the strikes staged on January 18, 1990 and February 6, 1990illegal. Su ch decision prompted the company to file a motion forreconsideration substantial ly on the ground that public respondentseriously erred in not dismissing the emp loyees particularly the unionofficers, who participated in the illegal strike. P etitioners filed an oppositionto the company's motion for reconsideration and su bsequently asupplemental comment/opposition to motion for reconsideration. I: Whether or not there is legal basis for declaring the loss of employmentstatu s by petitioners on account of the strike in respondent Company. H: Court finds the petition devoid of merit. The Solicitor General claimsthat it is undisputed that the union resorted to illegal acts during the strikearguing that private respondent's personnel manager specifically identifiedthe union off icers and members who committed the prohibited acts andactively participated the rein. Moreover, the Solicitor General maintainsthat the illegality of the strike likewise stems from the failure of thepetitioners to honor the certification or der and heed the return-to-workorder issued by the Secretary of Labor. Unrebutted evidence shows that the individual petitioners defied thereturn-to-wo rk order of the Secretary of Labor issued on February 15,1990. As a matter of fa ct, it was only on February 23, 1990 when thebarricades were removed and the mai n gate of the company was opened. Hence, the termination of the services of the individual petitioners isjustified on this ground alone. Anent the contention that the respondent Commission gravely abused itsdiscretion when it allowed the presentation of additional evidence to provethe loss suffer ed by the company despite the fact that they were mereafterthoughts and just con cocted by the company, time and again, Weemphasize that "technical rules of evid ence are not binding in labor cases. Labor officials should use every and reasonable means to ascertain thefacts in e

ach case speedily and objectively, without regard to technicalitiesof law or pro cedure, all in the interest of due process" (PhilippineTelegraph and Telephone C orporation v. National Labor RelationsCommission, G.R. No. 80600, March 21, 1990 , 183 SCRA 451, 457). We believe that redundancy, for purposes of our Labor Code, exists wherethe serv ices of an employee are in excess of what is reasonably demandedby the actual re quirement of the enterprise. Succinctly put, a position isredundant where it is superfluous, and superfluity of a position or positionsmay be the outcome of a n umber of factors, such as over hiring of workers, decreased volume of business, or dropping of a particular product line orservice activity previously manufactured or undertaken by the enterprise. The employer had no legal obligation to keep in its payroll moreemployees, than are necessary for the operation of its business. (WiltshireFile Co., Inc. v. Nat ional Labor Relations Commission, G.R. No. 82249, February 7, 1991; 193 SCRA 665,672). The reduction of the number of workers in a company made necessary bythe introdu ction of the services of Gemac Machineries in the maintenance and repair of its industrial machinery is justified. There can be no questionas to the right of the company to contract the services of GemacMachineries to repl ace the services rendered by the terminated mechanicswith a view to effecting mo re economic and efficient methods ofproduction. In the same case, We ruled that "(t)he characterization of (petitioners') services as no longer necessary or sustainable, and therefore properlyterminable , was an exercise of business judgment on the part of (privaterespondent) compan y. The wisdom or soundness of such characterizationor decision was not subject t o discretionary review on the part of the LaborArbiter nor of the NLRC so long, of course, as violation of law or merelyarbitrary and malicious action is not sh own". In contracting the services ofGemac Machineries, as part of the company's cost-saving program, theservices rendered by the mechanics became redundant and superfluous, and therefore properly terminable. The company merely exercised itsbusiness judg ment or management prerogative. Petition dismissed.

Maya Farms Employees Organization v. NLRC, 239 SCRA 508 F: Private respondents Maya Farms, Inc. and Maya Realty and LivestockCorporation belong to the Liberty Mills group of companies whoseundertakings include the op eration of a meat processing plant whichproduces ham, bacon, cold cuts, sausages and other meat and poultryproducts. Petitioners, on the other hand, are the exclusive bargaining agents of theemploy ees of Maya Farms, Inc. and the Maya Realty and LivestockCorporation. On April 12, 1991, private respondents announced the adoption of an earlyretirem ent program as a cost-cutting measure considering that theirbusiness operations suffered major setbacks over the years. The programwas voluntary and could be av ailed of only by employees with at leasteight (8) years of service. Dialogues we re thereafter conducted to give theparties an opportunity to discuss the details of the program. Accordingly, the program was amended to reduce the minimum requirement of eight (8) years of service to only five (5) years. However, the response to the program was nil. There were only a fewtakers. To av ert further losses, private respondents were constrained tolook into the compani es' organizational set-up in order to streamlineoperations. Consequently, the ea rly retirement program was convertedinto a special redundancy program intended t o reduce the work force to anoptimum number so as to make operations more viable . In December 1991, a total of sixty-nine (69) employees from the twocompanies ava iled of the special redundancy program. On January 17,1992, the two companies se nt letters to sixty-six (66) employees informingthem that their respective posit ions had been declared redundant. Thenotices likewise stated that their services would be terminated effective thirty (30) days from receipt thereof. Separation benefits, including theconvers ion of all earned leave credits and other benefits due under existing CBAs were thereafter paid to those affected. On January 24, 1992, a notice of strike was filed by the petitioners whichaccuse d private respondents, among others, of unfair labor practice, violation of CBA and discrimination. Conciliation proceedings were held bythe Na tional Conciliation and Mediation Board (NCMB) but the parties failedto arrive a t a settlement. On February 6, 1992, the two companies filed a petition with the Secretaryof Lab or and Employment asking the latter to assume jurisdiction over thecase and/or c ertify the same for compulsory arbitration. Thus, on February12, 1992, the then Acting Labor Secretary (now Secretary) Nieves Confesorcertified the case to here in public respondent for compulsory arbitration. On March 4, 1992, the parties were called to a hearing to identify theissues inv olved in the case. Thereafter, they were ordered to submit theirrespective posit ion papers. In their position paper, petitioners averred that in the dismissal of sixty-six (66) union officers and members on the ground of redundancy, privaterespondents circumvented the provisions in their CBA. Petitioners alsoalleged that the compa nies' claim that they were in economic crisis wasfabricated because in 1990, a n et income of over 83 million pesos wasrealized by Liberty Flour Mills Group of C ompanies. Invoking the workers'constitutional right to security of tenure, petit ioners prayed for thereinstatement of the sixty-six (66) employees and the payme nt ofattorney's fees as they were constrained to hire the services of counsel in

order to protect the workers' rights. On their part, private respondents contend that their decision toimplement a spe cial redundancy program was an exercise of managementprerogative which could not be interfered with unless it is shown to betainted with bad faith and ill motiv e. Private respondents explained thatthey had no choice but to reduce their work force, otherwise, they wouldsuffer more losses. Furthermore, they denied that t he program violatedCBA provisions. NLRC favored the company. I: WON there was grave abuse of discretion amounting to lack or in excessof juri sdiction with the factual findings of public respondent H: The termination of the sixty-six employees was done in accordance withArticle 283 of the Labor Code. The basis for this was the companies' studyto streamline operations so as to make them more viable. Positions whichoverlapped each other , or which are in excess of the requirements of theservice, were declared redund ant. We fully agree with the findings andconclusions of the public respondent on the issue of termination. A close examination of the positions retained by management show thatsaid positi ons such as egg sorter, debonner were but the minimal positionsrequired to susta in the limited functions/operations of the meat processingdepartment. In the abs ence of any evidence to prove bad faith on the partof management in arriving at such decision, which records on hand failedto show in instant case, the rational ity of the act of management in thisregard must be sustained. The rule is well-settled that labor laws discourage interference with anemployer 's judgment in the conduct of his business. Even as the law issolicitous of the welfare of employees, it must also protect the right of anemployer to exercise w hat are clearly management prerogatives. As longas the company's exercise of the same is in good faith to advance itsinterest and not for the purpose of defeati ng or circumventing the rights ofemployees under the laws or valid agreements, s uch exercise will beupheld.

Finally, contrary to petitioners' contention, there is nothing on record toshow that the 30-day notice of termination to the workers was disregardedand that the same substituted with separation pay by private respondents. As found by public respondent, written notices of separation were sent tothe emp loyees on January 17, 1992. The notices expressly stated that thetermination of employment was to take effect one month from receiptthereof. Therefore, the alle gation that separation pay was given in lieu ofthe 30-day notice required by law is baseless. Petition dismissed. GOLDEN THREAD KNITTING INDUSTIRES v. NLRC | 304 SCRA 720 | March 11, 1999 FACTS -several employees of Golden Thread Knitting Industries (GTK) were dismissed for different reasons. 2 employees were allegedly for slashing the company s products (towels), 2 for redundancy, 1 for threatening the personnel manager and violating the company rules, and 1 for abandonment of work. -The laborers filed complaints for illegal dismissal. They allege that the company dismissed them in retaliation for establishing and being members of the Labor Union. GTK, on the other hand, contend that there were valid causes for the terminations. The dismissals were allegedly a result of the slashing of their products, rotation of work, which in turn was caused by the low demand for their products, and abandonment of work. WRT to the cases involving the slashing of their products and threats to the personnel manager, the dismissals were in effect a form of punishment. -The labor arbiter ruled partially in favor of GTK. He said that there was no showing that the dismissals were in retaliation for establishing a union. He, however, awarded separation pay to some employees. -NLRC, however, appreciated the evidence differently. It held that there was illegal dismissal and ordered reinstatement. ISSUE: WON there was illegal dismissal HELD: YES Ratio Dismissal is the ultimate penalty that can be meted to an employee. It must therefore be based on a clear and not on an ambiguous or ambivalent ground. Reasoning -WRT to the case involving slashing of towels, the employees were notgiven proce dural due process. There was no notice and hearing, onlyoutright denial of their entry to the work premises by the security guards. The charges of serious misconduct were not sufficiently proved. -WRT to the employees dismissed for redundancy, there was also denial ofprocedur al due process. Hearing and notice were not observed. Thus, although the characterization of an employee s services is a managementfunction, i t must first be proved with evidence, which was not done in thiscase. the compan y cannot merely declare that it was overmanned. -WRT to the employee dismissed for disrespect, the SC believed the storyversion of the company (which essentially said that the personnel managerwas threatened

upon mere service of a suspension order to the employee), but ruled that the dismissal could not be upheld. the dismissal will not be upheld where it appears that the employee sact of disresp ect was provoked by the employer. xxx the employeehurled incentives at the perso nnel manager because she was provokedby the baseless suspension imposed on her. The penalty of dismissalmust be commensurate with the act, conduct, or omission to the employee. -The dismissal was too harsh a penalty; a suspension of 1 week would have sufficed. GTK exercised their authority to dismiss without due regard to theprovisions of t he Labor Code. The right to terminate should be utilizedwith extreme caution bec ause its immediate effect is to put an end to anemployee's present means of live lihood while its distant effect, upon asubsequent finding of illegal dismissal, is just as pernicious to theemployer who will most likely be required to reinsta te the subjectemployee and grant him full back wages and other benefits. Disposition Decision AFFIRMED LOPEZ SUGAR CORP v. FED OF FREE WORKERS PHILIPPINE LABOR UNION ASSOCIATION (PLUA NACUSIP) | 189 SCRA 179 | August 30,1990 FACTS -Lopez Sugar Corporation (LPC), allegedly, to prevent losses due to majoreconomi c problems, and exercising its privilege under the 1975-1977 CBAentered into wit h PLUA-NACUSIP, caused the retrenchment and retirement of a number of its employees. -LPC filed with the MOLE a combined report on retirement and applicationfor clea rance to retrench affecting eighty six (86) of its employees. Of

these 86 employees, 59 were retired and 27 were to be retrenched inorder to prev ent losses. -Federation of Free Workers (FFW), as the certified bargaining agent of therankand-file employees of LPC, also filed with the MOLE a complaint forunfair labor practices and recovery of union dues. -In said complainant, FFW claimed that the terminations undertaken byLPC were vi olative of the security of tenure of its members and wereintended to "bust" the union and hence constituted an unfair labor practice. -FFW claimed that after the termination of the services of its members, LPC advised 110 casuals to report to its personnel office. -FFW further argued that to justify retrenchment, serious businessreverses must be "actual, real and amply supported by sufficient andconvincing evidence." FFW prayed for reinstatement of its members whohad been retired or retrenched. -LPC denied having hired casuals to replace those it had retired orretrenched. I t explained that the announcement calling for 110 workers toreport to its person nel office was only for the purpose of organizing a poolof extra workers which c ould be tapped whenever there were temporaryvacancies by reason of leaves of abs ence of regular workers. -LA: denied LPC s application for clearance to retrench its employees onthe groun d that for retrenchment to be valid, the employer's losses mustbe serious, actua l and real and must be amply supported by sufficient andconvincing evidence. The application to retire was also denied on theground that LPC's prerogative to so retire its employees was granted bythe 1975-77 CBA had long ago expired. LPC wa s, therefore, ordered toreinstate 27 retired or retrenched employees represented by PLUAand FFWand to pay them full backwages from the time of termination until actualreinstatement. -On appeal, the NLRC, finding no justifiable reason for disturbing thedecision o f the Labor Arbiter, affirmed that decision ISSUE: WON NLRC acted with GAD in denying LPC s combined report onretirement and a pplication for clearance to retrench HELD NO -A283 of the LC provides: Article 283. Closure of establishment and reduction of personnel. Theemployer ma y also terminate the employment of any employee due tothe installation of labor saving devices, redundancy, retrenchment toprevent losses or the closing or cess ation of operation of theestablishment or undertaking unless the closing is for the purpose ofcircumventing the provisions of this Title, by serving a written n otice onthe workers and the Ministry of Labor and Employer 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 workeraffected there by shall be entitled to a se pay equivalent to at least hisone (1) month pay or to at least one (1) month pay for every year ofservice, whichever is higher. In case of retrenchment to prevent lossesand in cases, of closures or cessation of operations of establishment orundertaking not due to serious business losses or financial reverses, the separation pay shall be equivalent to one (1) month pay or at least onehalf (1/2 ) month pay for every year of service, whichever is higher. Afraction of at leas t six (6) months shall be considered one (1) whole year. -In ordinary connotation, the phrase "to prevent losses" means thatretrenchment or termination of the services of some employees isauthorized to be undertaken b y the employer sometime before the losses anticipated are actually sustained or realized. It is not, in other words, thein tention of the lawmaker to compel the employer to stay his hand andkeep all his

employees until sometime after losses shall have in factmaterialized ; if such a n intent were expressly written into the law, that lawmay well be vulnerable to constitutional attack as taking property from oneman to give to another-When, or under what circumstances does the employer becomes legallyprivileged to retrenc h and reduce the number of his employees? -The general standards in terms of which the acts of petitioner employermust be appraised: 1) the losses expected should be substantial and not merely deminimis in extent. If the loss purportedly sought to be forestalled byretrenchment is clearly show n to be insubstantial and inconsequential incharacter, the bona fide nature of t he retrenchment would appear to be seriously in question. 2) The substantial loss apprehended must be reasonably imminent, assuch imminenc e can be perceived objectively and in good faith by theemployer. There should, i n other words, be a certain degree of urgency for the retrenchment, which is after all a drastic recourse with serious consequences for the livelihood of the employees retired orotherwis e laid-off. 3) Because of the consequential nature of retrenchment, it must bereasonably nec essary and likely to effectively prevent the expectedlosses. The employer should have taken other measures prior or parallel to retrenchment to forestall losses, i.e., cut other costs than labor costs. To impart operational meaning to the constitutional policy of providing "full protection" to labor, the employer's prerogative to bring down labor costs by retrenching must be exercised essentially as a measure of last e.g., reduction of both managementand rank-andresort, after less drastic means file bonuses and salaries, going on reduced time, improving manufacturing efficiencies, trimming of marketing andadvertising costs , etc. have been tried and found wanting. 4) If already realized, and the expected imminent losses sought to beforestalled , must be proved by sufficient and convincing evidence. The reason for requiring this quantum of proof is readily apparent: anyless exac ting standard of proof would render too easy the abuse of thisground for termina tion of services of employees. -Garcia v. National Labor Relations Commissions: . . . But it is essentially required that the alleged losses in businessoperatio ns must be prove[n] (NAFLU vs. Ople, [1986]). Otherwise, saidground for terminat ion would be susceptible to abuse by schemingemployers who might be merely feign ing business losses or reverses intheir business ventures in order to ease out e mployees.

-WON an employer would imminently suffer serious or substantial lossesfor econom ic reasons is essentially a question of fact for the Labor Arbiterand the NLRC t o determine. -In the instant case, the LA found no sufficient and convincing evidence tosusta in petitioner's essential contention that it was acting in order toprevent subst antial and serious losses. -The principal difficulty with LPC' s case as above presented was that noproof o f actual declining gross and net revenues was submitted. No audited financial statements showing the financial condition of petitionercorpor ation during the above mentioned crop years were submitted. -LPC conspicuous failed to specify the cost-reduction measures actuallyundertake n in good faith before resorting to retrenchment. Upon the otherhand, it appears from the record that petitioner, after reducing its workforce, advised 110 casu al workers to register with the company personnelofficer as extra workers. -LPC argued that it did not actually hire casual workers but that it merelyorgan ized a pool of "extra workers" from which workers could be drawnwhenever vacanci es occurred by reason of regular workers going on leaveof absence but the LA and the NLRC did not accord much credit to LPC's explanation. *AS REGARDS the RETIREMENTS effected by LPC -On this point, SC finds for LPC saying that although the CBA expired on31 Decemb er 1977, it continued to have legal effects as between theparties until a new CB A had been negotiated and entered into. Thisproposition finds legal support in Ar ticle 253 of the Labor Code, whichprovides: Article 253 Duty to bargain collectively when there exists a collective bargaining agreement. When there is a collective bargainingagreement, the duty t o bargain collectively shall also mean that neitherparty shall terminate nor mod ify such agreement during its lifetime. However, either party can serve a written notice to terminate or modifythe agree ment at least sixty (60) days prior to its expiration date. It shall be the duty of both parties to keep the status quo and to continue in full force and effect the terms and conditions of the existing agreement during the 60-day period and/or until a new agreement is reached by the parties. (Emphasis supplied) -Accordingly, in the instant case, despite the lapse of the formal effectivityof the CBA by virtue of its own provisions, the law considered the same ascontinui ng in force and effect until a new CBA shall have been validlyexecuted. -Hence, LPC acted within legal bounds when it decided to retire severalemployees in accordance with the CBA. That the employees themselvessimilarly acted in acc ordance with the CBA is plain from the record. -Even after the expiration of the CBA, LPC's employees continued toreceive the b enefits and enjoy the privileges granted therein. If theworkers chose to avail o f the CBA despite its expiration, equity if not thelaw dictates that the employer should likewise be able to invoke the CBA. -The fact that several workers signed quitclaims will not by itself bar themfrom joining in the complaint. Quitclaims executed by laborers arecommonly frowned u pon as contrary to public policy and ineffective to barclaims for the full measu re of the worker's legal rights. -AFP Mutual Benefit Association, Inc. v. AFP-MBAI-EU: In labor jurisprudence, it is well establish that quitclaims and/or completerele ases executed by the employees do not estop them from pursuingtheir claims arisi ng from the unfair labor practice of the employer. The basic reason for this is that such quitclaimants and/or complete releases are against public policy and, therefore, null and void. The acceptance of

termination pay does not divest a laborer of the right to prosecute his employer for unfair labor practice acts. -Cario vs. ACCFA, (1966) ~ Justice Sanchez, said: Acceptance of those benefits would not amount to estoppel. The reason is plain. Employer and employee, obviously, do not stand on the same footing The employer drove the employee to the wall. The latter must have to get hold of money. Because, out of job, he had to face the harshnecessit ies of life. He thus found himself in no position to resist moneyproffered. His, then, is a case of adherence, not of choice. One thingsure, however, is that pe titioners did not relent their claim. They pressedit. They are deemed not to hav e waived any of their rights. Renuntiatio non praesumitur Disposition Petition for Certiorari is partially GRANTED and NLRC s decision affirming that portion of the Decision of the Labor Arbiter ordering the reinstatement judgment of employees who had been retiredby LPC unde r the applicable provisions of the CBA is AFFIRMED. (*all illegally retrenched were ordered to be reinstated and givenbackwages; tho se who executed quitclaims-said amount shall be deductedfrom their backwages and where reinstatement is no longer possible, backwages + separation pay na lang. BUT those who were retired by LPCwere found to be valid as per the CBA. Flight Attendants and Stewards Association of the Philippines v. PAL, 559 SCRA 252 F: On June 15, 1998, PAL retrenched 5,000 of its employees, including more than 1,400 of its cabin crew personnel, to take effect on July 15, 1998. PAL adopted the retrenchment scheme allegedly to cut costs and mitigate huge financial losses as a result of a downturn in the airline industry brought about by the Asian financial crisis. During said period, PAL claims to have incurred P90 billion in liabilities, while its assets stood at P85 billion. In implementing the retrenchment scheme, PAL adopted its so-called "Plan 14" whereby PAL's fleet of aircraft would be reduced from 54 to 14, thus requiring the services of only 654 cabin crew personnel. Prior to the full implementation of the assailed retrenchment program, FASAP and PAL conducted a series of consultations and meetings and explored all possibilities of cushioning the impact of the impending reduction in cabin crew personnel. However, the parties failed to agree on how the scheme

would be implemented. Thus PAL unilaterally resolved to utilize the criteria set forth in Section 112 of the PAL-FASAP Collective Bargaining Agreement (CBA) in retrenching cabin crew personnel: that is, that retrenchment shall be based on the individual employee's efficiency rating and seniority. PAL determined the cabin crew personnel efficiency ratings through an evaluation of the individual cabin crew member's overall performance for the year 1997 alone. The factors taken into account on whether the cabin crew member would be retrenched, demoted or retained were: 1) the existence of excess sick leaves; 2) the crew member's being physically overweight; 3) seniority; and 4) previous suspensions or warnings imposed. While consultations between FASAP and PAL were ongoing, the latter began implementing its retrenchment program by initially terminating the services of 140 probationary cabin attendants only to rehire them in April 1998. Moreover, their employment was made permanent and regular. On July 15, 1998, however, PAL carried out the retrenchment of its more than 1,400 cabin crew personnel. Meanwhile, in June 1998, PAL was placed under corporate rehabilitation and a rehabilitation plan was approved per Securities and Exchange Commission (SEC) Order dated June 23, 1998 in SEC Case No. 06-98-6004. On September 4, 1998, PAL, through its Chairman and Chief Executive Officer (CEO) Lucio Tan, made an offer to transfer shares of stock to its employees and three seats in its Board of Directors, on the condition that all the existing Collective Bargaining Agreements (CBAs) with its employees would be suspended for 10 years, but it was rejected by the employees. On September 17, 1998, PAL informed its employees that it was shutting down its operations effective September 23, 1998 despite the previous approval on June 23, 1998 of its rehabilitation plan. On September 23, 1998, PAL ceased its operations and sent notices of termination to its employees. Two days later, PAL employees, through the Philippine Airlines Employees Association (PALEA) board, sought the intervention of then President Joseph E. Estrada. PALEA offered a 10-year moratorium on strikes and similar actions and a waiver of some of the economic benefits in the existing CBA. Lucio Tan, however, rejected this counter-offer. In a referendum conducted on October 2, 1998, PAL employees ratified the proposal. On October 7, 1998, PAL resumed domestic operations and, soon after, international flights as well. Meanwhile, in November 1998, or five months after the June 15, 1998 mass dismissal of its cabin crew personnel, PAL began recalling to service those it had previously retrenched. Several of those retrenched were called back to service. In December 1998, PAL submitted a "stand-alone" rehabilitation plan to the SEC by which it undertook a recovery on its own while keeping its options open for the entry of a strategic partner in the future. Accordingly, it submitted an amended rehabilitation plan to the SEC with a proposed revised business and financial restructuring plan, which required the infusion of US$200 million in new equity into the airline. On May 17, 1999, the SEC approved the proposed "Amended and Restated Rehabilitation Plan" of PAL and appointed a permanent rehabilitation receiver for the latter. On June 7, 1999, the SEC issued an Order confirming its approval of the "Amended and Restated Rehabilitation Plan" of PAL. In said order, the cash infusion of US$200 million made by Lucio Tan on June

4, 1999 was acknowledged. Respondent PAL is ordered to pay the separation benefits to those complainants who have not received their separation pay and to pay the balance to those who have received partial separation pay. I: WON CA decided the case a quo in a way contrary to law and/or jurisprudence and WON PAL s retrenchment scheme was justified. H: It is a settled rule that in the exercise of the Supreme Court's power of review, the Court is not a trier of facts and does not normally undertake the re-examination of the evidence presented by the contending parties during trial. However, there are several exceptions to this rule such as when the factual findings of the Labor Arbiter differ from those of the NLRC, as in the instant case, which opens the door to a review by this Court. The law recognizes the right of every business entity to reduce its work force if the same is made necessary by compelling economic factors which would endanger its existence or stability. Where appropriate and where conditions are in accord with law and jurisprudence, the Court has authorized valid reductions in the work force to forestall business losses, the hemorrhaging of capital, or even to recognize an obvious reduction in the volume of business which has rendered certain employees redundant. The burden clearly falls upon the employer to prove economic or business

losses with sufficient supporting evidence. Its failure to prove these reverses or losses necessarily means that the employee's dismissal was not justified. Any claim of actual or potential business losses must satisfy certain established standards, all of which must concur, before any reduction of personnel becomes legal FIRST ELEMENT: That retrenchment is reasonably necessary and likely to prevent business losses which, if already incurred, are not merely de minimis, but substantial, serious, actual and real, or if only expected, are reasonably imminent as perceived objectively and in good faith by the employer. The law speaks of serious business losses or financial reverses. Sliding incomes or decreasing gross revenues are not necessarily losses, much less serious business losses within the meaning of the law. The fact that an employer may have sustained a net loss, such loss, per se, absent any other evidence on its impact on the business, nor on expected losses that would have been incurred had operations been continued, may not amount to serious business losses mentioned in the law. The employer must show that its losses increased through a period of time and that the condition of the company will not likely improve in the near future or that it expected no abatement of its losses in the coming years. The employer must also exhaust all other means to avoid further losses without retrenching its employees. Retrenchment is a means of last resort; it is justified only when all other less drastic means have been tried and found insufficient. In the instant case, PAL failed to substantiate its claim of actual and imminent substantial losses which would justify the retrenchment of more than 1,400 of its cabin crew personnel. Although the Philippine economy was gravely affected by the Asian financial crisis, however, it cannot be assumed that it has likewise brought PAL to the brink of bankruptcy. Likewise, the fact that PAL underwent corporate rehabilitation does not automatically justify the retrenchment of its cabin crew personnel. Records show that PAL was not even aware of its actual financial position when it implemented its retrenchment program. It embarked on the mass dismissal without first undertaking a well-considered study on the proposed retrenchment scheme. This view is underscored by the fact that previously, PAL terminated the services of 140 probationary cabin attendants, but rehired them almost immediately and even converted their employment into permanent and regular, even as a massive retrenchment was already looming in the horizon. Also, the claim that PAL saved P24 million monthly due to the implementation of the retrenchment program does not prove anything; it has not been shown to what extent or degree such savings benefited PAL, vis-a-vis its total expenditures or its overall financial position. Likewise, its claim that its liabilities reached P90 billion, while its assets amounted to P85 billion only -or a debt to asset ratio of more than 1:1 may not readily be believed, considering that it did not submit its audited financial statements. All these allegations are self-serving evidence. FOURTH ELEMENT: That the employer exercises its prerogative to retrench employees in good faith for the advancement of its interest and not to defeat or circumvent the employees' right to security of tenure. Concededly, retrenchment to prevent losses is an authorized cause for terminating employment and the decision whether to resort to such move or not is a management prerogative. However, the right of an employer to

dismiss an employee differs from and should not be confused with the manner in which such right is exercised. It must not be oppressive and abusive since it affects one's person and property. On the requirement that the prerogative to retrench must be exercised in good faith, we have ruled that the hiring of new employees and subsequent rehiring of "retrenched" employees constitute bad faith; that the failure of the employer to resort to other less drastic measures than retrenchment seriously belies its claim that retrenchment was done in good faith to avoid losses; and that the demonstrated arbitrariness in the selection of which of its employees to retrench is further proof of the illegality of the employer's retrenchment program, not to mention its bad faith. When PAL implemented Plan 22, instead of Plan 14, which was what it had originally made known to its employees, it could not be said that it acted in a manner compatible with good faith. It offered no satisfactory explanation why it abandoned Plan 14; instead, it justified its actions of subsequently recalling to duty retrenched employees by making it appear that it was a show of good faith; that it was due to its good corporate nature that the decision to consider recalling employees was made. FIFTH ELEMENT: That the employer used fair and reasonable criteria in ascertaining who would be dismissed and who would be retained among the employees, such as status, efficiency, seniority, physical fitness, age, and financial hardship for certain workers. In selecting employees to be

dismissed, fair and reasonable criteria must be used, such as but not limited to: (a) less preferred status (e.g., temporary employee), (b) efficiency and (c) seniority. The appellate court held that there was no need for PAL to consult with FASAP regarding standards or criteria that the airline would utilize in the implementation of the retrenchment program; and that the criteria actually used which was unilaterally formulated by PAL using its Performance Evaluation Form in its Grooming and Appearance Handbook was reasonable and fair. Indeed, PAL was not obligated to consult FASAP regarding the standards it would use in evaluating the performance of the each cabin crew. However, we do not agree with the findings of the appellate court that the criteria utilized by PAL in the actual retrenchment were reasonable and fair. SC has repeatedly enjoined employers to adopt and observe fair and reasonable standards to effect retrenchment. This is of paramount importance because an employer's retrenchment program could be easily justified considering the subjective nature of this requirement. The adoption and implementation of unfair and unreasonable criteria could not easily be detected especially in the retrenchment of large numbers of employees, and in this aspect, abuse is a very distinct and real possibility. This is where labor tribunals should exercise more diligence; this aspect is where they should concentrate when placed in a position of having to judge an employer's retrenchment program. Moreover, in assessing the overall performance of each cabin crew personnel, PAL only considered the year 1997. This makes the evaluation of each cabin attendant's efficiency rating capricious and prejudicial to PAL employees covered by it. In sum, PAL's retrenchment program is illegal because it was based on wrongful premise (Plan 14, which in reality turned out to be Plan 22, resulting in retrenchment of more cabin attendants than was necessary) and in a set of criteria or rating variables that is unfair and unreasonable when implemented. It failed to take into account each cabin attendant's respective service record, thereby disregarding seniority and loyalty in the evaluation of overall employee performance. Quitclaims executed as a result of PAL's illegal retrenchment program are likewise annulled and set aside because they were not voluntarily entered into by the retrenched employees; their consent was obtained by fraud or mistake, as volition was clouded by a retrenchment program that was, at its inception, made without basis. The law looks with disfavor upon quitclaims and releases by employees pressured into signing by unscrupulous employers minded to evade legal responsibilities. As a rule, deeds of release or quitclaim cannot bar employees from demanding benefits to which they are legally entitled or from contesting the legality of their dismissal. The acceptance of those benefits would not amount to estoppel. The amounts already received by the retrenched employees as consideration for signing the quitclaims should, however, be deducted from their respective monetary awards. As to PAL's recall and rehire process (of retrenched cabin crew employees), the same is likewise defective. Considering the illegality of the retrenchment, it follows that the subsequent recall and rehire process is likewise invalid and without effect. A corporate officer is not personally liable for the money claims of discharged corporate employees unless he acted with evident malice and bad faith in terminating their employment. We do not see how respondent Patria Chiong may be held personally liable together with PAL, it appearing

that she was merely acting in accordance with what her duties required under the circumstances. Being an Assistant Vice President for Cabin Services of PAL, she takes direct orders from superiors, or those who are charged with the formulation of the policies to be implemented. Petition granted. Manatad v. PT&T, 548 SCRA 64 F: In September 1988, petitioner was employed by respondent PhilippineTelegraph and Telephone Corporation (PT&T) as junior clerk with a monthlysalary of P3, 839 .74. She was later promoted as Account Executive, theposition she held until she was temporarily laid off from employment on 1September 1998. Petitioner temporary separation from employment was pursuant to theTemporary Sta ff Reduction Program adopted by respondent due to seriousbusiness reverses. On 1 6 November 1998, petitioner received a letter fromrespondent inviting her to ava il herself of its Staff Reduction ProgramPackage equivalent to one-month salary for every year of service, one andone-half month salary, pro-rated 13th month pa y, conversion to cash ofunused vacation and sick leave credits, and Health Maint enance Organization and group life insurance coverage until full payment of theseparati on package. Petitioner, however, did not opt to avail herself of thesaid package . On 26 February 1999, petitioner received a Notice ofRetrenchment from responde nt permanently dismissing her fromemployment effective 16 February 1999.

Petitioner filed illegal dismissal before the Labor Arbiter. Petitionersubmitted evidence that the respondents have no grounds forretrenchment and that the comp any is not suffering from serious losses. However, the respondent also submitted financial reports to sustain itsground of a valid retrenchment. The Labor Arbiter held in favor of thepetitioner which wa s affirmed by the NLRC. It further noted that theDepartment of Labor and Employm ent (DOLE) was not notified by therespondent of its retrenchment program as requ ired by law. On appeal to CA, the decision of the NLRC was reversed. It held that thecompany is suffering serious financial losses as reflected on its financialstatements su bmitted and prepared by independent auditors of thecompany. Hence, this petition . I: Whether there is a valid retrenchment by the respondent company H: Pertinent provision is Article 283 of the Labor Code. For a validretrenchment , the following requisites must be complied with: (a) theretrenchment is necessa ry to prevent losses and such losses are proven; (b) written notice to the employees and to the DOLE at least one monthprior to t he intended date of retrenchment; and (c) payment of separationpay equivalent to one-month pay or at least one-half month pay for everyyear of service, whicheve r is higher. The financial statements reflect that respondent suffered substantial lossin the amount of P558 Million by 30 June 1998. The Report of SGV & Co. substantiates the alleged precarious financial condition of the respondent. The financial statements audited by independent external auditorsconstitute the normal method of proving the profit and loss performance of a company. The respondent complied with the requisite notices to the employee andthe DOLE t o effect a valid retrenchment. Petitioner failed to refute that she received the written notice of retrenchment from respondent on 16November 1998. Although respondent failed to furnish DOLE with a formalletter notifying it of t he retrenchment, it still substantially complied withthe requirement. Since the National Conciliation and Mediation Board, thereconciliatory arm of DOLE, superv ised the negotiation for separationpackage, we agree with the Court of Appeals t hat it would be superfluousto still require respondent to serve notice of the re trenchment to DOLE. In fact, even granting arguendo that respondent was not experiencing losses, it is still authorized by Article 283[26] of the Labor Code to cease its business operations. Explicit in the said provision is that closure or cessation of business operations is allowed even if the business is not undergoing economic losses. The owner, for any bona fide reason, can lawfully close shop anyone. 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 we were to unjustly interfere with the management prerogative to close or cease its business operations, just because said business operations are not suffering any loss or simply to provide the workers continued employment. North Davao Mining v. NLRC (1996) 254 SCRA 721 Facts: Respondent Wilfredo Guillema is one among several employees of North Davao who were separated by reason of the company s 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 per year, for each of the five years prior to its closure. All told five months prior to its closure, its total liabilities had exceeded it s assets by 20.392 billion pesos. 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 days pay for every year of service. Moreover, the employees had to collect their salaries at a bank in Tagum, Davao del Norte, and some 58 kilometers from their workplace and about 2 hours travel time by public transportation; this arrangement lasted from 1981 up to 1990. Subsequently, a complaint was filed with respondent labor arbiter byrespondent W ilfredo Guillema and 271 other separated employees foradditional separation pay; back wages; transportation allowance; hazardpay; etc., amounting to P58, 022,87 8.31. Issue: WON the time spent in collecting wages in a place other than theplace of employment is compensable notwithstanding that the same isdone during official t ime. Held: Hours spent by complainants in collecting salaries shall be considered compensable hours worked. It is undisputed that because of security reasons, from the time of itsoperation s, petitioner NDMC maintained its policy of paying its workers ata 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 suchtravel tim e is not official. Records also show that on February 12,1992, when an inspection was conducted by the Department of Labor andEmployment at the premises of petitioner NDMC at Amacan, Maco, Davaodel Norte, it was found out t hat petitioners had violated labor standardslaw, one of which is the place of pa yment of wages. Section 4, Rule VIII, Book III of the Omnibus Rules Implementing the LaborCode p rovides that: Place of payment. -(a) As a general rule, the place of paymentshall be at or nea r the place of undertaking. Payment in a place other than the workplace shall be permissible only under the following circumstances: (1) When payment cannot be effected ator near the place of work by reason of the deterioration of peaceand order conditions, or by reas on of actual or impendingemergencies caused by fire, flood, epidemic or other ca lamityrendering payment thereat impossible; (2) When the employer provides free transportation to the employees back and forth; and (3) Under any analogous circumstances; provided that the timespent by the employ ees in collecting their wages shall beconsidered as compensable hours worked. Considering further the distance between Amacan, Maco to Tagum which is2 hours by travel and the risks in commuting all the time in collectingcomplainants salarie s, would justify the granting of backwages equivalentto 2 days in a month. ESCAREAL v. NLRC (PHILIPPINE REFINING CO INC) | 213 SCRA 472 | September 2, 1992 FACTS -Escareal was hired by the PRC for the position of Pollution Control Manager effective on 16 September 1977 with a starting monthly pay of P4,230 00; the employment was made permanent effective on 16 March 1978. The contract of employment provides, inter alia, that his "retirement date will be the day you reach your 60th birthday, but there is provision (sic) for voluntary retirement when you reach your 50th birthday. Bases for the hiring of Escareal are LOI No. 588 implementing the National Pollution Control Decree, P.D No. 984, and Memorandum Circular No. 02, implementing LOI No. 588, which amended Memorandum Circular No. 007, Series of 1977, issued by the National Pollution Control Commission (NPCC). -1 April 1979: Escareal was also designated as Safety Manager pursuant to Article 162 of the Labor Code (P.D. 442, as amended) and the pertinent implementing rule thereon. At the time of such designation, Escareal was duly accredited as a Safety Practitioner by the Bureau of Labor Standards, Department of Labor and Employment (DOLE) and the Safety Organization of the Philippines. -In addition, the pertinent rules on Occupational Health and Safety implementing the Labor Code provide for the designation of full-time safety men to ensure compliance with the safety requirements prescribed by the Bureau of Labor Standards. Consequently, Escareal's designation was changed to Pollution Control and Safety Manager. -In the course of his employment, Escareal's salary was regularly upgraded; the last pay hike was granted on 28 March 1988 when he was officially informed that his salary was being increased to P23,100.00 per

month effective 1 April 1988. This last increase is indisputably a far cry from his starting monthly salary of P4,230.00. -Sometime in the first week of November 1987, PRC's Personnel Administration Manager George B. Ditching informed Escareal about the company's plan to declare the position of Pollution Control and Safety Manager redundant. Ditching attempted to convince Escareal to accept the redundancy offer or avail of the company's early retirement plan. Escareal refused and instead insisted on completing his contract as he still had about three and a half (3 1/2) years left before reaching the mandatory retirement age of sixty (60). -15 June 1988: Escareal's immediate superior, PRC's Engg Dept Manager Jesus P. Javelona, formally informed Escareal that the position of "Safety and Pollution Control Manager will be declared redundant effective at the close of work hours on 15th July 1988." Escareal was also notified that the functions and duties of the position to be declared redundant will be absorbed and integrated with the duties of the Industrial Engineering Manager; as a result thereof, Escareal "will receive full separation benefits provided under the PRC Retirement Plan and additional redundancy payment under the scheme applying to employees who are 50 years old and above and whose jobs have been declared redundant by Management." -Escareal protested his dismissal via his 22 June 1988 letter to Javelona. This notwithstanding, the PRC unilaterally circulated a clearance dated 12 July 1988, to take effect on 15 July 1988, indicating therein that its purpose is for Escareal's "early retirement" and not redundancy. Escareal confronted Javelona; the latter, in his letter dated 13 July 1988, advised the former that the employment would be extended for another month, or up

to 15 August 1988. Escareal responded with a letter dated 25 July 1988 threatening legal action. -14 July 1988: PRC's Industrial Relations Manager Bernardo N. Jambalos III sent a Notice of Termination to the DOLE informing the latter that Escareal was being terminated on the ground of redundancy effective 16 August 1988. -5 August 1988:Escareal had a meeting with Cesar Bautista and Dr. Reynaldo Alejandro, PRC's President and Corporate Affairs Director, respectively. To his plea that he be allowed to finish his contract of employment as he only had three (3) years left before reaching the mandatory retirement age, Bautista retorted that the termination was final. -8 August 1988: Escareal presented to Javelona a computation showing the amount of P2,436,534.50 due him (Escareal) by way of employee compensation and benefits. -On the date of the effectivity of his termination, Escareal was only fiftyseven (57) years of age. He had until 21 July 1991, his sixtieth (60th) birth anniversary, before he would have been compulsorily retired. Also, on the date of effectivity of Escareal's termination, 16 August 1988, (UP Chemical Engg graduate) Miguelito S. Navarro, PRC's Industrial Engineering Manager, was designated as the Pollution Control and Safety Officer. -In view of all this, Escareal filed a complaint for illegal dismissal with damages against the private respondent PRC before the NLRC. Labor Arbiter Manuel P. Asuncion rendered a decision ordering PRC to pay Escareal his redundancy pay in accordance with existing company policy on the matter, without prejudice to the grant of additional benefits offered by PRC during the negotiation stage of the case, though it never materialized for failure of the parties to reach an agreement. -On appeal, NLRC affirmed the Labor Arbiter's decision, with modification ordering PRC to pay Escareal his retirement pay in accordance with the company policy and other benefits granted to him thereunder, less outstanding obligations of the complainant with the company at the time of his dismissal. Separate MFRs of PRC and Escareal were both dismissed. Hence, this petition. ISSUES 1. WON PRC had valid and acceptable basis to declare the position of Pollution Control and Safety Manager redundant 2. WON Escareal's right to security of tenure was violated by PRC 3. WON Escareal's employment was for a fixed definite period to end at his 60th birthday because of the stipulation as to the retirement age of sixty (60) years 4. WON Escareal is entitled to backwages and retirement benefits 5. WON Escareal is entitled to damages and attorney's fees HELD 1. NO -Wiltshire File Co., Inc. vs. NLRC: Redundancy, for purposes of the Labor Code, exists where the services of an employee are in excess of what is reasonably demanded by the actual requirements of the enterprise; a position is redundant when it is superfluous, and superfluity of a position or positions may be the outcome of a number of factors, such as 257the overhiring of workers, a decreased volume of business or the

dropping of a particular product line or service activity previously manufactured or undertaken by the enterprise. -Redundancy in an employer's personnel force, however, does not necessarily or even ordinarily refer to duplication of work. That no other person was holding the same position which the dismissed employee held prior to the termination of his services does not show that his position had not become redundant. -PRC had no valid and acceptable basis to declare the position of Pollution Control and Safety Manager redundant as the same may not be considered as superfluous; said positions are required by law. Thus, it cannot be gainsaid that the services of Escareal are in excess of what is reasonably required by the enterprise. Otherwise, PRC would not have allowed ten (10) long years to pass before opening its eyes to that fact; neither would it have increased the Escareal's salary to P23,100.00 a month effective 1 April 1988. That Escareal's positions were not duplicitous is best evidenced by PRC's recognition of their imperative need thereof, this is underscored by the fact that Miguelito S. Navarro, the company's Industrial Engineering Manager, was designated as Pollution Control and Safety Manager on the very same day of Escareal's termination. -Indeed, the proposition that a department manned by a number of engineers presumably because of the heavy workload, could still take on

the additional responsibilities which were originally reposed in an altogether separate section headed by Escareal, is difficult to accept. -If PRC felt that either Escareal was incompetent or that the task could be performed by someone more qualified, then why is it that the person designated to the position hardly had any experience in the field concerned? And why reward Escareal, barely five (5) months before the dismissal, with an increase in salary? -If based on the ground of redundancy, such a move would be invalid as the creation of said position is mandated by the law; the same cannot therefore be declared redundant. -If the aim was to generate savings in terms of the salaries that PRC would not be paying Escareal any more as a result of the streamlining of operations for improved efficiency, such a move could hardly be justified in the face of PRC's hiring of ten (10) fresh graduates for the position of Management Trainee and advertising for vacant positions in the Engineering/Technical Division at around the time of the termination. -There would seem to be no compelling reason to save money by removing such an important position. As shown by their recent financial statements, PRC's year-end net profits had steadily increased from 1987 to 1990. -While concededly, Article 283 of the Labor Code does not require that the employer should be suffering financial losses before he can terminate the services of the employee on the ground of redundancy, it does not mean either that a company which is doing well can effect such a dismissal whimsically or capriciously. The fact that a company is suffering from business losses merely provides stronger justification for the termination. 2. YES -It is evident that Escareal's right to security of tenure was violated by the private respondent PRC. Both the Constitution (Section 3, Article XIII) and the Labor Code (Article 279, P.D. 442, as amended) enunciate this right as available to an employee. -Security of tenure is a right which may not be denied on mere speculation of any unclear and nebulous basis. -In this regard, it could be concluded that the respondent PRC was merely in a hurry to terminate the services of Escareal as soon as possible in view of the latter's impending retirement; it appears that said company was merely trying to avoid paying the retirement benefits Escareal stood to receive upon reaching the age of sixty (60). PRC acted in bad faith. 3. NO -There is no indication that PRC intended to offer uninterrupted employment until Escareal reached the mandatory retirement age, the contract of employement merely informs Escareal of the compulsory retirement age and the terms pertaining to the retirement. -The letter to Escareal confirming his appointment does not categorically state when the period of employment would end. It stands to reason then that Escareal's employment was not one with a specific period. 4. YES

-Article 279, LC: 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." -Torillo vs. Leagardo, Jr. / Santos vs. NLRC: "The normal consequences of a finding that an employee has been illegally dismissed are, firstly, that the employee becomes entitled to reinstatement to his former position without loss of seniority rights and, secondly, the payment of backwages corresponding to the period from his illegal dismissal up to actual reinstatement. xxx Though the grant of reinstatement commonly carries with it an award of backwages, the inappropriateness or non-availability of one does not carry with it the inappropriateness or non-availability of the other. xxx Put a little differently, payment of backwages is a form of relief that restores the income that was lost by reason of unlawful dismissal, separation pay, in contrast, is oriented towards the immediate future, the transitional period the dismissed employee must undergo before locating a replacement job." -Reinstatement of Escareal would have been proper. However, since he reached the mandatory retirement age on 21 July 1991, reinstatement is no longer feasible. He should thus be awarded his backwages from 16 August 1988 to 21 July 1991, inclusive of allowances and the monetary equivalent of the other benefits due him for that period, plus retirement benefits under the PRC's compulsory retirement scheme which he would have been entitled to had he not been illegally dismissed. 5. NO

-In his complaint and the attached Affidavit-Complaint, Escareal does not mention any claim for damages and attorney s fees; furthermore, no evidence was offered to prove them. An award therefor would not be justified. Disposition Petition granted. SY v. CA | 398 SCRA 301 | February 27, 2003 FACTS -Respondent Jaime Sahot started working as a truck helper for the petitioner when he was 23. Later on the company were renamed several times until it became SBT Trucking Corporation. For 36 years before his dismissal, respondent continuously served the trucking business of the petitioners. -in 1994, Sahot was 59 years old, he had been incurring absences as he was suffering from various ailments, particularly the pain in his left thigh. He filed a week-long leave when he was treated for his various ailments. He filed a formal request for extension of his leave, and during this time he was threatened that if he refused to go back to work he would be terminated. He could not retire on pension because petitioners never paid his correct SSS premiums. He could no longer work as his left thigh hurt abominably. Eventually petitioners dismissed him from work on June 30. -Sahot filed a complaint for illegal was their industrial partner ; that employee in 1994; that Sahot went on work nor did he file an extension of to have voluntarily resigned) dismissal. Petitioners claim that Sahot respondent only became their leave and never reported back to his leave (therefore, should be deemed

-LA: pro-petitioners (no illegal dismissal, they were industrial partners, but still pay financial assistance) -NLRC: pro-respondent (employee, no abandonment of job, entitled to separation pay for 29 years) -CA: affirmed with modification (employee, with separation pay for 36 years) ISSUES 1. WON there was an employer-employee relationship between petitioners and respondent Sahot (or WON Sahot is an industrial partner of the petitioners) 2. WON there was a valid dismissal 3. WON Sahot is entitled to separation pay HELD 1. YES. No partnership, Sahot was employee. Ratio: The elements to determine the existence of an employment relationship are: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer s power to control the employee s conduct. The most important element is the employer s control of the employee s conduct, not only as to the result of the work to be done, but also as to the means and methods to accomplish it.

Reasoning -Private respondent actually engaged in work as an employee: he did not have the freedom to determine where he would go, what he would do, and how he would do it; merely followed instructions of petitioners as long as he was paid his wages. -ON PARTNERSHIP: A1767, NCC-contract of partnership is where 2 or more persons bind themselves to contribute money, property or industry to a common fund, with the intention of dividing the profits among themselves. as applied in this case: no written agreement exist to prove partnership; no proof respondent was receiving a share in the profits, no proof that he actively participated in the management, administration and adoption of policies of the business. - if doubt exists between the evidence presented by the employer and the employee, the scales of justice must be tilted in favor of the latter 2. NO

Ratio In termination cases, the burden is upon the employer to show by substantial evidence that the termination was for lawful cause and validly made. A277, LC puts the burden of proving that the dismissal of an employee was for a valid or authorized cause on the employer, without distinction whether the employer admits or does not admit the dismissal. For an employee s dismissal to be valid, (a) the dismissal must be for a valid cause, and (b) the employee must be afforded due process. Reasoning -ON VALID CAUSE: if disease as a ground for termination, refer to A284, LC and Sec8, Book VI, Rule I of the Omnibus Implementing Rules of the Labor Code where a certification by competent public health authority that the disease is of such nature or at such a stage that it cannot be cured within a period of 6 months even with proper medical treatment. If curable, then employee would be required to take a leave, then reinstate to formal position upon restoration of his normal health. The requirement for a medical certificate cannot be dispensed with; otherwise, it would sanction the unilateral and arbitrary determination by the employer of the gravity or extent of the employee s illness and thus defeat the public policy in the protection of labor. as applied in the case: petitioners did not comply with the medical certificate requirement before Sahot s dismissal was effected -ON DUE PROCESS: The employer is required to furnish an employee with 2 written notices before the latter is dismissed: (1) the notice to apprise the employee of the particular acts or omissions for which his dismissal is sought, which is the equivalent of a charge; and (2) the notice informing the employee of his dismissal, to be issued after the employee has been given reasonable opportunity to answer and to be heard on his defense. as applied in the case: No notice given, but instead what they did to threaten the employee with dismissal, then actually implement the threat when the occasion presented itself because of private respondent s painful left thigh 3. YES Ratio. An employee who is terminated because of disease is entitled to separation pay equivalent to at least one month salary or to one-half month salary for every year of service, whichever is greater. as applied in the case: entitled to separation pay computed at P2,080 times 36 years or P74, 880. Disposition petition is DENIED and the decision of the Court of Appeals dated February 29, 2000 is AFFIRMED. Petitioners must pay private respondent Jaime Sahot his separation pay for 36 years of service at the rate of one-half monthly pay for every year of service, amounting to P74, 880.00, with interest of six per centum (6%) per annum from finality f this decision until fully paid. Assailed in the present petition are the Decision[1] and Resolution[2] of the Court of Appeals (CA) dated February 16, 2005 and August 2, 2005,

respectively, in CA-G.R. SP No. 79105. The CA Decision modified the March 31, 2003 Decision of the National Labor Relations Commission (NLRC) in NLRC NCR CA 028050-01, while the CA Resolution denied petitioner's Motion for Reconsideration. Villaruel v. Yeo Han Guan | GR 169191 | June 1, 2011 F: On February 15, 1999, herein petitioner filed with the NLRC, National Capital Region, Quezon City a Complaint[3] for payment of separation pay against Yuhans Enterprises. Subsequently, in his Amended Complaint and Position Paper dated December 6, 1999, petitioner alleged that in June 1963, he was employed as a machine operator by Ribonette Manufacturing Company, an enterprise engaged in the business of manufacturing and selling PVC pipes and is owned and managed by herein respondent Yeo Han Guan. Over a period of almost twenty (20) years, the company changed its name four times. Starting in 1993 up to the time of the filing of petitioner's complaint in 1999, the company was operating under the name of Yuhans Enterprises. Despite the changes in the company's name, petitioner remained in the employ of respondent. Petitioner further alleged that on October 5, 1998, he got sick and was confined in a hospital; on December 12, 1998, he reported for work but was no longer permitted to go back because of his illness; he asked that respondent allow him to continue working but be assigned a lighter kind of work but his request was denied; instead, he was offered a sum of P15,000.00 as his separation pay; however, the said amount corresponds only to the period between 1993 and 1999; petitioner prayed that he be granted separation pay computed from his first day of employment in June 1963, but respondent refused. Aside from separation pay, petitioner prayed for the payment of service incentive leave for three years as well as attorney's fees.

On the other hand, respondent averred in his Position Paper[5] that petitioner was hired as machine operator from March 1, 1993 until he stopped working sometime in February 1999 on the ground that he was suffering from illness; after his recovery, petitioner was directed to report for work, but he never showed up. Respondent was later caught by surprise when petitioner filed the instant case for recovery of separation pay. Respondent claimed that he never terminated the services of petitioner and that during their mandatory conference, he even told the latter that he could go back to work anytime but petitioner clearly manifested that he was no longer interested in returning to work and instead asked for separation pay. On November 27, 2000, the Labor Arbiter handling the case rendered judgment in favor of petitioner. Aggrieved, respondent filed an appeal with the NLRC which also dismissed the petition. On March 31, 2003, the Third Division of the NLRC rendered its Decision dismissing respondent's appeal and affirming the Labor Arbiter's Decision. In the CA, petition was partially granted. I: WON respondent, in fact, dismissed petitioner from his employment. H: The Court finds no convincing justification, in the Decision of the Labor Arbiter on why petitioner is entitled to such pay. In the same manner, the NLRC Decision did not give any rationalization as the gist thereof simply consisted of a quoted portion of the appealed Decision of the Labor Arbiter. On the other hand, the Court agrees with the CA in its observation of the following circumstances as proof that respondent did not terminate petitioner's employment:first, the only cause of action in petitioner's original complaint is that he was "offered a very low separation pay"; second, there was no allegation of illegal dismissal, both in petitioner's original and amended complaints and position paper; and, third, there was no prayer for reinstatement. In consonance with the above findings, the Court finds that petitioner was the one who initiated the severance of his employment relations with respondent. It is evident from the various pleadings filed by petitioner that he never intended to return to his employment with respondent on the ground that his health is failing. Indeed, petitioner did not ask for reinstatement. In fact, he rejected respondent's offer for him to return to work. This is tantamount to resignation. Resignation is defined as the voluntary act of an employee who finds himself in a situation where he believes that personal reasons cannot be sacrificed in favor of the exigency of the service and he has no other choice but to disassociate himself from his employment. By way of exception, this Court has allowed grants of separation pay to stand as "a measure of social justice" where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. However, there is no provision in the Labor Code which grants separation pay to voluntarily resigning employees. In fact, the rule is that an employee who voluntarily resigns from employment is not entitled to separation pay, except when it is stipulated in the employment contract or CBA, or it is sanctioned by established employer practice or policy. In the present case, neither the abovementioned provisions of the Labor Code and its implementing rules and regulations nor the exceptions apply because petitioner was not dismissed from his employment and there is no

evidence to show that payment of separation pay is stipulated in his employment contract or sanctioned by established practice or policy of herein respondent, his employer. Since petitioner was not terminated from his employment and, instead, is deemed to have resigned there from, he is not entitled to separation pay under the provisions of the Labor Code. But we must stress that this Court did allow, in several instances, the grant of financial assistance as a measure of social justice and exceptional circumstances, and as an equitable concession. The instant case equally calls for balancing the interests of the employer with those of the worker, if only to approximate what Justice Laurel calls justice in its secular sense. In the present case, respondent had been employed with the petitioner for almost twelve (12) years. On February 13, 1996, he suffered from a "fractured left transverse process of fourth lumbar vertebra," while their vessel was at the port of Yokohama, Japan. After consulting a doctor, he was required to rest for a month. When he was repatriated to Manila and examined by a company doctor, he was declared fit to continue his work. When he reported for work, petitioner refused to employ him despite the assurance of its personnel manager. Respondent patiently waited for more than one year to embark on the vessel as 2nd Engineer, but the position was not given to him, as it was occupied by another person known to one of the stockholders. Consequently, for having been deprived of continued employment with petitioner's vessel, respondent opted to apply for optional retirement. In addition, records show that respondent's seaman's

book, as duly noted and signed by the captain of the vessel was marked "Very Good," and "recommended for hire." Moreover, respondent had no derogatory record on file over his long years of service with the petitioner. Considering all of the foregoing and in line with Eastern, the ends of social and compassionate justice would be served best if respondent will be given some equitable relief. Thus, the award of P100, 000.00 to respondent as financial assistance is deemed equitable under the circumstances. Petition denied. AGABON v. NATIONAL LABOR RELATIONS | 442 SCRA 573 | November 17, 2004 FACTS -On January 2, 1992, petitioners Jenny Agabon and Virgilio Agabon were hired as gypsum board and cornice installers by respondent Riviera Home Improvements, Inc., a corporation engaged in the business of selling and installing ornamental and construction materials. Seven (7) years later, on February 23, 1999, their services were terminated on the ground of abandonment of work. Apparently, petitioners were subcontracting installation jobs for another company and were frequently absent from work. Thus, when petitioners reported for work on February 23, 1999, respondent company refused to reemploy them unless they agree to work on a pakyaw basis. Petitioners demurred since this would mean losing their benefits. They were given their walking papers without according them the twin requirements of notice and hearing. Respondent company stated that they abandon their jobs. Hence, petitioners filed a complaint for illegal dismissal and payment of money claims against respondent company. -On December 28, 1999, the Labor Arbiter held that the dismissal of petitioners was illegal and ordered respondent company to pay them backwages, holidy and service incentive leave pay, and separation pay in lieu of reinstatement. On appeal, the NLRC reversed the decision of the Labor Arbiter and ruled that the latter erred in awarding backwages and separation pay to petitioners who deliberately abandoned their work. On certiorari, the Court of Appeals affirmed the findings of the NLRC but ordered respondent company to pay petitioners their money claims. ISSUES 1. WON petitioners were illegally dismissed from the service 2. WON private respondent should be held liable for non-compliance with the procedural requirements of due process HELD 1. NO. Ratio: 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 latter s representative in connection with the employee s 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. -In this case, Agabon abandoned their job. 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 employeremployee 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. 2. YES -Where the dismissal is for a just cause, as in the instant case, the lack of statutory due process should not nullify the dismissal, or render it illegal, or ineffectual. However, the employer should indemnify the employee for the violation of his statutory rights. * It is worth noting that this ruling has evolved through times.

> Prior to 1989 -the rule was that a dismissal or termination is illegal if the employee was not given any notice. > In the 1989 case of Wenphil Corp. v. National Labor Relations Commission -where the employer had a valid reason to dismiss an employee but did not follow the due process requirement, the dismissal may be upheld but the employer will be penalized to pay an indemnity to the employee. This became known as the Wenphil or Belated Due Process Rule. > On January 27, 2000, in Serrano -violation by the employer of the notice requirement in termination for just or authorized causes was not a denial of due process that will nullify the termination. However, the dismissal is ineffectual and the employer must pay full backwages from the time of termination until it is judicially declared that the dismissal was for a just or authorized cause. Reasoning a. Constitutional due process is different from statutory due process. The former protects the individual from the government and assures him of his rights in criminal, civil or administrative proceedings; while statutory due process found in the Labor Code and Implementing Rules protects employees from being unjustly terminated without just cause after notice and hearing. b. The constitutional policy to provide full protection to labor is not meant to be a sword to oppress employers. The commitment of this Court to the cause of labor does not prevent us from sustaining the employer when it is in the right, as in this case. Disposition DENIED. But the private respondent is ORDERED to pay each of the petitioners the amount of P30,000.00 as nominal damages for noncompliance with statutory due process. Jaka Food Processing Corp. v. Pacot, GR 151378, March 28, 2005 Facts: -Respondents were employees of Jaka because the company was in direfinancial str aits. -However, the termination was effected without Jaka complying with therequiremen t regarding the service of written notice upon the employees and the DOLE at least one month before the intended date of termination. -The respondents filed a complaint with the Labor Arbiter who ruled infavor of t he respondents. -The NLRC initially affirmed the decision of the Labor Arbiter butsubsequently r eversed it decision upon the filing of a Motion forReconsideration. On appeal, the Court of Appeals reversed the decision of the NLRC based on the ruling of the SC in the case of Serrano vs. NLRC. Issue: What are the legal implications when an employee is dismissed without complying with the notice requirement under the Labor Code? Held:

-The difference between this case and the case of Agabon vs. NLRC isthat this ca se involves an authorized cause (particularly retrenchment) under Art. 283 while the Agabon case involves a just cause under Art. 282. The difference between the two is that in a just cause, theemployee is the direct cause of the termination, while in an authorizedcause, the main actor is usually the employer. -Because of the distinction, the SC held that if the dismissal is based on a just cause under 282 and the employer failed to comply with the noticerequiremen t, the sanction on the employer should be tempered becausethe dismissal was init iated by an act imputable to the employee. On the other hand, if the cause of the dismissal is one of the authorized causes under 283, failure of the employer to comply with the noticerequirement should m erit a stiffer sanction because the dismissalprocess was initiated by the employ er s exercise of managementprerogative. In this case, the dismissal of the respondents was indeed caused by retrenchment due to financial losses of the company (one of the authorized causes). Therefore, Jaka is ordered to pay P50,000 as indemnity (this is greater than the P30,000 indemnity for failure to comply with the notice requirement if the dismissal is due to a just cause as held in the case of Agabon). Perez v. PT&T, GR 152048, April 7, 2009

Facts: -Perez and Doria were employed by PT&T as shipping clerk andsupervisor, respecti vely. Pursuant to an unsigned letter, investigationswere commenced by the compan y, yielding findings that hipping Sectionjacked up the value of the freight cost s for goods shipped and that theduplicates of the shipping documents allegedly s howed traces oftampering, alteration and superimposition. Petitioners were place d onpreventive suspension for 30 days. The 15-day suspension was extendedtwice. A memorandum was issued charging criminal charges againstpetitioners and mandati ng their dismissal for falsification of documents. Thus, petitioners filed a complaint for illegal suspension and illegaldismissal. -Labor Arbiter: found that the 30-day extension of petitioners suspensionand thei r subsequent dismissal were both illegal. -NLRC: Reversed. CA: Affirmed NLRC Issues: 1. Was there just cause for dismissal? 2. Was due process observed? 3. Is a hearing (or conference) mandatory in cases involving the dismissal of an employee? 4. Were petitioners illegally suspended? Held: -No. Without undermining the importance of a shipping order or request, we find respondents evidence insufficient to clearly and convincingly establish the facts from which the loss of confidence resulted. Other than their bare allegations and the fact that such documents came into petitioners hands at some point, respondents should have provided evidence of petitioners functions, the extent of their duties, the procedure in the handling and approval of shipping requests and the fact that no personnel other than petitioners were involved. There was, therefore, a patent paucity of proof connecting petitioners to the alleged tampering of shipping documents. The alterations on the shipping documents could not reasonably be attributed to petitioners because it was never proven that petitioners alone had control of or access to these documents. Unless duly proved or sufficiently substantiated otherwise, impartial tribunals should not rely only on the statement of the employer that it has lost confidence in its employee. -No. Respondents illegal act of dismissing petitioners was aggravated by their failure to observe due process. To meet the requirements of due process in the dismissal of an employee, an employer must furnish the worker with two written notices: (1) a written notice specifying the grounds for termination and giving to said employee a reasonable opportunity to explain his side and (2) another written notice indicating that, upon due consideration of all circumstances, grounds have been established to justify the employer's decision to dismiss the employee. -Petitioners were neither apprised of the charges against them norgiven a chance to defend themselves. They were simply andarbitrarily separated from work and s erved notices of terminationin total disregard of their rights to due process an d security of tenure.

-Section 2(d), Rule I of the Implementing Rules of Book VI of the LaborCode itse lf provides that the so-called standards of due process outlinedtherein shall be observed "substantially," not strictly. This is recognitionthat while a formal hearing or conference is ideal, it is not an absolute, mandatory or exclusive avenue of due process. An employee may be validly suspended by the employer for just cause provided by law. Such suspension shall only be for a period of 30 days, after which the employee shall either be reinstated or paid his wages during the extended period. In this case, petitioners contended that they were not paid during the two 15-day extensions, or a total of 30 days, of their preventive suspension. Respondents failed to adduce evidence to the contrary. Where the dismissal was without just or authorized cause and there was no due process, Article 279 of the Labor Code, as amended, 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 this case, however, reinstatement is no longer possible because of the length of time that has passed from the date of the incident to final resolution. Fourteen years have transpired from the time petitioners were wrongfully dismissed. To order reinstatement at this juncture will no longer serve any prudent or practical purpose. GLAXO WELLCOME PHILIPPINES INC v. NAGKAKAISANG EMPLEYADO NG WELLCOME-DFA, 453 SCRA 256 | March 11, 2005 FACTS -Union NAGKAKAISANG EMPLEYADO NG WELLCOME-DFA (NEW-DFA) filed a Petition for Certification Election with the DOLE-NCR seeking to represent the bargaining unit comprised of all the regular rank-and-file employees of [petitioner] company GLAXO-WELLCOME. -Several days before the election GLAXO-WELLCOME issued a circular relative to the improvement of the company s retirement policy bringing different employees to different resorts. -In the meantime, GLAXO-WELLCOME adopted a new Car Allocation Policy. Under the provisions of the said car plan, a prioritization schedule in the assignment of company vehicles is to be fixed based on the sales performance of the employees. Pursuant to the same, several company cars had to be re-assessed and re-assigned in favor of other employees more qualified under the priority list. Incidentally, included among the vehicles that had to be re-allocated in accordance with the priority schedule of the new car plan were [those] of union officers Norman Cerezo and Jossie Roda de Guzman. -Accordingly, a memorandum was sent by the company to [Respondent] de Guzman advising her that she would have to surrender the vehicle assigned to her in light of the new car policy. De Guzman refused to turn over said car and instead sought reconsideration from the company s National Sales Manager. The latter did not accede to de Guzman s request. De Guzman, thru counsel, wrote the company, asking that the withdrawal of her car be held in abeyance. The company, however, rejected her petition. On December 7, 1990, de Guzman received another memorandum from the company, again instructing her to return the vehicle. The following day, de Guzman sent a letter to the company reiterating her plea for the suspension of the withdrawal of her car. On December 17, 1990, a final warning was sent to de Guzman instructing her to return her assigned vehicle or else she would be charged for insubordination and be dismissed. Finally, because of de Guzman s staunch refusal to comply with the order, through a letter dated December 20, 1990, she was cited, and at the same time, terminated for gross insubordination. Norman Cerezo was of the same case. -The Union alleged undue interference due to a massive electioneering and manipulative acts of GLAXO-WELLCOME prior to and during the certification election and that the new Car Allocation Policy adopted by the company was intended to harass, retaliate and discriminate against union officers and members. Union also challenged the legality of the suspension and dismissal of two of its officers, namely: Norman Cerezo and Jossie Roda de Guzman. It argued that the suspension and dismissal were effected without any prior hearing (Which was the only sticking issue in

this case). -Labor Arbiter dismissed the charges of unfair labor practice, illegal dismissal and illegal suspension filed against GLAXO-WELLCOME by union. NLRC affirmed the dismissal of the complaint. NLRC likewise denied the motion for reconsideration.The CA affirmed the ruling of the National Labor Relations Commission (NLRC) adopted the findings of the labor arbiter. It held that respondents had failed to proffer convincing evidence to prove that petitioner s assailed acts were ill-motivated and deliberately orchestrated to interfere with or otherwise influence the conduct of the certification elections. -Moreover, the CA ruled that there was nothing objectionable per se about the programs or incentive schemes that the company had provided for the employees. The appellate court said that the grant of benefits to the employees, as well as the adoption of the Car Allocation Policy, constituted a proper exercise of the company s management prerogatives. This plain company practice had been set up to make petitioner s employee benefits competitive with those of other pharmaceutical corporations. De Guzman and Cerezo were among those adversely affected by the policy, because they had failed to meet the sales performance required thereunder, not because they were officers of the union. -However, the CA held that the dismissal of De Guzman and the suspension of Cerezo had not been validly effected. Opining that their defiant actuation toward management constituted willful disobedience, which was a just cause for the termination of their employment, the appellate court conceded the validity of the dismissal and suspension. Nonetheless, the CA said that those actions (dismissal and suspension)

effected by petitioner could not be deemed legal, because it had failed to comply with procedural due process mandated by the Labor Code and with the two-notice requirement under the Implementing Rules. According to the CA, petitioner did not accord private respondents the benefit of a proper charge, an opportunity to defend themselves, and a formal investigation. -The appellate court opined that the Memoranda were merely demands for respondents to comply with the order to turn over their assigned cars. Those Memoranda merely intimated the possibility that De Guzman and Cerezo might be charged and dismissed if they continued to disobey the order. ISSUE: WON the Court of Appeals erred in ruling that petitioner did not observe procedural due process in terminating and suspending the employment of de Guzman and Cerezo, respectively HELD: YES, since there was substantial compliance through the memoranda. -In the present case, petitioner sent respondents a total of three Memoranda stating that their stubborn refusal to comply with the car policy and to surrender the subject vehicle constituted gross insubordination, for which they could be dismissed. The December 5, 1990 Memorandum sent to Respondent De Guzman specified her acts that constituted gross insubordination. -To each Memorandum, respondents were able to reply and expla sincein, with the aid of their counsel, why they had refused to return the vehicles; and, in effect, why they should not be dismissed for gross insubordination. Initially, they asked petitioner not to implement the car policy in the light of the Complaint and the Motion for the Issuance of a Writ of Preliminary Injunction that they had filed. They explained that they could not work effectively and efficiently for the company without the cars that had been assigned to them. -In their written replies to petitioner s succeeding Memoranda --which reiterated that their actions constituted gross insubordination and could result in their termination --respondents, still through their counsel, reasoned that they were not claiming ownership of the car. They said that their refusal to surrender the car to the company could not be denominated as gross insubordination, because they were merely acting upon the advice of their counsel. They added that, to enjoin the implementation of the car policy, they had already lodged with the NLRC a complaint for unfair labor practice. -Their counsel further alleged that De Guzman was apprehensive that she might not immediately be given a replacement upon the return of the car. He stressed that the vehicle was necessary to prevent adverse effects on the sales performance of respondents. Ultimately, after petitioner had sent them a final warning, to which they also ably replied, it served them a letter terminating their employment. -Neither Section 2 of Book V of Rule XXIII nor Section 2(d) of Rule 1 of Book VI of the Implementing Rules require strict literal compliance with the stated procedure; only substantial compliance is needed. On this basis, the Memoranda sent to respondents may be deemed to have sufficiently conformed to the first notice required under the Implementing Rules. The

Memoranda served the purpose of informing them of the pending matters beclouding their employment and of extending to them an opportunity to clear the air. In fact, not only were respondents duly informed of the particular acts for which their dismissal was sought; they were, in truth and in fact, able to defend themselves and to respond to the charges with the assistance of a counsel of their own choosing. Respondents were amply informed of the cause of their dismissal. Their correspondence with petitioner took almost a month, which was sufficient cooling time within which the parties could have, and in fact had, tried to settle the problem amicably. Moreover, petitioner s Memoranda amply gave them a distinct, different and effective first level of remedy (which was to surrender the vehicles) to protect their jobs. Furthermore, they were still able to file a Complaint with the labor arbiter, with better knowledge of the cause of their dismissal, with longer time to prepare their case, and with greater opportunity to take care of the financial needs of their family pendente lite. -Agabon v. NLRC effectively reverted to Wenphil and ruled that a dismissal due to abandonment --a just cause --was not illegal or ineffectual, even if done without due process; but that the employer should indemnify the employee with nominal damages for non-compliance with statutory due process. -To stress, if the dismissal is based on a just cause under Article 282 of the Labor Code, the employer must give the employee (1) two written notices and (2) a hearing (or at least, an opportunity to be heard). The first notice is intended to inform the employee of the employer s intent to dismiss and the particular acts or omissions for which the dismissal is sought. The second notice is intended to inform the employee of the employer s decision to dismiss. This decision, however, must come only after the

employee has been given a reasonable period, from receipt of the first notice, within which to answer the charge; and ample opportunity to be heard with the assistance of counsel, if the employee so desires. -The twin requirements of (a) two notices and (b) hearing are necessary to protect the employee s security of tenure, which is enshrined in the Constitution, the Labor Code and related laws. Disposition Petition is GRANTED and the challenged Decision REVERSED. The Decision of the NLRC dated August 28, 1998, affirming that of the labor arbiter dated August 15, 1995, is REINSTATED. King of Kings v. Mamac, G.R. No. 166208, June 29, 2007 Facts: Petitioner KKTI is a corporation engaged in public transportation and managed by Claire Dela Fuente and Melissa Lim. Respondent Mamac was hired as bus conductor of Don Mariano Transit Corporation (DMTC) on April 29, 1999. The DMTC employees including respondent formed the Damayan ng mga Manggagawa, Tsuper at Conductor-Transport Workers Union and registered it with the Department of Labor and Employment. Pending the holding of a certification election in DMTC, petitioner KKTI was incorporated with the Securities and Exchange Commission which acquired new buses. Many DMTC employees were subsequently transferred to KKTI and excluded from the election. The KKTI employees later organized the Kaisahan ng mga Kawani sa King of Kings (KKKK) which was registered with DOLE. Respondent was elected KKKK president. Respondent was required to accomplish a Conductor s Trip Report and submit it to the company after each trip. As a background, this report indicates the ticket opening and closing for the particular day of duty. After submission, the company audits the reports. Once an irregularity is discovered, the company issues an Irregularity Report against the employee, indicating the nature and details of the irregularity. Thereafter, the concerned employee is asked to explain the incident by making a written statement or counter-affidavit at the back of the same Irregularity Report. After considering the explanation of the employee, the company then makes a determination of whether to accept the explanation or impose upon the employee a penalty for committing an infraction. That decision shall be stated on said Irregularity Report and will be furnished to the employee. Upon audit of the October 28, 2001 Conductor s Report of respondent, KKTI noted an irregularity. It discovered that respondent declared several sold tickets as returned tickets causing KKTI to lose an income of eight hundred and ninety pesos. While no irregularity report was prepared on the October 28, 2001 incident, KKTI nevertheless asked respondent to explain the discrepancy. In his letter,[3] respondent said that the erroneous declaration in his October 28, 2001 Trip Report was unintentional. He explained that during that day s trip, the windshield of the bus assigned to them was smashed; and they had to cut short the trip in order to immediately report the matter to the police. As a result of the incident, he got confused in making the trip report. On November 26, 2001, respondent received a letter terminating his employment effective November 29, 2001. The dismissal letter alleged that the October 28, 2001 irregularity was an act of fraud against the company. On December 11, 2001, respondent filed a Complaint for illegal

dismissal, illegal deductions, nonpayment of 13th-month pay, service incentive leave, and separation pay. He denied committing any infraction and alleged that his dismissal was intended to bust union activities. Moreover, he claimed that his dismissal was effected without due process. In its April 3, 2002 Position Paper, KKTI contended that respondent was legally dismissed after his commission of a series of misconducts and misdeeds. It claimed that respondent had violated the trust and confidence reposed upon him by KKTI. Also, it averred that it had observed due process in dismissing respondent and maintained that respondent was not entitled to his money claims such as service incentive leave and 13th-month pay because he was paid on commission or percentage basis. On September 16, 2002, Labor Arbiter Ramon Valentin C. Reyes rendered judgment dismissing respondent s Complaint for lack of merit. Aggrieved, respondent appealed to the National Labor Relations Commission (NLRC). On August 29, 2003, the NLRC rendered a Decision, respondent

King of Kings Transport Inc. is hereby ordered to indemnify complainant in the amount of ten thousand pesos (P10, 000) for failure to comply with due process prior to termination. CA: held that there was just cause for respondent s dismissal. Moreover, the CA held that respondent is entitled to the 13thmonth pay benefit. Issue: WON CA erred in ruling that KKTI did not comply with the requirements of procedural due process before dismissing the services of the complainant/private respondent. Held: The petition is partly meritorious. Non-compliance with the Due Process Requirements: Due process under the Labor Code involves two aspects: first, substantive the valid and authorized causes of termination of employment under the Labor Code; and second, procedural the manner of dismissal. In the present case, the CA affirmed the findings of the labor arbiter and the NLRC that the termination of employment of respondent was based on a just cause. This ruling is not at issue in this case. The question to be determined is whether the procedural requirements were complied with. To clarify, the following should be considered in terminating the services of employees: (1) The first written notice to be served on the employees should contain the specific causes or grounds for termination against them, and a directive that the employees are given the opportunity to submit their written explanation within a reasonable period. Reasonable opportunity under the Omnibus Rules means every kind of assistance that management must accord to the employees to enable them to prepare adequately for their defense.[15] This should be construed as a period of at least five (5) calendar days from receipt of the notice to give the employees an opportunity to study the accusation against them, consult a union official or lawyer, gather data and evidence, and decide on the defenses they will raise against the complaint. Moreover, in order to enable the employees to intelligently prepare their explanation and defenses, the notice should contain a detailed narration of the facts and circumstances that will serve as basis for the charge against the employees. A general description of the charge will not suffice. Lastly, the notice should specifically mention which company rules, if any, are violated and/or which among the grounds under Art. 282 is being charged against the employees. (2) After serving the first notice, the employers should schedule and conduct a hearing or conference wherein the employees will be given the opportunity to: (1) explain and clarify their defenses to the charge against them; (2) present evidence in support of their defenses; and (3) rebut the evidence presented against them by the management. During the hearing or conference, the employees are given the chance to defend themselves personally, with the assistance of a representative or counsel of their choice. Moreover, this conference or hearing could be used by the parties as an opportunity to come to an amicable settlement. (3) After determining that termination of employment is justified, the employers shall serve the employees a written notice of termination indicating that: (1) all circumstances involving the charge against the employees have been considered; and (2) grounds have been

established to justify the severance of their employment. Respondent was not issued a written notice charging him of committing an infraction. The law is clear on the matter. A verbal appraisal of the charges against an employee does not comply with the first notice requirement. Second, even assuming that petitioner KKTI was able to furnish respondent an Irregularity Report notifying him of his offense, such would not comply with the requirements of the law. We observe from the irregularity reports against respondent for his other offenses that such contained merely a general description of the charges against him. The reports did not even state a company rule or policy that the employee had allegedly violated. Likewise, there is no mention of any of the grounds for termination of employment under Art. 282 of the Labor Code. Thus, KKTI s

standard charge sheet is not sufficient notice to the employee. Third, no hearing was conducted. Sanction for Non-compliance with Due Process Requirements: After a finding that petitioners failed to comply with the due process requirements, the CA awarded full backwages in favor of respondent in accordance with the doctrine in Serrano v. NLRC. However, the doctrine in Serrano had already been abandoned in Agabon v. NLRC by ruling that if the dismissal is done without due process, the employer should indemnify the employee with nominal damages. Thus, for non-compliance with the due process requirements in the termination of respondent s employment, petitioner KKTI is sanctioned to pay respondent the amount of thirty thousand pesos (PhP 30,000) as damages. Thirteenth (13th)-Month Pay: Court held that bus drivers and conductors who are paid a fixed or guaranteed minimum wage in case their commission be less than the statutory minimum, and commissions only in case where they are over and above the statutory minimum, are entitled to a 13th-month pay equivalent to one-twelfth of their total earnings during the calendar year. Petition partly granted. Uniwide Sales Warehouse Club v. NLRC, 547 SCRA 222 Facts: Amalia P. Kawada is an employee of Uniwide. Sometime in 1998, Uniwide received reports from the other employees regarding some problems in the departments managed by the private respondent. Thus, on March 15, 1998, Uniwide, through Store Manager Apduhan, issued a Memorandum addressed to the private respondent summarizing the various reported incidents signifying unsatisfactory performance on the latter s part which include the commingling of good and damaged items, sale of a voluminous quantity of damaged toys and ready-to-wear items at unreasonable prices, and failure to submit inventory reports. Uniwide asked private respondent for concrete plans on how she can effectively perform her job. She was constantly being bombarded with memorandum seeking to explain the reports of incidents. She was unable to answer them. It got to a point that she was being shouted at because of her unsatisfactory performance. On August 2, 1998, Apduhan issued a Memorandum received on the same day by Edgardo Kawada, the husband of private respondent, advising the latter of a hearing scheduled on August 12, 1998 to be held at the Uniwide Office in Quirino Highway, and warning her that failure to appear shall constitute as waiver and the case shall be submitted for decision based on available papers and evidence. Respondent did not attend the hearing and was terminated. She then filed for an illegal dismissal because she constructively dismissed which is the reason for her failure to attend the hearing. Issue: Was there constructive dismissal? Respondent argues that since the investigation was conducted after she was constructively dismissed. Therefore, according to her, there was no point to still attend the investigation set on August 12, 1998. Hence there was denial of due process. Held:

-Case law defines constructive dismissal as a cessation of work because continued employment is rendered impossible, unreasonable or unlikely; when there is a demotion in rank or diminution in pay or both; or when aclear di scrimination, insensibility, or disdain by an employer becomesunbearable to the employee. -The test of constructive dismissal is whether a reasonable person in theemploye e s position would have felt compelled to give up his positionunder the circumstan ces. It is an act amounting to dismissal but made to appear as if it were not. In fact, the employee who is constructivelydismisse d may be allowed to keep on coming to work. Constructive dismissal is therefore a dismissal in disguise. The law recognizes andresolves t his situation in favor of employees in order to protect theirrights and interest s from the coercive acts of the employer. -In the present case, private respondent claims that from the months ofFebruary to June 1998, she had been subjected to constant harassment, ridicule and inhumane treatment by Apduhan, with the hope that the

latter can get the private respondent to resign] The harassmentallegedly came in the form of successive memoranda which privaterespondent would receive almost e very week, enumerating a litany ofoffenses and maligning her reputation and spre ading rumors among theemployees that private respondent shall be dismissed soon. The laststraw of the imputed harassment was the July 31, 1998 incident whereinp rivate respondent s life was put in danger when she lost consciousnessdue to hyper tension as a result of Apduhan s alleged hostility andshouting. The Court finds th at private respondent s allegation ofharassment is a specious statement which cont ains nothing but emptyimputation of a fact that could hardly be given any eviden tiary weight bythis Court. Private respondent s bare allegations of constructivedi smissal, when uncorroborated by the evidence on record, cannot begiven credence. -2.) The termination of private respondent was grounded on theexistence of just cause under Article 282 (c) of the Labor Code or willfulbreach by the employee o f the trust reposed on him by his employer ora duly authorized representative. Private respondent occupies a managerial position. As a managerial employee, mere existence of a basis for believing that such employee has breached the trust of his employer would suffice for his dismissal. Wallem Maritime Services Inc. v. NLRC | G.R. No. 108433 | October 15, 1996 F: Private respondent Joselito V. Macatuno was hired by WallemShipmanagement Lim ited thru its local manning agent, Wallem MaritimeServices, Inc., as an able-bod ied seaman on board the M/T Fortuna, avessel of Liberian registry. Pursuant to t he contract of employment, private respondent was employed for ten (10) months covering the periodFebruary 26, 1989 until December 26, 1989 with a monthly salary of twohundred seventy-six US dollars (US $276); hourly overtime rate of onedollar and seventy-two cents ( US $1.72), and a monthly tanker allowanceof one hundred twenty-seven dollars and sixty cents (US $127.60), with six (6) days leave with pay for each month. On June 24, 1989, while the vessel was berthed at the port of Kawasaki, Japan, an altercation took place between privaterespondent and fellow Filipino crew member, Julius E. Gurimbao, on theone hand, and a cade t/apprentice officer of the same nationality as thecaptain of the vessel on the other hand. The master entered the incident in the tanker s logbook. As a consequence, private respondent and Gurimbao were repatriated tothe Philipp ines where they lost no time in lodging separate complaints for illegal dismissal with the POEA. According to the affidavit privaterespondent ex ecuted before a POEA administering officer, the followingfacts led to the filing of the complaint. At about 5:50 a.m. of June 24, 1989, private respondent was on duty alongwith Gu rimbao, checking the manifold of the vessel and looking for oilleakages, when a cadet/apprentice who was of the same nationality as thevessel s captain (Singh), a pproached them. He ordered Gurimbao to use a shovel in draining the water which, mixed with oil and dirt, hadaccumulated at t he rear portion of the upper deck of the vessel. Gurimbao explained to the cadet/apprentice that throwing dirty and oilywater ove rboard was prohibited by the laws of Japan; in fact, portauthorities were roamin g and checking the sanitary conditions of the port. The cadet/apprentice got mad and, shouting, ordered Gurimbao toget a hose

and siphon off the water. To avoid trouble, Gurimbao used a shovel in throwing the dirty water into the sea. Having finished his job, Gurimbao complained to private respondent aboutthe impro per and unauthorized act of the cadet/apprentice. The two went to the cadet/apprentice who was idly standing in a corner. Theyreminded him that as a mere apprentice and not an officer of the vessel, he had no right whatsoever to order around any member of thecrew. However, the c adet/apprentice reacted violently -shoutinginvectives and gesturing as if challen ging the two to a fight. To preventhim from intimidating them, private respondent p ushed twice thecadet/apprentice s chest while Gurimbao mildly hit his arm. Frantic a nd shouting, the cadet/apprentice ran to the captain who happened towitness the inci dent from the cabin s window. The captain summoned private respondent and Gurimbao. With their bosun (head of the deck crew), they went to the captain s cabin. The captain told them to pack up their things as their services were beingterminated . They would disembark at the next port, the Port of Ube, fromwhere they would b e flown home to the Philippines, the repatriationexpenses to be shouldered by th em. The two attempted to explain theirside of the incident but the captain ignor ed them and firmly told them togo home. Before disembarking, they were entrusted by the bosun with a letter oftheir fell ow crew members, addressed to Capt. Dio, attesting to theirinnocence. At the Port of Ube, an agent of the company handed them theirplane tickets and accompanied them the following day tothe Fukoka Airport where they boarded a Cathay Pacific airplane boundfor Manila. A few days after their arrival in Manila or on July 1, 1989, the two gave thelet ter to Capt. Dio and conferred with him and Mr. James Nichols. The latter told private respondent that they could not secure a reimbursementof thei r repatriation expenses nor could they get their salaries for themonth of June. Private respondent, in a letter addressed to Capt. Dio, asked for a reconsideration of their dismissal but the latter did not respond. Frustrated, private respondent sought the assistance of a lawyer

who wrote Wallem a demand letter dated August 28, 1989 but the samewas ignored.[ 4] Petitioners, defending their position, alleged that the incident was not thefirs t infraction committed by the two. In his aforementioned decisionof September 14 , 1990 finding private respondent s dismissal to be illegal. Granting that the entries in the logbook are true, a perusal thereof willreadily show that complainant was not afforded due process. The warnings allegedly given to complainant were not submitted inevidence. Likewise, no investigation report was presented to prove thatcomplainant was given the op portunity to air his side of the incident. It is also noteworthy to mention that complainant was able to describe withparti cularity the circumstances which led to his misunderstanding with thecadet/appre ntice and which we believe is not sufficient to warrant hisdismissal. NLRC affirm ed the decision of the POEA, adopting as its ownthe latter s findings and conclusi ons. I: WON private respondent was validly dismissed. No. H: An employer may dismiss or lay off an employee only for just andauthorized ca uses enumerated in Articles 282 and 283 of the Labor Code. However, this basic and normal prerogative of an employer issubject to reg ulation by the State in the exercise of its paramount policepower inasmuch as th e preservation of lives of citizens, as well as theirmeans of livelihood, is a b asic duty of the State more vital them thepreservation of corporate profits. One s employment, profession, trade orcalling is a property right within the protecti on of the constitutionalguaranty of due process of law. The ship captain s logbook is vital evidence as Article 612 of the Code ofCommerce requires him to keep a record of the decisions he had adoptedas the vessel s head . Under the Table of Offenses and Corresponding Administrative Penaltiesappended t o the contract of employment entered into by petitioners andprivate respondent, the offense described by the logbook entry may wellfall under insubordination an d may constitute assaulting a superiorofficer with the use of deadly weapon punish able with dismissal if thevictim is indeed a superior officer. However, an apprenti ce officer cannot be considered a superior officer. An apprentice is a person boundin the for m of law to a master, to learn from him his art, trade, or business, and to serve him during the time of his apprenticeship. Physical violence against anyone at any time and any place isreprehensible. Howe ver, in cases such as this, where a person s livelihoodis at stake, strict interpr etation of the contract of employment in favor ofthe worker must be observed to affirm the constitutional provision onprotection to labor. Moreover, the aforequ oted entry in the logbook is sosketchy that, unsupported by other evidence, it l eaves so many questions unanswered. Although private respondent candidly admitted in hisaffidavit having hit Sason on the chest twice, he did not admit using a spanner. Hence, as the typewritten excerpts from the logbook were the onlypieces of evidenc e presented by petitioners to support the dismissal ofprivate respondent, have n o probative value at all, petitioners cause mustfail. Petitioners failure to subst antiate the grounds for a valid dismissalwas aggravated by the manner by which t he employment of privaterespondent was terminated. It must be borne in mind that the right of anemployer to dismiss an employee is to be distinguished from and

shouldnot be confused with the manner in which such right isexercised. Dismissal from employment must not be effected abusively andoppressively as it affects on e s person and property. Neither is the ship captain s having witnessed the altercation an excuse fordispen sing with the notice and hearing requirements. Serving notice toprivate responde nt under the circumstances cannot be regarded as an absurdity and superfluity. The petition at bar is DISMISSED. Lopez v. Alturas Group of Companies, GR 191008, April 11, 2011 F: Quirico Lopez was hired by respondent Alturas Group of Companies in 1997 as truck driver. Ten years later or sometime in November 2007, he was dismissed after he was allegedly caught by respondent s security guard in the act of attempting to smuggle out of the company premises 60 kilos of scrap iron worth P840 aboard respondents Isuzu Cargo Aluminum Van with Plate Number PHP 271 that was then assigned to him. When questioned, petitioner allegedly admitted to the security guard that he was taking out the scrap iron consisting of lift springs out of which he would make axes. Petitioner, in compliance with the Show Cause Notice dated December 5, 2007 issued by respondent company s Human Resource Department Manager, denied the allegations by a handwritten explanation written in the Visayan dialect. Finding petitioner s explanation unsatisfactory, respondent company terminated his employment by Notice of Termination effective December 14, 2007 on the grounds of loss of trust and confidence, and of violation of company rules and regulations. In issuing the Notice, respondent company also took into account the result of an investigation showing that petitioner had been smuggling out its cartons which he had sold, in conspiracy with one Maritess Alaba, for his own benefit to thus prompt it to file a criminal case for Qualified Theft against him before the Regional Trial Court (RTC) of Bohol. It had in fact earlier filed another criminal case for Qualified Theft against petitioner arising from the theft of the scrap iron.

Petitioner thereupon filed a complaint against respondent company for illegal dismissal and underpayment of wages. Labor Arbiter held that petitioner s dismissal was justified, for he, a truck driver, held a position of trust and confidence, and his act of stealing company property was a violation of the trust reposed upon him. NLRC set aside said decision. I: WON there were invalid dismissal and underpayment of wages H: Dismissals have two facets: the legality of the act of dismissal, which constitutes substantive due process, and the legality of the manner of dismissal which constitutes procedural due process. [12] As to substantive due process, the Court finds that respondent company s loss of trust and confidence arising from petitioner s smuggling out of the scrap iron, confounded by his past acts of unauthorized selling cartons belonging to respondent company, constituted just cause for terminating his services. Loss of trust and confidence as a ground for dismissal of employees covers employees occupying a position of trust who are proven to have breached the trust and confidence reposed on them. Petitioner, a driver assigned with a specific vehicle, was entrusted with the transportation of respondent company goods and property, and consequently with its handling and protection, hence, even if he did not occupy a managerial position, he can be said to be holding a position of responsibility. Procedural due process has been defined as giving an opportunity to be heard before judgment is rendered. Important: After receiving the first notice apprising him of the charges against him, the employee may submit a written explanation(which may be in the form of a letter, memorandum, affidavit or position paper) and offer evidence in support thereof, like relevant company records (such as his 201 file and daily time records) and the sworn statements of his witnesses. For this purpose, he may prepare his explanation personally or with the assistance of a representative or counsel. He may also ask the employer to provide him copy of records material to his defense. His written explanation may also include a request that a formal hearing or conference be held. In such a case, the conduct of a formal hearing or conference becomes mandatory, just as it is where there exist substantial evidentiary disputes or where company rules or practice requires an actual hearing as part of employment pretermination procedure. Petitioner was given the opportunity to explain his side when he was informed of the charge against him and required to submit his written explanation with which he complied. Parenthetically, the Court finds that it was error for the NLRC to opine that petitioner should have been afforded counsel or advised of the right to counsel. In petitioner s case, there is no showing that he requested for a formal hearing to be conducted or that he be assisted by counsel. An employee s acquittal in a criminal case does not automatically preclude a determination that he has been guilty of acts inimical to the employer s interest resulting in loss of trust and confidence. Corollarily, the ground for the dismissal of an employee does not require proof beyond reasonable doubt; as noted earlier, the quantum of proof required is merely substantial evidence. Petition is denied. Aurelio v. NLRC, 221 SCRA 432 F: Petitioner started as clinical instructor of the College of Nursing ofNorthwe stern College (NWC) in June 1917 with a basic salary of P600.00 amonth. In Octob er 1979, petitioner was appointed Dean of the College ofNursing with a starting salary of P3, 000.00 a month. In September 1981,

petitioner was promoted to College Administrator or Vice-President forAdministra tion, retaining concurrently her position of Dean of the Collegeof Nursing, with an increased salary of P3, 500.00 per month. She was laterpromoted to Executive Vice-President with the corresponding salary of P7, 500.00. On April 10, 1988, petitioner's husband, Oscar Aurelio, a stockholder ofresponde nt NWC, was elected Auditor. On May 1, 1988, the individualrespondents, as Board of Directors, took over the management ofrespondent NWC. This new management un leashed a series ofreorganization affecting the petitioner and her husband, Osca r Aurelio. OnMay 30, 1988, petitioner's husband, then in the United States, wasr emoved as Auditor of the college. Without prior notice, petitioner's officewas s tripped of its facilities. Petitioner's salary was reduced from P7, 500.00 to P5,000.00 then to P2,500.00 a month, among others. Because of the indignities and humiliation suffered by the petitioner, shewrote a letter on September 20, 1988 informing the President ofNorthwestern College th at she was going on an indefinite leave, Petitioner sent a copy of the above letter to the Secretary of Education, Culture and Sports praying for assistance. The representatives of theRegional Di rector submitted their official findings and recommendationsconfirming the truth of the allegations of petitioner in her September 20,

1988 letter. The DECS also confirmed the willingness of petitioner towithdraw he r indefinite leave of absence. The matter of petitioner'sresumption of her posit ion as Dean of the College of Nursing wasaddressed by the DECS to the attention of respondents but Privaterespondents did not answer. They refused to accept pet itioner. OnNovember 16, 1988, petitioner filed her complaint for illegal dismiss alagainst private respondents and prayed for reinstatement plus backwages, moral and exemplary damages, and attorney's fees. At the arbitrationlevel, petit ioner and private respondents submitted their respectiveposition papers. On Dece mber 29, 1989, the labor arbiter issued a decisiondismissing the complaint. On April 30, 1988, the annual regular meeting of stockholders was held atthe pri ncipal office of the corporation in Laoag City. Since their electioninto office, the Board members have taken effective control of the management of the college and have regularly exercised their corporatepowers. Th e new Board conducted a preliminary audit which revealed thatthe college was fin ancially distressed, unable to meet its maturingobligations with its creditor ba nk. The new management headed by itsPresident, Ben Nicolas, embarked on a realig nment of positions andfunctions of the different department in order to minimize expenditures. As a result of the audit, NWC was compelled to abolish the administrativepositio ns held by petitioner, which she did not contest. I: WON the dismissal of the petitioner was for a just and valid cause H: Respondent had alleged and submitted evidence of irregularities ofcomplainant during her tenure at the college. The complainant instead ofrefuting the charge s cited alleged irregularities committed by therespondents in their respective o ffices. It must be emphasized that therules of dismissal for managerial employee s are different from thosegoverning ordinary employees for it would be unjust an d inequitable tocompel an employer to continue with the employment of a person w hooccupies a managerial and sensitive position despite loss of trust andconfiden ce. At the very least, the relationship must be considered seriouslystrained, fo reclosing the remedy of reinstatement. We find that theallegations of irregulari ties were sufficiently substantiated thus justifyingpetitioner's separation. Moreover, and still on the issue of dismissal, the records disclose that in holding on to the two positions, petitioner violated the AdministrativeManual fo r Private Schools. Thus, the respondent had no other recoursebut to take away on e of the positions from her or abolish the same. Undoubtedly, the College Board of Directors has the authority toreorganize and s treamline the operations of the college with the end inview of minimizing expend itures. The NLRC found that complainant was a managerial employee who has tohave the com plete trust and confidence of respondents. However, we findthat complainant was not accorded notice and investigation prior totermination. Except for the allega tion on constructive dismissal, thispetition is a repetition of what petitioner had already alleged below andwhich the labor arbiter and the NLRC dismissed for lack of merit. Petitioner's claim of constructive dismissal stems from her alleged removalfrom the positions of Administrator, Vice President for Administration andExecutive V ice President. The management of NWC rests on its Board ofDirectors including th e selection of members of the faculty who may beallowed to assume other position s in the college aside from that of teacheror instructor. In 1988, when the then new Board of Directors abolished the additional positions held by the petitioner, it was merely exercising itsright. The Board abolished the positions not because the petitioner was theoccupant the reof but because the positions had become redundant withfunctions overlapping th

ose of the President of the college. The Boardrealized that the college was viol ating the Administrative Manual forPrivate School which requires that all colleg iate departments should have afull-time head. The Board of Directors of NWC merely exercised rights vested in it by theArticle s of Incorporation. Petitioner failed to refute the evidence profferedby NWC bef ore the labor arbiter. In her appeal to the NLRC, petitioner alsofailed to rebut the findings of the labor arbiter. In the instant petition, shehas again failed to overturn private respondents' evidence as well as thefindings of the labor a rbiter which were affirmed by the NLRC. Petitioner's application for an indefinite leave of absence was not approvedby t he college authorities, but this notwithstanding, she failed to follow-upher app lication and did not report for work. Believing she was dismissed, petitioner filed the complaint for illegal dismissal, illegal deductions, underpayment, unpaid wages or commissions and for moral damages andattorney's fe es on November 16, 1988. As pointed out earlier, the rules on termination of employment, penaltiesfor inf ractions, and resort to concerted actions, insofar as managerialemployees are co ncerned, are not necessarily the same as thoseapplicable to termination of emplo yment of ordinary employees. Both the labor arbiter and the public respondent NLRC found that there issome ba sis for respondent NWC's loss of trust and confidence onpetitioner. The dismissal of the petitioner was for a just and valid cause. It appears onrec ord that the investigation of petitioner's alleged irregularities wasconducted a fter the filing of the complaint for illegal dismissal.

Public respondent's finding that petitioner was not afforded due process iscorre ct but the Commission erred when it awarded separation pay in theamount of P32,7 50.00. In the Pacific Mills, Inc. and Wenphil cases, thisCourt merely awarded P1 ,000.00 as penalty for non-observance of due process. The Board of Directors, composed of the individual private respondentsherein, ha s the power granted by the Corporation Code to implement areorganization of resp ondent college's offices, including the abolition ofvarious positions, since it is implied or incidental to its power to conductthe regular business affairs of the corporation. The prerogative of management to conduct its own business affairs toachieve its purposes cannot be denied. When petitioner was stripped bythe Board of her posit ions as Executive Vice President and Vice Presidentfor Administration, with a co rresponding reduction in salary, the Board didnot act in a capricious, whimsical , and arbitrary manner, thus negatingmalice and bad faith. WHEREFORE, the decision under review is hereby AFFIRMED with theMODIFICATION tha t the award of separation pay is DELETED Golden Donuts, Inc. v. NLRC, G.R. Nos. 113666-68, January 19,2000 FACTS: Private respondents were the complainants in three consolidated cases submitted with the Labor Arbiter. Complainants were members of the KMDD-CFW whose CBA with the corporation expired. During the negotiations, the management panel arrived late causing the union panel to walk out. The management addressed a letter of apology to the union and requested for negotiations to resume. The union panel did not show up despite letters from management advising the former of the CBA meetings. The union struck. A compliant was filed by Golden Donuts to declare the strike illegal. Counsel for the union and strikers pleaded for a compromise whereupon both parties would desist from continuing their cases against each other. The Labor Arbiter rendered a decision upholding the dismissal of private respondents and ruling that they were bound by the compromise agreement entered into by the union with petitioners. Private respondents appealed to the NLRC, claiming that the union had no authority to waive or compromise their individual rights and they were not bound by the compromise agreement entered into by the union with petitioners. ISSUE: Whether or not a union may compromise or waive the right to security of tenure and money claims of its minority members, without the latter s consent. HELD: No. Absent a showing of the union s special authority to compromise the individual claims of private respondents for reinstatement and backwages, there is no valid waiver of the aforesaid rights. The judgment of the Labor Arbiter based on the compromise agreement does not have the effect of res judicata upon private respondents who did not agree thereto since the requirement of identity of parties is not satisfied. A judgment upon a compromise agreement has all the force and effect of any other judgment and is conclusive only upon parties thereto and their privies. Private respondents have not waived their right to security of tenure nor can they be barred from entitlement of their individual claims. Since there was no evidence that private respondents committed any illegal act, petitioner s failure to reinstate them after the settlement of the strike amounts to illegal dismissal. Cabigting v. San Miguel Foods, GR 167706, Nov. 5, 2009

F: Petitioner Reynaldo G. Cabigting was hired as a receiver/ issuer at the San Miguel Corporation, Feeds and Livestock Division (B-Meg) on February 16, 1984 and after years of service, he was promoted as inventory controller. On June 26, 2000, respondent San Miguel Foods, Inc., through its President, Mr. Arnaldo Africa, sent petitioner a letter informing him that his position as sales office coordinator under its logistic department has been declared redundant. Simultaneously, respondent terminated the services of petitioner effective July 31, 2000, and offered him an early retirement package. Thereafter, petitioner was included in the list of retrenched employees (for reason of redundancy) submitted by respondent to the Department of Labor and Employment. Petitioner was surprised upon receipt of the letter because he was not a sales office coordinator, and yet he was being terminated as such. Accordingly, petitioner refused to avail of the early retirement package. Prior to petitioner s termination on July 31, 2000, he was an inventory controller, performing at the same time the function of a warehouseman. Furthermore, petitioner was an active union officer of respondent s union but upon his termination, was only a member thereof.

With the support of his union, petitioner filed a Complaint questioning his termination primarily because he was not a sales office coordinator, but an inventory controller, performing the functions of both an inventory controller and a warehouseman. In reply, respondent reiterated its declaration that petitioner s position as sales office coordinator was redundant as a result of respondent s effort to streamline its operations. Labor Arbiter (LA) rendered a Decision, where it ruled that petitioner was illegally dismissed. Accordingly, the LA ordered respondent to pay petitioner backwages, separation pay in lieu of reinstatement and attorney s fees. NLRC rendered a Decision affirming the LA s finding that petitioner was illegally dismissed by respondent. CA rendered a Decision partially granting respondent s petition I: WON strained relations bar petitioner s reinstatement. H: Under the law and prevailing jurisprudence, an illegally dismissed employee is entitled to reinstatement as a matter of right. However, if reinstatement would only exacerbate the tension and strained relations between the parties, or where the relationship between the employer and the employee has been unduly strained by reason of their irreconcilable differences, particularly where the illegally dismissed employee held a managerial or key position in the company, it would be more prudent to order payment of separation pay instead of reinstatement. In Globe-Mackay Cable and Radio Corporation v. National Labor Relations Commission, this Court discussed the limitations and qualifications for the application of the strained relations principle, in this wise: x x x 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. In order for the doctrine of strained relations to apply, 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. After a perusal of the LA Decision, this Court finds that the LA had no hard facts upon which to base the application of the doctrine of strained relations, as the same was not squarely discussed nor elaborated on. Also, it is of notice that said issue was addressed by the LA in just one sentence without indicating factual circumstances why strained relations exist. The same is also true for the CA Decision which disposed of the issue in just one sentence without any elaboration. Accordingly, this Court is of the opinion that both the LA and the CA based their conclusions on impression alone.

Finally, it is noted that the position of warehouseman and inventory controller still exists up to date. The nature of the controversy where the parties to this case were engaged is not of such nature that would spawn a situation where the relations are severely strained between them as would bar the complainant to his continued employment. Neither may it be said that his position entails a constant communion with the respondent such that hostilities may bar smooth interactions between them. There is no basis for an award of separation pay in lieu of reinstatement. The claim of respondent is not meritorious. This Court shares petitioner s view that the words allegedly imputing malice and bad faith towards the respondent cannot be made a basis for denying his reinstatement. The doctrine of strained relations has been made applicable to cases where the employee decides not to be reinstated and demands for

separation pay. The same, however, does not apply to herein petition, as petitioner is asking for his reinstatement despite his illegal dismissal. In conclusion, it bears to stress that it is human nature that some hostility will inevitably arise between parties as a result of litigation, but the same does not always constitute strained relations in the absence of proof or explanation that such indeed exists. Petition is granted. BUSTAMANTE v. NLRC | 265 SCRA 1 | March 15, 1996 FACTS -Petitioners Bustamante, Bantayan, Sumunod and Lamaran were employed as laborers, harvesters and sprayers in private respondent company s banana plantation in Davao del Norte. They all signed contracts of employment for 6 months from Jan.2, 1990 to July 2, 1990 but they had started working in Sept. 1989. They were previously hired to do the same work for periods lasting a month or more, from 1985 to 1989. Before the employment contracts expired on July 2, 1990, petitioners employments were terminated on the ground of poor performance due to age, as none of them was allegedly below 40 years old. -Petitioners then filed a complaint for illegal dismissal which the Labor Arbiter decided in their favor. The judgment declared the dismissal illegal, and ordered Evergreen Farms to reinstate them immediately with 6 months backwages. Private respondent company appealed to the NLRC but the appeal was dismissed for lack of merit. A subsequent MFR filed by respondent company was similarly disposed of with the modification that the award for backwages was deleted, as there was no bad faith on the part of Evergreen Farms. -The removal of the award of backwages prompted petitioners to file this case, alleging that public respondent NLRC gravely abused its discretion. ISSUE: WON petitioners are entitled to backwages HELD: YES, because petitioners are regular employees. Ratio Regular employees dismissed for no valid cause are entitled to full backwages and other benefits from the time their compensation was withheld from them up to the time of their actual reinstatement. Reasoning -Petitioners were employed at various periods from 1985-1989 for the same work they were hired to perform. They were engaged to perform activities which are necessary in the usual business of the employer. The contract for probationary employment was utilized by respondent company as a chicanery to deny petitioners their status as regular employees and to evade paying them the benefits attached to such status. They were hired and re-hired in a span of from 2-4 years to do the same type of work which conclusively shows the necessity of petitioners services to the respondent. -The act of hiring and re-hiring the petitioners over a period of time without considering them as regular employees evidences bad faith on the part of private respondent. The public respondent made a finding to this effect when it stated that the subsequent rehiring of petitioners on a probationary status clearly appears to be a convenient subterfuge on the part of management to prevent complainants (petitioners) from becoming

regular employees. Disposition Resolution of NLRC is modified, the deletion of the award for backwages is set aside. LA decision is AFFIRMED, with modification that backwages shall be paid to petitioners from the time of their illegal dismissal up to the date of their reinstatement. Palteng v. UCPB, GR 172199, February 27, 2009 F: Palteng was the Senior Assistant Manager/Branch Operations Officer ofUCPB. Af ter conducting a diligence audit, the Internal Audit and CreditReview Division r eported that Palteng committed several offenses underthe Employee Discipline Cod e in connection with Mercado s (a client) PastDue Domestic Bills Purchased (BP). P alteng explained that at the time theBP accommodation was extended, she was not aware that Mercado s Omnibus Line has been reduced to P50 Million and that it contained a P5 Million sublimit on BP. Nevertheless, she accepted full responsibility forgranti ng the BP accommodation against Mercado s personal checksbeyond her authority. Whi le she admitted committing a major offense thatmay cause her dismissal, she clai med that it was an honest mistake. Palteng was dismissed with forfeiture of all benefits. Palteng filed acomplaint for illegal dismissal. The Labor Arbiter declared her dismissal illegal, entitling her to, amongothers, full backwages from the time of her dismissal until finality of

judgment. The CA modified the decision, declaring that backwages shouldbe comput ed until the labor arbiter s decision. I: Is Palteng entitled to backwages? H: No. An employee who is illegally dismissed from work is entitled toreinstatem ent without loss of seniority rights, and other privileges as wellas to full bac kwages, inclusive of allowances, and to other benefits or theirmonetary equivale nt computed from the time his compensation waswithheld from him up to the time o f his actual reinstatement. However, inthe event that reinstatement is no longer possible, the employee may begiven separation pay instead. Reinstatement and payment of backwages are distinct and separate reliefsgiven to alleviate the economic setback brought about by the employee sdismissal. The awar d of one does not bar the other. Backwages may beawarded without reinstatement, and reinstatement may be orderedwithout awarding backwages. In a number of cases, the Court, despite ordering reinstatement orpayment of sep aration pay in lieu of reinstatement, has not awardedbackwages as penalty for th e misconduct or infraction committed by theemployee. In the case at bar, petitioner admitted that she granted the BP accommodation against Mercado s personal checks beyond and outside her authority. The Labor Arbiter, the NLRC and the Court of Appeals all found her to have committed an "error of judgment," "honest mistake," vis--vis a "major offense." Since petitioner was not faultless in regard to the offenses imputed against her, she is entitled to separation pay only, without backwages. Phil Tobacco Flue Curing v. NLRC, 300 SCRA 37 These refer to the consolidated cases for payment of separation paylodged by [th e] Lubat Group, and for illegal dismissal and underpayment ofseparation pay by [ the] Luris group, with prayers for damages andattorney s fees against the above re spondents. F: There are two groups of employees, namely, the Lubat group and theLuris group . The Lubat group is composed of petitioner s seasonalemployees who were not rehir ed for the 1994 tobacco season. At the start of that season, they were merely informed that their employment hadbeen terminat ed at the end of the 1993 season. They claimed thatpetitioner s refusal to allow t hem to report for work without mention of anyjust or authorized cause constitute d illegal dismissal. In their Complaint, they prayed for separation pay, back wages, attorney s fees and moraldamages. On the other hand, the Luris group is made up of seasonal employees whoworked du ring the 1994 season. On August 3, 1994, they received a notice informing them that, due to serious business losses, petitionerplanned to close its Balintawak plant and transfer its tobacco processingand redrying oper ations to Ilocos Sur. Although the closure was to be effective September 15, 1994, they were no longer allowed to work starting August 4, 1994. Instead, petitioner awarded them separation paycomputed according to the following formula: total no. of days actually worked -----------------------------------------------------x daily rate x 15 days total no. of working days in one year In their Complaint, they claimed that the computation should be based noton the above mathematical equation, but on the actual number of yearsserved. In additio

n, they contended that they were illegally dismissed, andthus they prayed for ba ck wages. Against these factual antecedents, the labor arbiter ordered the petitioner to pay complainants separation pay differential plus attorney s fees in the total amount of P3,092,896.76. Dissatisfied with said Decision, Philippine Tobacco and the complainants filed their respective appeals before the NLRC. As noted earlier, the NLRC affirmed the labor arbiter s Decision. Before this Court, only Philippine Tobacco filed the present recourse, as the complainants did not question the NLRC Decision. Issues: In the Court s view, three issues must be tackled: First, did petitioner prove serious business losses, its justification for the nonpayment of separation pay? Second, was the dismissal of the employees valid? Third, how should the separation pay of illegally dismissed seasonal employees be computed? Held: First Issue: Serious Business Losses Not Proven Article 283 of the Labor Code prescribes the requisites and the procedure for an employee s dismissal arising from the closure or cessation of operation of the establishment. It must be noted that the present case involves the closure of merely a unit or division, not the whole business of an otherwise viable enterprise. Although Article 283 uses the phrase closure or cessation ofoperation of an establishment or undertaking, this Court previously ruledin Coca-Cola Bott lers (Phils.), Inc. v. NLRC that said statutory provisionapplies in cases of bot h complete and partial cessation of the businessoperation.

Petitioner did not actually close its entire business. It merely transferred orr elocated its tobacco processing and redrying operations. Moreover, it was also engaged in, among others, corn and rental operations, which wereunaffected by the closure of its Balintawak plant. Tested against the aforecited standards, we hold that herein petitioner was not able to prove serious financial losses arising from its tobacco operations. A close examination of its Statement of Income and Expensesand its r ecasted version thereof, which were presented in support of itscontention, sugge sts its failure to show business losses. On the contrary, the Statement of Income and Expenses shows that theselling and administrative expenses pertain not only to the tobacco business of petitioner, but also to its corn and rental operations, and thatthe interest expenses pertain to all of its business operations. In fact, the aforementioned Statement shows that there was a net gain from operations in each year covered by the report. In other words, the recasted financial statement effectively modified the Statement of Incomeand Exp enses by deducting from the tobacco operations alone the operating costs pertaining to all businesses of petitioner. The contention ofpet itioner that tobacco was its main business does not justify the deviouscontents of the recasted financial statement. It is difficult to accept that itcould not have incurred any expense in its other operations. Common sense revolts against such proposition. Second Issue: Lubat Group Illegally Dismissed Petitioner illegally dismissed the members of the Lubat group when itrefused to allow them to work during the 1994 season. It follows that theemployer-employee relationship between herein petitioner and membersof the Lubat group was not ter minated at the end of the 1993 season. From the end of the 1993 season until the beginning of the 1994season, t hey were considered only on leave but nevertheless still in theemploy of petitio ner. Petitioner is liable for illegal dismissal and should be responsible for therein statement of the Lubat group and the payment of their back wages. However, since reinstatement is no longer possible as petitionerhas alrea dy closed its Balintawak plant, respondent members of the said group should instead be awarded normal separation pay (in lieu of reinstatement) equivalent to at least one month pay, or one month pay for every year of service, whichever is higher. It must be stressed that the separation pay being awarded to the Lubat group is due to illegaldismissal; henc e, it is different from the amount of separation pay providedfor in Article 283 in case of retrenchment to prevent losses or in case ofclosure or cessation of t he employer s business, in either of which theseparation pay is equivalent to at l east one (1) month or one-half (1/2) month pay for every year of service, whichever is higher. Third Issue: Amount of Separation Pay The amount of separation pay is based on two factors: the amount ofmonthly salar y and the number of years of service. Although the Labor Code provides different definitions as to what constitutes one year of service, Book Six 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 sixmont hs shall be considered one whole year. Applying this to the case at

bar, we hold that the amount of separation pay which respondentmembers of the Lu bat and Luris groups should receive is one-half (1/2) their respective average monthly pay during the last season they workedmultiplie d by the number of years they actually rendered service, providedthat they worke d for at least six months during a given year. The formula that petitioner proposes, wherein a year of work is equivalentto act ual work rendered for 303 days, is both unfair and inapplicable, considering that Articles 283 and 284 provide that in connection with separation pay, a fraction of at least six months shall be considered onewhole y ear. Under these provisions, an employee who worked for only six months in a given year --which is certainly less than 303 days --is considered to have worked for one whole year. NLRC Decision is affirmedwith modi fications. National Federation of Labor vs. NLRC | G.R. No. 127718 (March 2,2000) Facts: Petitioners are employees of the Patalon Coconut Estate inZamboanga. With the advent of the RA No. 6657 or the ComprehensiveAgrarian Reform Law, the gove rnment sought the compulsory acquisitionof the land for agrarian reform. Because of this, the private respondentswho are owners of the estate decided to shut do wn its operation. Petitioners did not receive any separation pay. Now, the petitioners pray, with the representation of their labor group, claiming that they wereillegally d ismissed. They cite Article 283 of the Labor code where anemployer may terminate t he employment of any employee due to theinstallation of labor saving devices, re dundancy, and retrenchment toprevent losses or the closing or cessation of opera tion. Petitioners becameco-owners of the land and subsequently filed complaints for illegaldismissal. The Regional Arbitration Branch of the NLRC dismissed thec harge for illegal dismissal but ordered the payment of separation pay. TheNLRC r eversed the decision. Issues: a. Whether or not the Court should apply the legal maxim verbal legisin construi ng Article 283 of the Labor Code as regards its applicabilityto the case at bar. b. W/N an employer that was compelled to cease its operationbecause of compulsory a cquisition by the government of its landpurposes of agrarian reform is liable to pay separation pay its affectedemployees. Held:

a. Yes, the legal maxim is applicable in this case. The use of the word May, in its plain meaning, denotes that it is directory in nature andgenerally permissive o nly. Also, Article 283 of the Labor Code does notcontemplate a situation where t he closure of the business establishment isforced upon the employer and ultimate ly for the benefit of the employees. The Patalon Coconut Estate was closed down because a large portion ofthe said es tate was acquired by the DAR pursuant to the CARP. Theseverance of employer-empl oyee relationship between the parties cameabout involuntarily, as a result of an act of the State. Consequently, complainants are not entitled to any separation pay. Reasoning: Where the words of a statute are clear, plain and free from ambiguity, it must begiven its literal meaning and applied without attempted interpretation. Policy: Article 283 of the Labor Code applies in cases of closures ofestablishme nt and reduction of personnel. The peculiar circumstances inthe case at bar, how ever, involves neither the closure of an establishment nor a reduction of personnel as contemplated under the article. b. No. The peculiar circumstance in the case at bar involves neither theclosure of an establishment nor a reduction in personnel as contemplatedin Article 283. The closure contemplated in 283 is a voluntary act on thepart of the employer as may be gleaned for the wording, the employerMAY also terminate, denoting that it is directory in nature. The Labor Codedoes not contemplate a situation where the closure is forced upon theemployer. As such, petitioners are not entitled to se paration pay as privaterespondents did not voluntary shut down operation as they even sought tobe exempted from the coverage of RA 6657. Universal Robina v. Caballeda F: FACTS: Agripino Caballeda was a welder for URSUMCO from March1989 until June 23, 1997 with a salary of P124 per day while AlejandroCadalin was a crane operat or from 1976 to June 15, 1997, with a salary ofP209.30 per day. John Gokongwei J r., President of URSUMCO, issued aMemorandum establishing the age of compulsory retirement at 60. Subsequently, RA 7641 set the compulsory retirement age, in the absenceof a reti rement plan or agreement, at 65and that an employee may retireupon reaching 60. The National Labor Federation, the labor union of the workers of URSUMCO, of which Alejandro Cadalin was a member entered into a CBAwith URSUMCO. Article XV of said CBA particularly provided that theretirement benefits of the members of the collective bargaining unit shallbe in accordance with law. Agrip ino and Alejandro subsequently reachedthe age of 60 and were allegedly forced to retire. They accepted theirseparation pays and applied for retirement benefits with the SSS. Alejandroalso executed a quitclaim in favor of URSUMCO. They subse quently filedComplaints for illegal dismissal with the LA of Dumaguete City. URSUMCO claimed that Agripino and Alejandro voluntarily retired, that theMemoran dum was no longer in effect when they did so, and that RA 7641 cannot be given retroactive effect since there was an existing CBA that covered the retirement benefits of the employees. It further alleged that Agripino was merely a seasonal or project worker and not a casual worker since the sugar millingbusiness is seasonal in nature. Thus, he was not actually forced to retire. The termination of his employment was essentially based on the fact that the period in his contract had expired. I&R: WON RA 7641 has retroactive effect: Yes. The issue of the retroactive effect of RA 7641 has long been settled. It is a curative statute. It is evident from the records that when respondents were compulsorily retired

from the service, R.A. 7641 was already in full force and effect. The petitioners failed to prove that the respondents did not comply with the requirements for eligibility under the law for such retirement benefits. In sum, the aforementioned requisites were adequately satisfied, thus, warranting the retroactive application of R.A. 7641 in this case. WON Agripino is a seasonal or project employee: No. He is a regular employee. WON the Agripino and Alejandro voluntarily retired: No. Retirement is the result of a bilateral act of the parties, a voluntary agreement between the employer and the employee whereby the latter, after reaching a certain age, agrees to sever his or her employment with the former.[29] The age of retirement is primarily determined by the existing agreement between the employer and the employees. However, in the absence of such agreement, the retirement age shall be fixed by law. Under Art. 287 of the Labor Code as amended; the legally mandated age for compulsory retirement is 65 years, while the set minimum age for optional retirement is 60 years. The law generally looks with disfavor on quitclaims and releases of employees who have been inveigled or pressured into signing them by unscrupulous employers seeking to evade their responsibilities. to the best of my understanding) Ratio: (On nature of issue Whether or not Agripino was a seasonal/project employee or a regular employee is a question of fact. Time and again, we have held that the Court is not a trier of facts. In this case, it is noteworthy that the LA, the NLRC and the CA are one in ruling that Agripino was not a casual employee, much less a seasonal or project employee. In their findings, Agripino was considered a regular employee of URSUMCO. Consequently, such uniform finding of the LA, the NLRC, and the CA binds this Court. Petition DENIED. CAINTA CATHOLIC SCHOOL V. CAINTA CATHOLIC SCHOOL EMPLOYEES UNION F: On March 6, 1986, a Collective Bargaining Agreement (CBA) wasentered into bet ween Cainta Catholic School and the Cainta Catholic Employees Union effective January 1, 1986 to May 31, 1989. This CBAprovided, amo ng others that: This CBA shall become effective and binding

upon the parties from January 1, 1986 up to May 31, 1989. At least 60 daysbefore the expiration of this agreement, the parties hereto shall submitwritten propos als which shall be made the basis of negotiations for theexecution of new agreem ent. If no new agreement is reached by the parties at the expiration of thisagreement , all the provisions of this agreement shall remain full force andin effect, up to the time a new agreement shall be executed. Msgr. MarianoBalbago was appointe d School Director in April 1987. The Union becameinactive. September 10, 1993, the union held an election of officers and Mrs. RosalindaLlagas was elected as President; Paz Javier, VicePresident; FeVillegas, Treasurer; and Maria Luisa Santos, Secretary. The other electedofficers wereRiza lina Fernandez, Ester Amigo, secretaries; Nena Marvilla, treasurer; GuildaGalange and Jimmy del Rosario, auditors; FilomenoDacanay and Ad elinaAndres, P.R.O.s; and Danilo Amigo and ArturoGuevarra, business managers. Llagas was the Dean of of Student Affairs while Villegas and Santos wereYear-Lev el Chairmen. October 15, 1993, the school retired Llagas andJavier who had rende red more than twenty years of continous service. Three days later, the Union filed a notice of strike with the NationalConcillati on and Mediation Board (NCMB) docketed as NCMB-RB-12-NS-1012493. On November 8, 1993, the Union struck and picketed the school sentrances. On N ovember 11, 1993, the Secretary of Labor Ma. Nieves R. Confesor issued an order certifying the labor dispute to the NLRC. I: Whether the forced retirement of Llagas and Javier was a valid exerciseof man agement prerogative. Whether the strike was legal is highlydependent on whether the retirement was valid. R: We are impelled to reverse the CA and affirm the validity of thetermination o f employment of Llagas and Javier, arising as it did from amanagement prerogativ e granted by the mutually-negotiated CBAbetween the School and the Union. Pursuant to the existing CBA, the School has the option to retire anemployee upo n reaching the age limit of sixty (60) or after havingrendered at least twenty ( 20) years of service to the School, the last three (3) years of which must be continuous. Retirement is different species oftermina tion of employment from dismissal for just or authorized causesunder Articles 28 2 and 283 of the Labor Code. While in all three cases, the employee to be terminated may be unwilling to part from service, thereare eminen tly higher standards to be met by the employer validlyexercising the prerogative to dismiss for just or authorized causes. In thosetwo instances, it is indispen sable that the employer establish the existenceof just or authorized causes for dismissal as spelled out in the Labor Code. Retirement, on the other hand, is the result of a bilateral act of the parties, a voluntary agreement between the employer and the employee whereby the latter after reaching a certain age agrees and/or consents to sever hisemplo yment with the former. The CBA in the case at bar established 60 as the compulsory retirementage. Howev er, it is not alleged that either Javier or Llagas had reached thecompulsory ret irement age of 60 years, but instead that they had renderedat least 20 years of service in the School, the last three (3) yearscontinuous. Clearly, the CBA prov ision allows the employee to be retired bythe School even before reaching the ag e of 60, provided that he/she hadrendered 20 years of service. Would such a stip ulation be valid? Jurisprudence affirms the position of the School. Llagas and Javier were indeed managerial and supervisory employees.

Having established that Llagas is a managerial employee, she is proscribedfrom j oining a labor union,38 more so being elected as union officer. In thecase of Ja vier, a supervisory employee, she may join a labor unioncomposed only of supervi sory employees.39 Finding both union officers tobe employees not belonging to th e rank-and-file, their membership in theUnion has become questionable, rendering the Union inutile to representtheir cause. Since the strike has been declared as illegal based on the foregoingdiscussion, we need not dwell on its legality with respect to the meansemployed by the Union . There is neither legal nor factual justification inawarding backwages to some union officers who have lost theiremployment status, in light of our finding tha t the strike is illegal. Theruling of the NLRC is thus upheld on this point. We are also satisfied withthe disposition of the NLRC that mandates that Llagas and Javier (or herheirs) receive their retirement benefits. Dy Caico v SSS, G.R. No. 161357, Nov. 30, 2009 F:Elena Dycaico seeks to reverse the Decision of the Court of Appeals thataffirm ed the decision of Social Security Commission denying her claim forsurvivor s pens ion which accrues from the death of her husband, BonifacioDycaico. Bonifacio Dycaico became a member of SSS and designated Elena Dycaicoand their e ight children as beneficiaries therein. At that time, Bonifacio andElena lived t ogether as husband and wife without the benefit of marriage. Nine years after, Bonifacio was considered retired and began receiving hismonthl y pension from the SSS. He continued to receive the monthlypension until he pass ed away. A few months prior to his death, however, Bonifacio married the petitioner. Shortly after Bonifacio s death, the petitioner filed with the SSS anapplication f or survivor s pension. Her application, however, was deniedon the ground that they were not living under the benefit of marriage whenBonifacio became a member of SSS. The basis was Section 12-B(d) ofRepublic Act (Rep. Act) No. 8282 which read s:

Sec. 12-B. Retirement Benefits. (d) Upon the death of the retiredmember, his pri mary beneficiaries as of the date of his retirement shall beentitled to receive the monthly pension. An appeal was made to the Court of Appeals but it was, likewise, denied. The same Court ruled that that since the petitioner was merely thecommon-law wif e of Bonifacio at the time of his retirement, his designationof the petitioner a s one of his beneficiaries is void. The petitioner claims that there is no merit to the decision of Court ofAppeals as the SSS law does is silent denying the beneficiary s claim forsurvivor pension. I: Whether or not there is a violation to equal protection clause of theConstitu tion. H: The Supreme Court ruled in the positive. There is a violation of dueprocess a nd equal protection. The Court holds that the proviso as of thedate of his retire ment in Section 12-B(d) of Rep. Act No. 8282, whichqualifies the term primary bene ficiaries, is unconstitutional for it violatesthe due process and equal protectio n clauses of the Constitution. If the said provision will be sustained, there will be an outright confiscationo f benefits due to the surviving spouse without giving her opportunity tobe heard . There is, therefore, a violation of due process. There is also a violation of equal protection of the Constitution. A statute, to be valid and reasonable, must satisfy the following requirements: mustsatisfy the following requirements: (1) it must rest on substantialdistinctions; (2) it must be germane to the purpose of the law; (3) it mustnot be limited to existin g conditions only; and (4) it must apply equally toall members of the same class . Classifying dependent spouses and determining their entitlement tosurvivor s pensi on based on whether the marriage was contracted beforeor after the retirement of the other spouse bears no relation to theachievement of the policy objective of the law Indeed, the SC does not find substantial distinction between spouseswhose assign ment as a beneficiary was made after the marriage andspouses whose assignment as a beneficiary was made before themarriage. The statute violates equal protectio n clause when it grantssurviving pensions only to the spouses belonging to the f ormer case andnot to than the latter. SOCIAL SECURITY COMMISSION VS. FAR S. ALBA F: (Lamboso) filed a claim for retirement benefit before (SSS). However, his claim was denied on the ground that he could not qualify for monthlypension under Republic Act (R.A.) No. 1161[5] (the Social Security Act of1954) as he the n had only (39) paid contributions. Lamboso appealed thedenial of his claim by f iling a petition before the Commission wherein he alleged that he should be entitled to monthly retirement pension. He prayed for the adjustment of the date of his (SS) coverage&for theremittance of his delinquent monthly contribution. Lamboso averred that he received from Far Alba a monthly salary ofP45.00 from 19 60 to 1965 and P180.00 from 1965 to 1973 and from employer Ramon S. Benedicto, a monthly salary of P500.00 from 1973 to1984; and t hat he was reported to the SSS from coverage in 1973 and onlya total of 39 month ly contributions were remitted in his name. SSS avers that Apolonio Lamboso, was reported for SS coverage, effectiveApril 1,

1970 by employer Far Alba; that he was, likewise, reported for SSScoverage by e mployer Kamandag Agri & Dev. Corp.; and that Lamboso hasonly 39 monthly contribu tions (remitted in his favor by Far alba) but noneunder Kamandag Agri. Dev. Corp . The failure on the part of respondent Far Alba to file his responsivepleading to the petition filed by petitioner Lamboso strongly indicates lackor absence of e vidence, by way of rebuttal, to the positive assertion of thepetitioner regardin g his employment with the former. Besides, defraudingrespondent Alba reported La mboso to the SSS for coverage and this act ofreporting is already an incontrover tible proof of employment. CA reversed and set aside both the resolution and the order of the Commission. It held that Far Alba cannot be considered as an employer ofLamboso prior to 1970 because as administrator of the familyowned hacienda, he is not an employer under Section 8 (c) of the SocialSecurity Act of 1954. I: (1) whether Far Alba had been Lamboso's employer R: Section 8 (c), Social Security Act of 1954 (as amended by PresidentialDecree [P.D.] No. 1202 and P.D. No. 1636) defines an employer as "anyperson, natural or juridical, domestic or foreign, who carries on in thePhilippines any trade or b usiness, industry, undertaking, or activity of anykind and uses the services of another person who is under his orders asregards the employment, except the Gove rnment and any of its politicalsubdivisions, branches or instrumentalities, incl uding corporations ownedor controlled by the Government." Section 8 (d) defines an employee as"any person who performs services for an employer in which either or bothmental and physical efforts are used and who receives compensation forsuc h services where there is an employer-employee relationship." Based on the testimonies, Far Alba had indeed served as Lamboso's employer, at the very least, he had served as the hacienda's administrator before 1970. (2) whether an administrator could be considered an employer within thescope of the Social Security Act of 1954.

Yes. Alba was no ordinary administrator. He was no less than the son of the hacienda's owner and as such he was an owner-in-waiting prior to hisfather's death. He was a member of the owner's family assigned toactively manage the ope rations of the hacienda. Applying the control testwhich is used to determine the existence of employer-employeerelationship for purposes of compulsory coverage under the SSS law, FarAlba is technically Lamboso's employer. Lamboso testified that he wasselected and his services were engaged by Far Alba himself. Corollari ly, Far Alba held the prerogative of terminating Lamboso's employment. Lamboso also testified in a direct manner that he had been paid his wagesby Far Alba. This testimony was seconded by Lamboso's co-worker, Rodolfo Sales. Anent the power of control with regard to the work of theemployee , the element refers merely to the existence of the power and notthe actual exer cise thereof. It is not essential for the employer to actuallysupervise the perf ormance of duties of the employee; it is sufficient thatthe former has a right t o wield the power. Article 167(f) of the Labor Code which deals with employees' compensationand sta te insurance fund. The said provision of the law defines andemployer as " any pe rson, natural or juridical, employing the services ofthe employee." It also defi nes a person as "any individual, partnership, firm, association, trust, corporation or legal representative thereof." Plainly, Far Alba, as the hacienda administrator, acts as the legalrepresentativ e of the employer and is thus an employer within themeaning of the law liable to pay the SS contributions. Petition GRANTED. SSS VS. ATLANTIC GULF AND PACIFIC COMP. OF MLA., INC. F: AG&P and Semirara filed a complaint for specific performance anddamages again st SSS before RTC of Batangas. Plaintiff informed SSS inwriting of its premiums and loan amortization delinquencies covering theperiod from January 2000 to May 2000 amounting to P7.3 Million. AG&Pproposed to pay its said arrears by end of 2 000, but requested for thecondonation of all penalties; defendant suggested two (2) options to AG&P, either to pay by installment or through "dacion en pago"; AG&P chose to settle its obligation with the SS through dacion en pago of its 5,999 sq. m. property situated in Baguio with an appraised value of about P80.0Million. SS S proposes to carve-out from the said property an area sufficientto cover plaint iffs' delinquencies. AG&P, however, is not amenable tosubdivide its Baguio prope rty; AG&P then made another proposal to SSS offering as payment a portion ofits 58,15 3 square meter-lot, situated in Batangas. SSS informed AG&P ofits decision to in clude other companies within the umbrella of DMCI groupwith arrearages with the SSS. In the process of elimination of thecompanies belonging to the DMCI group w ith possible outstandingobligation with the SSS, it was only SEMIRARA which was left withoutstanding delinquencies with the SSS. Thus, SEMIRARA's inclusion in t heproposed settlement through dacion en pago; AG&P was directed by the defendant to submit certain docus, such asTransfer Cert ificate of Title, Tax Declaration covering the subject lot, andthe proposed subd ivision plan, AG&P immediately complied. As a result of the approval of the dacion en pago, posting of contributionsand l oan amortization to individual member accounts, both for AG&P and SEMIRARA employees, was effected immediately. The benefits of themember-employee s of both companies were restored; From the time of the approval of AG&P's proposal up to the present, AG&Pis (sic) religiously remitting the premium contributions and loanamortization of its mem

ber-employees to the defendant; Defendant failed to take any action on said Deed of Assignment causingAG&P to re -submit it to the same office of the Vice-President -NCR in December 2001. From its original submission of the Deed of Assignment inJuly 200 1 to its re-submission in December 2001, and SSS returning of therevised draft i n February 28, 2003 AG&P was consistent in its regularfollow ups with SSS as to the status of its submitted Deed of Assignment; More than a year after the approval of AG&P's proposal, defendant sentthe revise d copy of the Deed of Assignment to AG&P. However, the amountof the plaintiffs' obligation appearing in the approved Deed of Assignmenthas ballooned from P29,26 1,902.45 to P40,846,610.64 allegedlybecause of the additional interests and pena lty charges assessed onplaintiffs' outstanding obligation from April 2001, the d ate of approval ofthe proposal, up to January 2003; AG&P and SEMIRARA maintain their willingness to settle their allegedobligation o f P29,261,902.45 to SSS. Defendant, however, refused toaccept the payment throug h dacion en pago, unless plaintiffs also pay theadditional interests and penalti es being charged; I: which body has jurisdiction to entertain a controversy arising from thenon-im plementation of a dacion en pago agreed upon by the parties as ameans of settlem ent of private respondents' liabilities. R: The pertinent provision of law detailing the jurisdiction of theCommission is Section 5(a) of R.A. No. 1161, as amended by R.A. No. 8282, otherwise known as the Social Security Act of 1997, to wit: SEC. 5. Settlement of Disputes.-(a) Any dispute arising under this Act withrespe ct to coverage, benefits, contributions and penalties thereon or anyother matter related thereto, shall be cognizable by the Commission, andany case filed with respect thereto shall be heard by the Commission, orany of its members, or by he aring officers duly authorized by theCommission and decided within the mandatory period of twenty (20) daysafter the submission of the evidence. The filing, det ermination andsettlement of disputes shall be governed by the rules and regulati onspromulgated by the Commission.

The law clearly vests upon the Commission jurisdiction over "disputesarising und er this Act with respect to coverage, benefits, contributions andpenalties there on or any matter related thereto..." Dispute is defined as "aconflict or controv ersy." The essential elements of a contract of sale, namely, consent, objectcertain, an d cause or consideration must be present. In its modernconcept, what actually ta kes place in dacion en pago is an objectivenovation of the obligation where the thing offered as an acceptedequivalent of the performance of an obligation is co nsidered as the objectof the contract of sale, while the debt is considered as t he purchase price. In any case, common consent is an essential prerequisite, be it sale ornovation, to have the effect of totally extinguishing the debt or obligation. The controversy, instead, lies in the non-implementation of the approvedand agre eddacion en pago on the part of the SSS. As such, respondentsfiled a suit to obt ain its enforcement which is, doubtless, a suit for specificperformance and one incapable of pecuniary estimation beyond thecompetence of the Commission. In determining whether an action is one the subject matter of which is notcapabl e of pecuniary estimation this Court has adopted the criterion of firstascertain ing the nature of the principal action or remedy sought. If it isprimarily for t he recovery of a sum of money, the claim is consideredcapable of pecuniary estim ation, and whether jurisdiction in the municipalcourts or in the courts of first instance would depend on the amount of theclaim. However, where the basic issue is something other than the right torecover a sum of money, where the money cla im is purely incidental to, ora consequence of, the principal relief sought, thi s Court has consideredsuch actions as cases where the subject of the litigation may not beestimated in terms of money, and are cognizable exclusively by courts offirst instance (now Regional Trial Courts).DENIED. IBARRA P. ORTEGA, VS. SS Commission and SSS F: Petitioner, a member of SSS, filed claims for partial permanent disabilityben efits on account of his condition of Generalized Arthritis and Partial Ankylosis,[3] which claims the SSS granted for a total monthly pension of 23 months.[4] After the expiration of his disability pension, petitioner filed with the SSS ac laim for total permanent disability benefits w/c was denied, however, onthe grou nd that he was already granted disability benefits for the sameillness and physi cal examination showed no progression of illness. Aggrieved, petitioner filed before the SSC alleging that the SSS denied hisappli cation despite the fact that his attending physician, diagnosed him tobe sufferi ng from Trigger finger 4th (L) and thumb (L) while another private medical practitioner diagnosed him to be also sufferingfrom Bronchial As thma, Hypertension and Gastro-EsophagealReflux Disease. Before taking cognizance of his appeal, SSC directed the exhaustion ofadministra tive remedies. The matter was thus referred to the SSS Office of the Medical Program Director for review of petitioner's disability claim. SSS Legal Department denied a reconsideration of the denial of his claim. Upon referral of the SSC, the SSS Medical Program Department confirmedthat, upon examination of petitioner, there was no progression of hisillness, prompting pe titioner to submit a letter-opposition charging the SSSmedical officers of issui ng fraudulent medical findings. SSS MedicalProgram Department stood its ground a nd denied with finality petitioner'sclaim. SSC denied petitioner's claim for entitlement to total permanent disabilityfor l

ack of merit. Petitioner's motion for reconsideration having beendenied by Order appealed to CA. I: whether he is entitled to total permanent disability benefits from the SSSgiv en his "angioplasty operation of the heart, coronary artery disease, ischemic heart disease, severe hypertension and a host of other seriousillnesses filed with the SSS R: It bears stressing that Rule 45 and Rule 65 pertain to different remediesand have distinct applications.[35] It is axiomatic that the remedy ofcertiorari is not available where the petitioner has the remedy of appeal orsome other plain, speedy and adequate remedy in the course of law.[36] The petition for review under Rule 45 covers the mode of appeal from ajudgment, fina l order, resolution or one which completely disposes of thecase, like the herein assailed Decision and Resolution of the appellatecourt. There being already a f inal judgment at the time of the filing of thepetition, a petition for review un der Rule 45 is the appropriate remedy. Petitioner failed to carve out an exception to this rule, as he did not-andcould not-illustrate the inadequacy of an appeal as a remedy that couldpromptly relie ve him from the injurious effects of the assailed judgment. While the Court may dismiss a petition outright for being an improperremedy, it may, in certain instances where a petition was filed on timeboth under Rules 45 and 65 and in the interest of justice, proceed toreview the substance of the pet ition and treat it as having been filed underRule 45. Either way, however, the p resent petition just the same meritsdismissal since it puts to issue questions o f fact rather than questions oflaw which are appropriate for review under a Rule 45 petition. The requisite quantum of proof in cases filed before administrative orquasi-judi cial bodies is neither proof beyond reasonable doubt norpreponderance of evidenc e. In this type of cases, a fact may be deemedestablished if it is supported by substantial evidence, or that amount ofrelevant evidence which a reasonable mind might accept as adequate tojustify a conclusion. In this case, substantial evid ence abounds. The conclusion that petitioner is not entitled to total permanent disability

benefits under the Social Security Law was reached after petitioner wasexamined not just by one but four SSS physicians.SSC did not ignore thecertifications of petitioner's attending physicians as, in fact, it ordered theSSS to conduct an i nvestigation as to the medical findings and finaldiagnosis by his attending phys icians. The member was requested to submit recent ECG, x-rays and otherlaboratory work-u p results but he could not locate them during visit andwould still look for the said medical documents and mail them to SSS. He was then advised to come to SSS, Diliman Branch for ECG and x-ray, however he refused. He also refused to affix his signature on the medicalfield s ervice form to confirm the visit of our Medical Officer. Petitioner's reliance on jurisprudence on work-connected disability claimsinsofa r as it relates to a demonstration of disability to perform his tradeand profess ion[54] is misplaced. Claims under the Labor Code for compensation and under the SocialSecurity Law fo r benefits are not the same as to their nature and purpose. On the one hand, the pertinent provisions of the Labor Code governcompensability of work-related disabilities or when there is loss of incomedue to work-connect ed or work-aggravated injury or illness. On the otherhand, the benefits under th e Social Security Law are intended to provideinsurance or protection against the hazards or risks of disability, sickness, old age or death, inter alia, irrespective of whether they arose from or inthe c ourse of the employment. And unlike under the Social Security Law, adisability i s total and permanent under the Labor Code if as a result of theinjury or sickne ss the employee is unable to perform any gainfuloccupation for a continuous peri od exceeding 120 days regardless ofwhether he loses the use of any of his body p arts. SSS medical examiners are tasked by law to analyze the extent of personalincapac ity resulting from disease or injury. Oftentimes, a physician who isadequately v ersed in the knowledge of anatomy and physiology will findhimself deficient when called upon to express an opinion on the permanentchanges resulting from a disa bility. Unlike the general practitioner whomerely concerns himself with the exam ination of his patient for purposesof diagnosis and treatment, the medical exami ner has to consider variedfactors and ascertain the claimant's related history a nd subjectivecomplaints. DENIED. SSC v. RIZAL POULTRY and LIVESTOCK ASSOCIATION, INC. F: Alberto Angeles had earlier filed a complaint for illegal dismissalagainst BS D Agro and/or its owner, Benjamin San Diego (San Diego). LA initially found that Angeles was an employee and that he was illegallydismissed. On appeal, NLRC reversed LA s Decision and held that noemployer-employee relation ship existed between Angeles andrespondents. The ruling was anchored on the find ing that the dutiesperformed by Angeles, such as carpentry, plumbing, painting a nd electricalworks, were not independent and integral steps in the essential ope rations of the company, which is engaged in the poultry business.[4] Angeles elevated the case to the Court of Appeals via petition for certiorari. The appellate court affirmed NLRC ruling and upheld the absence of employeremployee relationship. Angeles moved for reconsideration but it wasdenied by the Court of Appeals. No further appeal was undertaken, hence, an entry of judgment was made on 26 May 2001.[7] At any rate, the SSC did not take into consideration the decision of theNLRC. It denied respondents motion to dismiss in an Order.

I: WON res judicata applies so as to preclude the SSC from resolving anewthe exi stence of employer-employee relationship, which issue waspreviously determined i n the NLRC case. R: Res judicata embraces two concepts: (1) bar by prior judgment asenunciated in Rule 39, Section 47(b) of the Rules of Civil Procedure; and (2) conclusiveness of judgment in Rule 39, Section 47(c).[14] There is bar by prior judgment when, as between the first case where thejudgment w as rendered and the second case that is sought to be barred, there is identity of parties, subject matter, and causes of action. In this instance, the judgment in the first case constitutes an absolute bar to thesecon d action. But where there is identity of parties in the first and second cases, but noiden tity of causes of action, the first judgment is conclusive only as tothose matte rs actually and directly controverted and determined and notas to matters merely involved therein. This is the concept of res judicata known as conclusiveness of judgment. Stated differently, anyright, fact o r matter in issue directly adjudicated or necessarily involved inthe determinati on of an action before a competent court in whichjudgment is rendered on the mer its is conclusively settled by the judgmenttherein and cannot again be litigated between the parties and their privies, whether or not the claim, demand, purpose, or subject matter of the twoactions i s the same. The elements of res judicata are: (1) the judgment sought to bar the newaction m ust be final; (2) the decision must have been rendered by a courthaving jurisdic tion over the subject matter and the parties; (3) thedisposition of the case mus t be a judgment on the merits; and (4) theremust be as between the first and sec ond action, identity of parties, subjectmatter, and causes of action. Should ide ntity of parties, subject matter, and causes of action be shown in the two cases, thenres judicata in its aspect as a bar by prior judgment would apply. If as between the two cases, only identity of parties can be shown, but not identical causes ofaction, then res judicata as conclusiveness of judgment applies. The first element is present in this case. The NLRC ruling was affirmed bythe Co urt of Appeals. It was a judicial affirmation through a decision dulypromulgated and rendered final and executory when no appeal wasundertaken within the reglem entary period. The jurisdiction of the NLRC,

which is a quasi-judicial body, was undisputed. Neither can the jurisdictionof t he Court of Appeals over the NLRC decision be the subject of adispute. The NLRC case was clearly decided on its merits; likewise on themerits was the affirmance of the NLRC by CA. With respect to the fourthelement of identity of parties, we hold that there is substantial compliance. The parties in SSC and NLRC cases are not strictly identical. Rizal Poultry was impleaded as additional respondent in the SSC case. Jurisprudencehowever doe s not dictate absolute identity but only substantial identity. There is substantial identity of parties when there is a community ofinterest be tween a party in the first case and a party in the second case, even if the latter was not impleaded in the first case.[20] BSD Agro, Rizal Poultry and San Diego were litigating under one and thesame enti ty both before the NLRC and the SSC. Although Rizal Poultry isnot a party in the NLRC case, there are numerous indications that all thewhile, Rizal Poultry was also an employer of Angeles together with BSDAgro and San Diego. Angeles admitte d before the NLRC that he wasemployed by BSD Agro and San Diego from 1985 until 1997.[21] He made a similar claim in his Petition before the SSC including as employer RizalPoultry as respondent.[22] Angeles presented as evidence before the SSChis Identificatio n Card and a Job Order to prove his employment in RizalPoultry. He clarified in his Opposition to the Motion to Dismiss[23] filed before SSC that he failed to adduce these as evidence before the NLRC even if it would have proven his employment with BSD Agro. Most significantly, the three respondents, BSD Agro, Rizal Poultry and SanDiego, liti gated as one entity before the SSC. They were represented byone counsel and they submitted their pleadings as such oneentity. Certainly, and at the very least, a community of interest existsamong them. We therefore rule that there is substa ntial if not actual identity of parties both in the NLRC and SSC cases. As previously stated, aniden tity in the cause of action need not obtain in order to apply res judicata by conclusiveness of judgment. An identity of issues would suffice. The NLRC decision on the absence of employer-employee relationshipbeing binding in the SSC case, we affirm the dismissal by Court of Appealsof the SSC case. DEN IED. CIRIACO HINOGUIN vs.EMPLOYEES' COMPENSATION COMMISSION and GSIS F: Sgt. Hinoguin, Cpl. Clavo and Dft. Alibuyog left Carranglan, Nueva Ecija, about noon on 1 August 1985 and arrived in Aritao, Nueva Viscaya, about 1:30 o'clock P.M. on the same day. 3 They proceeded to the home of Dft. Alibuyog's parents where they had lunch. About 4:00 o'clock P.M., thethree (3) s oldiers with a fourth man, a civilian and relative of Dft. Alibuyog, had some gin and beer, finishing a bottle of gin and two (2) large bottles ofbee r. Three hours later, at about 7:00 o'clock P.M., the soldiers left the Alibuyog home to return to their Company Headquarters. They boarded atricycle, p resumably a motor-driven one, Sgt. Hinoguin and Cpl. Clavo seating themselves in the tricycle cab while Dft. Alibuyog occupied theseat behi nd the driver. Upon reaching the poblacionof Aritao, Dft. Alibuyogdismounted, wa lked towards and in front of the tricycle cab, holding his M16 rifle in his right hand, not noticing that the rifle's safety lever was onsemi a utomatic (and not on "safety"). He accidentally touched the trigger, firing a single shot in the process and hitting Sgt. Hinoguin, then still sittin gin the cab, in the left lower abdomen. The Sergeant did not apparentlyrealize i mmediately that he had been hit; he took three (3) steps forward,

cried that he had been hit and fell to the ground. His companions rushed Sgt. Hinoguin to a hospital in Bayombong, NuevaViscaya, fo r treatment. Their Company Commander, Capt. Besas, hurriedto the hospital upon b eing notified of the shooting and there talked withthe wounded Sergeant. The lat ter confirmed to Capt. Besas that he hadindeed been accidentally shot by Dft. Al ibuyog Sgt. Hinoguin was latermoved to the AFP Medical Center in Quezon City and there he died. TheDeath Certificate lists "septic shock" as immediate cause of death, and"generalized septicemia of peritonitis" as antecedent cause, following hissustaining a gunshot wound. An investigation conducted by H.Q., 14th Infantry Battalion concluded thatthe sh ooting of Sgt. Hinoguin was "purely accidental in nature." Petitioner filed his claim for compensation benefits under P.D. No. 626 (asamend ed), claiming that the death of his son was work-connected andtherefore compensa ble. This was denied 6 by the GSIS on the ground thatpetitioner's son was not at his work place nor performing his duty as asoldier of the Philippine Army at th e time of his death. Petitioner filed a Motion for Reconsideration which Motion was, however, denied by the GSIS. This denial was confirmed by the Workmen'sCompensation Commi ssion ("WCC"). I: whether or not the death of Sgt. Lemick Hinoguin is compensable underthe appl icable statute and regulations. R: Considering that Sgt. Hinoguin died on 7 August 1985, the applicablelaw is to be found in Book Four, Title III of the Labor Code, as amended. It may be noted at the outset that under Article 167 (g) of the Labor Code, asamend ed and Section 4 (b) (1) of Rule I of the Amended (Implementing) Rules on Employees' Compensation, the term "employee" includes a"member of the A rmed Forces of the Philippines." Rule XIII entitled"Death", of the Amended (Impl ementing) Rules provides in part as follows: SECTION 1. Conditions to Entitlement. (a) The beneficiaries of adeceased employe e shall be entitled to an income benefit if all of thefollowing conditions are s atisfied:

(1) The employee had been duly reported to the System; (2) He died as aresult of injury or sickness; and (3) The System has been duly notified ofhis death, as w ell as the injury or sickness which caused his death. Hisemployer shall be liabl e for the benefit if such death occurred before theemployee is duly reported for coverage of the System.xxx Article 167 (k) of the Labor Code as amended defines a compensable"injury" quite simply as "any harmful change in the human organism fromany accident arising ou t of and in the course of the employment." The Amended (Implementing) Rules have, however, elaborated considerably onthe simple and succinct statutory provision. Rule III, Section 1 (a) reads: SECTION 1. Grounds. (a) For the injury and the resulting disability or deathto b e compensable, the injury must be the result of an employmentaccident satisfying all of the following grounds: (1) The employee must have been injured at the place work requires him to be; (2) The employee must have been performing his official functions; and (3) If the injury is sustained elsewhere, the employee must havebeen executi ng an order for the employer. It will be seen that because the Amended (Implementing) Rules areintended to app ly to all kinds of employment, such rules must be read andapplied with reasonabl e flexibility and comprehensiveness. The concept ofa "work place" referred to in Ground 1, for instance, cannot always beliterally applied to a soldier on activ e duty status, as if he were a machineoperator or a worker in an assembly line i n a factory or a clerk in aparticular fixed office. Obviously, a soldier must go where his company isstationed. In the instant case, Aritao, Nueva Viscaya was n ot, of course, Carranglan, Nueva Ecija. Aritao being approximately 1-1/2 hours awayfrom the lat ter by public transportation. But Sgt. Hinoguin, Cpl. Clavo andDft. Alibuyog had permission from their Commanding Officer to proceed toAritao, and it appears to us that a place which soldiers have securedlawful permission to be at cannot be very different, legally speaking, froma place where they are required to go by their commanding officer. Turning to the question of whether Sgt. Hinoguin was performing officialfunction s at the time he sustained the gunshot wound, it has already beenpointed out abo ve that the Line of Duty Board of Officers of the14th Infantry Battalion Headqua rters had already determined that thedeath of Sgt. Hinoguin had occurred "in lin e of duty." It may be noted inthis connection that a soldier on active duty stat us is really on 24 hours aday official duty status and is subject to military di scipline and military law24 hours a day. He is subject to call and to the orders of his superiorofficers at all times, 7 days a week, except, of course, when he is onvacation leave status (which Sgt. Hinoguin was not). 'Thus, we think thatt he work-connected character of Sgt. Hinoguins injury and death was noteffectivel y precluded by the simple circumstance that he was on anovernight pass to go to the home of Dft. Alibuyog, a soldier under his own command. Sgt. Hinoguin did not effectively cease performing "officialfunctions" because he was granted a pass. More generally, a soldier in theArmed Forces must accept certain risks, for instance, that he will be firedupon by forces hostile to the State or the Government. That is not, ofcourse, the only ask that he is compelled to accept by the very nature ofhis occupation or profession as a soldi er. Most of the persons around himare necessarily also members of the Armed Forc es who carry firearms, too. In other words, a soldier must also assume the risk of being accidentallyfired u pon by his fellow soldiers. This is reasonably regarded as a hazard orrisk inher ent in his employment as a soldier. We hold, therefore, that the death of Sgt. Hinoguin that resulted from hisbeing

hit by an accidental discharge of the M-16 of Dft. Alibuyog, in thecircumstances of this case, arose out of and in the course of his employment as a soldier on active duty status in the Armed Forces of thePhilippi nes and hence compensable. REVERSED and the GSIS is herebyDIRECTED to award all applicable benefits in respect of the death of Sgt. Lemick G. Hinoguin, to petitioner. VISAYAN STEVEDORE ., vs. THE WORKMEN'S COMPENSATION COMMISSION F: It appears that Graciano Gutana was a laborer of petitioner in itsstevedoring business at the Pulupandan wharf in Occidental Negros, at adaily salary of P4.6 0. Petitioner undertook the loading of sugar on theJapanese ship "Hiyeharu Maru" then anchored about two miles from thecoast of Pulupandan, and Gutana was one o f the more than seventy of itslaborers assigned to do the loading. After having rendered the usual 8hours of work, the laborers were giventime off to take their evening meal before working over time, as it was thepurpose of the employer to finish the loading of the sugar as soon aspossible. After taking th eir meal on board the ship, Gutana and some of thelaborers had to answer the cal l of nature by the left side of a barge tiedalong the right side of the Japanese ship, in view of the insufficiency of thesanitary facilities board. After relie ving himself, and as he was standingand buttoning up his pants, the raft "Narwha l" came along the right side ofthe barge and bumped it, causing it to hit the ri ght side of the Japanesevessel. As a result, Gutana was pinned by the end of the hatch cover of thebarge against the side of the vessel, thereby suffering physi cal injurieswhich resulted in his death. Petitioner's foreman at the premises immediately notified the latter of thefatal incident, and petitioner shouldered all the funeral expenses. A claimfor compen sation for the death of Gutana was filed by the widow of thedeceased and their c hildren. After hearing, the Regional Office of DOLE, Bacolod City, rendered a decision awarding death compensation to theclaimants in the total amount of P4,000.00, plus attorneys' fees and costs. Petitioner appealed to the Workmen's Compensation Commission which, inturn, affi rmed the decision just mentioned in its resolution of October 15,1963, the latte r being now the subject of appeal.

I&R: (1) the claim for compensation had prescribed having been filed morethan th ree months after Gutana's death. The case is covered by the provisions of Section 24, Workmen'sCompensation Act N o. 3428, as amended, which dispenses with therequirement of filing a claim for c ompensation if the employer hadvoluntarily made compensation payments. Under Sec tion 8 of the sameact, burial expenses are considered as part of the death benef its due to theheirs of a deceased laborer. It appears in this case that petition er hadvoluntarily paid the burial expenses in connection with the burial ofGutan a. Consequently, the late filing of the claim for compensation is notfatal. (2) the death of Gutana was due to his notorious negligence. Facts established by the evidence do not support petitioner's contention. Due to the number of laborers engaged in the loading work, the sanitaryfacilitie s on board the "Hiyeharu Maru" were rendered inadequate, thuscompelling some of the laborers to answer the call of nature by going downa barge tied along the ri ght side of the ship. The deceased Gutana wasamong those who was forced, to reso rt to this uncomfortable way ofrelieving himself. Moreover, in the circumstances of this case, it is butlogical to consider the barge as an extension of the pre mises where thelaborers were working. As already stated, they took their evening meal onboard the ship and were supposed to resume their work (overtime work) ar easonable time thereafter. As, because of this, they were not free to leavethe v essel, the accident must be deemed to be one arising out of, or in thecourse of employment. DISMISSED. ALANO vs. EMPLOYEES' COMPENSATION COMMISSION F: Dedicacion de Vera, a government employee during her lifetime, workedas princ ipal of Salinap Community School in San Carlos City, Pangasinan. Her tour of duty was from 7:30 a.m. to 5:30p.m. On November29, 1976, at 7:00 A.M., while she was waiting for a ride at Plaza Jaycee inSan Carlos Cit y on her way to the school, she was bumped and run over bya speeding Toyotaminibus which resulted in her instantaneous death. Sheis survived by her four sons a nd a daughter. On June 27, 1977, Generoso C. Alano, brother of the deceased, filed the instant claim for income benefit with the GSIS for and in behalf of the decedent's children. The claim was,however, denied on the same date on the ground that the "injury uponwhich co mpensation isbeing claimed is not an employment accidentsatisfying all the condi tions prescribed by law." OnJuly 19, 1977 appellantrequested for a reconsiderati on of the system's decision, but the samewasdenied and the records of the case w ere elevated to this Commission for review. I: Whether or not the death of Dedicacion de Vera can be compensable. H: In this case, it is not disputed that the deceased died while going to herpla ce of work.She was at the place where, as the petitioner puts it, her jobnecessa rily required her to be if she was to reach her place of work ontime. There was nothing private or personal about theschool principal'sbeing at the place of the accident. She was there because heremploymentrequired her to be there.As to the Government ServiceInsurance System's manifestation, we hold that it is not fata l tothis casethat it was not impleaded as a party respondent. As early as the ca se of LaO v.Employees' Compensation Commission, (97 SCRA 782) up to Cabanero v. Employees' Compensation Commission (111 SCRA 413) andrecently,Clemente v. GSI S(G.R. No. L-47521, August 31,1987), this Courthas ruled that the GSIS is a prop er party in employees' compensationcases as the ultimate implementing agency of the Employees'Compensation Commission. We held in the cited cases that "the law andthe rules refer to the said System in all aspects of employee compensationinc luding enforcement of decisions (Article 182 of ImplementingRules)." SALVADOR LAZO vs. EMPLOYEES' COMPENSATION COMMISSION

F: Salvador Lazo, is a security guard of the Central Bank of the Philippinesassi gned to its main office in Malate, Manila. His regular tour of duty is from 2:00 o'clock in theafternoon to 10:00 o'clock in the evening. On 18 June1986, th e petitioner rendered duty from2:00 o'clock in the afternoon to 10:00 o'clock in the evening. But, as the security guard who was to relievehim f ailed to arrive, the petitioner rendered overtime duty up to 5:00o'clock in the morning, when he asked permission from his superior toleave early in order totak e home to Binangonan, Rizal, his sack of rice. Onhis way home, at about 6:00 o'c lock in the morning, the passenger jeepneythe petitioner was riding on turned tu rtle due to slippery road. As a result, he sustained injuries and was taken to the Angono Emergency Hospital fortreatmen t. He was later transferred to the National Orthopedic Hospitalwhere he was conf ined until 25 July 1986.For the injuries he sustained, petitioner filed a claim for disability benefits under PD 626, as amended. His claim, however, was denied by the GSIS for the reason that .It appearsthat a fter performing your regular duties as Security Guard from 2:00 P.M. to 10:00P.M. on June 18, 1986, you rendered overtime duty from 10:00 P.M. to 5:06 A.M. of the following day; that at about 5:06 A.M. after askingperm ission from your superior you were allowed to leave the Office to docertain pers onal matter . that of bringing home a sack of rice and that, while on your way home, you met a vehicular accident that resulted to (sic) your injuries. From the foregoing informations, it is evident that you werenot a t your work place performing your duties when the incident occurred. 1It was held that the condition for compensability had not been satisfied. Upon review of the case, the respondent Employees CompensationCommission affirme d the decision since the accident which involved the petitioner occurred far from his work place and while he was attending to aperso nal matter. Hence, the present recourse. I: Whether petitioner's injury comes within the meaning of and intendmentof the phrase 'arising out of and in the course of employment?

H: We held that 'where an employee, after working hours, attempted toride on the platform of a service truck of the company near his place ofwork, and, while th us attempting, slipped and fell to the ground and wasrun over by the truck, resu lting in his death, the accident may be said tohave arisen out of or in the cour se of employment, for which reason hisdeath is compensable. The fact standing al one, that the truck was inmotion when the employee boarded, is insufficient to j ustify the conclusionthat he had been notoriously negligent, where it does not a ppear that thetruck was running at a great speed.' And, in a later case, Iloilo Dock&Engineering Co. vs. Workmen's Compensation Commission, 26 SCRA102, 103, We ruled that' employment includes not only the actual doing ofthe work, but a reas onable margin of timeand space necessary to be usedin passing to and from the pl ace where the work is to be done.If theemployee be injured while passing, with t he express or implied consent ofthe employer, to or from his work by a way over the employer's premises, or over those of another in such proximity and relation as to be in practicaleff ect a part of the employer's premises, the injury is one arising out of andin th e course of the employment as much as though it had happened whilethe employee w as engaged in his work at the place of its performance. Inthe case at bar, it ca n be seen that petitioner left his station at the CentralBank several hours afte r his regular time off, because the reliever did notarrive, and so petitioner wa s asked to goon overtime. After permission toleave was given, he went home. Ther e is no evidence on record thatpetitioner deviated from his usual, regular homew ard route or thatinterruptions occurred in the journey. There is no reason, in p rinciple, whyemployees should not be protected for a reasonable period of time p rior toor after working hours and for a reasonable distance before reaching oraf ter leaving the employer's premises. The decision appealed from isREVERSED and S ET ASIDE. Let the case be remanded to the ECC and the GSIS for disposition in accordance with this decision. (GSIS), vs CA and FELONILA ALEGRE F: Private respondent Felonila Alegre s deceased husband, SPO2 Florencio A. Alegre, was a police officer assigned to the PNP station in the town ofVigan, Ilocos Sur.On December 6, 1994, he was driving his tricycle andferrying passeng ers within the vicinity of Imelda Commercial Complexwhen SPO4 Alejandro Tenorio, Jr., Team/Desk Officer of the PoliceAssistance Center located at said complex, confronted him regarding histour of duty.SPO2 Alegre allegedly snubbed SPO4 Teno rio and evendirected curse words upon the latter. A verbal tussle then ensued be tweenthe two which led to the fatal shooting of the deceased police officer. Ona ccount of her husband s death, private respondent seasonably filed aclaim for deat h benefits with petitioner (GSIS) pursuant to PD No. 626. In its decision on August 7, 1995, the GSIS, denied the claim on thegroundthat at t he time of SPO2 Alegre s death, he was performing apersonal activity which was not work-connected which was later onaffirmed by the Employees Compensation Commissio n(ECC). Privaterespondent finally obtained a favorable ruling in the Court of Ap peals whenitreversed the ECC s decision and ruled that SPO2 Alegre s death waswork-c onnected and,therefore, compensable. Hence; GSIS filed a petition for review on certiorari to the SC; reiterating its position that SPO2Alegre s dea th lacks the requisite element of compensability which is, thatthe activity bein g performed at the time of death must be work-connected. I: Whether or not the SPO2 Alegre s death is compensable pursuant to theapplicable laws and regulations. H:Taking together existing jurisprudence and the pertinent guidelines ofthe ECC with respect to claims for death benefits, namely: (a) that theemployee must be at the place where his work requires him to be; (b) thatthe employee must have b een performing his official functions; and(c) thatif the injury is sustained els ewhere, the employee must have beenexecuting an order for the employer, it is no t difficult to understand thenwhy SPO2 Alegre s widow should bedenied the claims o therwise due her.

Obviously, the matter SPO2 Alegre was attending to atthe time he met hisdeath, t hat of ferrying passengers for a fee, was intrinsically privateandunofficial in nature proceeding as it did from no particular directive orpermission of his sup erior officer. That he may be called upon at any timeto render police work as he is considered to beon a round-the-clock dutyand was not on an approved vacation leave will not change theconclusionarrived at considering that he was not place d in a situation where he wasrequired to exercise his authority and duty as a po liceman. In fact, he was refusing to render one pointingout that he already complied with the dutydetail. At any rate, the 24-hour duty doctrine, as applied to policemen andsoldiers, se rves more as an after-the-fact validation of their acts to placethem within the scope of the guidelines rather than a blanket license tobenefit them in all situ ations that may give rise to their deaths. In other words, the 24-hour duty doctrine should not be sweepingly appliedto all acts and circumstances causing the death of a police officer but onlyto those w hich, although not on official line of duty, are nonethelessbasically police ser vice in character. CELERINO VALERIANO,,vs.ECC and GSIS F: Celerino S. Valeriano was employed as a fire truck driver assigned atthe San Juan Fire Station.Sometime on the evening of July 3, 1985, petitioner was standing along Santolan Road,Quezon City, when he met afriend by the name of Alexander Agawin. They decided to proceed toBonanza Restaurant in ED SA, Quezon City, for dinner. On their way homeat around 9:30PM, the owner-type j eepney they were riding in figured in ahead-on collision with another vehicle at the intersection of N. Domingoand Broadway streets in Quezon City. Due to thest rong impact of thecollision, petitioner was thrown out of the vehicle and was se verelyinjured.As a result of the mishap, petitioner was brought to severalhospit als fortreatment.On September 16, 1985, he filed a claim for income benefits und er PD 626, with theGSIS. His claim for benefits was opposed on the groundthat th e injuries he sustained did not directly arise or result from thenature of his w ork. Under the present compensation law, injury and theresulting disability or d eath is compensable if the injury resulted from an

accident arising out of and in the course of employment. It means that theinjury or death must be sustained while the employee is in theperformance of hisoffici al duty; that the injury is sustained at the placewhere his work requires him to be; and if the injury is sustained elsewhere, that the employee is executing an order for the employer. Theaforementioned cond itions are found wanting in the instant case. Theaccident that the appellant met in the instant case occurred outside of histime and place of work. Neither was appellant performing his official dutiesas a fireman at the time of the accident . In fact, appellant just left theBonanza Restaurant where he and his friends ha d dinner. Apparently, theinjuries appellant sustainedfrom the accidentdid not arise out of [and] in the course of his employment. Consideringtherefore the abs ence of a causal link between the contingency for whichincome benefits [are] bei ng claimed and his occupation as fireman, hisclaim under PD 626, asamended, cann ot be given due course. I: WHETHER PETITIONER'S INJURIES ARE WORK-CONNECTED. H: Injuries and Resulting Disability. Disability benefits are granted anemployee who sustains an injury or contracts a sickness resulting intemporary total, per manent total, or permanent partial, disability. For the injury and the resulting disability to be compensable, they musthave nec essarily resulted from an accident arising out of and in the courseof employment . Were Petitioner's Injuries Work Connected? The two components of the coverage formula "arising out of" and "in the course o f employment" are said to be separate tests which mustbe independently satisfied ; however, it should not be forgotten that thebasic concept of compensation cove rage is unitary, not dual, and isbest expressed in the word, "work-connection, b ecause an Uncompromising insistence on an independent application of each of thetwo portio ns of the test can, in certain cases, exclude clearly workconnected injuries. The words "arising out of" refer to the origin or causeof th e accident, and are descriptive of its character, while the words "in thecourse of" refer to the time, place and circumstances under whichthe accident takes pla ce. As a matter of general proposition, an injury oraccident is said to arise "i n the course of employment" when it takes placewithin the period of the employme nt, at a place where the employee mayreasonably be, and while he is fulfilling h is duties or is engaged in doingsomething incidental thereto. Thus, for injury to be compensable, the standard of "work connection" must be substantially satisfied. The injury and the resulting disability sustained by reason of employment are co mpensable regardless of the place where the injured occurred, if itcan be proven that at the time of the injury, the employee was actingwithin the purview of hi s or her employment and performing an actreasonably necessary or incidental. Pet itioner Valeriano was not able to demonstrate solidly how his job as a fire truck driver was related to theinjurie s he had suffered. That he sustained the injuries after pursuing apurely persona l and social function having dinner with some friends is clearfrom the records o f the case. His injuries were not acquired at his workplace; nor were they susta ined while he was performing an act within thescope of his employment or in purs uit of an order of his superior. Thus, we agree with the conclusion reached by the appellate court that hisinjuri es and consequent disability were not work-connected and thus notcompensable. DE NIED. Clemente vs. Government Service Insurance System

FACTS: Petitioner -Wife of late pedro clemente-10 years janitor of doh, assigned in ilocos norte skin clinic Nov 3-14-1976 hospitalized due to nephritis-Later fo und out also suffering from portal cirrhosisand leprosy, AKAHansen s disease -Nov. 14, 1976, died of uremia due to nephritis. -Wife / PET. Filed for employee s compensation under labor code to GSISGSIS -Denie d Bec. Ailment is not occupational disease and not the leastcausallyrelated to h is duties and condi of work. -Motion for reco. Denied GSIS -forwarded claim to ECC ECC Rulings: 1.not listed in occupational diseases, 2.no evidence of casualconne ction 3. had acquired the disease prior employmentart 167 labor code: For sickness and the resulting disability and death becompensable : 1.) Sickness must be listed in the occupational diseases. 2.) Proof that risk of contracting the disease is increased by workingconditions. PET. Invokes theory of increased riskECC: -disease was caused by his employmentit was only a recurrence of an existing disease aggravated by nature ofwork GSIS: prayed to be dropped as party respondent in this case ISSUES: 1. Whether or not there is sufficient evidence to sustain theory ofincre ased risk. -exposed as janitor diseased was to diff. carriers of viral and bacterialdisease s , the EE most exposed to dangerous concentration of infectedmaterials and the least likely to know how to avoid infection. -it is unreasonable to not conclude that the working conditions definitelyincrea sed the risk of contract f the disease. -Resp s posture is against / inconsistent with the liberal of the labor codewhich favor the workers. 2. there have been aggravation of existing ailment but such aggravation is not in the present law. -no evidence deceased was hired in state of having an existing disease_____ to become worse. 3. GSIS, to be dropped as party in the case

-no merit, the fact that the court required GSIS to comment is anindication that it is a necessary partyDISPO: Decision appealed is set aside. respondentGSIS or dered to pay. 1.P12,000 death benefits; 2.P1,200 Atty s fee RUBEN T. LIMBO, v. ECC and SSS. F: Limbo was confined for one week at (PGH) because of joint pains. Hiswork-up r evealed that he had elevated BUN, creatinine and anemia. WhenLimbo was subjected to a renal ultrasound, it was further discovered thathe had chronic renal disea se and he was forthwith referred to a nephrologist and was advised to undergo a kidney transplant. Limbounderwent a re nal transplant at the PGH and was discharged. Limbo filed a claim for compensation benefits before (SSS), invoking (P.D.) No. 626, as amended. However, the claim was denied on the ground thatLimbos illn ess, end-stage renal disease secondary to uric acidnephropathy, had no causal re lationship to his job as Area SalesSupervisor. Limbo promptly appealed to (ECC). ECC affirmed the decisionof the SSS and dismissed the appeal for lack of merit. CA dismissed, motion also denied. I: whether or not end-stage renal disease secondary to uric acidnephropathy is c ompensable under P.D. 626, as amended. R: Yes. Under the Amended Rules on Employees Compensation, (f)or thesickness and the resulting disability to be compensable, the sickness mustbe the result of a n occupational disease listed under Annex A of theseRules with the conditions se t therein satisfied; otherwise, proof must beshown that the risk of contracting the disease is increased by the workingconditions. Concededly, end-stage renal d isease secondary to uric acidnephropathy is not among the Occupational Diseases under Annex A of theAmended Rules on Employees Compensation. This, however, woul d notautomatically bar petitioners claim for as long as he could prove that ther isk of contracting the illness was increased by his working conditions. Petitioners job description showed that he was responsible for theTerritory s coll ection, merchandising, market hygiene and promotion goals; Principal Liason of the territory with the National Sales Manager, etc. Considering the workload and areas of responsibility of petitioner in thiscase, it is not unlikely for him to develop hypertension, which in turn led touremia. It should be stressed that in determining whether a disease iscompensable, it is enough that there exists a reasonable work connection. It is sufficient that the hypothesis on which the workmens claim is based isprob able since probability, not certainty, is the touchstone. As correctly pointed out by the OSG, a physicians report is the bestevidence of work-connection of workmens ailments and can be the basis of an award even if the physician was not presented as a witness.[6 We have no reason to doubt the findings of Dr. Mejia who is an expert in her field ofwor k. Verily, petitioner was able to show that his ailment was work-related.